The week's news: Intel opens door to chip secrets

The deal between the chipmaking giant and graphics chipmaker S3 is in fact a 10-year cross-licensing agreement--a technology swap--that also gives Intel the right to buy shares of S3. But following a similar pact with Via Technologies two weeks ago, the upshot is that Intel-based parts will now be made by more and more different companies.

Cutting a deal
S3 plans to introduce new 3D chips, chipsets with 3D capabilities for low-cost PCs, and possibly even processors for handheld computers, taking advantage of its right to incorporate Intel's "P6" bus into its technology. The bus is the main data pathway between the processor and a computer's other components, and S3's license will likely mean Intel technology proliferates into the lower ends of the computer market.

Analysts predicted the agreement will encourage a long-awaited shakeout in the crowded graphics chip industry. It may also stave off legal problems for Intel, by weakening an antitrust case brought by the Federal Trade Commission which alleges that Intel limits access to its intellectual property , and likely removing claims S3 may have had against Intel's forthcoming 64-bit "Merced" processor.

En garde
Oracle and Sun Microsystems struck a licensing agreement that aims to create a new class of server computer "appliances" based on Oracle's database software and part of Sun's Solaris operating system. The "Raw Iron" project would dispense with a full-fledged operating system. Analysts see the initiative as intended to blunt Microsoft's push into the corporate computing market.

Shipments of the Linux operating system for servers surged by 212 percent in 1998, outpacing all other rivals, according to a research firm. Separately, database maker Informix and Corel, which makes WordPerfect, announced versions of their programs for the freely available operating system. WordPerfect for Linux itself will be free, in a bid to boost depressed market share.

Apple Computer's hot-selling iMac dropped toward the $1,000 mark in time for the holidays, as national electronics retailer Best Buy reduced prices without Apple's authorization. The Cupertino, California-based Apple is readying a new class of business desktops, code-named Yosemite, for debut at a January trade show.

A tangled network
Microsoft too will make a splash at next month's MacWorld, unveiling a new version of its Internet Explorer Web brower. IE 4.5 will support Sherlock, Apple's new search technology.

Rival Netscape Communications will launch an "offline" advertising campaign designed to attract users to its Netcenter portal. The $30 million campaign will include include TV, radio, print, and billboard ads.

The federal judge overseeing the Microsoft antitrust trial opined that America Online's planned $4.3 billion acquisition of Netscape could alter the case's outcome by producing a "very significant change" in the high-tech industry, and granted Microsoft's requests for documents related to the deal. Microsoft contends the deal proves market competition is vigorous.

For its part, Aol announced a joint venture with Cisneros Group that aims to introduce the world's largest ISP to the Latin American market. Initial service would launch in about a year. Star Media now dominates the region.

Touché
Busy Microsoft invested $200 million in Qwest Communications, as both companies try to make inroads into the burgeoning market for e-commerce and "mission-critical" business software applications and services. Unlike the thrust of "Raw Iron," the move promotes Windows NT, as a platform for digital subscriber line technology.

Rumors swirled of possible business deals involving General Instrument and Scientific-Atlanta, said to be targets of Philips Electronics or networking giants Cisco Systems and Lucent Technologies. GI's stock shot up, but analysts think a company such as Cisco is more likely to invest in a set-top box maker, rather than own the rapidly changing technology.

Meanwhile, Cisco will soon disclose plans to enter the consumer market by dipping into home networking. The goal is to spur sales of its high-end routing and switching equipment.

California's Public Utilities Commisson denied Pacific Bell's request to provide long distance service and agreed to set the costs the local phone company is allowed to charge for connections to its network.

At least they're talking
The Record Industry Association of American formed a consortium of record industry and technology executives charged with developing a Net standard for downloading copyrighted music, but critics said the Secure Digital Music Initiative undermines a perfectly good technology now in use, MP3.

Talks between the European Union and United States regarding an EU privacy directive are proceeding slowly, if they haven't broken down. The directive, promulgated in October and soon to be enforced, threatens to cut off transfers of personal data used for commercial purposes.

E-commerce companies in California are signaling their acceptance of sales taxes and increasing lobbying efforts in an effort to have a say. Chief executives from eToys, Onsale, Yahoo, and Excite signed off on the state's recommendation that online sales should be taxed in the same was as retail catalog sales.

Also of note
Amazon.com's shares zoomed past $300 for a time, based on an analyst's report the online bookseller's stock would reach $400 within 12 months ... Orders for chipmaking equipment have been approaching actual sales, healthy news for the beleaguered industry ... PC maker NEC effectively shut down its NEC Now direct sales effort ... Office supply chain Staples will create a standalone unit for its fledgling online store, and invest $10 million next year ... WebTV looks as if it will support the popular Real Audio Net standard after all ... Yahoo will experiment with downloading its online calendars and addrress books to Palm Pilots and other handhelds running Microsoft's Outlook ... Free email services run by Excite and Hotmail were each downed by failures resulting from server upgrades.