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The week in review: Microsoft on the move

Just a week after dodging the breakup bullet, Microsoft is showing signs that it is trying to create its own remedy, but some problems may hold it back a little.

Just a week after dodging a breakup bullet, Microsoft is showing signs that it's willing to concede some points that got it into legal hot water--but critics warn the concessions might only be lukewarm.

The software giant changed the licensing terms it imposes on PC manufacturers to install its Windows operating system, responding to a recent ruling in its antitrust case. In a dramatic shift, Microsoft will allow PC makers to remove Internet Explorer icons and entries from the Start menu and provide the ability to remove user access to Internet Explorer in the new Windows XP. The company also will extend this to Windows 98, Windows Me and Windows 2000.

Microsoft's licensing changes come as some state attorneys general have raised concerns about Windows XP, the new version of the operating system, which could become the focal point of future proceedings in Microsoft's antitrust case.

Though the more lax licensing requirements may seem a monumental shift from previous restrictions, Microsoft has left plenty of room to retract the changes through other arrangements, such as co-marketing deals for promoting Windows XP.

"It is an important first step, even if only a tiny one," said Bob Lande, an antitrust professor at University of Baltimore School of Law. "On the other hand, this only addresses the browser. But that war is over. What do any of these concessions mean when Netscape is on life support? It's a public relations move."

Later in the week, Microsoft settled its antitrust case with New Mexico, eliminating one of the 19 states participating with the Justice Department in the landmark lawsuit. As part of the agreement to drop the case, New Mexico will receive reimbursement from Microsoft for legal fees and other costs incurred during the case. The announcement shocked legal experts and other states.

Late Friday, the government asked an appeals court to issue an order promptly moving the Microsoft case back to the trial court. If honored, the request would mean that the government could go forward with the case immediately rather than waiting until mid-August. Experts saw the move as a possible sign that the government could seek some kind of injunction against Microsoft before Windows XP ships in October.

Also this week, the company ran into problems while delivering its preview version of Windows XP. More than a week after its release, many of the 100,000 testers who plunked down $10 for the right to download the approximately 500MB file said they had not received the e-mail containing a user ID and password that would allow them to do so. Microsoft also delivered the wrong passwords to some people, while a server glitch allowed others to download the preview for free.

Apple bulks up
Ahead of Macworld New York next week, Apple Computer may be planning some hardware changes. Supplies of Apple's iMacs have been dwindling at resellers and distributors. Apple's online store now lists a 10-day wait for all iMacs, except the low-end $899 model. Apple usually lists a one-day time frame for shipping its standard models.

The 10-day wait would postpone shipments until after Apple CEO Steve Jobs' July 18 keynote address at Macworld, a forum Jobs often uses to unveil new models. And such a time frame would give computer buyers the chance to change their orders based on any announcement Jobs makes.

Apple's Power Mac G4 Cube achieved in death what eluded it in life: demand. The 8-inch, cube-shaped machine, which remained in oversupply throughout its short life, has quickly disappeared from most store shelves since Apple confirmed that it was pulling the plug. Apple immediately removed the Cube from its online shop, and its retail store in Virginia sold out two days later. Other retailers report a similar rush to grab one of the last new Cubes.

Apple recalled 570,000 power adapters used on some older PowerBook models after reports that the brick-shaped units can overheat, creating a potential fire hazard. The recall affects cords for the PowerBook G3 notebooks shipped from May 1998 until March 2000, but not those used for the iBook consumer laptops or the newer Titanium PowerBook G4. Apple is providing a free replacement power adapter. An Apple spokeswoman would not say how much the recall will cost the company. But the power adapters sold for $69 when purchased separately from a computer, she said.

Desert showdown
Las Vegas played host to two separate security conferences this week--one for people who guard computer systems, another for those who break into them.

System administrators and hackers, CIOs and script kiddies gathered in the desert to trade information, swap stories and take each other's measure. At the Black Hat Briefings security conference at Caesar's Palace, security experts taught network administrators and information-technology managers how to protect their critical systems.

A new way to attack wireless networks underscores the lack of security for PC owners using the airwaves to connect their computers, said security experts at the Black Hat Briefings conference. Tim Newsham, a researcher for security firm @Stake, presented the details of weaknesses in the password system of wireless networks that could lead to a break in security in less than 30 seconds. The flaw is the third to be uncovered in the so-called Wired Equivalent Privacy, or WEP, protocol that supposedly secures wireless networks.

The next generation of computer worms will be stealthier, more targeted and harder to defend against, a security expert predicted. "They are adaptive; they are evolving," Jose Nazario, a researcher for computer-security group Crimelabs, said of worms, malicious, self-replicating programs that have become a favorite tool of online vandals.

Nazario called today's viral code the equivalent of "primordial ooze." While malicious code--such as the Love Bug, Hybris, Ramen and 1i0n--has spread widely, such programs are less evolved than single-cell organisms. In the future, Nazario expects more complicated and effective programs that will be used to attack specific companies and pieces of the telecommunications infrastructure.

AT&T's troubled legacy
Months into a plan to split up the former high-flying Wall Street titan, AT&T still seems to be under constant attack.

Comcast, a major cable television operator, made an unsolicited offer worth $44.5 billion in stock to buy AT&T Broadband, the communications giant's cable unit, and assume $13.5 billion in AT&T debt. The offer follows months of negotiations between Comcast and AT&T, which is in the process of splitting its company into four separate businesses. Spinoff AT&T Wireless began trading Monday.

The soap opera that is AT&T took another surprising turn when John Malone, the telecommunications giant's largest individual shareholder, abruptly resigned from the company's board of directors. Malone, who originally planned to leave AT&T's board in August when his Liberty Media Group business is formally separated from AT&T, was unimpressed by Comcast's unsolicited $40.5 billion offer for AT&T Broadband.

Industry and financial analysts said Malone's resignation could mean that he and other well-heeled investors will soon make an offer of their own, raising the price tag for AT&T Broadband by offering at least one other suitor to compete with Comcast for the rights to the nation's largest cable network.

AT&T spinoff Lucent Technologies plans another round of layoffs in the coming months to help it save more money. Lucent Chief Executive Henry Schacht told employees that the telecommunications equipment maker will need to slash additional jobs by the end of September, a Lucent spokesman said. Lucent also announced that 8,500 employees had taken a voluntary early retirement package to help the company cut costs.

Lucent has been ravaged by the economic downturn and has been restructuring, undergoing changes in its corporate structure, executive turnover and the selling of manufacturing plants. The company, which has about 104,000 employees, announced layoffs of 10,000 employees in January.

Also of note
Troubled Webvan has ceased operations and plans to file for Chapter 11 bankruptcy protection... Intel has stopped shipping its top-end server chip because of a bug that could cause servers to crash...Letting even one copyrighted song slip through Napster's file-sharing system is unacceptable, according to a federal judge on the landmark copyright case...Web standards advocates are declaring victory in their battle over browsers, but as they turn up the heat on their next adversary it's clear that their longstanding crusade on behalf of elegant design principles is far from over.

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