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Week in review: Google, the defiant one

Search giant rejects demand to turn over millions of search records related to federal defense of a Net porn law.

Federal prosecutors defending a controversial Internet pornography law are trying to force Google to hand over millions of search records--a request that the search giant is rejecting.

The Bush administration asked a federal judge to force Google to comply with a subpoena for the information, which would reveal the search terms of a broad swath of the search engine's visitors. Prosecutors are requesting a "random sampling" of 1 million Internet addresses accessible through Google's popular search engine, and a random sampling of 1 million search queries submitted to Google over a one-week period.

The Bush administration's request is part of its attempts to defend the 1998 Child Online Protection Act, which is being challenged in court by the American Civil Liberties Union. The ACLU says Web sites cannot realistically comply with COPA and that the law violates the right to freedom of speech mandated by the First Amendment.

An attorney for the ACLU said Microsoft, Yahoo and AOL received identical subpoenas and chose to comply with them rather than fight the request in court.

Google said in a statement sent to CNET News.com that it will resist the request "vigorously."

CNET News.com readers were divided on Google's actions.

"You'll let Google read your email to send you advertisements but the government can't request a random non-identifying sample of data to evaluate the effectiveness of its laws?" wrote David Arbogast in News.com's TalkBack Forum.

Other readers championed Google for its actions.

"Slowly we sit here while parents leave parenting to the government and the government seems to think it knows best what is good for me," Tom Eldred wrote. "Here's to Google for resisting."

On one level, the situation involves a straightforward question of whether the department's demands are too onerous and therefore not permitted under federal law. On another, the dispute raises novel questions about search engines' privacy protections and the relationship that four tech giants have with the federal government.

What does it all mean, and what happens next? CNET News.com prepared an FAQ to address some of your questions.

Meanwhile, U.S. senators on Thursday blasted what they called an "explosion" in Internet pornography and threatened to enact new laws aimed at targeting sexually explicit Web sites.

Senate Commerce Committee Chairman Ted Stevens, an Alaska Republican, lashed out at an adult-entertainment industry representative, saying that the industry needs to take swift moves to devise a ratings system and to clearly mark all its material as "adult-only."

A lawyer representing companies offering "lawful, adult-oriented entertainment" agreed.

"I think any adult producer would agree," said Paul Cambria, counsel to the Adult Freedom Foundation. It would just be a matter of organizing the industry, he added.

"My advice is you tell your clients they better do it soon, because we'll mandate it if they don't," Stevens said.

Wild, wild Web
Crime is big business on the Internet these days, and it seems to be getting bigger.

A popular advertising site came under a denial-of-service attack this week from blackmailers demanding a ransom. The Million Dollar Homepage site is battling a DoS onslaught that has escalated since it began last week, its owner said. The site, which successfully brought in $1 million by selling ad space for $1 per pixel, was launched by British student Alex Tew and gained notoriety for its unique approach to online advertising.

The blackmailers have demanded a ransom of $50,000, said Russell Weiss, vice president of technical services at InfoRelay, which operates the site. Tew and InfoRelay are working with the FBI on the case, Weiss added.

"There are clues that a Russian group may be involved, but we'll leave that assessment up to the FBI," he said.

Meanwhile, phishing attacks reached a new high at the end of 2005 after growing steadily all year, according to a new study. The number of unique e-mail-based fraud attacks detected in November 2005 was 16,882, almost double the 8,975 attacks launched in November 2004.

Phishing e-mails pretend to come from legitimate companies, such as banks and e-commerce sites, and are used by criminals to try and trick Web users into revealing personal information and account details.

The number of brands targeted increased by almost 50 percent over the course of 2005, from 64 to 93 percent in November. And attacks are becoming increasingly sophisticated, with a quarter of all phishing Web sites hosting keylogging malicious software.

But phishing is far from the greatest threat on the Net. Dealing with viruses, spyware, PC theft and other computer-related crimes , according to the FBI. The FBI calculated the price tag by extrapolating results from a survey of 2,066 organizations.

The survey found that 1,324 respondents, or 64 percent, suffered a financial loss from computer security incidents over a 12-month period. The average cost per company was more than $24,000, with the total cost reaching $32 million for those surveyed.

Often survey results can be skewed because poll respondents are more likely to answer when they have experienced a problem. So, when extrapolating the survey results to estimate the national cost, the FBI reduced the estimated number of affected organizations from 64 percent to a more conservative 20 percent.

Vista visit
Microsoft brought a little more focus to its operating systems as it gave developers access to a key piece of Windows Vista, months ahead of the operating system's release.

The company posted near-final versions of two software development technologies that are part of WinFX, the underlying programming model being introduced with Vista, which is slated to ship late this year. The release is a "significant checkpoint" on the road toward delivery of the company's new programming model because it allows developers to build and deploy applications on their core production systems, said Ari Bixhorn, director of Web services strategy at Microsoft.

WinFX combines Microsoft's existing .Net programming model with new tools for more easily linking software over the Internet, displaying data and creating business systems, Microsoft said.

Microsoft also released a security update for preview releases of Windows Vista that fixes the same image-rendering vulnerability found in earlier versions of the operating system. The release is believed to be the first security patch for Windows Vista. Updates are available for Windows Vista beta 1, released in July, and last month's Community Technology Preview release.

The patch fixes a vulnerability in the way the operating system's Graphics Rendering Engine processes Windows Meta File images. That bug was first discovered late last month as it was being exploited by cybercriminals to load spyware, adware and other malicious code onto the PCs of unwitting Windows users.

Aiming to keep its focus on Windows Vista, Microsoft is now targeting 2007 for its next Windows XP service pack update. In a posting to its "life cycle" Web site, Microsoft set a preliminary date of the second half of next year for the release of Windows XP Service Pack 3 for both home and professional editions. That puts its debut well past the arrival of Vista, which is slated for the second half of this year and later than both outsiders and some insiders had originally predicted.

"We will be releasing another service pack for XP over the course of the product life cycle, and we are tentatively targeting the second half of 2007 for release," a Microsoft representative said in an e-mail to CNET News.com. "However, right now our priority is Windows Vista--we'll have more information to share about the next service pack for XP after Windows Vista ships."

Earnings season
Silicon Valley gave mixed messages on the health of the tech industry this week.

Lower prices and lower-than-expected processor shipments dented Intel's earnings and revenue for the fourth quarter. The company also forecast slower growth in 2006.

CEO Paul Otellini said the fourth-quarter shortfall can be attributed in part to a shortage of desktop chipsets. The shortage, which began in the third quarter, prevented PC makers from building as many Intel-based PCs as they might have, he said.

The effects of the shortage will linger in the first quarter because now PC makers have excess supplies of some chips. This will likely dampen Intel's revenue in the current three months.

The same day, Internet bellwether Yahoo posted net income for the fourth quarter that rose from a year ago but was below analyst expectations. Yahoo met its internal guidance and gained market share against other portal rivals, including Google and MSN. However, net income came in lower than analyst expectations.

Advanced Micro Devices seemed unaffected by the kinds of woes that hurt its rival. AMD topped expectations for fourth-quarter revenue on the back of strong processor sales across desktops, notebooks and servers.

The real driver behind AMD's strong revenue growth was its processor unit. The Computation Product Group, which makes the company's Opteron, Athlon 64 and Turion processors, enjoyed a 79 percent increase in revenue compared with the total in the previous year's fourth quarter.

Apple Computer offered a mixed picture. After selling a bundle of iPods over the holidays, Apple reported better-than-expected earnings, but offered an outlook that was below some analysts' forecasts.

For the just-ended quarter, Apple's sales were a record, but they did not come as a surprise. CEO Steve Jobs announced at Macworld Expo last week that the company had about $5.7 billion in revenue for the December quarter. He also announced that the company sold 14 million iPods and 1.25 million Macs.

Also of note
Microsoft confirmed that there is a Wi-Fi security vulnerability in Windows XP, but it may not be fixed for as long as 18 months...With the next Itanium chip, Intel has abandoned the x86 interoperability feature it once banked on but that never proved successful...Following a wave of privacy concerns last week, Apple began prominently notifying customers about a new recommendation feature in its iTunes software, as well as spotlighting a simple way to turn it off.