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The week in review: HP clears the way

One of the most costly and contentious tech mergers in recent memory clears its last hurdle this week, paving the way for HP to complete its $19 billion deal with Compaq Computer.

One of the most costly and contentious tech mergers in recent memory cleared its last hurdle this week, paving the way for Hewlett-Packard to finally close its acquisition of Compaq Computer.

A Delaware judge ruled that HP's shareholder vote was legal and dismissed Walter Hewlett's suit, which sought to overturn the vote. A three-day trial revealed there were doubts among some HP workers that the company's financial goals were achievable. But many trial watchers said Hewlett lacked the smoking gun that would prove his allegations.

Just hours after the judge revealed his decision, Hewlett abandoned his challenge to the merger, saying he would not further contest the outcome of the shareholder vote. Hewlett said that although he disagreed with the merits of the deal, he said he would now "do everything possible to support the successful implementation of HP's acquisition of Compaq and encourage others who have shared my views in the past several months to do the same."

The new HP will have approximately six months to establish itself in the marketplace, incoming company President Michael Capellas said, adding that the next big challenge lay in quickly bringing to fruition the company's plans to forge HP and Compaq into a single entity.

However, Compaq won't completely disappear. HP plans to change its ticker symbol on the New York Stock Exchange from its current "HWP" to "HPQ" to reflect the newly combined company. Compaq's former ticker symbol was "CPQ."

Executive exodus
Sun Microsystems President and Chief Operating Officer Ed Zander plans to retire this summer, the latest in a string of recent executive changes at the company. Zander, 55, will step down July 1 and will stay on to assist with the transition, among other things, for the rest of the calendar year.

The news comes as a surprise since Zander was among the most visible executives at Sun. Zander worked at the company for more than 15 years.

The move will create a substantial personality change for the server company. Zander was instrumental in attracting more temperate customers, such as defense contractors, retailers and manufacturing companies. In contrast, CEO Scott McNealy has been more inclined to concentrate on grand concepts than on the day-to-day details.

Telecommunications giant WorldCom also lost some top talent this week, as it hastily selected a new chief executive after the resignation of Bernard Ebbers. The brash executive who built WorldCom from a sleepy phone company into one of the world's top telecommunications companies resigned, bowing to a plummeting stock price and a government probe of company support of his personal finances. John Sidgmore was designated WorldCom's new chief executive.

While executive resignations are not new, management experts and executive recruiters say the turnover pace is likely to quicken in the next six to 12 months as the economy continues to sputter, stock prices remain depressed and companies continue massive rounds of layoffs. They're warning employees in the technology sector--still struggling to recover from the dot-com stock bubble of the late 1990s--to brace for a particular frenzy of senior-level resignations.

Security alert
A group of hackers defaced dozens of Web sites in the past two weeks and published sensitive data culled from the sites in what it says is an effort to increase awareness of online security risks. The group, which calls itself the Deceptive Duo, is in the midst of a multipart hacking campaign targeting different sectors of government and industry.

Each defaced Web page is replaced with a message identifying the group and its goal: "Locate and scan critical cybercomponents of The United States of America for vulnerabilities creating a foreign threat, while remaining undetected...Take necessary measures to ensure that the public is aware of The United States of America's lack of security. Include proof/documentation of infiltrated systems."

The latest and friskiest versions of the Klez worm were by far the most active computer threat last month. The Klez.g and Klez.h worms were responsible for 77.8 percent of all virus infections in April, according to a report.

The Klez.h worm surfaced in mid-April and quickly became one of the fastest-spreading pests to ever hit people's e-mail. Unlike previous versions of the worm, Klez.h poses an additional privacy threat by snagging documents from infected PCs as it spreads.

After years of reluctance, consumers are finally starting to bank online in substantial numbers--and hackers are wasting no time in preying on the trend. Law enforcement agencies and security experts agree that breaches in bank security are rising, but the number of serious incidents--and the risk to the public--remains largely unknown.

In a three-part special report CNET News.com examines the rising frequency of online bank break-ins, reveals the methods that hackers exploit and explores the most vulnerable financial links: Web services.

Sound off: Do you feel safe transmitting sensitive personal finance information across the Web? Write in and tell us why or why not.

Go go gadget
Aiming to lift its fortunes in the education market, Apple Computer unveiled the eMac, an all-in-one computer similar to the original iMac, but built around a 17-inch flat-screen monitor. The all-white desktop, which will be sold only to teachers, schools and college students, features a 700MHz G4 processor, a 40GB hard drive and 128MB of memory.

Because it uses a flat-screen CRT (cathode-ray tube) monitor, the eMac takes up roughly the same amount of space as the original iMac.

However, some college students eager to snap up the new eMac were surprised at the price tag and lack of availability of the lower-priced model when they tried to buy one this week from Apple's online store.

Panasonic launched its 4-in-1 combination audio-video device, melding a camcorder, digital camera, digital audio player and a voice recorder into a single device. The SV-AV10 comes with a 2-inch liquid-crystal display that flips out like those on most camcorders, making it easier to view what is being recorded. The device can play back MPEG-4 video and display digital still images as well as play MP3 files.

Sony plans to play a different tune this summer, with the introduction of a notebook that can act as a music studio on the go. The company's Vaio PCG-NV170 includes a recordable CD drive and pre-loaded music editing and management software, as well as a subwoofer small enough to fit into the floppy drive.

The notebook will include a 15-inch display, a 1.6GHz Intel Pentium 4-M, 256MB of RAM and a 30GB hard drive. Other models, some of which will be available direct from Sony, will offer faster processors, more memory and built-in wireless networking.

Also of note
Federal regulators have set down rules to solve a problem for 911 call centers and people who use special cell phones to call them...RealNetworks said it inked a multiyear partnership with Sony, extending their long-held relationship to include digital audio and video distribution to home-networked devices...Advanced Micro Devices gained a bit of ground on Intel in the first quarter, bolstered in part by growth in the markets for notebook and server chips, according to a research study...Dell Computer has opened up relationships with a wider variety of memory manufacturers to curb the effect of recent price hikes in memory chips...Tech workers and employers alike could wind up paying more U.S. taxes next year under a plan to impose new taxes on certain stock incentive programs widely used in the high-tech industry...Red Hat said that Jim Henson's Creature Shop is using its version of Linux to develop the animatronic performance control system--a technology that will make a digital character perform just like a puppet.

Want more? Check out all this week's News.com headlines.