The week in review: Linux has legs

Following a similar move by IBM, Intel sought to enlist the help of open-source developers in pushing Linux and open-source software to their limits. During his keynote address at LinuxWorld, William Swope, vice president of Intel's architecture group, talked up the role of enterprise servers in furthering the growth and potential of open-source software.

While Microsoft executives publicly vacillate between declaring Linux either the most hyped operating system or the biggest threat to Windows, the company has learned some powerful lessons from its open-source competitors. In an unprecedented move, during the past six months Microsoft has made available to "hundreds" of its larger customers copies of its closely guarded Windows source code.

Separately, Sun Microsystems released a version of Java for small gadgets using the Linux operating system. This version is called the "connected device configuration" of Java, which is designed for set-top boxes, in-car computers and home servers that join computers and consumer electronics devices to the Internet.

Bungle in the jungle
Amazon.com posted a fourth-quarter loss that slightly exceeded expectations and said it will lay off 15 percent of its staff, or 1,300 employees, as it strives to become profitable by the end of the year.

Along with the layoffs, the company said it is setting up a trust fund of $2.5 million worth of stock for laid-off employees. The unusual fund will hold the stock until mid-2003, when it will be sold and distributed to dismissed workers. The company did not disclose details about how it will dispense the proceeds or in what portions.

As a condition for an additional week's worth of severance pay and a cash bonus, Amazon required workers to sign an agreement not to make negative statements about the company. The company eventually backed off the requirement, which in itself is unusual since such agreements are increasingly common.

Local union organizers had urged the employees to refuse to sign the agreements, saying the agreements limit workers' rights long after they have left a company.

Going, going...
Ariba's $2.55 billion acquisition of Agile Software may be the final straw that breaks the heavily touted business-to-business alliance between IBM, Ariba and i2 Technologies. The alliance, formed amid much fanfare last March, was followed by a $90 million ad campaign and news of numerous deals to build business e-commerce marketplaces. The trio was created to sell software and services to help build online marketplaces that serve companies in aerospace, construction, retail, chemical and other industries.

Walt Disney will discontinue operations of its troubled Go.com Web portal, becoming the latest big media company to fold its Internet efforts back into core TV businesses. Go.com's entire work force, about 400 employees, has been laid off with the closure. In addition, Infoseek, a search engine in which Disney acquired a controlling interest in 1998, will likely disappear if the company can sell its technology to a third party.

Amid a sharp downturn in Gateway's PC business, Chief Executive Jeffrey Weitzen stepped down and will be replaced by the company's founder and chairman, Ted Waitt. Waitt has remained active in the San Diego-based company and owns about 100 million shares, or roughly one-third of the company's stock. Several other high-ranking executives resigned as well.

A tall call
Heralded as the brainchild of celebrated Chairman Marc Andreessen, Loudcloud was thought to mark a coming of age for the 29-year-old wunderkind as his first venture beyond the shadow of Netscape Communications. But a little more than a year since its launch, Loudcloud has been forced from its lofty perch by the sobering realities of today's high-tech slowdown. Like many others, it has been torn by a decaying market, a quick cash burn and skittish partners leery of the service company's ambitions.

As the historic Telecommunications Act reaches its five-year anniversary this month, its most tangible accomplishment may be something not even known to many legislators who drafted the landmark law: broadband technology. But it effectively set in motion a series of market-driven events that accelerated development of cable, DSL and other technologies that could have taken years longer to reach the consuming public in any significant numbers.

Virgin Mobile--a division of the conglomerate that owns Virgin Atlantic Airways, Virgin Megastores, Virgin Cola and the fastest-growing mobile phone company in the United Kingdom--is close to a deal that would bring its brand into the U.S. market. A deal is expected in the next several weeks. Virgin's entry would be the first significant example on this side of the Atlantic of a new model taking off in Europe, in which Virgin and others that partner with established carriers are dubbed "virtual network operators."

Also of note
Microsoft is investigating a leak of its upcoming Internet Explorer 6 browser, which renegade software sites have posted to the Web...Looking to rebound from a massive $247 million loss last quarter, Apple Computer began shipping the Titanium PowerBook G4 laptop, and its CFO said the company is on track to reach its goal of a slight profit in the March quarter...The major outages that hit Microsoft last week could become more commonplace because of four flaws found in the software used to identify servers around the Internet...In a move that could clear the way for the first-ever union election at a dot-com, organizers have withdrawn their remaining unfair labor practice charge against Etown.com.