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The week in review: Inside Intel's plans for the future

Intel steals the spotlight, showing off new chips for cell phones and handheld computers, talking strategy and predicting a rival's doom.

Intel stole the spotlight this week, showing off new chips for cell phones and handheld computers, talking strategy and predicting a rival's doom.

Intel released details on the Pentium 4 and showcased new chips for cell phones and handheld computers. The Pentium 4 features a completely new architecture called "NetBurst" designed to handle tasks--such as data encryption, video compression or Napster-like peer-to-peer networking--that have grown in popularity with the Internet.

The upcoming Pentium 4 will be more than twice as big as the Pentium III and approximately 28 percent bigger than anticipated, an increase that will boost Intel's manufacturing cost and limit the number of chips produced.

Most initial Itanium chips will run at 733 MHz, slower than the 800 MHz expected, but there are a host of other high-end computer products to compensate for the disappointment. The chip's speed is a lesser factor than architectural improvements such as the 64-bit design that allows it to hold vast databases within memory. But the slower speed indicates difficulties with the manufacturing process for the large new chip.

Intel will ratchet up the speed of its high-end Xeon chips to 1 GHz, which has more psychological value than practical utility because of bottlenecks talking to memory and other components in a computer. Xeons are used primarily in servers, the computers that are the brains of computer networks.

Intel executives predict the peer-to-peer technology popularized by Napster could usher in the next wave of the Internet and, in the process, save companies billions of dollars by using computing power already in place.

The chip giant and others have invested $9 million in a start-up that will make chips for the upcoming InfiniBand technology for high-speed connections among servers, storage systems and networks.

Intel CEO Craig Barrett compared Sun Microsystems to communism, saying the server maker represents an increasingly outmoded way of doing business because it locks corporate customers into products or services from a single seller. "If (Sun CEO) Scott McNealy's model worked, communism would still be prevalent and challenging capitalism."

You've got email
Yahoo plans to let its mail account holders use data scrambling to protect the privacy of their email messages, marking a potentially significant advance for the mainstream use of encryption. When the system launches, it will let Yahoo Mail account holders send messages through ZixIt's SecureDelivery.com site. The deal will make Yahoo the first major portal to offer encrypted email.

Network Associates confirmed that emails encrypted using its PGP software may be vulnerable to a sophisticated attacker. PGP--Pretty Good Privacy--is used by 7 million people worldwide. Some businesses use it to send confidential documents.

Microsoft is "thoroughly investigating" a scenario in which expired Hotmail accounts are thought to provide an avenue for either malicious or unwitting appropriation of existing IM usernames and contact lists. One Hotmail user says he lost his account because of inactivity, and when he created a new account with the same name, he found that his old IM contact list lingered with the cleaned-out account.

USA.net, which has powered WebMail since its 1998 launch, will lose its only major portal customer when Netscape Communications' Netcenter migrates its WebMail accounts to its own service this fall. Netcenter has 7 million account holders using USA.net-powered email and just fewer than a million using its new homegrown service.

Dow Chemical plans to fire about 40 employees for allegedly violating the company's email policy by circulating violent or sexually explicit material. The firings follow a review of 6,000 email accounts conducted after a worker complained about offensive email.

Chain of command
After Larry Ellison almost died at sea in December 1998, the swashbuckling chief executive began wondering who would run Oracle if something were to happen to him. The answer is anything but clear. Many sources close to the company believe that, regardless of titles, Ellison will remain firmly in control as long he stays with the corporation.

That question--as well as speculation as to who is running the $200 billion database powerhouse right now--has been a topic of conversation throughout the high-tech industry ever since longtime No. 2 executive Ray Lane abruptly resigned in June.

Lane joined the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers as a general partner because he will be able to spend more time with his family, as the nature of the VC industry is changing. "I'm trying to stay true to my goal of building balance in my life. I want to have more time with my kids," Lane said.

After just three months in the job, Razorfish president Michael Pehl resigned. New York-based Razorfish, a consultancy for Internet strategies and Web site design, did not name Pehl's replacement. He will continue to work with the company on a consulting basis.

A year following his ascension to CEO, Bob Bishop runs a very different SGI than predecessor Rick Belluzzo. It's been a gut-wrenching year of tough decisions, many of which put Bishop in the hot seat with investors and Wall Street analysts.

Handhelds in hand
Retail sales of handheld computers are set to double this year, granting the once geeky devices mass-market status. Sales of personal digital assistants (PDAs) from Palm and Microsoft are surging. PDA sales for this year already equal sales for all of 1999, with a strong holiday season around the corner likely to boost the numbers more.

XScale--the successor to Intel's StrongArm chip architecture--will power future generations of handheld computers, mobile phones and the backbone of the wireless network. Intel said the new design will enable entirely new types of wireless devices that can be powered by a single AA battery, but the company would not discuss specific speeds.

A possible shortage of parts means Nintendo won't sell Game Boy Advance until March 21 in Japan and next July in North America and Europe. Nintendo said the delay was caused by parts shortages, as sales of the Game Boy Color handhelds are still growing and monopolizing the supply of components.

Also of note
A fake press release rocked the shares of networking equipment company Emulex, causing the company's market value to plunge by $2 billion and creating anxiety for thousands of investors...Verizon Communications, the nation's largest local-phone company and wireless business, agreed with union negotiators on a tentative contract for 35,000 workers in six mid-Atlantic states and the District of Columbia to end an 18-day strike...Verizon Wireless plans to raise up to $5 billion in its initial pubic offering...The Federal Reserve decided to keep interest rates unchanged at 6.5 percent, a move that was widely expected by economists and investors...A pornographer who has registered hundreds of domain names could lose one of the biggest gems in his collection: Madonna.com...Microsoft may have lost the initial round in its federal antitrust case, but the software giant scored two more victories in private lawsuits, giving it a 7-0 record...Online retailer Amazon.com will launch an online car store this week in conjunction with Greenlight.com, an online car seller...The Federal Trade Commission and New York attorney general filed a lawsuit against Playgirl.com, Highsociety.com and dozens of other adult content Web sites for allegedly billing consumers for services that were offered as free.