2006: The Year in Security

Online attacks, spam, and sneaky cybercrime top list of year's most common security issues.

Though Internet-crippling virus attacks now seem to be a thing of the past, PC users didn't feel a lot more secure in 2006. That's because online attacks have become more sneaky and professional, as a new breed of financially motivated cyber criminals has emerged as enemy number one. Microsoft patched more bugs than ever and whole new classes of flaws were discovered in kernel-level drivers, office suites and on widely used Web sites. Vendors' chatter about security is at an all-time high, but the bad guys are still finding lots of places to attack.

And, oh yes, spam is back.

Following are five of the top computer security stories in 2006.

Cybercrime Dividends

Hackers teamed with professional criminal gangs in increasingly sophisticated computer crime operations aimed purely for profit.

Much of the trouble centered on phishing, a type of attack where fake Web pages are constructed to harvest log-in details, credit card numbers or other personal information. Credit card numbers are often sold online to others for illicit gain.

In May, 20,000 phishing complaints were reported, a 34 percent increase over the previous year, according to U.S. Department of Justice report. The U.S. hosts the largest percentage of phishing sites, it said.

But law enforcement agencies are getting more organized and cooperating better, particularly in international investigations. At least 45 countries participate in the G8 24/7 High Tech Crime Network, which requires nations to have a contact available 24 hours a day to aid in quickly securing electronic evidence for trans-border cybercrime investigations.

The private sector has also helped. Microsoft filed dozens of civil suits and gave information to law enforcement for criminal cases in Europe, the Middle East and the United States against alleged phishers throughout 2006.

It's a Brand New Day

With automatic software updates now the norm, hackers have been forced to look a little harder for ways to put their malicious software on unsuspecting victims' PCs. In 2006 they turned to zero-day attacks as never before.

These attacks take advantage of previously unreported flaws in software, and in 2006 they became a top concern, according to the SANS Institute. In fact, hackers kicked off the new year in 2006 by releasing zero-day attack code based on a flaw in the way Internet Explorer handled WMF (Windows Meta File) documents.

This was followed, later in the year, by a rash of very targeted online attacks that exploited unpatched flaws in Microsoft's Office software. In fact, Microsoft warned of the latest such attack -- this one targeting a flaw in Word -- just this month.

To underline the scope of the zero-day problem, security researchers launched widely publicized "Month of Kernel Bugs" and "Month of Browser Bugs" projects, during which they exposed a new, unpatched vulnerability in browsers and operating systems every day for a month.

Spam Avalanche

Microsoft's Chief Software Architect Bill Gates predicted two years ago that spam would be gone by 2006. He should check his in-box.

Rising volumes of junk mail nagged IT administrators throughout 2006. Up to 90 percent of all e-mail was spam, depending on the vendor recording the statistics. Spammers found creative ways to circumvent security software. Image-based spam, where individual messages appear to be unique by subtracting or adding pixels, foiled some security techniques.

Spammers also put messages in the images themselves, a tougher challenge to stop since it requires processor-intensive optical character recognition (OCR) techniques. Spam remained the delivery vehicle for other malicious software such as keystroke loggers and rootkits in addition to promoting links to phishing sites, which often aim to steal financial data or log-in credentials.

Web 2.0 Gets Hacked 1.0

MySpace.com may be a poster child for Web 2.0, but from a security perspective, it hasn't been looking so pretty.

That's because the popular social networking site was hit hard by a password-stealing worm that exploited a scripting vulnerability on the Web site. And this was not even the first worm to hit MySpace. In October another more benign worm, called Samy, automatically added a Los Angeles teenager's name to visitors profiles, quickly making him appear to be the most popular member of the MySpace community.

Security experts say that the kind of cross-site scripting attack used in the recent MySpace worm has become much more prevalent in the past year, as hackers have discovered just how much can be done with these attacks. These bugs can be used to do far more harm than many people realize, security experts say, including forcing PCs to download illegal content, hack other Web sites or send e-mail.

Vista Lockout Irks Vendors

Microsoft rankled security vendors by saying it wouldn't allow their software to access the kernel of the 64-bit version of Windows Vista. Patch Guard, Microsoft's kernel security technology, blocks access to prevent unauthorized modifications by malicious software.

Vendors, led by Symantec and McAfee, argued they needed access to the kernel to detect malicious software such as rootkits, which burrow deep into the OS. After a flurry of public statements and pressure from the European Commission, Microsoft agreed to make APIs (application programming interfaces) available.

The APIs will allow host intrusion prevention technologies used by vendors to function without hooking the kernel. But Microsoft said the APIs wouldn't be ready until the release of Service Pack 1 for Vista.

Grant funds open-source challenge to Google library

The nonprofit Internet Archive announced Wednesday it has received $1 million from the Alfred P. Sloan Foundation to continue its effort to scan public domain works for open online accessibility.

The archiving organization's Open-Access Text Archive is an open-source alternative to book-scanning efforts like the ones from Google and Microsoft. Internet Archive, perhaps best known for its WayBack Machine archive of Web pages by date--is also an online digital library of text, audio, software, images and video content.

"Brewster Kahle and the Internet Archive are pioneers in this exciting and historic opportunity to create a universal digital library that is both open-access and non-proprietary," said Doron Weber, who overseas public understanding of science and technology at the Sloan Foundation, in a statement.

Kahle was one of the inventors of Wide Area Information Servers (WAIS), a text-based search system that searched database indexes on remote servers before there were Internet search engines. After WAIS was sold to AOL in 1995 for several million dollars, Kahle founded the Internet Archive, which works closely with the Open Content Alliance (OCA). The OCA developed a set of principles dedicated to a "permanent archive of multilingual digitized text and multimedia content" for free and open access.

The grant from the Sloan charitable trust will enable Internet Archive and the OCA to scan collections from several major institutions, including the entire collection of publications from the Metropolitan Museum of Art as well as several thousand images from the museum; John Adams' personal library of over 3,800 works at the Boston Public Library; and other collections from The Getty Research Institute, Johns Hopkins University and the University of California, Berkeley.

The announcement comes just after the San Francisco-based Internet Archive reached the milestone of scanning 100,000 books. That may not sound like a lot compared to Google Book Search's claim of millions within a decade, but the OCA has ramped up its scanning recently to about 12,000 books a month. According to its own statistics, the organization has also archived 65 billion pages from 50 million Web sites.

"Google is so good at the media being their PR machine, that you would not know there was an alternative out there," Kahle said. "We have brand name institutions going open and foundations like the Sloan are funding (us). It shows that the Open Content Alliance is viable, that there is support for public interest. We don't have to privatize the library system."

Google has begun to offer full-text, printable PDFs of public domain works with plans to add more as it scans more books. But its platform is closed, and its PDF pages have a "Digitized by Google" watermark. The company is not planning to share its scanned material with the OCA or Internet Archive, according to Kahle.

"We think they (Google) are doing great stuff. If the materials would be made available for broad public search and educational use we'd be all for it, but in my discussion with the founders (Google co-founders Larry Page and Sergey Brin) they aren't going to," said Kahle.

Google did not respond to requests for comment about its book scanning project.

"It shows that the Open Content Alliance is viable, that there is support for public interest. We don't have to privatize the library system."

--Brewster Kahle, Internet Archive founder

Google scans and indexes both public domain and copyright works, an issue that has raised legal concerns. The Google Book Search engine restricts full access to copyright works while still offering snippet views, instead of excluding the work from its search feature altogether, according to the Google Book Search Web site.

"This whole Google Book Search looks like Amazon's Search Inside the Book," said Kahle. "Let's go open with these collections...These are beautiful books."

Yahoo is a supporter of the OCA and has helped the OCA index some of the scanned content, but its project is smaller than those of Google and Microsoft, according to Gregory Crane, a classics professor and digital library expert at Tufts University.

Microsoft was an early supporter of the OCA and in June worked with it on a project scanning and indexing materials from the University of California and the University of Toronto libraries as part of its Windows Live Book Search project. But Microsoft has become more proprietary in recent months, Kahle said.

"We continue to work with Microsoft, but the results going forward are not strictly OCA principles," Kahle later added in an e-mail. "To their credit, they are interested in helping get more scanning done in the open, of course because they can use the books as well, but still, this is more than other projects.

Jay Girotto, who heads Microsoft's Live Book Search selection team, further explained his company's position.

"We support the fundamental mission of the OCA, and hope that many more partners like the Sloan Foundation will step forward and contribute significant resources to scan public-domain materials under the OCA principles," he said in a statement.

Research impacts

Tufts' Crane thinks the companies are reluctant to share for fear of helping the competition.

"My impression is that both Microsoft and Google don't want the other benefiting from their investment, he wrote in an e-mail. "Now each is hoarding. Ideally, each would split the cost of digitizing content and then make the public domain material available in the OCA. At the moment, Google is well ahead, and I would think that they would feel that Microsoft would benefit too much."

A lack of open-source access, Crane explained, impedes research that requires access to multiple groups of works in bulk, and prevents researchers from applying more nuanced OCR (optical character recognition) searches to those texts.

"We are evaluating OCR on classical Greek. Google runs OCR on all its texts--that's how it generates searchable OCR. The Google OCR, though, doesn't know Greek and produces no usable text as far as we can tell. Google says that you have to get permission to run OCR, etc...on its PDF books," Crane said, further explaining, "Even if the PDF books are good enough quality to support OCR--they might be lower than the archival resolution.

"I am sure that Google would be open to us doing this work, but that means (for each academic project) getting their attention, writing letters, and a lot of hassle," Crane said. "I think it's easier and better in the long run to open the library up and let the world have at it," he said.

Microsoft makes Zune Vista-friendly

After a few weeks of not speaking to one another, Microsoft's new operating system and its Zune digital-music player are getting along fine.

Microsoft on Tuesday released a software update that lets the Zune work with Windows Vista. Although Vista has yet to go on sale to consumers, the software has been available to businesses since last month, and many tech enthusiasts have been running test versions of Vista.

Microsoft noted the lack of Vista compatibility in November but pledged that a software update to fix the issue would be out well before the January 30 consumer launch of Vista.

In addition to adding support for the new operating system, Microsoft said on its Zune Insider blog that the update "improves the Zune software installation process."

A Microsoft representative said the new software also includes updates, but Microsoft declined to elaborate on the nature of the security issues involved.

The lack of Vista compatibility has been one of several knocks on Microsoft's would-be iPod rival, which went on sale in November. Sales of the device were strong in its first week, but the device has since seen its place in the sales rankings dip.

Microsoft has said it is considering upping its advertising budget for the Zune.

Mozilla: Patch Firefox now

update Firefox users have been urged to update their browser immediately after Mozilla, the organisation behind the popular browser, said it had fixed eight vulnerabilities in Firefox 2.0.

Mozilla said five of the eight vulnerabilities were 'critical', meaning an attacker could exploit the weaknesses to run malicious code on the compromised machine. Seven vulnerability updates have been issued for the previous version of Firefox, version 1.5, of which five are rated as critical.

The updated version was made available on Tuesday evening. It can be downloaded from Mozilla's website. Firefox users who have set their browser to receive automatic updates will be notified or sent the update, depending on their preferences.

Mozilla also urged users of its Thunderbird email application to download several security updates. Mozilla advised people to forgo enabling JavaScript in Thunderbird and the mail portions of its Internet application suite SeaMonkey. Users are also urged to download SeaMonkey 1.0.7, which is undergoing its final paces of testing.

"Some of these (flaws) were crashes that showed evidence of memory corruption, and we presume that at least some of these could be exploited to run arbitrary code with enough effort," according to one of six-related "critical" Mozilla security advisories issued on Tuesday.

The updates to Firefox 2.0 are the first since its release in late October. They cover flaws in memory corruption, and the way the browser executes RSS, Javascript and CSS code.

Version 1.5 has already seen a whole raft of updates, including the patching of other critical vulnerabilities in November.

According to Mozilla developers, the Firefox updates will work with Vista, which was released to businesses three weeks ago.

Security research organisation Secunia rated the Mozilla flaws as 'highly critical' and described the threats in detail on its site.

Last month, Mozilla also issued "critical" security updates for Firefox, Thunderbird and SeaMonkey.

Tristan Nitot, president of Mozilla Europe, confirmed that Mozilla plans to drop support for Firefox 1.5 on 24 April, 2007, not October 2007 as previously reported. "We are consistent with our approach, which is to support a version, in this case 1.5.0.x, for six months after the following version, in this case Firefox 2," Nitot said.

Fingers on the Pulse -- And on the Keyboard

Dec. 19, 2006— When German philosopher Johann Herder introduced the term "zeitgeist," which literally translates to "spirit of the times," to the world in his 1769 critique, few could have imagined that more than two centuries later it would come to represent everything from Bebo to Borat, Togo to TomKat, Hezbollah to Hurricane Katrina.

Merriam-Webster defines "zeitgeist" as the "intellectual, moral, and cultural climate of our time." This week Google released its own "zeitgeist," an annual tally of the trends of the year, and possibly a generation, based on our searches.

Google's statement on their Web site explains it all: "a year's worth of search speaks to our collective consciousness, and 2006 is no exception."

Instead of simply listing the top 10-searched words of the year, Google broke its study down into six categories: Home, What's Hot, Current Events, Milestones, Entertainment and Sports. So, what is it that Internet users are looking for?

In a year that saw the Internet increase it's grip on our lives, the war in Iraq seesaw between the "war on terror" and "civil war," and the need for sporting events like the Olympics and the soccer World Cup to bring the world together, the top searches, not surprisingly, centered around connection.

Social Creatures

More people searched for the Web site Bebo.com than anything else. A social networking site where 22 million users from Internet portals all over the world post pictures and blogs and instant-message one another, Bebo, which didn't even exist in 2005, had an explosive debut year.

It makes sense then that the year's second most popular search was for the largest social networking site in the world — MySpace.com. One year ago, social networking was just beginning to spread its wings, utilized by tens of millions of people. Today, the site hosts the largest communities on the Web, measured in the hundreds of millions.

Video was the seventh most popular term searched on Google overall in 2006.

N.J. gov to make gay unions official

TRENTON, N.J. — New Jersey's gay couples are gaining all the rights and responsibilities of marriage as the state moves to become the fifth in the nation to institute civil unions.

Gov. Jon S. Corzine was to sign a civil unions bill on Thursday. The law will take effect Feb. 19.

New Jersey will join Connecticut and Vermont as states that allow civil unions for gay couples. Massachusetts allows gay couples to marry, while California has domestic partnerships that bring full marriage rights.

Once joined in civil union, gay couples will enjoy adoption, inheritance, hospital visitation, medical decision-making and alimony rights and the right not to testify against a partner in court.

The civil unions bill passed the Legislature on Dec. 14 in response to an October state Supreme Court order that gay couples be granted the same rights as married couples. The court gave lawmakers six months to act but left it to them to decide whether to call the unions "marriage" or something else.

Gay couples welcome the law, but some argue that not calling the relationship "marriage" creates a different, inferior institution.

Donna Harrison, of Asbury Park, has been with her partner, Kathy Ragauckas, for nine years. She isn't exactly celebrating the bill signing, though she said she and Ragauckas will probably obtain a civil union certificate.

"Although I think they provide some benefit, it is a different treatment of human beings," she said.

Chris Schwam and Steven Piacquiadio, of Collingswood, have been together for 20 years and have a 3-year-old son.

They had a big wedding in 1993, though it wasn't recognized legally, so Schwam, 40, said they will get a civil union, but without a big fuss.

"I don't think my mother would be happy to pay for that again," he said.

Gay rights group Garden State Equality has promised to push lawmakers to change the terminology to "marriage." Others are considering lawsuits to force full recognition of gay marriage.

The bill creates a commission that will regularly review the law and recommend possible changes.

Corzine, a Democrat, said that seems a reasonable approach, but said calling the arrangement a civil union rather than gay marriage is preferable.

"For most people marriage has a religious connotation, and for many there is a view that that term is not consistent with the teachings of their religious belief," the governor said. "So there is not democratic support in the broader society for that label, even though there is strong support for equal protection under the law."

Senate President Richard J. Codey, D-Essex, who sponsored the bill, said time could bring change.

"The history of civil rights progress, whether it's women's rights, minorities' rights or any other movement, is one that is typically achieved in incremental steps," Codey said. "This is, by no means, the end, but it is a major step forward."

Social conservative groups and lawmakers opposed the measure, reasoning it brings gay relationships too close to marriage, but it easily passed the legislature. Some have vowed to push to amend the state constitution to ban same-sex marriage, but Democrats who control the legislature said such proposals won't be heard.

The three-day waiting period required by the law is the same as with marriage licenses. Licenses will be valid for 30 days, and ceremonies can be officiated by anyone who performs weddings, including clergy and mayors. As with marriages, civil unions will have to be witnessed by one additional adult.

Deal Maker’s 3-Day Tally: $37 Billion

It has been a good week to be Leon Black. In the course of just three days, Mr. Black, the enigmatic founder of the Apollo Group, a private equity firm, has struck about $37 billion worth of deals.

Marina Garnier/Globe Photo

Leon Black in 2001. He first made a name at Drexel Burnham Lambert.

On Sunday, Apollo acquired Realogy, the giant real estate franchiser that owns Coldwell Banker, Century 21 and Sotheby’s International Realty. That deal has now been trumped by a $27.8 billion deal yesterday for Harrah’s Entertainment, the world’s largest casino company. The acquisition, which includes the assumption of $10.7 billion in debt, was made in tandem with the Texas Pacific Group.

While Texas Pacific has long been acknowledged as in the top tier of private equity, Apollo — and Mr. Black — have largely avoided the limelight.

With Harrah’s, its new crown jewel, that will change. Harrah’s is the leader in the industry, operating 39 casinos in the United States, including Caesars Palace in Las Vegas and the Showboat in Atlantic City. Harrah’s is also expanding overseas, with projects recently announced in the Bahamas, Slovenia and Spain.

The acquisitions this week and Apollo’s new $12 billion fund have catapulted Mr. Black, 55, a former lieutenant of Michael R. Milken, into the upper echelons of private equity — in a league with Henry R. Kravis of Kohlberg Kravis Roberts and Stephen A. Schwarzman of the Blackstone Group.

Mr. Black declined to comment for this article.

The recent successes may elevate Mr. Black’s image beyond one marred by personal tragedy and clouded by the scandals of the late 1980s at Drexel Burnham Lambert, where he first made his name.

While he was still at Harvard Business School in 1975, his father, Eli Black, the chairman of United Brands, forerunner of Chiquita Brands International, leapt to his death from his 44th-floor office in the Pan Am Building in Manhattan. Investigators later discovered the senior Mr. Black’s involvement in a Honduran bribery scandal, one that led to sweeping legislation against corporate bribery.

In the 1980s, Leon Black was the head of leveraged buyouts at Drexel, which was then designing revolutionary tools in corporate finance. Investors and entrepreneurs like Carl C. Icahn and Boone Pickens were shaking company boardrooms with takeover offers financed by high-yield bonds — a type of sub-investment-grade lending that Mr. Milken of Drexel popularized.

In a book chronicling the era, “The Predators’ Ball,” Mr. Black is described as being extremely well connected to corporate executives and close to Mr. Milken, even though Mr. Milken worked in Beverly Hills, Calif., and Mr. Black was based in Manhattan. When Drexel collapsed amid felony charges and scandal in 1990, Mr. Black emerged unscathed.

Apollo made its name by buying junk bonds. The best known was the debt portfolio of the insurer Executive Life, a former Drexel client. Though it had a face value around $6 billion, Mr. Black was able to buy it for less than $3 billion.

Apollo also found success in scooping companies out of bankruptcy and turning them around for profit. Some of its notable successes have included Intelsat and Telemundo, the Spanish-language broadcaster that NBC bought in 2001.

The gambling business gives Apollo a much larger public footprint, and it will put it under the scrutiny of more regulators.

Indeed, it has been the sometimes bewildering thicket of regulations that has stymied many private-equity gambling deals. Wall Street is familiar with betting the house; with Harrah’s, both Apollo and Texas Pacific get to be the house.

Under the terms of the deal announced yesterday, the private equity firms will pay $90 a share for Harrah’s — an 11 percent increase over their original offer of $81 a share in October and a 36 percent premium to the price before Harrah’s disclosed that bid.

The board of Harrah’s had also been considering a rival offer from Penn National Gaming, which runs casinos and racetracks.

An army of bankers and lawyers were also gambling on the outcome of the deal. UBS and the law firm of Kaye Scholer advised Harrah’s board committee on the deal. The law firm of Latham & Watkins also advised the company, and Peter J. Solomon provided a fairness opinion. Deutsche Bank, Citigroup, Credit Suisse, J. P. Morgan Chase and Merrill Lynch were financial advisers to the buyout firms; Wachtell, Lipton, Rosen & Katz and Cleary Gottlieb Steen & Hamilton were the legal advisers. Global Leisure Partners also advised Apollo.

Harrah’s was built into the nation’s largest casino operator under the leadership of an outsider, Gary Loveman, a former Harvard Business School professor who will remain chief executive.

Mr. Loveman joined Harrah’s in 1998, after he did some research on the gambling chain and sent his suggestions to its chief executive, Philip G. Satre. The recommendations seemed on target, and Mr. Satre invited Mr. Loveman to become chief operating officer. He was elevated to chief executive in 2003 after Mr. Satre retired.

A vital tool in that program is a huge consumer database, which Harrah’s mines to find people likely to be the most profitable repeat visitors.

The most lucrative customers, Mr. Loveman found, tended to be frequent rollers from the Midwest instead of the high rollers wooed by other casinos. So Harrah’s offered Nascar dads and slot-machine-playing grandmothers cheap air fares on chartered planes to its casinos, and these middle-market gamblers enabled the casino to prosper.

2007 Oscars poster unveiled

The 2007 Oscars poster has been unveiled, and the Academy of Motion Pictures, Arts and Sciences have opted for one which features dozens of quotes from movies of yesteryear. Films like CASABLANCA, THE WIZARD OF OZ, LORD OF THE RINGS, SIDEWAYS and even BROKEBACK MOUNTAIN are quoted on the one-sheet.

Here's the press release from the Academy.

“Stella!” “I’m as mad as hell and I’m not going to take this anymore!” “Snap out of it!” “You had me at hello.” Dozens of the most memorable and quotable lines from motion pictures will share the 79th Academy Awards® poster canvas with Oscar.

The commemorative poster features words and phrases that have become part of society’s colloquial speech. “They are the unforgettable lines that you hear in everyday conversations, in meetings, at parties, or walking down the street,” said Sid Ganis, president of the Academy of Motion Picture Arts and Sciences. “They tap into what we think and give us great shorthand ways to express how we feel about those things. If a picture is worth a thousand words, then each quote is worth at least 500.”

All of the lines showcased in the poster except one are from films that have received an Academy Award® nomination for Best Picture, Writing, or both, between 1936 and 2005. (Finding the exception should be the first of many trivia contests that the Academy expects the poster to generate.)

The concept and design for the poster was created for the Academy by TBWAChiatDay Los Angeles. Photographer Albert Watson captured the Oscar statuette featured on the poster.

The 27x40 poster, printed on premium recycled paper, uses a black canvas and highlights the quotes in gold metallic ink, each in a distinctive typeface to reflect the movie it represents.

Starting today, more than 65,000 posters will be distributed worldwide. The poster will be available for purchase through March 12, 2007, on the Academy’s Web site at http://www.oscars.org/publications/ or by calling 1-800-554-1814.

Nominations for the 79th Academy Awards will be announced on Tuesday, January 23, 2007, at 5:30 a.m. PST in the Academy’s Samuel Goldwyn Theater.

Academy Awards for outstanding film achievements of 2006 will be presented on Sunday, February 25, 2007, at the Kodak Theatre at Hollywood & Highland Center®, and televised live by the ABC Television Network at 5 p.m. PST, beginning with a half-hour arrivals segment.

Master cartoonist who created Tom and Jerry draws his last

In Jellystone Yogi Bear might wipe away a tear. The Flintstone family will be in mourning in Bedrock and, just possibly, Tom and Jerry might declare a truce as a mark of respect.

For, after decades of entertaining children and adults with some of the finest cartoons ever drawn, their creator, Joseph Barbera, has died at his home in Los Angeles. He was 95.

	Joe Barbera and Bill Hanna met in Hollywood in 1937

Barbera and his late partner William Hanna formed a revered Hollywood animation team which also created Huckleberry Hound and Friends, Top Cat, Scooby Doo, Johnny Quest, and The Jetsons.

On top of that, Fred Flintstone's "yabba dabba doo" and Yogi's "smarter than the average bear" became part of the language.

"When we started, people said, 'Cat and mouse? That's old stuff'," Barbera once said of Tom and Jerry. "They said it had been done by everybody – Felix the Cat, Ignatz the Cat, not to mention Mickey Mouse. But I felt that in any country you wouldn't need dialogue to understand the plot. All you needed was a cat and mouse, and everybody knew what was going to happen."

Hanna and Barbera first tried the theme in the 1937 Puss Gets the Boot with a cat named Jasper and a mouse called Jinx. It earned an Oscar nomination, and MGM let the pair keep experimenting until the full-fledged Tom and Jerry characters were born.

Tom and Jerry won seven Oscars for MGM – more than its great rivals Disney or Warner Brothers earned for any individual creation. Their fantastically violent plots included Tom using everything from guns, axes, poison and dynamite to murder Jerry, while Jerry would retaliate by putting Tom's tail in a waffle iron.

In an age before computer-generated images, each cartoon was hugely labour intensive. At 24 frames per second, a Tom and Jerry cartoon running at five minutes would have taken 7,200 hand drawn and painted frames.

Tom and Jerry were the inspiration for Itchy and Scratchy, the sadistic cat and mouse in The Simpsons and even today they are often cited in debates about children being exposed to violence on screen.

Not that that has ever bothered each new generation of youngsters who adore the venomous glee which Tom and Jerry bring to their murderous plots.

After MGM closed its animation department in the mid-1950s, Barbera and Hanna founded their own company and made their fortune with the launch of The Flintstones on television in 1960.

With television's sharply lower budgets, their new cartoons put more stress on verbal wit than the detailed – and expensive – action of theatrical cartoons.

Like The Simpsons decades later, The Flintstones found success by not limiting its reach to children. The show is still broadcast in more that 80 countries.

Among Barbera and Hanna's other major creations was Scooby Doo, which started in 1969 and became the longest-running American cartoon series.

Warner Brothers chairman Barry Meyer said of Barbera: "The characters he created with his late partner William Hanna are not only animated superstars, but also a very beloved part of American pop culture. While he will be missed by his family and friends, Joe will live on through his work,"

Flowers were yesterday being laid on Barbera's star on the Hollywood's Walk of Fame. Hanna, who died in 2001, once said he was never a good artist but his partner could "capture mood and expression in a quick sketch better than anyone I've ever known". Barbera brought the comic gags and skilled drawing, while Hanna brought a keen sense of timing.

Critic Leonard Maltin wrote in his book, Of Mice and Magic, that "this writing-directing team may hold a record for producing consistently superior cartoons using the same characters year after year – without a break or change in routine".

Barbera was born in New York to Lebanese parents and began his career as a delivery boy for a tailor. In 1937 he left for Los Angeles where he met Hanna at MGM.

Small Nissan Versa aces crash tests

Some small cars do well in Insurance Institute crash tests, but bigger cars still safer, group warns.

NEW YORK (CNNMoney.com) -- The Nissan Versa got top marks in crash test results released Tuesday by the Insurance Institute for Highway Safety, though bigger cars still offer greater safety than small cars, the Institute said.

The Institute tested eight small cars. Only the Versa earned the top rating of "Good" for front- and side-impact protection as well as for whiplash protection in rear impacts.

Small cars have become increasingly popular as fuel prices have risen and their quality and safety ratings have improved.

But even the safest small car offers less protection in a crash than a larger car, the Institute said.
"People traveling in small, light cars are at a disadvantage, especially when they collide with bigger, heavier vehicles," said Institute president Adrian Lund.

Photo Gallery: Top Safety Picks

The poorest-performing small cars in this round of tests were the Hyundai Accent and Kia Rio. The Accent received a "Poor" rating in the Institute's side-impact test despite having side airbags as standard equipment. The Accent was rated as "Acceptable" for front-impact protection.

The Accent's steel body didn't hold up well, the Institute said, which resulted in severe impact forces to the pelvis of a crash test dummy in the driver's seat. Rear-seat occupants have no airbag protection in the Accent and a dummy placed there was struck in the head during the side-crash test, the Institute said.

The Accent's crash test results also apply to the closely-related Kia Rio.

The Institute also tested the Toyota Yaris, Honda Fit, Scion xB and Chevrolet Aveo. The Mini Cooper had been tested previously.

The Yaris, when equipped with optional side airbags, earned "Good" ratings in front- and side-impact tests, but rated only "Marginal" in rear-impact whiplash protection. Without the optional side airbags, though, the Yaris was rated "Poor" for side-crash protection.

The Scion xB, a tall, boxy wagon also made by Toyota, doesn't come with side airbags even as an option. Like the Yaris, it earned a "Good " rating for front-impact protection, but "Poor" for side protection and "Marginal" for rear impact protection.

Good performances, but no awards
None of the vehicles in this round of tests earned the Institute's Top Safety Pick Award because they don't offer electronic stability control, which is a requirement for that award.

The Insurance Institute's front- and side-impact tests are different from those performed by the government.

For front-impact safety, the Institute uses an "offset" test in which the vehicle strikes a barrier with just part of its front bumper, concentrating impact forces.

In its side-impact test, the Insurance Institute hits the vehicle with a barrier that resembles the front of a SUV or pick-up truck. That type of impact represents a much graver risk of head injury, and therefore a greater risk of death than an impact from a car. Vehicles without head-protecting side airbags generally perform poorly in the Institute's side-impact test.

Rear-impact safety is calculated by, first, measuring various features of the seat and headrest. If those are judged to seem reasonably safe, the seat is then tested using an actual impact test.

eBay is expected to close its auction site in China

Acknowledging that the online auction market in China is enticingly fast- growing but difficult to crack, eBay will shut its main Web site in China and enter into a joint venture with a Chinese company instead, according to a person briefed on the companies' plans.

EBay will take a 49 percent stake in the venture, he said late Monday, and Tom Online, a Beijing-based Internet company that is controlled by the Hong Kong billionaire Li Ka-shing, will take the majority share. Tom Online also will administer the venture, which has yet to be named.

The plans call for eBay to put $40 million into the venture and Tom Online to contribute $20 million. Meg Whitman, the eBay chief executive, is to make the announcement Wednesday at eBay's office in Shanghai.

EBay, which has already spent hundreds of millions of dollars trying to establish its presence in China, declined to comment.

Analysts said the move would not surprise them. "It's an admission that they failed in China, on their own at least," said Tim Boyd, an analyst with Caris & Co., who has a "buy" rating on eBay shares, "but I think that's something the market already knew."

Ina Steiner, editor of AuctionBytes.com, an online newsletter, said that "a bailout in China would be a huge concession by eBay." She noted that last year, Whitman said China was eBay's biggest long-term opportunity in local markets.

"The company sold analysts on China as a way to counter slowing growth rates in its more mature markets like the U.S. and Germany," Steiner said.

But China has not been easy territory for eBay. The company established itself there as early as 2002, when it pulled out of Japan in a concession to Yahoo's sizable lead there and bought a one-third stake in Eachnet.com, China's principal online auction site.

The next year, eBay acquired the rest of Eachnet, bringing the total price to $180 million. In 2005, eBay spent an additional $100 million on marketing in China.

Whitman predicted in 2002 that within four years, e-commerce revenue from all sources in China would grow nearly twelvefold to more than $16 billion.

Whitman's projections were on the mark, Boyd said, "but the problem has not been the growth in e-commerce in China. The problem has been that eBay is losing market share."

EBay has been trailing Taobao, the consumer auction arm of Alibaba.com, China's largest e-commerce company. The research firm Analysis International said that in 2005, Taobao's share of the Chinese online auction market was 57.7 percent, compared with 31.5 percent for eBay Eachnet.

EBay's move is similar to a partnership Yahoo struck last year with Alibaba. With its own Chinese operations failing to gain traction, Yahoo paid $1 billion to hand over operations to Alibaba in exchange for a 40 percent stake in the company.

Both deals represent new thinking among Internet companies, that what works in other countries does not necessarily work in China, where strong local managers are needed.

In September, Martin Wu, the chief executive of eBay Eachnet, resigned after just a year in the position, and since then rumors have swirled that the company would leave the market entirely.

Steiner said eBay had failed to understand the Chinese marketplace and culture. For example, she said, in contrast to Taobao, eBay Eachnet provided no phone support and discouraged buyer- seller contact that could lead to haggling.

Also, she said, eBay failed to react quickly enough when Taobao entered the market with no user fees. In January, eBay Eachnet stopped charging transaction fees.

Besides its loss of market share, she said, eBay in China "continues to face regulatory and other challenges."

She said a partnership with Tom Online would be "an effort to salvage its Chinese investment."

EBay has played down its troubles in China. As recently as October, in a conference call with analysts and the media, Whitman sought to dispel speculation that the company might reverse course in the country.

"We believe we are actually maintaining share in what is becoming an increasingly competitive market," she said then. "We are committed to China for the long term."

But in recent days, Chinese bloggers and news sites have published an e-mail message from someone describing himself as a disgruntled Eachnet employee.

"I have suffered through the incompetence of eBay leaders for many years," he wrote. "EBay has screwed up our company and in China."

The message continued, "EBay failed in China because it relies on one leader who did not understand the market at all: Meg Whitman. Meg Whitman is eBay Mao Zedong."

EBay's stock has been climbing back after hitting a 52-week low of $22.83 in August. The shares closed Monday at $32.42, down 1.5 percent.

Tom Online, with 75 million subscribers, allows users access to television, music stations and online stores through its popular Web portal and over wireless networks.

In September 2005, it formed a joint venture with eBay in China to distribute the popular Internet telephone service Skype, which eBay owns.

Overall, Boyd said he was encouraged by the news of eBay's new alliance. "Now they're partnering with a strong Chinese presence on the Internet," he said, referring to Tom Online. "In hindsight, I think they'd say this is the way we should have gone about it at the beginning."

The person briefed on the plan said that eBay was considering partnerships and other options for its electronic payments site, PayPal China, but that no decision had been reached.

Although eBay's current site will be shut, he said, a separate site will be maintained to give Chinese users access to international auctions. And eBay's Kijiji China, a Chinese classified advertising site similar to Craigslist in the United States, will continue operations unchanged

Ahead of the Bell: Express Scripts

The debt load that pharmacy-benefit manager Express Scripts Inc. will bear is manageable if its $26 billion bid for larger competitor Caremark Rx Inc. transpires and defeats a rival offer from the CVS Corp. drug store chain, several analysts said Tuesday.

Express Scripts will take on a debt load roughly quadruple its annual cash flow if the deal is approved, and Prudential Equity Group analyst David H. Shove said he thinks Express Scripts will be able to pay down the debt. Shove expects new interest expense in a range of $790 million and $810 million during the first fiscal year if the transaction closes, since the company is taking on about $13.4 billion in additional debt.

"However, with strong cash flow and a solid, acquisition-laden track record, we are confident in the company's ability to successfully carry and pay off this level of debt," Shove wrote in a client note.

Wachovia Capital Markets analyst Matt Perry echoed a similar sentiment, saying that Express Scripts' leverage would be 3.6 times the debt/EBITDA (earnings before interest, taxes depreciation and amortization) in 2007.

Perry said it's "a level that we view as manageable, and similar to the level Express Scripts reached in 1999 after two acquisitions."

Perry also said Express Scripts' offer supports his view that fundamentals in the pharmacy benefits manager sector will continue to be strong over the next few years and disputes the notion that the pharmacy benefits manager business is deteriorating.

"To make the offer, we think Express Scripts must be confident that the combined company will generate strong and stable cash flows over the next several years to pay down the debt burden," Perry wrote.

In premarket electronic trading, shares of Express Scripts shed $1.97, or 3 percent, to $68 after closing at $69.97 on the Nasdaq.

Alcohol can help save lives

Alcohol may actually provide some life-saving benefits to drinkers who get themselves into car crashes and other serious accidents, new research out of Toronto's Sunnybrook Health Sciences Centre shows.

But that's no licence to drink and drive, warn researchers, whose study was published yesterday in the journal Archives of Surgery.

The study shows that people with low to moderate amounts of alcohol in their systems may be less likely to die after arriving in hospital with serious head injuries than those who have not been drinking.

"Low concentrations of alcohol may have the ability to reduce secondary brain injury and may therefore improve brain-injury survival," Sunnybrook trauma surgeon Dr. Homer Tien, who led the study, said in a news release.

"However, the study only describes the effect of alcohol on the brain after injury occurs, and I'd like to stress that alcohol remains the leading cause of preventable trauma deaths and dramatically increases the likelihood of injury and fatal injury."

About a third to a half of all patients hospitalized from trauma are intoxicated at the time of their injury, the report says.

Paradoxically, however, the same alcohol responsible for the trauma might offer some significant brain protection in the aftermath of injury, Tien said.

Of the 1,158 people suffering severe head trauma who entered the hospital's trauma unit between 1988 and 2003, only 27.9 per cent with low to moderate blood-alcohol concentrations died of their injuries.

Meanwhile, 36.3 per cent of those who entered the sophisticated unit with no alcohol in their system succumbed to their trauma.

After adjusting for other factors, including type and severity of injury and whether blood transfusions were used, the study found that patients with low to moderate alcohol levels were 24 per cent less likely to die in hospital than those who had not been drinking.

But the same, post-accident drinking benefit did not extend to those with massive amounts of alcohol in their systems, the study found.

Patients with high blood-alcohol concentrations were 73 per cent likelier to die than those who had not been drinking.

In all, 403 of the patients suffering from severe "blunt force" head trauma died in the hospital of their injuries.

The study made no determination of the cause of this alcohol effect. But researchers speculated that moderate amounts of alcohol may help cut brain-cell loss from post-accident oxygen starvation that can compound the initial injury.

The study looked at three levels of alcohol concentrations: none, less than 230 milligrams of alcohol per decilitre of blood, and more than 230 milligrams per decilitre.

(The last blood reading translates into a roadside breathalyzer reading of 0.23 per cent – nearly three times the common legal limit of 0.08 per cent.)

The study stresses, however, that it should not be taken as good news for people who might consider drinking and driving – or other treacherous alcohol-related behaviours.

"There are major sociologic implications from implying that intoxicated patients with severe traumatic brain injury have better outcomes than non-intoxicated patients," the study says.

"We stress that our study only examined the role of alcohol on outcome in the post-injury phase because we examined only in-hospital deaths."

Cingular makes deal with MySpace.com

ATLANTA - Cingular Wireless LLC, the nation's largest cell phone provider, has made a deal with MySpace.com that will allow MySpace users to access their profiles through Cingular phones.

Under the agreement, cell phone users will be able to go to their MySpace.com page to edit it, post photos and get messages. For example, a MySpace.com user could take a picture with their cell phone and then immediately post the image to their Web page.

The new MySpace Mobile application will cost $2.99 a month plus charges for data usage, Atlanta-based Cingular said.

The deal also expands Cingular's work with MySpace.com, which includes letting bands use a service called MySpace Mobile Music to create ringtones.

MySpace.com, a popular social networking Web site, already has a deal with Helio, a cell phone venture of South Korea's SK Telecom and EarthLink.

Google Earth Soon the Be Followed by Google Space

NASA Ames Research Center and Google have jointly announced the signed a Space Act Agreement that formally establishes a relationship to work together on a variety of challenging technical problems ranging from large-scale data management and massively distributed computing, to human-computer interfaces.

As the first in a series of joint collaborations, Google and Ames will focus on making the most useful of NASA's information available on the Internet. Real-time weather visualization and forecasting, high-resolution 3-D maps of the moon and Mars, real-time tracking of the International Space Station and the space shuttle will be explored in the future.

"This agreement between NASA and Google will soon allow every American to experience a virtual flight over the surface of the moon or through the canyons of Mars," said NASA Administrator Michael Griffin at Headquarters in Washington. "This innovative combination of information technology and space science will make NASA's space exploration work accessible to everyone," added Griffin.

"Partnering with NASA made perfect sense for Google, as it has a wealth of technical expertise and data that will be of great use to Google as we look to tackle many computing issues on behalf of our users," said Eric Schmidt, chief executive officer of Google. "We're pleased to move forward to collaborate on a variety of technical challenges through the signing of the Space Act Agreement."

Recently, teams from NASA and Google met to discuss the many challenging computer science problems facing both organizations and possible joint collaborations that could help address them.

NASA and Google intend to collaborate in a variety of areas, including incorporating agency data sets in Google Earth, focusing on user studies and cognitive modeling for human computer interaction, and science data search utilizing a variety of Google features and products.

"Our collaboration with Google will demonstrate that the private and public sectors can accomplish great things together," said S. Pete Worden, Ames center director. "I want NASA Ames to establish partnerships with the private sector that will encourage innovation, while advancing the Vision for Space Exploration and commercial interests," Worden added.

"NASA has collected and processed more information about our planet and universe than any other entity in the history of humanity," said Chris C. Kemp, director of strategic business development at Ames. "Even though this information was collected for the benefit of everyone, and much is in the public domain, the vast majority of this information is scattered and difficult for non-experts to access and to understand.

"We've worked hard over the past year to implement an agreement that enables NASA and Google to work closely together on a wide range of innovative collaborations," said Kemp. "We are bringing together some of the best research scientists and engineers to form teams to make more of NASA's vast information accessible."

NASA and Google also are finalizing details for additional collaborations that include joint research, products, facilities, education and missions.

Google's innovative search technologies connect millions of people around the world with information every day. Google is headquartered close to Ames in Silicon Valley with offices through the Americas, Europe and Asia.
(http://www.nasa.gov/home/hqnews/2006/dec/HQ_06371_Ames_Google.html)

Google Earth is a free-of-charge, downloadable virtual globe program. It maps the earth by the superimposition of images obtained from satellite imagery, aerial photography and GIS over a 3D globe. Google Earth was developed by Keyhole, Inc., a company acquired by Google in 2004. The product was renamed Google Earth in 2005 and is currently available for use on personal computers running Microsoft Windows 2000 or XP, Mac OS X 10.3.9 and above, Linux (released on June 12, 2006), and FreeBSD. In addition to releasing an updated Keyhole based client, Google also added the imagery from the Earth database to their web based mapping software.

Google also released Featured Content for Google Earth, a new showcase of multimedia overlays in Google Earth that connect users to information about the world around them from a variety of premium content providers.

Users can access these informative overlays by clicking on the "Featured Content" checkbox in the Google Earth sidebar. In doing so, icons for each Featured Content provider will span the globe, enabling users to click on individual locations and learn about the area's significance. The Featured Content showcase will be routinely updated to include innovative and diverse contributions from additional content providers.

Exclusive Video Interview: Milo Ventimiglia On Rocky Balboa and Heroes

Exclusive Video Interview: Milo Ventimiglia On Rocky Balboa and Heroes

Last week, we were invited to have an exclusive video interview with head hero and Rocky Balboa offspring Milo Ventimiglia. We talked about being Rocky Jr., working on NBC's Heroes and he did a little Sly Stallone impersonation for us!

In the newest Rocky installment, the storylline for one of cinema's favorite characters is finally given the dignified send off he has always deserved.

The greatest underdog story of our time is back for one final round of the Academy Award-winning "Rocky" franchise, former heavyweight champion Rocky Balboa steps out of retirement and back into the ring, pitting himself against a new rival in a dramatically different era.

After a virtual boxing match declares Rocky Balboa the victor over current champion Mason "The Line" Dixon, the legendary fighters passion and spirit are reignited. But when his desire to fight in small, regional competitions is trumped by promoters calling for a rematch of the cyber-fight, Balboa must weigh the mental and physical risks of a high profile exhibition match against his need to be in the ring.

Ventimiglia portrays Rocky Jr., who has become distant from his father due to the overwhelming shadow cast by his success.

Click on the link below to watch our exclusive video interview with Milo Ventimiglia!

Milo Ventimiglia

	Windows Media Player
	Quicktime

Delphi accepts $3.4B from investors

DETROIT — An investment group will buy up to $3.4 billion (all figures U.S.) worth of stock in auto parts supplier Delphi Corp. to support the company's plan to get out of Chapter 11 bankruptcy protection, Delphi said Monday.

Under the deal, Appaloosa Management LP, Cerberus Capital Management LP and Harbinger Capital Partners Master Fund I, as well as Merrill Lynch & Co. and UBS Securities LLC, will invest a minimum of $1.4 billion and a maximum of $3.4 billion in the struggling company in exchange for common and preferred stock that will be issued in the first half of next year.

The money will be used to fully fund Delphi's pension plan, which at the end of 2005 was underfunded by $4.1 billion, the company said.

Troy-based Delphi, the nation's largest auto parts supplier, said the agreement was part of a plan to emerge from bankruptcy protection by the second quarter of 2007. A reorganization framework agreement, signed by Delphi, the investors and former parent General Motors Corp., was included in the deal.

Separately, Delphi accepted a proposal from JPMorgan Chase Bank and a group of lenders to refinance the company's existing $2 billion debtor in possession credit line and about $2.5 billion in loans.

"Today's agreements represent significant milestones in Delphi's reorganization and another major step towards emergence from our Chapter 11 reorganization in the U.S.," Delphi chairman and chief executive officer Robert S. "Steve" Miller said in a statement.

Under the deal, Delphi will offer 135 million new shares for sale sometime during the first half of next year, the company said.

In addition to the new investors, existing shareholders will get rights to buy some of the shares, Delphi said.

Delphi shares rose three cents, or 0.92 per cent, to $3.30 in over-the-counter pre-market trading Monday.

Delphi, GM's former parts-making arm that was spun off as a separate company, filed for bankruptcy protection in October 2005. It had 21,600 hourly workers at the end of September, the latest figures available.

The parts supplier plans to close or sell 21 of its 29 U.S. plants and focus on operating eight U.S. plants that make electronics, safety systems, heating and air conditioning systems and some mechanical parts. The plants slated for sale or closure make steering systems, brakes, dashboards and other parts that Delphi no longer considers part of its core business.

Delphi also has asked a court for permission to void previous labour contracts. The company continues to negotiate with GM and Delphi's unions on wage reductions for many of its hourly workers.

Introducing the iPhone—But Not from Apple

Cisco is using a long-held trademark on a new line of consumer handsets—less than a month before Apple is expected to release its own cell phone

A joke making the rounds on the Web Dec. 15 said the iPhone will be released on Dec. 18.

Here's the punch line: It's true. Not only that, but the company unveiling the device isn't Apple Computer (AAPL). Instead, the manufacturer behind a series of new products bearing the iPhone name is Linksys, a unit of networking equipment maker Cisco Systems (CSCO).

The company is announcing a series of Web-enabled telephone handsets designed to work with Internet calling services such as Skype, a division of eBay (EBAY), and other services, including SIP Phone's Gizmo Project.
Registered Trademark

For longtime tech watchers, Cisco's ownership of the iPhone name shouldn't come as a big surprise. Cisco has owned the trademark on the iPhone brand since 2000, when it acquired Infogear—which had registered the name in 1996. Infogear showed an Internet appliance bearing the iPhone name at the International Consumer Electronics Show in Las Vegas in 1997 (see BusinessWeek.com, 2/3/97, "A New Gig for Your Phone: Net Surfer"). Cisco spent $301 million to acquire Infogear in 2000. It later acquired Linksys, a maker of consumer home-networking products, in 2003.

Linksys' announcement comes amid increasingly persistent speculation that Apple is on the verge of announcing a wireless phone that includes some of the music-playing features of its popular iPod music players. The name? Let's just say many thought it would start with an "i." Apple CEO Steve Jobs is widely expected to announce some kind of phone device at the Macworld Expo trade show in San Francisco on Jan. 9. Apple had no comment.

Trademark filings for use of the iPhone name have been spotted in countries outside the U.S., and Apple rumor sites recently raised eyebrows with the discovery that the Internet domain www.iphone.org points to www.apple.com.
What's in a Name?

There's no telling what an Apple telephone device will be called, and presumably Apple could use the iPhone name under an arrangement with Cisco. Indeed, Apple's very corporate moniker is split between itself and Apple Corps, the British holding company created by the Beatles in the 1960s.

Still, it's no match made in high-tech heaven. A contract limits the scope under which each party may use the Apple name, and as the computer company's activities have expanded over the course of nearly three decades in business, the two companies have sued each other over the finer points of how to interpret that contract (see BusinessWeek.com, 5/9/06, "Apple Finds It Can Do That").

Cisco's reputation is built on making the routers and switches that direct traffic around the Internet and catering to a client base that includes the world's largest corporations and providers of communications services. But increasingly, Cisco is transforming into a maker of devices aimed at consumers too.

Dennis Vogel, a product manager for Cisco, says the use of the iPhone name is part of a larger strategic vision concerning networked homes. Cisco CEO John Chambers will expand on that strategy in remarks at the International Consumer Electronics Show in Las Vegas in January. "He'll be talking about the integration of devices around the home," Vogel says. "The phone is a good starting point, but there is quite a bit more to be done."

One feature likely to appear in future products, Vogel says, is a smart call-routing feature. When a call comes in to a typical home, all the phones in the house ring until someone picks it up. With call routing, a call from a particular number makes only certain phones ring or all phones in the house ring, according to a set of rules.

A call might be sent directly to the phone in a teenage son's or daughter's bedroom instead of ringing all the phones in the house. Other calls might ring more than one phone in the house but not all of them.

Additionally, consumers will be able to make and receive more than one call at once, meaning family members won't have to wait on each other to use a landline or move to a cell phone because the house phone is in use.
All Aboard the Skype Bandwagon

There's certainly demand for devices that do more than handle traditional phone calls over landlines. Skype, the most popular Internet calling service, already claims to have more than 100 million registered subscribers around the world and says the software required to use its service has been downloaded more than 200 million times.

Hardware products that allow consumers to gain access to Skype have already started to hit the market from other vendors, among them a handset recently released by Netgear (NTGR) and Belkin (see BusinessWeek.com, 12/13/06, "Netgear's Phone in the Rough"). Meanwhile, Vonage (VG) said in its most recent quarterly earnings statement that it had more than 2 million lines in service. Time Warner (TWX), Comcast (CMCSA), and Cablevision (CVC) all offer their own Internet calling services as well. Additionally, a recent study by market research firm In-Stat suggests that there are nearly 10 million voice-over-Internet-protocol (VoIP) phones used in businesses and forecasts that number will grow to nearly 46 million by 2010.

The Cisco-Linksys line of phones are coming to market just as the Internet calling business is heating up considerably. One model, the iPhone CIT4, is aimed squarely at Skype users who also use a landline phone. It's a cordless handset with a base unit that connects both to a regular phone line and to a computer network. It doesn't require a PC to use. Skype users can make free calls to other Skype users, but calls to and from conventional phones incur a fee. Skype announced plans for a flat-fee unlimited calling plan on Dec. 13, under the terms of which customers in the U.S. and Canada would pay $29.95 a year for unlimited calling to conventional phones.

Another new Linksys product, the iPhone WIP320, is a self-contained handset that connects to Skype by way of a home Wi-Fi network. A few other phones from Linksys bearing the iPhone brand include the WIP300, which is also a wireless handset that works with the Session Initiation Protocol, or SIP, which makes it compatible with services such as the Gizmo Project, as well as users of Earthlink's (ELNK) VoIP calling services among others. As with Skype, customers on SIP-compatible services can also make and receive calls to and from conventional phones, but such calls require a fee.

Another important step for VoIP will be to cell phones. Last month, Nokia (NOK) said it had integrated Internet calling on its N80 mobile phone in a partnership with the Gizmo Project.

Sony to enter video download market

Sony is to gatecrash the fledgling market in handheld devices to play downloaded video content early next year when it launches a service for the PlayStation Portable.

The decision, which could threaten Apple Computer’s grip on the video download market, will allow PSP owners to download a film from the internet to a PC and then to transfer a single, legal version of the film to a Sony device.

Sony, which has sold more than 20m PSPs worldwide, expects to launch the service in the first quarter of 2007 after tying up deals with online video providers.

Crucially for Sony, the service will not require the launch of a new PSP or for consumers to buy new hardware.

The new PSP service has been developed by Sony Pictures Home Entertainment and will use the Japanese company’s memory stick technology to store the video content. Sony is distributing a 4Gb memory stick capable of storing 10 feature films.

Amazon.com and film download sites such as Movielink and CinemaNow are in talks with Sony about signing up to the service. But the PSP service will not be compatible with Apple’s iTunes store, the dominant film download platform. Only iPod devices can download content from iTunes.

Only Walt Disney has made its films available on iTunes. Hollywood’s other studios have been reluctant to join Disney because of concerns about piracy: unlimited numbers of iPods can download copies of films that have been bought on iTunes and then downloaded to a PC.

Mike Goodman, a digital entertainment programme manager with Yankee Group, the research firm, said Sony’s PSP decision would “open the [video download] market up” for Sony.

Although the video download market is still immature, the industry is forecast to grow at an exponential rate during the next five years.

Global revenue from online video sales will be $298m this year, says Strategic Analytics. The technology research firm expects the market to grow to $1.5bn in annual revenues by the end of 2007 and to $5.9bn by 2010.

With Sony Pictures Entertainment producing film content in Hollywood and DVD sales growth slowing industrywide, Sony is keen to establish a strong position in digital delivery of film content.

Sony has had a difficult year. Launch of the PlayStation 3 suffered hitches. The group sold fewer than 200,000 units in its first month. It had intended to sell 400,000.

The problems led Sir Howard Stringer, chairman and chief executive, to describe the company as facing “a perfect storm”.

Google Phone: Free to consumers?

Will Orange soon be Google's favorite color?

France Telecom Group’s “Orange” mobile telephony division is in discussions with Google about a prospective “branded Google phone,” according to Guardian reports:

"Manufactured by HTC, a Taiwanese firm specialising in smart phones and Personal Data Assistants, it might have a screen similar to a video iPod. It would have built-in Google software (for) surfing the web from a mobile handset…The companies believe that they have an affinity as brands that are perceived as both 'positive' and 'innovative'.

France-Telecom does appear to share Google’s worldwide growth ambitions. It touts:

The group is even more effective to accompany its clients of all sizes, in all countries, on the road to IP convergence and their integration in the information system.

France-Telecom on its 2005 year of “innovation for Orange and broadband”:

The aim is to become the benchmark brand for tomorrow's world of mobile telephony.

Orange is one of the world leaders for mobile telephony. Driven by the adoption of the Orange brand in Poland, the buyout of Amena in Spain, as well as the performance of the numerous subsidiaries, the mobile business now accounts for 50% of France Telecom's sales.

3G kicks off
Launched in 2004, Orange UK and Orange France 3G services took off during the year 2005. By December 31, 2005, the two subsidiaries respectively accounted for more than 306,000 3G customers in the United Kingdom and more than 1 million broadband customers in France (EDGE and 3G).

In September, Orange Switzerland opened its 3G network in 14 cities.

84.3 million mobile customers at December 31, 2005

56% of mobile broadband owners in France use television and video services.

The Group seeks to serve more than 12 million mobile broadband customers in 2008, including more than 6 million in France and more than 5 million in the United Kingdom.

In July, France Telecom acquired nearly 80% of Amena, the 3rd ranked mobile operator in Spain holding 24% of the market, for 6.4 billion euros. This buyout enabled 10.3 million Amena customers to join the Group by the end of 2005.

More than 1.5 million broadband service subscribers at December 31, 2005

Google CEO Eric Schmidt has recently called for free mobile phones:

As mobile phones become more like handheld computers and consumers spend as much as eight to 10 hours a day talking, texting and using the Web on these devices, advertising becomes a viable form of subsidy.

‘Your mobile phone should be free. It just makes sense that subsidies should increase.’

Larry Page - Co-Founder and President of Products, focused on Google’s mobile strategy in its Q2 earnings call:

We are bringing more of our products to mobile phone users. Since there are at least twice as many mobile phones than PCs in use globally, and mobile usage is growing faster than PCs, we want to make Google available in a device-independent way.

Mobile phone users can now access Gmail, news and a personalized homepage in French, Italian, German and more. We launched Maps for mobile in several additional countries, and we are creating more opportunities for advertisers to reach users through mobile devices.

We launched mobile ads in Japan in April, and the early results are very positive. We expect to roll out mobile ads in additional countries later this year.

How about next year? Mobile ads on FREE Google (orange) Phones?

Don't lie to your lover on Skype

Skype has introduced a downloadable 'lie-detector': an application developed by KishKish that works with the Skype softphone to detect stress levels in the callers' voice.

According to Skype, "Using the KishKish Lie detector, you can monitor (in real-time) the stress level of the person you are talking to which allows you to gauge the level of stress and modify your questions."

The use of voice stress analysis (VSA) as a lie detector became popular in the late 1970s and 80s. In the 90s the first computerised VSA (CVSA) systems came to out to the market. According to KishKish, "the CVSAT is now the truth verification device of choice in the law enforcement community as the number of law enforcement agencies utilising the CVSAT continues to grow dramatically, proving the viability of the system for twenty-first century crime detection. The CVSAT is also being utilised by the US military in the global war on terrorism."

The KishKish Skype lie detector uses the first 10 seconds to "calibrate the system to the general stress level of the speaker." (So does this mean you can fool the system by opening up with a great big porker before continuing to lie through your teeth?).

Afterwards, "you will see four indicators about the stress level of the speaker. The most prominent one is a needle that moves up and down and registers the stress level of the speaker. The second is a meter which measures the stress level from 0 to 100. There is also a green light that changes to red when stress levels are above normal and finally, on top of the display there is a message which indicates the stress level of the speaker (high, normal)." KishKish offers no indication as to the accuracy of the product.

The lie detector is the latest in a series of products from KishKish designed to enhance Skype. Other tools include: voice mail, call recorder, book and mobile and the company says further additions will be announced in the near future.

KishKish is a wholly owned subsidiary of London Stock Exchange listed BATM Advanced Communications Ltd and also works closely with hardware manufacturers on Skype-related products.

A game console like an iPod: Nintendo's Wii set to perform well

Munich ­ Revolutions are rarely announced so far in advance. But after years of tinkering and publicizing, Nintendo's new games console has finally hit the market.

The Wii, long known on the internet under the working title 'Revolution' is Nintendo's new entrant into the gaming field. It has been designed to show up Microsoft's XBox 360 and Sony's Playstation while replacing its hapless predecessor, the Gamecube.

At a low price, a wide selection of games and, above all, new technology, Nintendo hopes to regain a healthy share of the gaming market.

The Wiimotem or the system's controller, provides the console's magic and it resembles a TV remote. Motion sensors let the Wiimotem act according to requirements - anything from a steering wheel to a sword or a tennis racket. Players do not have to master a dozen buttons to play a game. Instead, they just take the device and swing it like a golf club.

'We want the Wii to reach whole new target groups that up until now, have had a kind of fear of video games that seemed too complicated,' said Stefan Gundelach of Nintendo in Großostheim in the state of Bavaria. Even beginners can figure out the controller.

'New customers are Nintendo's biggest chance,' says Markus Schwerdtel from the Munich-based magazine GamePro. 'This is something for people who might normally not be so interested in games.' In addition, Nintendo has picked a great design.'

'This looks like an iPod for the living room,' says Schwerdtel. Priced at 250 euros (330 dollars), the Wii is affordable. 'But image is even more important,' says Schwerdtel. 'Nintendo was always a kind of toy. The competition was just cooler.' New games, a new design and new marketing could change that now.

There are already 27 titles to kick off sales. For the first time in Nintendo's history, Mario is not in the lineup. The Italian plumber will have to wait. To make up for it, the newest version of the Zelda games is already on shelves. Electronic Arts (EA) is bringing out sports and car racing games, normally the domain of XBox and the Playstation.

'The new controllers create fantastic possibilities for game designers and developers,' says Martin Lorber of EA. EA wants all consoles 'to exhaust their individual possibilities.' Technically, the devices might be more tempting than what the competition is offering.

The Nintendo controllers are revolutionary, even though they use relatively simple technology. The XBox 360 and especially the Playstation 3, when it comes on the European market in March 2007, will offer more computing power.

Washington uses flu pandemic money to prepare for any disaster

OLYMPIA, Wash. -- Washington state officials trying to figure out how to spend $7 million this year to prepare for a flu pandemic that may never arrive say they've learned lessons that will help with any disaster.

The $2 million in state money and $5 million from the federal government has already paid for a stockpile of protective equipment for health care workers, a new TV commercial and brochures to educate the public, a new Web site, and meetings and drills around the state.

"This is all one-year, one-time money, which is part of the problem," said John Erickson, who runs the state's emergency preparedness program through the Department of Health.

He and Secretary of Health Mary C. Selecky aren't complaining about the infusion of cash for emergency preparedness, but they wish they could expect yearly help.

Sixty percent of the money has gone to local and county health departments and to Washington's 29 American Indian tribes.

A worldwide outbreak of influenza could cause more than 5,000 deaths in Washington out of more than a million sick people, the health department estimates. The state has 300,000 licensed health care workers, and 96 hospitals with approximately 14,000 beds - not enough to handle a flu pandemic, state officials said.

"They're at capacity now," Erickson said, adding that other ailments won't stop and women won't stop going into labor if a worldwide flu arrives. "The challenge in a pandemic would be to redirect people away from hospitals."

The sickest would still be sent to hospitals, but the next level down will be treated in schools and fairgrounds and at home, he said.

The federal government has allocated 900,000 Tamiflu treatments - 10 pills to be used over five days - for Washington pandemic flu patients and the state has ordered another 200,000 courses, Selecky said. If the Legislature allocates more money, the health department would like to buy 400,000 more treatments.

Tamiflu, which is expected to help with symptoms but doesn't cure or prevent the flu, will be given to the people who get sick first and the health care workers who take care of them.

Selecky said this plan, modeled on the federal guidelines, will allow the first people who get sick and then recover to take over in the business world and in care centers when the next wave of people gets sick.

Washington's pandemic flu emergency plan includes a network of "flu spies" in doctor's offices and medical labs who provide regular reports on flu strains they see.

State officials have grouped the state's 39 counties into nine emergency preparedness regions based on population and hospital locations.

This year, every region is holding drills and updating public health emergency plans, with a task force including health departments, law enforcement, emergency officials, the State Patrol, military installations and business groups. Erickson said. Such exercises aren't new, though. They've been held since 2002.

Washington state has also improved its cross-border communication with British Columbia, because pandemic flu would not stop at the border.

About 6,000 people fly into Seattle, Portland and Vancouver, British Columbia, each day from Asia, Selecky said.

"If there's a pandemic flu, it will quickly move beyond the borders of the community," she said.

Local health departments will make recommendations to local governments concerning school closures and they will be in charge of public communication until the governor declares a statewide emergency, Selecky said.

The Benton and Franklin County region recently held a vaccination drill, using this year's flu vaccine. The drive-through flu clinic tested the region's emergency vaccination plan by giving this year's flu shots to volunteers who agreed to help the health department test a new procedure.

Erickson said state and county officials learned a lot from the exercise: they need written materials to be translated into more languages, they underestimated the volume of people who would show up, they needed more volunteers directing traffic, and they needed to plan for inclement weather.

Meetings with the various government agencies and business groups has been useful for a variety of reasons, such as learning the right person to call to get emergency rations or fix a tainted water supply.

"Relationships are everything," Selecky said. "You don't trade business cards during a disaster."

Selecky pointed out the preparation has been especially helpful for the smallest communities and American Indian tribes, which are also getting state and federal money to update their emergency plans.

The Makah Tribe in the state's far northwest corner used its updated emergency plan - a plan that had previously been updated in the 1970s - during a severe water shortage this summer. The tribe got the governor to declare a local emergency, advised 1,800 residents to cut their water consumption, used emergency sirens to give updates to the public and installed desalination equipment.

Selecky said one of the benefits of the federal focus on pandemic flu preparation - even if can seem a little like the "crisis of the month" - is that it reminds people to get ready for emergencies.

"People forget that you're supposed to be doing all-hazards preparedness," she said, adding that it doesn't really matter if you're preparing for an earthquake or a flood or an infectious disease. "It all comes down to a certain level of preparedness."

Tire Workers Strike Goodyear At Stores

Union members battling Goodyear Tire & Rubber Co. took their picket lines to tire retailers across the country on Saturday as part of an effort to gain leverage in talks with the company.

About 50 members of a Lincoln chapter of United Steelworkers protested at two Goodyear retailers here, decrying the company's use of replacement workers during the 2-month-old strike. About 150 additional rallies were planned in the U.S. and Canada.

"We know what it takes to build tires,x and unskilled workers just can't do it. We do not want the general public riding their lives on temporary workers," said Gary Schaefer, 54, vice president of the United Steelworkers Local 286 in Lincoln and a 34-year employee of Goodyear.

Members stood along a busy street, carrying signs with pictures of flat tires that read, "Recklessly driving experienced workers off the job."

Leo Gerard, USW international president, visited with strikers Saturday in the Cleveland suburb of Parma, Ohio, and planned a stop in Akron, where Goodyear is based.

Gerard said the point of the protests is to tell consumers about what the union believes is unfair treatment by Goodyear, including plans to slash health care and retirement benefits.

"They're literally stealing the money out of our retirees' pockets," Gerard said.

Goodyear spokesman Ed Markey said the protests do not affect plans to return to the bargaining table. Negotiations are scheduled to resume Monday in Pittsburgh, the first talks since meetings broke off Nov. 17.

"Our goals in the negotiations remains the same, and that is to reach a fair agreement that enables us to be competitive and win with our customers," he said.

The company's temporary workers are qualified and received the same training as all new employees, Markey said.

"Goodyear will never compromise quality," he said. "We have had quality systems in place and dedicated experts to run those systems since before the strike began. Additionally, every tire we make is screened for quality before it leaves the factory."

About 15,000 workers are on strike at 12 U.S. and four Canadian plants, counting union members on layoff, sick leave or other time off. Goodyear workers went on strike Oct. 5 after talks broke down on a new contract.

Among those on strike are workers at the Goodyear plant in Union City, Tenn.

Since the strike began, Goodyear has been making tires at some of its North American plants with nonunion and temporary workers as well as some managers and relying on production at its international plants to help supply North American customers.

In Lincoln, Ted Kastl, 56, who has worked for Goodyear 35 years, was hopeful that the storefront protests would force the company's hand.

"I think this could lead to us getting what we want. It will put more pressure on Goodyear to get things resolved," Kastl said.

Striking workers have found it difficult to make ends meet, but $50-a-week payments from the union for groceries and gas have helped, said 20-year employee Kurt Bomberger, 43.

The union's strike fund could drop below $100 million if the dispute drags into March, Gerard said, at which time all members would be asked to contribute $5 to fill the coffers and support striking workers.

In suburban Pittsburgh, more than 80 people handed out fliers and urged holiday shoppers driving past a Goodyear service center at a mall to honk in support of Goodyear employees. Most drivers obliged.

"I'd say (we're getting) a lot of support, and that's what we're doing: educating the public on what the dispute is about," said John Sellers, a retired Steelworkers official.

The Steelworkers there were joined by members of the AFL-CIO and American Federation of Teachers.

AFL-CIO President John Sweeney said the union's decision to join forces with the USW for Saturday's protests was a statement by working people to Goodyear and other companies.

"We're going to hold the line for the nation's middle class. Working people everywhere have been pushed to the brink by giant multinational conglomerates like Goodyear," Sweeney said. "We're going to push back."

Goodyear has said it intends to close its Tyler, Texas, tire plant by next year because the company is ending production of low-profit private-label tires. The union wants all plants protected from closing. The USW also strongly objected to a company proposal for creating a retirees' health care trust, which the union argues shortchanges retirees.

Goodyear executives have said they are seeking a contract that will help the company be globally competitive. The company has said its offer protects wages, proposes upgrades to union plants and offers a plan to provide health care coverage for retirees.

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'Person of the Year': You

You were named Time magazine "Person of the Year" today for the explosive growth and influence of user-generated internet content such as blogs, video-file sharing site YouTube and social network MySpace.

"For seizing the reins of the global media, for founding and framing the new digital democracy, for working for nothing and beating the pros at their own game, Time's Person of the Year for 2006 is you," the magazine's Lev Grossman wrote.

The magazine has put a mirror on the cover of its "Person of the Year" issue, released on Monday, "because it literally reflects the idea that you, not us, are transforming the information age", Editor Richard Stengel said in a statement.

You beat candidates including Iran's President Mahmoud Ahmadinejad, China's President Hu Jintao, North Korean leader Kim Jong-il and James Baker, the former US Secretary of State who led Washington's bipartisan Iraq Study Group.

Time has been naming its person of the year since 1927 and the tradition has become the source of speculation every year, as well as controversy over unpopular choices such as Adolf Hitler in 1938 and Ayatollah Khomeini in 1979.

The aim is to pick "the person or persons who most affected the news and our lives, for good or for ill, and embodied what was important about the year, for better or for worse".

Grossman said the creators and consumers of user-generated internet sites showed a community and collaboration on a scale never seen before.

"It's about the many wresting power from the few and helping one another for nothing and how that will not only change the world, but also change the way the world changes," said Grossman, Time's technology writer and book critic.

"The tool that makes this possible is the World Wide Web," he said. "It's a tool for bringing together the small contributions of millions of people and making them matter."

MySpace - bought by media giant News Corp last year for $US580 million ($742.21 million) - has more than 130 million users around the world and adds around 300,000 members a day, while YouTube - bought by internet search leader Google Inc last month for $US1.65 billion ($2.11 billion) - gets about 100 million daily views.

"These blogs and videos bring events to the rest of us in ways that are often more immediate and authentic than traditional media," Stengel said.

"Journalists once had the exclusive province of taking people to places they'd never been. But now a mother in Baghdad with a videophone can let you see a roadside bombing or a patron in a nightclub can show you a racist rant by a famous comedian," he said.

Time's 2005 Person of the Year was the richest man in the world, Bill Gates, his wife Melinda, and Irish rocker Bono for being Good Samaritans, while the 2004 choice was US President George W Bush. In 2003 "The American Soldier" graced the cover in a year when US troops invaded Iraq.