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HolidayBuyer's Guide
Tech Industry

Week in review: SCO's big score

Microsoft surprises the tech world by agreeing to license cash-strapped SCO Group's Unix technology, which is at the heart of a copyright fight over Linux.

Microsoft surprised the tech world by agreeing to license cash-strapped SCO Group's Unix technology, which is at the heart of a copyright fight over Linux.

The software giant announced that it will license SCO's Unix patents and the source code, which is at the heart of a $1 billion lawsuit between SCO and IBM. Big Blue, which is a major backer of Linux as an open-source alternative to Microsoft's Windows, has dismissed SCO's claims and says it has a valid license to Unix technology.

Microsoft has repeatedly labeled Linux as a threat, partly because of its low cost. The license ensures that Microsoft's software complies with SCO's intellectual-property rights and that the company can ensure compatibility with Unix software, according to a Microsoft representative.

The licensing agreement lends heavyweight backing to SCO's intellectual-property claims and helps Microsoft combat Linux, a growing marketplace threat to its operating system. The deal also appears to lend credence to SCO's charges that large parts of Unix source code have been copied into Linux. Microsoft's move may have a snowball effect, causing other companies to also strike licensing pacts with SCO.

The general manager of SCO's intellectual-property division said that the Microsoft licensing agreement reflects the strength of its intellectual-property suit against IBM. Other industry experts said the Microsoft deal might be more notable for its public relations value. "The announcement really serves two purposes," one analyst said. "First, it temporarily allows Microsoft to steal the moral higher ground from its Linux competitors; and second, it's a big fork in the eye to IBM."

Desktop debuts
PC makers and chipmakers had coming-out parties for new hardware.

IBM kicked off the party by introducing a new line of desktops for businesses called ThinkCentre, in accordance with the company's "Think" vision for PCs that are easier to use and therefore should help companies save money. ThinkCentre desktops combine elements of the retiring NetVista desktop PCs with some new design enhancements and IBM's ThinkVantage technologies--a special home-brewed software collection designed to make it easier for businesses to address tasks such as setting up a new PC.

The new desktops are based on Intel chips, including the chipmaker's new 865 chipset, which also made its official debut this week. Dell Computer, Gateway and others released PCs that feature the new chipsets, which are expected to enhance the desktop experience.

The 865 series of chipsets, formerly code-named Springdale, accelerates the flow of data between the processor and various computer components, leading to richer graphics and better performance from applications such as audio- or video-editing programs. The new systems will start around $799 with a monitor included. Dell and IBM are putting the new chipsets in PCs that are around 60 percent smaller than standard desktops.

Sony Electronics is hoping to join in the celebration with six new desktop PCs that it hopes will revive a business that has recently stalled. According to a report this week from research firm ARS, the consumer electronics giant has a half-dozen PCs in the works that will target the middle and high ends of the market.

File swapping's new spin
A new all-you-can-eat music download service that claims to take advantage of a loophole in Spanish copyright law launched this week, piggybacking on a popular file-swapping network for distribution. Puretunes is the second Spanish Web service to try offering access to a vast and otherwise unavailable catalog of music online without directly securing the record labels' permission.

In an apparent bid for publicity--and in what will certainly further spark record companies' ire--Puretunes' first affiliate distributor is Grokster, the file-swapping software company that recently won a clean legal bill of health from a Los Angeles federal judge.

The original file-swapping service may be resurrected, as Roxio announced plans to buy the Pressplay online music service and merge it with another recent acquisition, the long-muted Napster. Roxio, a developer of CD-burning technology, will pay about $39.5 million to Universal Music Group and Sony Music Entertainment, the joint owners of Pressplay.

Roxio expects to spend $20 million to relaunch Napster, according to the company, and will incur negative cash flow until the new service gains popular appeal--though that's not guaranteed. Roxio pulled Napster from the cut-out bin in November when it bought the service's assets from German media giant Bertelsmann for $5 million.

Also of note
The company formerly known as WorldCom took another step toward corporate normalcy with the filing of a $500 million settlement proposal hammered out with the federal government...A new mass-mailing e-mail worm feigning a Microsoft.com origin was spreading rapidly. Antivirus vendors say it can also spread via a local area network and can install "spyware" on a victim's PC...The latest wireless networking specification is on track for standards approval, which should open the door for further adoption of the already popular technology...America Online began offering its members an entertainment e-mail service--the Internet giant's latest move in its campaign to keep subscribers onboard.