The week in review: Microsoft, Napster in court

The latest round in the landmark antitrust case against Microsoft may have left the software giant with some hope that it could come out of the proceedings victorious.

Appellate judges during a hearing this week called into doubt a lower court's ruling that led to the recommendation to break up the software giant. Among other issues, the court's chief justice questioned whether U.S. District Judge Thomas Penfield Jackson's findings of fact sufficiently defined what he called "the browser and platform market."

Earlier comments made by Jackson outside the courtroom were also sharply criticized by the panel of judges, some of whom suggested the trial judge could be removed from the case.

Many legal experts previously had handicapped in favor of the government, but concluded Microsoft would punch some holes in the government's case for breakup. Now legal authorities think even that is uncertain, with one saying that Microsoft "could win the whole case."

Napster's fate is far from clear, however. Late Friday the popular music-swapping service decided to voluntarily block thousands of songs from its service, in anticipation of a potential court order that could demand even stronger remedies to end the trade of copyrighted music online.

Lawyers for the music industry and Napster gathered in a courtroom in San Francisco on Friday to rehash arguments over how to police alleged copyright violations on the service. A ruling in the case could come at any time.

Thin is in
Intel, IBM and Compaq Computer are furiously working on "ultradense" servers that will allow companies to cram vastly more computing horsepower into hardware without taxing power supplies or cooling systems. Most of the hardware heavyweights already sell servers just 1.75 inches thick. In the future, server racks will be able to hold hundreds of ultradense, and superthin, servers.

Separately, IBM unveiled its Intellistation R Pro workstation, the guts of which can be packed away in a storage area. IBM said this approach offers employees more room to work and gives companies the ability to pack more workers into high-rent but low-space areas, such as stock-trading floors. The Intellistation R Pro is only 1.75 inches high, allowing it to be plugged into a rack with up to 42 other machines.

Times are tough for Network Engines, the company that pioneered the superthin, two-processor server, but the company is banking on a new model to spur a recovery. The company introduced its second-generation product, the WebEngine Sierra. The product comes with advanced cooling and management features that CEO Larry Genovesi asserts will put Network Engines ahead of competitors.

World according to Intel
Intel executives are calling for a dramatic overhaul in the innards of PCs. The as-yet-unnamed new technology will supplant the existing PCI (Peripheral Component Interconnect) data pathway for accommodating devices such as sound cards and network cards. The new technology is important because it would require not only PC makers to redesign their systems from the ground up, but also any company making hardware that plugs into a PC.

The Pentium III will fade out of desktops this year, an accelerated exit that could rearrange the chessboard in the processor world. Although the chip will continue to appear in notebooks and low-end servers, the Pentium III will essentially be phased out of the desktop market by the end of the year. A new version of the Pentium III, code-named Tualatin, is set for release near the third quarter, but it won't be actively marketed for desktops.

Rambus, however, is something the chipmaker plans to keep. Intel will stick to its stated strategy for pairing Rambus DRAM, or RDRAM, with its high-end products such as Pentium 4. Although Intel plans to keep the often-criticized RDRAM technology at the top of its product lineup for PCs, it will look to a pair of memory alternatives to help reduce the price of Pentium 4-based PCs and reach its goal of driving that chip into the mainstream PC market.

Tough times
The slowing economy continues to have a negative effect on the tech sector.

Oracle issued a profit warning for its third quarter Thursday as executives blamed the slowing economy for sluggish sales of its flagship database software. Oracle shares fell sharply on the news and took a majority of software stocks down with them.

Gateway warned that it will post only break-even operating results in the first quarter--far short of analyst expectations--as it looks to cut prices and boost its customer satisfaction ratings. In addition, executives told financial analysts that the company's costs are too high and that it will drastically cut the number of computer configurations it sells. The direct computer seller is in the process of reducing the 23 million combinations of computers it sells to hundreds of configurations.

3Com issued a profit warning for its third quarter, citing the slowing economy and sluggish sales to telecommunications carriers.

Also of note
In an effort to offset its dwindling power over domain name registrations, VeriSign agreed to relinquish full control over the .org and .net suffixes to maintain rights to its registry for the .com domain...As the practice of overclocking becomes more widely used, the computer industry is more concerned than ever about the potential dangers from overheated machines--which can actually catch fire in the most extreme cases...As Microsoft appeals the antitrust verdict related to Internet Explorer, the company is inching toward delivering the first public preview of a stand-alone, next-generation browser...High-speed Internet access rate increases are on the way, industry analysts and executives say.