The week in review: Battle of the operating systems

Microsoft's Windows Me, which went on sale quietly last month, is expected to become a dominant fixture in home computing as many PC manufacturers have already dumped Windows 98 in favor of the new system. Although Windows Me will tout improved video playback and other features, analysts say consumers shouldn't expect any eye-popping changes.

The new system is largely an extension of Windows 98, which Microsoft chairman Bill Gates initially promised would be the last operating system based on DOS, the OS that forms the bedrock of the Redmond, Wash., empire.

Consumers who want to see dramatic changes will have to wait until next year, when Whistler is scheduled to arrive. Whistler, which will target both the home and business computing markets, is the next version of Windows 2000, Microsoft's OS for offices.

Several retailers, including CompUSA and CDW, began selling the Windows 98 upgrade version of Windows Me for $49.95, or $10 less than the official price of the software.

Yet a few wrinkles exist. Because of changes designed to solidify Windows Me's reliability, the new operating system is incompatible with a variety of third-party applications, such as software from companies such as McAfee.com, Symantec, Adaptec and Quarterdeck.

In addition, a bug hunter announced that he discovered a vulnerability in the new system that allows attackers to crash or reboot a Windows Me computer running a TV software package by sending the computer a certain type of data over the Internet.

Bobbing for Apples
Apple Computer didn't let a sprinkler system hitch rain on its parade at Apple Expo 2000 in Paris, as it unveiled a new, more powerful notebook and its anticipated new operating system, OS X.

Apple added brawn to its colorful line of iBook notebooks, beefing up storage, offering speedier processors and adding a DVD drive to the high-end model. The company also released the test, or beta, version of OS X and said it will offer ATI Technologies' high-end Radeon graphics card as a $100 option in its PowerMac G4 and G4 cube models.

Behind the scenes, a startling drama unfolded, as show exhibitors struggled with the aftermath of a faulty fire sprinkler system that left up to 2 inches of water in many areas of an exhibit hall.

Pricing problems
Amazon.com dealt with the fallout from another pricing glitch, this time in its DVD store. Last week, price-savvy DVD shoppers placed dozens of orders for drastically discounted movies and box sets. But Seattle-based Amazon has since told customers that the prices--some were more than 75 percent off the list price--were a mistake and has asked customers to pay the higher price or cancel.

In a separate incident, Amazon decided to back away from a price test in its DVD store and give refunds to customers who paid higher prices. The price test, which ran early last week, affected dozens of Amazon's top-selling titles.

Spotlight on privacy
Days after acknowledging a privacy problem with its Internet Explorer browser, Microsoft said that it does not disclose how it identifies people who travel across its network of Web sites. A complaint that Microsoft was tracking Web surfers across its multiple properties raised the privacy bugaboo of the moment: the ability of companies to uniquely identify people as they traverse domains. Microsoft said its method of identifying surfers across various sites is not addressed in its privacy policy, but that a version in progress will explain the practice.

Amazon's new privacy policy could put customers at risk, according to two watchdog groups that have recently cut ties with the online bookseller. One of the groups pulled its books from Amazon's shelves, ending a four-year relationship. The move was a way of protesting a common practice by online retailers of periodically changing privacy rules.

A privacy group issued a new set of industry guidelines to regulate the use of invisible technology that keeps tabs on Web site visitors. The Privacy Foundation is proposing that Internet advertising companies and Web sites disclose the use of "Web bugs" wherever they are found online. Web bugs, or clear GIFs, are tiny images embedded in a Web page or HTML-enhanced email that transmit information to a remote computer when the page is viewed.

Sing and swap
Napster fired its final legal salvo before meeting the record industry in appeals court, accusing the big labels of trying to hijack the beleaguered music-swapping company's technology. At the core of Napster's final argument is the contention that the big record labels are frightened of the company's power and are trying to take over the technology before it can hurt them.

A Napster supporter, alternative rock band The Smashing Pumpkins, released what is being called its final album on vinyl and in the MP3 format, forgoing a CD release through its record label, Virgin Records. The 25-song album, titled "Machina II: The Friends and Enemies of Modern Music," is being downloaded by fans via Napster and various Web sites highlighted on the message boards at The Smashing Pumpkins' Web site.

Joseph Wecker's song about a binary computer code wasn't exactly a chart-topper, but he doesn't think MP3.com should have banned it. The popular music Web site removed the song, in which Wecker sings a version of the banned DVD-hacking code known as DeCSS. "Your song has either a song title or lyrics that are offensive or otherwise inappropriate," the company wrote in an email.

Aimster, the Napster-like program that taps into America Online's Instant Messenger software to create file-swapping buddy lists, is expanding its file-searching capabilities to support ICQ and to search Napster and Scour Exchange networks. The new release will dramatically expand the potential audience for the file-trading program, which the company says has already been downloaded more than 1 million times. ICQ, also owned by AOL, has had more than 73 million downloads.

Also of note
Web portal AltaVista trimmed its work force by 25 percent, or 225 people, to focus its efforts on its search engine and to accelerate its path to profitability...The auction of FuckedCompany.com, the irreverent Web site that documents the demise of dot-coms, ended two days after it began...Qwest Communications International and Verizon Communications announced broad new plans to offer stock options and employee stock purchase plans as an incentive to create a more entrepreneurial workplace...Hewlett-Packard announced a new server line that includes a dedicated HP support crew instead of a "revolving door" of new personnel who must learn about a customer each time there's a problem...The international saga that is Rambus continued as the company filed lawsuits in Europe against Hyundai and Micron and signed a licensing deal with NEC.