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The week's news: Internet Explorer 5 launches

Microsoft launches Internet Explorer 5 in low-key fashion, with no major changes, but the new version be a key part of a Windows 98 upgrade due later this year.

Microsoft launched Internet Explorer 5 in low-key fashion. The latest upgrade includes a variety of new features, but no major changes.

But the browser will be a key part of a Windows 98 upgrade due later this year, chief executive Bill Gates said during the IE 5's unveiling. Microsoft will bundle its Windows operating system with its Web browser and a collection of bug fixes and application updates under the name of Windows 98, Second Edition.

Shifting market
The launch comes amid significant change in the browser market. On the legal front, the tactics that fueled its wildly successful bid for share have gotten Microsoft into serious trouble in a federal antitrust trial. Perhaps more important, IE's single largest customer, America Online, is on the verge of acquiring the competition, Netscape Communications.

From a purely technical standpoint, IE 5 may be best viewed as an incremental upgrade that refines much of the work done in Internet Explorer 4. New features include some innovative ideas on how to present Web content along with one or two others borrowed from the competition.

But often it's often perceived as a separate if not independent piece of software, IE 5 underscores Microsoft's commitment to forging stronger ties between Windows and browsing--even in the face of the legal issues that continue to surround the company's business practices.

Cheap and cheaper
A small, Seattle-based company lowered the PC price bar with a box that sells for only $299--and comes bundled with a year's Internet access. Microworkz doesn't expect the system to be profitable, but will instead depend on subsidies to sustain its business. The response was overwhelming.

Intel will release a 433-MHz version of Celeron at the beginning of next week. The company's latest low-cost processor will inevitably prompt a new round of chip price cutting.

The Santa Clara chipmaking giant also took the wraps off its new Xeon chip, another step in its plan to elbow in on the turf of high-performance processor companies. Intel boasts that the new chip, which runs at 500 MHz and contains up to 2MB of performance-enhancing cache memory, will put it in the same class as Reduced Instruction Set Computing (RISC) chips, the powerful processors that run many high-end corporate servers and workstations.

As ever, personal electronics devices dominated this week's CeBit trade show in Germany, although this year the presence of devices blending the computing, telecom, and Internet industries have been more evident than in the past. New-fangled handhelds and cell phones with Internet connectivity were a popular theme.

Toward Linux
Apple Computer took its first step toward the open source philosophy by declaring it will open up the "source code" to parts of its Mac OS X Server, in an effort to garner support from software developers. The company is inching toward the open source ideal to capitalize on the runaway success of the Linux.

Though they have a tightly knit relationship when it comes to the application server and database, SAP and Microsoft appear to be splitting up on the desktop operating system. EnjoySAP, a new platform-independent portal-style interface designed to make R/3 easier to use, enables users to access the Internet, download information about the competition, check on product delivery status, or do report distribution--all without ever using Windows. SAP estimates it can reach 10 million users within the next three years.

Also this week, SAP announced a team of industry heavyweights--including IBM, Compaq, and Hewlett-Packard--that will help the company throw its support behind Linux. Initially, the German software giant said it will support Red Hat's version of Linux for R/3 on Intel-based systems.

A group of PC and communications heavyweights including Microsoft, Intel, Hewlett-Packard, and Nortel Networks unveiled new technologies designed to carry voice, data, and Internet traffic for businesses. The alliance aims to bring voice networks to a wider array of customers through the use of technologies like Intel-based hardware and Microsoft's Windows operating system.

Compaq and Hewlett-Packard are simultaneously reorganizing their workstation divisions in similar ways--splitting them by performance rather than platform--in an effort to catch up with a changing market. In the past three years, workstation sales have been turned upside down as systems with technology from Intel and Microsoft have been outselling their Unix-RISC brethren. The duo are trying to adapt to a high-volume, commodity mentality without ceding the high-margin performance market.

Separately, graphics vendors unveiled new products and corporate strategies this week in a flurry of announcements that presages yet another bruising round of competition for 3D chipmakers.

Intel is stepping up its efforts to combat chip "remarking"--the practice of fraudulently disguising slower chips so they can be sold as newer, more expensive processors. The changes will make it more difficult for home users to goose the speeds on their own chips through "overclocking."

The Federal Trade Commission approved last week's surprise settlement with Intel. The consent order, made public this week, is being cast as a win for both sides. While it generally prevents Intel from witholding advanced product information and samples from customers over intellectual property disputes, it is significantly narrower than the relief the FTC originally requested.

Federal regulators required long distance companies to post details about their telephone rates on the Internet, allowing consumers to compare complicated calling plans. The decision stemmed in part from a consumer campaign pressing the Federal Communications Commission to make the information more accessible.

Three federal agencies--the Transportation Department Health, the Health and Human Services Department, and the U.S. Agency for International Development--are likely to miss a rapidly approaching White House deadline for all "mission critical" government systems to be Year 2000 compliant, a newly released report released shows.

Several members of Congress are planning to introduce new legislation that would officially bar federal regulators from imposing new charges on Internet access. In a letter to Federal Communications Commission chairman William Kennard, a group of GOP legislators asked him to support legislation definitively barring his agency from regulating Internet fees.

Backed by Gov. Tom Ridge, Pennsylvania state Sen. Melissa Hart introduced the Electronic Transaction Act to encourage the use of digital signatures, which industry regulators around the globe believe will bolster e-commerce.

A new beginning
Microsoft made a $30 million investment in high-speed Net access company Rhythms NetConnections, and will provide the company with a Microsoft Network-branded portal page for its business customers. The deal is Microsoft's first with one of the new DSL startup companies, and also the latest example of the software giant's push into broadband, which have previously been in the cable companies.

AT&T plans to revive a once-hyped local wireless phone project, yet the push may be as much about jump-starting negotiations with cable TV companies as it is about the technology itself. Current cable deals will allow AT&T to offer cable-based services in just 40 percent to 50 percent of the nation, while Armstrong has said he wants 60 percent to 65 percent national cable coverage.

Separately, with its TCI agreement deal completed, AT&T now is turning to the difficult task of upgrading its new cable TV network to handle telephone and high-speed Internet service. The futuristic bundle of communications services promised by AT&T requires a modern cable network, and the infrastructure acquired from TCI is widely viewed as among the most antiquated in the industry.

BellSouth rolled out a new Web site that it hopes will signal the first step toward subsidizing Internet access fees with Web advertising and e-commerce revenue. BellSouth Buzz aggregates content and Web services and adds a commercial focus, but also marks a renewed attempt to bring the company's print advertising partners onto the Web.

Netscape shareholders voted in favor of a much-publicized deal that will give them 0.9 shares of American Online common stock for each share of Netscape common stock. A vision for the combined companies will be unveiled next week. The stock has been trading at an all-time high, but it was a wistful day for those who followed the Internet pioneer since its inception. The company was largely responsible for creating the World Wide Web as a cultural and economic phenomenon.

Now that it's been bought by America Online, ICQ has been thrust under the spotlight of old Net issues, first for its controversial "dirty word" filtering and now for that monster of all virtual headaches: spam.

Also of note
Microsoft sent out the latest beta version of Office 2000 to technical testers ... PlanetRx opened its online pharmacy and also announced a marketing agreement with Yahoo ? The Federal Trade Commission this week met with privacy groups to discuss the implications of the controversial serial code that is part of Intel's Pentium III chip ? Dell Computer will install Linux technology on corporate PCs in a deal that could mark a broad new stage for the upstart operating system ? Under a termination agreement, USA Networks would be granted an option to buy up to a 17.51 percent stake in Lycos if their deal falls through ? Five-month-old NetZero, which provides its users with free advertising-supported Net access, said it has reached 500,000 registered users ? Magazine publisher Steve Forbes formally launched his presidential campaign on the Internet.