The week in review: The song remains the same

Companies behind the ubiquitous MP3 digital music format released this week an upgraded version of their music format called MP3Pro. Although the release will be limited, it will include a new player and "ripper," or file creator, that will allow music lovers to create near-CD quality digital music files using only about half the disc space previously required for MP3s.

Separately, Microsoft is weighing how much support it will offer in its upcoming Windows XP operating system for MP3s, which competes with the company's own Windows Media technology. Test versions of the new operating system have alternately included and excluded an encoder that would allow people to convert audio tracks from CDs to the MP3 format. A decision has not been made on whether an encoder will be included in the final version of Windows XP, scheduled to be released in October.

Regardless of what it settles on, Microsoft's presence in the online music arena looms powerfully enough to influence the biggest alliances in the business--even if the software giant hasn't struck big deals itself. Record labels have been wary of handing the company too much power over their online plans, and Microsoft has yet to broker the alliances that would let it offer access to the labels' full catalogs--as have Yahoo, Napster and archrival RealNetworks.

Amid all the competitive wrangling, what happened to the days of good ole' music swapping? Many disappointed Napster users are turning to Audiogalaxy, a relatively new alternative for free music downloads. Like Napster, Audiogalaxy filters copyrighted music from its system. In a twist, however, the company helps search off the network for music it refuses to host itself, guiding people to free copies of almost any popular song.

In other news, Vivendi Universal and Sony rechristened their joint online music initiative and appointed someone to lead the secretive venture as it races a key rival to market. Andy Schuon will become the chief executive of Pressplay, formerly known as Duet. Schuon previously served as president of Jimmy and Doug's Farmclub.com, an online music service created by Universal Music Group.

Feeling not-so-secure
Microsoft contritely acknowledged that its second attempt to fix an Exchange security hole went awry. Rather than fix the problem, and the security hole, the company's second attempt at a software patch included a bug that caused many servers to hang. The prolonged embarrassment comes at a tough time for Microsoft, as the company tries to hold onto its share of the server software market, partly by attacking Linux and other open-source software competitors.

A month-old flaw in Microsoft Word has opened up PCs to attack by a new Trojan horse. Dubbed "Goga," the malicious code poses as a Word document saved in rich text format but actually reaches through the Net to run a Word macro--a small program that runs within the application--saved on a Russian Web site. The Trojan horse comes as an e-mail attachment. When opened, the RTF file will link back to a Word template file on a Russian Web site. The file contains a macro, which will steal and upload information regarding the victim's log-in and password to the guest book of a second site.

Previously considered immune to viruses, Macintoshes are being plagued by a new mass-mailing virus. Called MacSimpson, the worm arrives attached to an e-mail message promising recipients access to secret episodes of "The Simpsons." Instead, those who open the attachment get a typical mass-mailing worm that uses AppleScript to infect Macs using OS 9.0 or 9.1 and sends itself across the Internet.

Software as savior?
Some analysts say advanced instant-messaging technology could help Microsoft break a string of mediocre-selling upgrades to its ubiquitous operating system. While Windows XP offers many performance improvements over earlier consumer Windows versions, such as better memory management and improved crash resistance, those attributes are often hard to sell to consumers, analysts say--but the new messaging software just might do the trick.

Windows XP might weigh heavy on PCs, however. Early adopters could find that their computers lack enough memory and processor speed to run the new operating system. Beta testers during trial runs of the new OS say they may have found Microsoft underestimated its recommended minimum configuration--a 300MHz Pentium II processor and 128MB of RAM (random access memory). The final version of Windows XP is expected to carry more stringent requirements.

Separately, Oracle this week released version 9i of its database software and introduced a new pricing plan. Oracle, which ranks first in market share for database software, has spent the first half of the year combating listless sales caused by the economic slowdown and renewed competition from IBM and Microsoft, which sell their products at much lower prices than Oracle. The new pricing arrangement is expected to bring Oracle's software pricing in line with pricing models from IBM and Microsoft.

In a world where semiconductor designers can't keep up with demand for their services, Hewlett-Packard researchers are working on letting computers design themselves. The company showed a glimpse of a technology that converts a computer program into a chip tailored to run that program--a method that bypasses laborious human fiddling with the abstruse rules of electronic circuit design. For now, though, the technology works only for some types of smaller chips.

Gadget crazy
One way of looking at Sony's launch of the eVilla is that the consumer electronics giant is late to a party that everyone else left because they weren't having fun. In the 18 months that Sony has been developing the Web-surfing device, a number of other companies have entered and pulled back from the market, including 3Com, Netpliance and Gateway, which still sells its America Online-powered unit but is rethinking its plans. Although market researchers remain optimistic about prospects for Internet appliances in a broad sense, analysts have pared expectations for devices that, like eVilla, resemble a desktop PC but are designed almost exclusively for Web-surfing and e-mail.

Making its own changes in the Net appliance market, National Semiconductor announced a new design for delivering increased performance to its Geode system-on-a-chip processors for appliances. The announcement comes after the recent demise of 3Com's Audrey, steep price cuts for Net appliances from Gateway and Compaq Computer, and a less-than-stellar track record for market pioneer Netpliance.

Basketball superstar Michael Jordan and Palm plan to announce on Monday a Jordan-edition Palm. The handheld maker has been struggling with slowing sales, a glut of its gear, and dwindling cash.

Also of note
Cable giant AT&T is changing its interactive TV plans and will now offer set-top boxes with fewer advanced services than previously planned...The Securities and Exchange Commission's Regulation Fair Disclosure is breaking open the last bastion of secrecy on Wall Street: the investment conference "breakout" session...Netscape Communications, an AOL Time Warner unit, released a new test version of its Web browser.

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