Week in review: Chips down for Comdex

Once the biggest event on the tech calendar, the computer trade show won't make its annual November appearance this year, a victim of the growing interest in shows emphasizing consumer electronics and specialist IT gear. Organizer MediaLive International said it plans to give Comdex a breather after years of falling attendance by both attendees and vendors.

MediaLive said Comdex, which has a long-term contract with the Las Vegas Convention Center running through 2007, would be back in 2005. Key to that return, however, is the ability of a newly formed advisory board comprising major vendors to rally support for the annual conference.

Some tech executives said the show was already long past its freshness date. P.G. Bartlett, vice president of marketing for specialty software maker Arbortext, said his company gave up on Comdex in the late 1990s, as the show's broad audience made connecting with potential customers a hit-or-miss proposition.

"A lot of the people who come to the Comdex booths are trick-or-treaters rather than serious buyers," he said. "If the density of potential buyers is low...it's just not worth it."

On the Net
Popular file-trading networks such as Kazaa and Morpheus would be outlawed under a new bill that enjoys broad support from top Democrats and Republicans in the U.S. Senate. The legislation says "whoever intentionally induces any violation" of copyright law would be legally liable for those violations, a prohibition that would effectively ban file-swapping networks and could also imperil some consumer electronics devices.

Foes of the legislation, including civil liberties groups and file-swapping network operators, are alarmed that the measure enjoys strong support from prominent politicians of both major parties. Violators could be punished with civil fines and, in some circumstances, lengthy prison terms.

The instant-messaging wars heated up as Yahoo began blocking Cerulean Studios' Trillian software from communicating with its instant-messaging service in its latest step to fence its popular client from third-party integrators. Like previous statements, the company said the block is meant as a pre-emptive measure against spammers from its Yahoo Messenger service.

Just a few hours after Yahoo changed its instant-messenger protocols, Cerulean issued a patch to allow Trillian users to connect again with users of Yahoo's messaging program. For people who use popular third-party messaging clients such as Trillian, or smaller services such as Gaim, the reaction was instantaneous and negative.

Speculation began flying about whether Yahoo's true intention was to battle "spim," or instant-messaging spam, currently a minor issue.

"This is just Yahoo's attempt to stifle progress," one person wrote on CNET News.com's message board. "Trillian brings the IM worlds together. Why does (Yahoo) keep splitting it apart and saying it's to increase 'security' on their network?"

Another change in the IM landscape came when America Online announced it would no longer offer its flagship instant-messenger software for businesses, as the so-called enterprise IM segment appears better suited to more-established applications vendors.

The announcement that AOL is ditching its AIM Enterprise Gateway package comes only days after Yahoo, one of AOL's closest competitors, said it was pulling the plug on its own enterprise messaging software. AOL said it will transfer existing users of its applications to a similar program offered and maintained by IMLogic, which previously designed and supported features of the Internet service provider's enterprise messaging.

Oracle's fight
The Justice Department's case against Oracle entered its third week with videotaped testimony from Oracle Chief Executive Officer Larry Ellison revealing that Siebel Systems and BEA Systems are on the company's wish list of potential acquisitions.

"Tom Siebel came to my house and tried to sell me Siebel," Ellison said, adding that he would put the company as his next choice if Oracle is unsuccessful in its bid for PeopleSoft.

Oracle laid out the pros and cons of nine potential acquisitions, offering in court documents a rare glimpse into the software maker's merger mindset when sizing up potential deals. Sybase was one of the nine companies on an April 2003 list of acquisition candidates presented to the company's board of directors last year. Other possible targets included BEA Systems, Lawson Software, Cerner, Business Objects and PeopleSoft. Documentum, SCT and J.D. Edwards were also on the list, but have since been acquired by other companies.

The proposed merger had Microsoft worried that it could lose ground in the database software market if Oracle acquired PeopleSoft, and that fear spurred Microsoft to discuss a merger with SAP last year, according to testimony. The software giant also briefly pondered taking a minority stake in PeopleSoft to help it fend off Oracle.

"Thinking about this PeopleSoft bid by Oracle made me wonder if we should approach them and suggest a minority investment to bolster their independence in return for a modest platform commitment," Microsoft Chairman Bill Gates said in an e-mail to CEO Steve Ballmer the day after Oracle announced its PeopleSoft bid.

Oracle contends that Microsoft plans to enter the market for "high-function" business applications, a move that would act as a check on its market power if it were to combine with PeopleSoft.

But even a software giant like Microsoft can't be a big presence in every market, a company executive countered Thursday. In a videotaped deposition, Orlando Ayala, senior vice president of Microsoft's server software and other products for small and midsize businesses, said the company does not plan to enter the business applications market for large corporate customers in the near future.

"These are sales that take a lot of time and resources," said Ayala.

Big iron's big guns
A U.S. Army contractor has purchased a $5.8 million, 1,566-server supercomputer from Apple Computer, a real-world cousin to an academic system that briefly appeared high on a list of the most powerful machines. Colsa is buying a larger system called MACH 5 to run Army simulations of the aerodynamics of flight much faster than the speed of sound.

System X, which vanished from the most recent list for upgrades, had sustained performance of 10.3 trillion calculations per second, or "teraflops." The Colsa system, made of dual-processor Xserve G5 machines, is expected to reach about 15 teraflops when it's up and running this fall.

Meanwhile, IBM regained dominance on a list of the 500 fastest supercomputers and has also landed two unusual prototypes in the top 10. Of the systems on the latest Top500 list, Big Blue built 224 and Hewlett-Packard built 140, giving IBM back the lead it lost in 2001. Two new systems, ranked No. 4 and No. 8, are prototypes of Blue Gene/L, a system that uses vastly less space and power than its competitors.

CNET News.com special focus
A three-part special report examines how the Seoul government and national conglomerates--on the brink of financial collapse only a few years ago--have battled back to become a major force in the global technology economy.

Also of note
Security researchers warned Web surfers to be on their guard after uncovering evidence that widespread Web server compromises have turned corporate home pages into points of digital infection...Microsoft said that it will boost storage limits in its Hotmail Web e-mail service, a move intended to counter similar steps taken by rivals Google and Yahoo...A security researcher warned of a "critical" flaw in a widely used piece of game software that could let attackers take over vulnerable PCs...The Recording Industry Association of America launched a new round of lawsuits against online music swappers, targeting 482 individuals around the United States...A judge in California dismissed approximately 50 toxic chemical lawsuits filed by former IBM employees against the computer giant, following a round of court-ordered mediation.