The week in review: Oracle in hindsight

Just over a year ago, on the last day of its 2001 fiscal year, the company inked a multimillion-dollar contract with the state of California. While the salespeople associated with the deal likely toasted their good fortune at the time, apparently no one at the company predicted the storm of negative publicity the deal would generate in subsequent months--or they would have kept the bubbly on ice.

The $95 million, no-bid contract has been panned by state auditors, has cost some state employees their jobs, and has drawn harsh criticism from a legislative audit committee. This week, the crisis erupted anew when newly released e-mail showed that an Oracle lobbyist encouraged the company to line the pockets of key state politicians to keep the contract intact.

In January, as questions mounted about the contract, Oracle lobbyist Ravi Mehta asked Robert Hoffman, director of legislative affairs at the company, to "make contributions to a number of individuals who are presently in office or running in safe seats and will be elected to the California legislature next year."

Specifically, the memo lists nine state politicians, summarizes why they are important to Oracle, and recommends how much money they should receive. For example, the memo notes that one candidate for the assembly will "be an ardent supporter of Oracle when elected."

The company responded that it never acted on the memo and has severed ties to Mehta. "I think in hindsight it was probably a mistake" to have Mehta doing sales and lobbying work for the company, said Oracle vice president Ken Glueck.

Meanwhile, Mehta was subpoenaed to testify on Thursday but he refused, citing a state statute based on the Fifth Amendment right against self-incrimination.

Earlier in the week, the audit committee released a stack of documents, including e-mail discussing how to present now controversial cost-savings estimates.

While Oracle was deflecting critics in its home state, the company was busy extending its global operations: It will hire an additional 2,000 engineers in India and it has launched a Chinese version of its popular online resource center.

Covered in bugs
Another week, another spate of patches, hacks, flaws, bugs and viruses.

Microsoft started the week by acknowledging it will more quickly retire old code in its Windows operating system and other software as a result of the company's four-month-old "trustworthy computing" initiative.

The move followed last week's warning that a serious vulnerability in Microsoft's Internet Explorer occurred in the software supporting a decade-old protocol called Gopher that has rarely been used since the World Wide Web became popular.

More bad news came later when the company posted three advisories on its Web site detailing several recently discovered flaws, one of which was deemed critical for Windows NT and 2000 servers.

And antivirus companies warned of a new virus that communicates through digital images. Dubbed the first "JPEG infector" by security company Network Associates, the W32/Perrun virus has two parts: infected JPEG images that contain the virus' payload and a viral program that extracts the code from the images and infects other JPEGs on the system as they are opened.

On a more benevolent note, a Swedish game programmer won the race to discover the password to a Norwegian history museum's database. The password had been lost when the database's steward died without revealing it.

It's in hand
Remember when convergence was a technology buzzword? Well, guess what--in the handheld market, it still is. Handheld makers, faced with sinking sales, are searching for the next best thing to get consumers interested in spending more for meatier devices.

Handspring recently released its line of Treo communicators that can make phone calls, surf the Web and send e-mail. A start-up called Danger is following that theme with its own all-in-one device called the Hiptop. Expected in late July, the device will be priced around $200--much less than most combination devices on the market.

But the start-up has got its work cut out for it--even the leading handheld makers are struggling. Palm this week was looking for a boost following the release of the latest version of its handheld operating system. Palm OS 5 is designed to pave the way for hardware makers to create Palm OS handhelds using more powerful processors based on chip designs from England's ARM. The OS also adds improved security, sound and networking features.

Price is still a sticking point with many consumers, as handhelds increasingly incorporate flashier features but still remain somewhat expensive. Palm CEO Eric Benhamou, however, says Palm is working on a new line of devices that could include a handheld that would sell for $100. Benhamou said Palm can design a product to be sold at that price and still meet its profit-margin targets.

CIOs: Their hopes, needs and fears
What keeps your chief information officer up at night? In a series of exclusive interviews, CNET News.com talked to the technology chiefs of a number of Fortune 100 companies to discover what they think will bring the market back around. The future of technology--who buys it, and how it's used--is in their hands.

Also of note
The future of KPNQwest's European network was still up for grabs as of Friday, as employees threatened to walk out if a buyer was not found...Investors in online payment service PayPal decided to sell shares in a secondary offering, while battling legal suits on the side...Microsoft and state trustbusters delivered their last major legal filings in a hearing designed to determine remedies in the case. The judge in the case is expected to submit her own versions of the filings for her ruling, expected late this summer...And eager to get Web services developers to conform to one of its key recommendations, the Web's leading standards body, the World Wide Web Consortium, released a set of tests for XML processors.

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