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The week in review: Yahoo kindles tech climb

Yahoo sparks an Internet stock rally by calming fears over the extent of the dot-com shakeout.

Yahoo kindled an Internet stock rally by calming fears over the extent of the dot-com shakeout.

The bellwether reported better-than-expected 2nd-quarter earnings, including advertising revenues more than double its year-ago figures. Several prominent financial analysts had recently downgraded the portal based on concerns that faltering start-ups wouldn?t be able to meet their obligations to Yahoo, creating a ripple effect.

Recovery or respite?
Yahoo promptly climbed from its calendar-year low, pulling up Lycos, eBay and Amazon as well during the latter half of the week. But the hard-hit sector has yet to hear from other ad-based companies and weaker Net businesses remain in peril, observers warned.

Separately, e-commerce software company Ariba surged after reporting sixfold sales growth and smaller-than-expected loses. Gateway too bettered estimates, by a penny, the company?s results suggesting PC makers will meet rosy expectations this quarter.

The other guy
Microsoft?s strategy for Web-based software omits Sun Microsystems in favor of its own Java-like product. The decision will likely complicate developers? efforts to bring Java programs to Windows. Separately, the giant is sending a near-final version of its 64-bit edition of Windows 2000 to software developers with prototypes of Intel?s Itanium processor.

A new series of benchmark tests show Rambus memory does not perform as well as cheaper, standard high-speed memory. The results are sure to rekindle debate. While proponents have maintained that Rambus-based memory can boost PC performance, detractors have said the benefits are minor, especially in light of its high cost.

Hewlett-Packard unveiled a high-end data storage system, capable of holding up to 24 terabyes of data and typically costing more than $1 million, as part of its continuing effort to dislodge leader EMC. That?s been difficult for server companies, whose storage systems are typically used in conjunction with their own computers. Like EMC?s products, HP?s new model is widely interoperable.

At the altar
WorldCom and Sprint called off their $120 billion merger in response to opposition from antitrust regulators in the United States and Europe. The American Justice Department objected to the proposed company?s degree of control over both the long-distance telephone and Internet-backbone market.

JDS Uniphase will pay $41 billion for SDL, a maker of fiber-optic network components, expanding its ability to make the parts found in equipment sold by the likes of Cisco Systems and Ciena. The move, one of the largest technology acquisitions ever, follows the company?s June purchase of E-Tek Dynamics for $15 billion. Fiber-optic technology lets a network operator send larger chunks of network traffic across its networks at higher speeds.

An e-commerce alliance led by IBM beat out an Andersen Consulting consortium for a contract to provide technology to one of the largest Internet marketplaces. The multiyear, multimillion-dollar deal will underpin, a business-to-business operation seeking to simplify trading between 22 retailers including Best Buy and Kmart and more than 100,000 suppliers and distributors. General Electric and Oracle also vied for the contract but did not make the final round.

PeopleSoft unveiled a suite of Internet-based business applications, two years in the making. Analysts have criticized the software maker for being late to introduce Web-savvy applications, as rivals Oracle and SAP have already released Web-based versions of their core enterprise software.

Big browser
A flaw in Microsoft's Hotmail program is inadvertently sending subscribers' email addresses to online advertisers. The problem crops up when people who receive HTML newsletters open messages that come packaged with banner ads. Similar ?data spill? problems have plagued Internet companies that make personal information available in URLs or Web addresses.

A widely used yet virtually undetectable means of tracking people's Internet surfing habits is joining its better-known cousin, the cookie, as the subject of several lawsuits. The technology, often called Web bugs or 1-pixel gifs, is an electronic tag that help Web sites and advertisers track visitors' whereabouts in areas online where banner ads are not present or on sites where people may not expect to be trailed. Ironically, while the federal government has already stopped using Web bugs, an FBI email surveillance tool drew fire from civil libertarians and privacy advocacy advocates. One ISP refused to install ?Carnivore,? which scans email for items associated with the target of a criminal probe.

Microsoft?s lastest browser came under fire from Web standards advocates. The newly released Internet Explorer 5.5 introduces shortcuts for Web developers that make adding page elements, such as calendars, as easy as inserting a tag; but these innovations and the company?s questionable adherence to basic industry standards for technologies like HTML mean that Web pages created to work for IE won't work with products from Netscape, Opera Software and other companies.

Also of note
SBC Communications plans to give PCs to customers who sign a two-year contract for its DSL service, which costs $40 per month ? America Online added RealNetworks server software for audio and video streaming to its internal network, tightening the bond between the two companies ? Separately, AOL scrambled to patch a hole that allows its Parental Control content filtering system to be subverted, enabling teens to access forbidden Web addresses simply by adding a dot ? One of the few points that connect the Internet's hundreds of networks was crippled for much of this week, forcing massive amounts of Internet traffic to shy away from the WorldCom-owned MAE West ? Hacker David Mitnick gained federal permission to work as a computer consultant or columnist, reversing a previous parole ban against such endeavors.