The week in review: Slimming down

The slowing economy continued to pound high-tech giants, with many revising earnings estimates and laying off large numbers of employees.

Steven Musil Night Editor / News
Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
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Steven Musil
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The slowing economy continued to pound high-tech giants, with many revising earnings estimates and cutting large numbers of employees.

Compaq Computer warned it will miss first-quarter earnings estimates and cut 5,000 jobs, or 7 percent of its work force. The announcement put Compaq's earnings per share between 12 cents and 14 cents, or flat year over year. Analysts had expected earnings of 17 cents a share.

Mobile phone manufacturer Motorola said it is cutting 7,000 jobs in its global cell phone unit to reduce costs in its wireless handset business during a time of sluggish sales. This latest round of layoffs in the cell phone division brings the total to 12,000 since December.

Chipmaking equipment leader Applied Materials will ask up to 1,000 employees to leave the company voluntarily. Although the company has implemented a series of cost-cutting measures during the past several months, "the continued slowdown in demand for semiconductor equipment requires further action by the company," Applied Materials said in a statement.

Exit, stage left
Rank-and-file workers were not the only people making changes in the technology world this week.

Network software provider Novell said Chief Executive Eric Schmidt will step aside as part of the company's $266 million acquisition of consulting company Cambridge Technology Partners. The two companies announced Monday that they would merge. Though the Silicon Valley veteran engineered a brief turnaround at the struggling software provider, Schmidt could not rebuild a business that has consistently lost market share to competitors such as Microsoft and Linux in recent years.

The judge who oversaw Microsoft's antitrust trial has recused himself from another proceeding affecting the software giant. U.S. District Judge Thomas Penfield Jackson issued an order that removed him from overseeing a massive $5 billion discrimination suit against Microsoft. The software giant had earlier filed a request that Jackson recuse himself from the matter because of alleged bias against the company. Jackson defended his views formed about Microsoft during several court cases, saying he harbors no bias.

Just a week after its chief executive bade farewell, Yahoo said that Anil Singh, who led the Net giant's advertising and marketing efforts, is leaving the company. Yahoo had indicated that Singh would step down from his day-to-day sales and marketing role, but would remain as a strategist. Now, Singh plans to leave the company altogether.

Not for the Net
Thousands of confidential instant messages between the CEO of an Internet company and top executives have been posted on the Web, stirring up a hornet's nest of corporate intrigue and providing a rare glimpse into a dot-com as it struggled to cope with a brutal shakeout. The logs, which were apparently snatched from a PC used by Sam Jain, CEO of eFront, have nearly paralyzed his company and created a personal nightmare for Jain.

While embarrassing to the company, legal sources said any evidence culled from such logs may not be admissible in court.

With the first big batch of music now blocked from Napster's file-swapping network, the average number of songs available on the service has dropped precipitously. After the latest update of its filters, the average number of MP3 files publicly shared by music swappers on the service dropped from 172 to just 71 per person, a decline of close to 60 percent. However, the service is far from useless. Even many of the blocked songs, ranging from tunes by Madonna to Elvis, are still available online in some form.

To help it identify and block trademarked music from being swapped, Napster has hired Gracenote, which maintains a massive database identifying recorded music. Gracenote's CDDB database will be one tool used to help identify variations of songs that are slipping through Napster's existing filters.

Getting better all the time
Sony unveiled Double Density CD-R and CD-RW drives and discs that can hold 1.3GB of data, or about 300 songs. That is twice the capacity of CD-R and CD-RW discs, which hold 650MB. The technology doubles the capacity of the discs by essentially shrinking the space between the tracks on the media.

Flat-panel monitor prices are plummeting yet again, bringing the largest displays within reach of many consumers' budgets. Liquid-crystal displays, also known as flat-panel monitors, started their price plunge before the winter holidays, making 15-inch flat panels one of the hottest-selling peripherals of the season. Since then, prices have dipped to the $499 range for many 15-inch displays.

The newest version of the Clie combines the Palm operating system with a sharper screen and the ability to play music downloaded from a PC--a feature not yet available on other Palm-based handhelds. The unit, which will go on sale first in Japan next month, also features four times the screen resolution of other Palm-based handhelds.

Also of note
Computer worm viruses spread quickly, can be easily copied and changed, and accounted for half the viruses on the Internet in 2000...The announcement two weeks ago by Northwest Airlines and KLM Royal Dutch Airlines that they would stop paying commissions to Internet travel agencies may only be the beginning...Penny stocks--some of which have the brand recognition and the cash on hand to see them through profitability--have quickly become market refugees...The secrecy surrounding a purportedly world-changing device known as "IT" remained as thick as ever at a computer conference that the inventor of "Ginger" attended...Microsoft and eBay linked arms to support each other's technologies, aiming to expand their Internet footprints.