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Week in review: Apple secrets on the record

Apple Computer's effort to seal product-secret leaks may prove to be a publicity dam break.

Apple Computer's effort to seal product-secret leaks may prove to be a publicity dam break.

A lawsuit filed this week highlighted rumored details of the company's next iBook notebook computer. Apple alleges that an unknown individual posted information online about the company's new optical mouse and dual-processor PowerMac before the products' introduction last month.

Apple also said that individual, who allegedly goes by the name of "worker bee," posted information last month about a third product the company has yet to introduce. Court documents have shown that the third product appears to be a new version of the iBook, with a faster processor.

Apple subpoenaed Yahoo to disclose any information the leading Net portal had on "worker bee." The anonymous poster allegedly put photos of the mouse and PowerMac on two GeoCities Web sites; GeoCities is owned by Yahoo.

Separately, Apple's PowerMac G4 Cube and several of the new iMacs are in short supply at distributors Ingram Micro and Tech Data, according to sources. While high demand is a factor, so is Apple's practice of not shipping systems to distributors before the official product launch. This helps Apple maintain secrecy about new products, but it prevents stores from getting computers right away.

The shortage comes at the dawn of the back-to-school season, which is typically the second-biggest period for PC sales and often Apple's busiest season.

The power of Napster publicity
A federal judge's order last week to shut down Napster helped increase the music-swapping service's traffic by 92 percent. The number of people visiting rose to 849,196 the day it was to close, according to Nielsen/NetRatings. The day before the shutdown order, Napster had 443,070 visitors.

While the record industry fights Napster, other businesses are getting an indirect boost from the popularity of the music-swapping software. Electronics companies that produce CD burners or portable MP3 players are cashing in on the growing use of Napster and other related MP3 file-swapping software.

Napster's appeal of a court-ordered shutdown grants the company more time but little room to maneuver in its clash with the recording industry. But legal experts said a settlement is unlikely given the company's inability to pay for it. In addition, the company faces a serious challenge in cutting a deal that would pass muster with millions of people who have flocked to the service in search of free music.

What's in a name?
Hollywood agent Michael Ovitz is lending his entertainment credentials to another Silicon Valley start-up. Lynx Technology Group, Ovitz's investment and consulting firm, announced an alliance with Web aggregator to help push its technology with media companies. For Lynx, the venture is the latest in a string of alliances with more than a dozen tech companies, including natural-language search engine Ask Jeeves and "peer-to-peer" file-sharing start-up

Highly regarded investors and media giants Paul Allen and John Malone invested $190 million in move that is considered a vote of confidence for the company's beleaguered stock and perhaps the entire online travel sector. Allen's Vulcan Ventures and Malone's Liberty Media will buy 8 million shares of Priceline stock from founder Jay Walker.

Palm has tapped supermodel Claudia Schiffer to introduce the Palm Vx Claudia Schiffer Edition, which resembles a typical Palm V but sports a blue brushed-metal case. Starting this fall, Schiffer will sell the device exclusively through her Web site. The model and aspiring actress is "personally selecting her favorite add-on software applications to include on a CD that customers can use to install the programs."

Surf's up and down
Time Warner signed a letter of intent to carry Juno Online Services, an outside Internet service provider, on its high-speed cable network. The agreement marks the first time Time Warner Cable has offered to carry an outside ISP. It also allows Juno to offer a complete service including high-speed access, content and applications.

Fry's Electronics--a retailing mecca for tech geeks in Silicon Valley--has quietly launched a long-awaited Web site that sells only high-speed Internet access. was months in the planning before the company settled on a deal with Covad Communications, a provider of high-speed Internet connections.

In a largely anecdotal study, International Data Corp. concluded that free Net services aren't worth the hassle. The report added another voice of doubt to the sector, following the recent failures of free services Freewwweb and WorldSpy. Analysts agree that the free ISP market is undergoing a shakeout and that providing services equal to for-pay competitors is crucial to survival.

The delay of AOL Latin America's public offering splashed cold water on the region's emerging Internet market and has raised questions about the Internet leader's efforts abroad. The joint venture between Venezuelan media giant Cisneros Group and America Online slashed its IPO price to $8 to $10 from its previous $15 to $17 range and delayed its IPO. The company originally filed to raise $575 million; the share cut pushed the value down to $250 million.

A better plan
Apple has not capitalized on one of the hottest options for PCs today: the CD-RW drive. The drives, which can be used to burn-write CDs, have become a hot-ticket item for consumers who want to record MP3 files or download tunes from the Internet. Hewlett-Packard, among others, has helped jump-start consumer PC sales by incorporating CD-RW drives into a wide range of systems. By contrast, Apple does not offer any computers with a built-in CD-RW drive.

Corporate customers investing in Windows 95, 98, NT or 2000 may be buying more software than they need. Confusing and ornate contractual terms in Microsoft's licensing agreements are forcing many to buy two copies of Windows 2000 for the same computer or to invest in additional upgrade packages, a report finds.

"Clients are calling us and saying, 'Microsoft is insisting we buy upgrades for Windows versions we already got with the machines,'" a Gartner analyst said. Not so, says Microsoft, which argues that its customers and Gartner misunderstand the rights granted by its software licenses.

Microsoft quietly released the first collection of Windows 2000 bug fixes, a move that could help spur adoption of the corporate operating system. Availability of the service pack is expected to be an important event for Microsoft. Many industry analysts had recommended that the bulk of businesses wait until the release of the first service pack before moving to Windows 2000.

A pricing glitch at's toy store allowed customers to place dozens of orders for goods that were mistakenly discounted 50 percent or more off Amazon's regular prices. Some customers posted the discounts on message boards such as those on, which led to more orders. The Internet retail giant has since moved to cancel many of the orders, upsetting some customers.

Dot-com drama continues as yet another e-tailer struggles to keep its doors open. In many ways, is an irresistible metaphor for the hard times that have befallen companies in the Internet economy. A CNET special report reveals a blueprint for dot-com disaster, a company obsessed with the belief that an IPO would solve its mounting problems while drumming up sales when it was ill-equipped to handle the business it already had.

Other news to note
Microsoft has asked a federal judge to dismiss 62 of the more than 130 private antitrust suits pending against the company...Ray Lane, who resigned last month as president of Oracle, joined the board of directors of Sheer Networks...Creative Technology launched its Nomad Jukebox, an MP3 player capable of storing up to 6 gigabytes of multiple audio file formats such as WAV and MP3.