History > 2006 > USA > Internet (II)

Sgt. Mark Grelak, in Iraq, talks to his wife, Jennifer,

and daughters Sara and Katie, holding doll, in Baltimore,

using a Web camera.

Jane Therese for The New York Times

An Internet Lifeline for Troops in Iraq and Loved Ones at Home

NYT

8.7.2006

http://www.nytimes.com/2006/07/08/us/08FAMILY.html

Universal Music Group

and an Online Site

Plan a Joint Venture

to Challenge iTunes

August 30, 2006
By ERIC PFANNER International Herald Tribune
By ERIC PFANNER
The New York Times

A new online music company said yesterday that it would make a huge catalog of songs from the world’s largest record company, the Universal Music Group, available for consumers to download free.

The company, called SpiralFrog, said its intention was to wean music fans, especially young people, away from illegal downloads and pirate music sites by offering a legitimate source, supported by advertising instead of download fees.

SpiralFrog is the latest to offer a challenge to Apple Computer’s hugely successful iTunes service, which allows consumers to download songs legally for 99 cents each, and its many smaller imitators. Though the venture is not the first to try a free ad-supported approach, the backing of Universal, with millions of songs in its catalog from thousands of artists like Eminem and Gwen Stefani, Elton John and Gloria Estefan, Count Basie and Hank Williams, promises to give it instant credibility and scale.

SpiralFrog, which is privately held and headed by Robin Kent, a former advertising executive, said it expected to start testing its service in the United States and Canada by the end of the year and would extend its service to Britain and other European markets next year.

The announcement reflects the music industry’s eagerness to experiment with various digital business models and to find a way to overcome piracy and illegal copying, which remain a big problem despite the record companies’ efforts to enforce their copyrights in court.

While the industry has tried to encourage the growth of legitimate alternatives like iTunes, some record executives have begun to chafe at Apple’s dominance in the online market, particularly its insistence on a “one size fits all” pricing model, saying it has restricted the growth of digital sales.

For consumers, SpiralFrog’s free downloads will come with many more strings attached than Apple’s paid ones. Users of SpiralFrog will have to sit through advertisements and will be prevented by special software from making copies of the songs they download or from sharing them with other people.

They will have to revisit the SpiralFrog Web site regularly to keep access to the music they download. And the songs will be encoded in the Microsoft WMA format, meaning they will probably not work on Apple iPod portable music players.

The venture is not the first legitimate one to make music available free. Napster, a former peer-to-peer file-sharing scourge of the record companies, introduced an advertising-supported service this year that lets users listen to a few songs without paying fees. But Napster’s free service streams its music to users, rather than allowing them to download and store the files, as iTunes does.

Kazaa, another digital file-sharing network, agreed last month to settle copyright-infringement lawsuits with the music and movie industries. It is also expected to start a free-with-advertising service when it reintroduces itself as a licensed, legitimate distribution business.

SpiralFrog beat Kazaa to the punch with its own announcement, which was reported yesterday by The Financial Times.

“Offering young consumers an easy-to-use alternative to pirated music sites will be compelling,” Mr. Kent of SpiralFrog said in a statement. “SpiralFrog will offer those consumers a better experience and environment than they can get from any pirate site.”

Mr. Kent is a former chief executive of Universal McCann, a media-buying unit of the Interpublic Group that is not connected to Universal Music.

Neville Hobson, a spokesman for SpiralFrog, said the company hoped to pursue licensing deals with the other major record companies — Sony BMG, EMI and Warner Music — to augment its deal with Universal Music, a unit of Vivendi.

SpiralFrog, which is based in New York, did not disclose the terms of its licensing agreement with Universal Music or how it would compensate the company for use of its copyrighted songs. Universal’s many record labels control about a quarter of the worldwide market for recorded music.

Given the fragmentation of the digital music business — the hundreds of would-be challengers to iTunes mainly have minuscule shares of the market — analysts said that new services like SpiralFrog would face difficult challenges, despite the lure of free music.

“Few service providers are currently in a position to provide the large audiences that advertisers require, and few pure music providers have the heritage of building a business funded by advertising,” said Michele Mackenzie, principal analyst at Ovum, a telecommunications and Internet consulting firm.

The music industry must also manage its relationship with Apple carefully, analysts said.

SpiralFrog took pains to discourage talk that its free-with-advertising model would threaten Apple’s pay-per-song service. Mr. Hobson, the SpiralFrog spokesman, said, “It’s a very different model. It’s complementary to iTunes.”

Universal Music Group and an Online Site Plan a Joint Venture to Challenge iTunes, NYT, 30.8.2006, http://www.nytimes.com/2006/08/30/technology/30music.html

Magazines drop print for Web

to reach teens

Updated 8/29/2006 6:50 PM ET
By Anne D'innocenzio, Associated Press
USA Today

NEW YORK — This fall, teens who want the 411 on skinny jeans will have fewer teen monthly fashion bibles to flip through. But the moves by Elle Girl and Teen People to pull the plug on their publications and focus on their websites don't seem to bother 14-year-old Devon Brodsky.

"There are so many other ways to read about fashion," said the Harrison, N.Y. resident. Aside from Teen Vogue, Brodsky gets her fashion fix from entertainment weeklies like In Touch, the Internet and television's E! Entertainment.

Such a blase attitude contrasts sharply with the heated interest among teens back in 1998, when Teen People catapulted on the scene, spawning a new genre of teen fashion magazines like CosmoGIRL!, Teen Vogue and Elle Girl . But as teens are finding new alternatives in other media, the teen magazine market is undergoing an adolescent crisis.

YM magazine, whose assets were purchased by Conde Nast Publications, closed in early 2005; Hachette Filipacchi Media's Elle Girl and Time's Teen People both announced this year they will suspend publication to focus on their websites. Executives at Hearst's CosmoGIRL! and Seventeen as well as Conde Nast's Teen Vogue all vow they'll continue publishing, but all are reinventing themselves to follow where teens are going. That means relaunching their websites to make them more interactive as well as offering fashion and beauty information through teens' mobile phones.

Meanwhile, Conde Nast's Internet division CondeNet will be unveiling a teen content website in early 2007, though company officials declined to comment further.

Officials at Teen People, which is suspending its publication after the September issue, declined an interview.

"You can't just be a magazine editor sitting in your office. You can no longer dictate. It is a two-way street," said Atoosa Rubenstein. Since joining Seventeen as editor-in-chief in July 2003, she has been spearheading a revival of the once-tired 62-year-old publication, which still leads in circulation among teen rivals. Rubenstein had helped to launch CosmoGIRL! as editor-in-chief back in 1999.

Last fall, Rubenstein produced and starred in a reality show called Miss Seventeen, which aired on MTV. Another television project will be announced soon with a major network, she said. Seventeen is also relaunching its website later this fall that will further develop it as a social networking site.

Some analysts are not upbeat about the overall teen magazines' outlook, given competition from online social network sites like MySpace.com. Editors at teen magazines argue that their authoritative voice in fashion sets them apart from other sites out there.

"I think they're overplaying their authority card," said Jon Gibs, director of media analytics at Nielsen/NetRatings Inc., an Internet research company. "As consumers generate media themselves, the idea of an authoritative voice becomes more diluted. What is an authoritative voice? Is it a popular teenager, a brand, a magazine, a journalist or best friend? The whole thing is very fudgeable."

Brodsky noted that while she still loves magazines, she would be more open to getting her fashion information from interactive teen magazine sites than a community site.

Consumers' migration to the Web has hurt overall magazines, but teen publications have been the first group of major consumer publications that have "fallen by the wayside," said Martin S. Walker, chairman of Walker Communications, a magazine consulting firm.

While the overall magazine industry is suffering, industry observers note that teen magazine publishers have their own unique challenges.

First, with their readers outgrowing the magazines every couple of years, publishers have to spend money to replenish their subscriber base.

The fragmented pop culture has also hurt, according to Anne Zehren, who helped launch Teen People as publisher in 1998 and left in 2003. In the late 1990s, the hot teen music idols were few, like Britney Spears and the Backstreet Boys. But teens now have more varied musical tastes, from hip hop to heavy metal, a trend that has diluted magazine newsstand sales.

Moreover, in recent years, kids are spending less time reading magazines, as chatting with their friends on their cellphone or on the Internet have taken center stage in their lives.

"Magazines are part of this one-way media," said Anastasia Goodstein, a San Francisco-based writer who publishes Ypulse, a blog about Generation Y for media and marketing professionals. Media is now about teens "being in touch with their friends all the time.... We have to follow where teens are hanging out."

Experts say the first big test online comes when Ellegirl.com relaunches its website this fall. Anne Sachs, executive editor of Ellegirl.com, reports the website has seen traffic increase in July, the month the magazine disappeared from the newsstands.

With the relaunch, the online community will take center stage, Sachs said. Teens can customize parts of the site and stories online will be more focused on their comments, she said. Ellegirl.com is also creating a mobile site called ellegirlMobile.

Other rivals aim to further integrate their publications with the online world.

Seventeen magazine will feature pop star Hilary Duff as a guest editor on its October issue, and will show videos of her putting the issue together on AOL's RED and KOL interactive service for teens and kids, respectively, as well as selective versions on Seventeen.com. Teenvogue.com will feature video podcasts on its site and clips of an October event where about 700 teens will learn about the fashion business from seminars with designers and executives.

CosmoGIRL!'s website, which is set to relaunch this year, will air a reality-based "Webisode," featuring graduating college seniors starting Sept. 19. It's also considering offering video based on such magazine fixtures as Project 2024, which spotlights celebrity interviews by college students whose career aspirations match their subjects'.

"Of course we do makeup... but we really do respect our reader," said Susan Schulz, editor-in-chief of CosmoGIRL! "She has bigger plans for herself and we want to feed that part of her soul."

    Magazines drop print for Web to reach teens, UT, 29.8.2006, http://www.usatoday.com/tech/news/2006-08-29-teen-mags-net_x.htm

EBay Gambles

on Google Partnership

for Success of Skype,

the Internet Phone Service

August 29, 2006
The New York Times
By SAUL HANSELL

EBay is hoping its new partnership with Google will help it find new ways to make money from Skype, its Internet calling service. But experts wonder if enough people are willing to make the switch from traditional phones to talking through their computers.

A critical aspect of the deal announced yesterday is that Google will introduce a feature that allows users to talk to advertisers by way of Skype, instead of just clicking through to the advertisers’ Web sites. Users of this feature, called click-to-call, would also have the option of using Google’s own Google Talk system or standard telephones.

Early tests by several companies indicate there is a group of advertisers, including mortgage brokers, who are willing to pay $8 to $15 for each call from a Web searcher, roughly 10 times more than they will pay for a Web site click. Under the Google- eBay deal, money paid by advertisers for calls completed through Skype would be split between the two companies, although the proportion of the split was not disclosed.

But most of these tests so far, including those by Google, are focused on calling using regular phones, rather than calling by PC using services like Skype. Indeed, eStara, a company that provides pay-per-call advertising technology to companies including Verizon’s SuperPages.com unit, offers both telephone and PC calling options. It has found that only 10 to 15 percent of people choose to talk using their computers, and that this proportion is not increasing.

“The vast majority of consumers want calls to be landline-based,” said John Federman, eStara’s chief executive. PC calling requires computers that are equipped with microphones, and a change in customer behavior.

Alex Kazim, the president of Skype, said an increasing number of computers now came with microphones, and consumers were increasingly using them.

“We see a shift over time as users become more and more able to do voice calling on their PC’s,” Mr. Kazim said. He pointed out that Skype had 100 million users worldwide.

EBay bought Skype last year for $2.6 billion and additional payments based on its performance. It expects Skype to generate $200 million in revenue this year, mainly from fees for connecting PC calls to regular telephones and extra services like voice mail.

In an interview Sunday, Meg Whitman, eBay’s chief executive, said that the click-to-call system could substantially increase Skype’s revenue, but she declined to say by how much.

Skype and Google will begin testing the system next year. So far, most pay-per-call advertising uses one of two technologies. In some, the ads simply display a telephone number for users to call as they would any business. But the number is used only for that advertising campaign, so each call can be tracked. In others, users enter their phone number on the Web and receive a call moments later from the advertiser.

Google has tested the latter system because it can record exactly what path a user took before initiating a call.

AOL, which is using pay-per-call in its Web search ads, uses the unique phone number approach, because it is easier to understand.

“Consumers are more interested in what they are going to say to the mortgage broker than learning how to change behavior,” said Marc Barach, the chief marketing officer of Ingenio, which runs the pay-per-call system used by AOL.

Matt Booth, an analyst with the Kelsey Group, said there was a large potential market for ads that generate voice calls, especially among small businesses that do not do much business online.

“Sending someone to a Web site for a plumber is not as valuable as setting up a phone call,” Mr. Booth said.

EBay is also exploring how to use voice communication on its own auction site. So far, it has allowed sellers in some categories to add “Skype me” buttons that let potential bidders call them using Skype. It does not charge for this service, as it is seen as an alternative to e-mail, the usual way sellers have answered questions.

But eBay hopes to develop new services for marketers who are simply looking for contacts with potential customers rather than simple transactions, charging them for every call completed.

“There is a class of goods and services where the eBay transaction model is struggling,” said Mr. Kazim of Skype. “Real estate agents are not looking to sell a particular house. They want you to come in, and figure out what you need and can afford, so they can show you five houses that are right.”

The other part of the deal announced yesterday is more straightforward: Google will sell advertising that will appear on eBay pages outside of the United States. In May, eBay struck a similar deal for Yahoo to sell ads on its pages in the United States. Yahoo also agreed to use eBay’s PayPal unit as its main payments system worldwide.

Ina Steiner, the editor of AuctionBytes, a newsletter, said many eBay sellers saw little benefit from the deals with Yahoo and Google.

“It looks like eBay is milking its auction site as a cash cow to invest in PayPal and Skype,” Ms. Steiner said. “People are already seeing the tests for the Yahoo ads, and they are not happy about them because they compete with the eBay sellers.”

EBay is trying to minimize this competition by showing ads for what it calls complementary products, like accessories, rather than for the products being auctioned.

Ms. Steiner said most sellers saw the Skype Me feature as an imposition.

“Most sellers don’t want to talk to buyers,” she said. “They can barely keep up with their e-mail correspondence.”

Google’s shares rose $7.69 yesterday, to close at $380.95, while eBay’s shares rose 49 cents, to $25.79.

    EBay Gambles on Google Partnership for Success of Skype, the Internet Phone Service, NYT, 29.8.2006, http://www.nytimes.com/2006/08/29/technology/29ebay.html

Google, EBay

Form Advertising Alliance

August 28, 2006
By THE ASSOCIATED PRESS
Filed at 4:13 a.m. ET
The New York Times

SAN FRANCISCO (AP) -- In a deal between two of the Internet's most prominent properties, Google Inc. will begin selling advertising on Web auction leader eBay and help buyers quickly ring an online merchant to do business.

The arrangement announced Monday promises to introduce ''click-to-call'' Web site technology to a broader audience and potentially speed its adoption as a means to more quickly connect online consumers with advertisers. It allows potential buyers to call up sellers by clicking a link in a Web page.

''We have a chance to create a whole new way for buyers and sellers to connect online and to create what we hope will be a significant revenue stream for both eBay and Google,'' eBay Chief Executive Meg Whitman said in an interview Sunday night.

Last year, eBay Inc. bought the Internet phone service Skype. Google has its own messaging and voice telephone service, Google Talk. Both services will be used in the partnership, though details were not disclosed.

Google CEO Eric Schmidt said the agreement with eBay is ''likely to go on for many years,'' but he would not disclose the terms of the deal or what it might mean for the Mountain View-based search engine's bottom line. Whitman said eBay does not expect the partnership to affect its financial performance either this year or next.

Under the partnership, Google would become the exclusive provider of text advertising on eBay outside the United States. In May, eBay announced a deal with the No. 2 Internet search engine, Yahoo Inc., to serve all its domestic advertising.

The second component of the alliance calls for the two Silicon Valley companies to work together on developing a service that lets Web surfers place telephone calls through their computers or handheld devices when they click on a link in an Internet ad.

Schmidt and Whitman said they would begin testing some of their joint services early next year.

Whitman said eBay decided to give Google's advertisers access to its international auction sites after choosing Yahoo for its domestic advertising because of the competing Internet search engines' respective strengths and how they mesh with eBay's assets.

San Jose-based Ebay also owns PayPal, the online payment service, and when the company joined advertising forces with Yahoo, PayPal became the preferred payment provider for purchases made on Yahoo.

Similarly, eBay plans to rely on Google's international presence to build a worldwide market for Skype, the Luxemborg-based Internet phone provider the company acquired last year.

The companies said they would use Skype and Google Talk, the search engine's instant messaging and voice-over-Internet telephone service, to build a search function that lets Web surfers launch Internet phone calls to eBay merchants or Google advertisers by clicking on ads.

Promoting ''click-to-call'' advertising was also part of the deal eBay announced with Yahoo in May.

Although eBay already was one of Google's biggest advertisers, the search engine launched a rival online payment service to Paypal in June. Schmidt said the overlapping services and partnerships are all part of Silicon Valley's effort to respond to tech-saavy shoppers who want service in a hurry.

''This is all about speed,'' he said. ''The moment somebody wants to buy something, we want that advertiser to be able to sell it, hawk it or do whatever they want with it.''

    Google, EBay Form Advertising Alliance, NYT, 28.8.2006, http://www.nytimes.com/aponline/us/AP-Google-eBay.html

Google expands into business

software market

Mon Aug 28, 2006 1:10 AM ET
Reuters
By Eric Auchard

SAN FRANCISCO (Reuters) - Google Inc. is making a concerted move beyond search and advertising into the business software market, starting with a set of Web programs for e-mail, scheduling and communications, it said on Sunday.

The online search leader said it has created a software platform to run basic business activities -- based on programs it already offers separately. The move marks a stepped up challenge to rival Microsoft Corp. as the software giant prepares to upgrade its Windows and Office franchises.

The free set of Web-based programs for small businesses, universities and nonprofit businesses goes by the mouthful "Google Apps for Your Domain" ( http://www.google.com/a ).

Later this year, Google said it will offer a "paid, premium" version with the option of being ad-free and more administrative control and compliance features to meet the demands of bigger corporations and government agencies. Pricing for this more advanced version is not yet available, it said.

Google will host the applications relieving companies of the need to maintain or install software on individual PCs -- support tasks often more costly than software itself.

"If we do it right, we get the best of both worlds -- very consumer-friendly software, but also low-cost business applications," said Dave Girouard, general manager of Google's enterprise division, which sells search software to companies.

Individual office workers can sign on to Google Apps -- short for applications -- through their Web browsers.

Initial apps are Gmail Web e-mail, the Google Talk instant message and Web phone-calling service, group scheduling on Google Calendar, and Google Page Creator for Web page design.

"It really is intended to be a platform," Girouard said.

"One of the fundamental benefits of the software as service approach is that you can just turn on new features over time." The Writely word processor and Google Spreadsheet are candidates for future inclusion in Google Apps, Girouard said.

SOFTWARE CHALLENGE

Google's main appeal is to consumers of its popular Web search and advertising systems. By packaging a set of software for businesses, Google is responding to demands by corporate network administrators who prefer to manage a standard set of software inside organizations. Many are cracking down on the spread of individual consumer programs within their networks.

Sue Feldman, an analyst with market research firm IDC, said Google Apps moves the company into open competition with Microsoft in the business software market.

Anticipating Google's moves, the world's biggest software maker has responded with Windows "Live" -- Web-based software for small business and consumers. But Microsoft's unwillingness to deliver its software until it is "fully baked" gives Google an opening to win adherents to its approach, the analyst said.

"There is simplicity and there is s-i-m-p-l-i-c-i-t-y," Feldman said. "If you are used to using Microsoft Outlook, you may need many more features and you will want to use them whether you are connected to the Internet or offline."

Martin Pyykkonen, an analyst with Global Crown Capital of San Francisco, says Google's bid to host business software may give pause to companies mulling when to upgrade to new versions of Microsoft Windows, Office and Outlook due in the next year.

"For all the complexity of Microsoft software and how long Vista has taken, a lot of corporate executives are going to be wary: Do you update to the complexity of Vista or would you be better off just using something simple like Google Apps?" he said.

Vista, the first major upgrade of Windows in five years, is due out later this year or early next.

IBM, Oracle Corp. and SAP AG also are racing to offer their software as Web-based services in order to make it easier to use and to cut costs, following the lead of pioneer Salesforce.com. Google's latest move makes them both competitors and potential partners.

Girouard underscored that the Google Apps platform is not designed to replace Microsoft's core software. Many businesses are likely to run Windows and Office programs alongside Google Apps on office workers' computers, he said.

"This platform isn't by any means an alternative to Windows," Girouard said. "We are not really out there to eliminate any applications. We are looking to introduce new ways to solve problems people have been having for years."

"There is a lot of open territory," he said.

    Google expands into business software market, R, 28.8.2006, http://today.reuters.com/news/articlebusiness.aspx?type=ousiv&storyID=2006-08-28T051028Z_01_N27461978_RTRIDST_0_BUSINESSPRO-GOOGLE-APPS-DC.XML&WTmodLoc=Home-C4-Business-ousiv-2&from=business

They know all about you

Every time you use an internet search engine, your inquiry is stored in a huge database.
Would you like such personal information to become public knowledge?
Yet for thousands of AOL customers, that nightmare has just become a reality.
Andrew Brown reports on an incident that has exposed how much we divulge to Google & co

Monday August 28, 2006
Guardian
Andrew Brown

In March this year, a man with a passion for Portuguese football, living in a city in Florida, was drinking heavily because his wife was having an affair. He typed his troubles into the search window of his computer. "My wife doesnt love animore," he told the machine. He searched for "Stop your divorce" and "I want revenge to my wife" before turning to self-examination with "alchool withdrawl", "alchool withdrawl sintoms" (at 10 in the morning) and "disfunctional erection". On April 1 he was looking for a local medium who could "predict my futur".

But what could a psychic guess about him compared with what the world now knows? This story is one of hundreds, perhaps tens of thousands, revealed this month when AOL published the details of 23m searches made by 650,000 of its customers during a three-month period earlier in the year. The searches were actually carried out by Google - from which AOL buys in its search functions.

The gigantic database detailing these customers' search inquiries was available on an AOL research site for just a few hours before the company realised that substituting numbers for users' names did not really protect their identities enough. The company apologised for its mistake - and removed the database from the internet. The researcher who published the material has been sacked, as has his manager, and last week AOL's chief technology officer, Maureen Govern, resigned. But those few hours online were enough for the raw data files to be copied all over the internet, and there are now four or five sites where anyone can search through them using specialised software.

What was published by AOL represents only a tiny fraction of the accumulated knowledge warehoused within Google's records - but it has given all of us, as users, a dramatic and unsettling glimpse of how much, and in what intimate detail, the big search engines know about us.

The number of searches Google carries out is a secret, but comScore, an independent firm, reckons that the search engine performed 2.7bn searches by American users alone in July this year. Yahoo, its main rival, conducted around 1.8bn American searches in the same month; Microsoft's MSN around 800m and AOL 366m.

All of this information is stored. Google identifies every computer that connects to it with an implant (known as a cookie) which will not expire until 2038. If you also use Gmail, Google knows your email address - and, of course, keeps all your email searchable. If you sign up to have Google ads on a website, then the company knows your bank account details and home address, as well as all your searches. If you have a blog on the free blogger service, Google owns that. The company also knows, of course, the routes you have looked up on Google maps. Yahoo operates a similar range of services.

All this knowledge has been handed over quite freely by us as users. It is the foundation of Google's fortune because it allows the company to target very precisely the advertising it sends in our direction. Other companies have equally ambitious plans: an application lodged on August 10 with the US Patent & Trademark Office showed that Amazon is hoping to patent ways of interrogating a database that would record not just what its 59 million customers have bought - which it already knows - or what they would like to buy (which, with their wish lists, they tell the world) but their income, sexual orientation, religion and ethnicity. The company, of course, already knows who we are and where we live.

Even though the search logs that AOL released were made anonymous, by assigning a number to each user, it is not difficult in many cases to discover somebody's name from their search queries. And it is easy to follow exactly what users were thinking as they sat at their computers, in the apparent privacy of their own homes, since the time and date of every search is given.

On April 4, for instance, user 14162375, the melancholy Portuguese-American in Florida, seems to have passed out on the keyboard at 6.20pm, when he asked, suddenly, "llllfkkgjnnvjjfokrb" then "vvvvbmkmjk" and "vvglhkitopppfoppr". An hour later he had recovered enough to search for variations on his wife's name - he thought she might have moved to New England. On the evening of April 16, matters came to a head. "My cheating wife," he typed; and then, five times, "I want to kill myself," and then "I want to make my wife suffer," followed quickly by "Kill my wifes mistress," "My wifes ass," "A cheating wife". Two days after that he was back looking for audio surveillance and bugging equipment and four weeks later he seemed to have cheered up and was looking for motorcycle insurance.

The story stops abruptly there, at the end of May, because that is when the three months' worth of released AOL search records came to an end.

One of the first researchers to demonstrate that we will tell anything, however intimate, to a computer, was Joseph Weizenbaum of MIT, who in 1966 wrote a programme called "Eliza" that parodied non-directional psychotherapy. If the user typed anything in, Eliza would appear to ask a question based on that cue. In no time at all, unhappy students were telling the computer all their troubles as if there were a real and sympathetic person behind the screen. Stories and jokes about this circulated for decades, but the men most successful at turning this concept into a fortune were the founders of Google, Larry Page and Sergei Brin. As users, we think that the Google search engine is a way of supplying us with information about what's on the web. But the flow of information is two way. We ask Google things that we would hesitate to ask anyone living. The price for the answers is that Google remembers it all.

Take user 11110859 of New York City, who fell in love and then was sorry. She was up early on March 7 to buy hip-hop clothes from G-Unit; by March 26, however, there was more excitement in her life. Searches on "losing your virginity" were followed by three weeks of frantic worry about whether she was pregnant: stuff she might have hesitated to tell her best friend or her mother is all quite clear from the Google searches. But by the end of April the pregnancy scare was over and had been replaced by a broken heart. Even before she had stopped asking "Can you still be pregnant even though your period came?" she was asking "Why do people hurt others" and this was the theme of almost all her questions throughout May, culminating on the afternoon of the 19th, when she asked "How to love someone who mistreated you?"; "What does Jesus say about loving your enemies?" "What does God mean when he says bless those who spitefully use you?" Then she spent a couple of days trying to buy Betty Boop postage stamps, and the next thing we know, she was asking first for directions to the New York prison on Rikers Island, then "What items are we allowed to bring at Rikers Island" and finally for "uncoated playing cards".

User 11110859 was not the only person interested in the prison but she seems to have been the youngest and, in some senses, the most innocent. User 3745417 laid out her thoughts in detail just as graphic: on March 6 she made eight searches on child molestation and similar phrases. A week later she was trying to find a prisoner in Rikers Island - nine searches in one evening - a subject she returned to at 9.30am on March 25, when she made another eight searches. Between March 27 and March 29 she made 34 successive searches for M&M chocolates in the early evening, followed on the 30th, at 10pm, by four searches for "Kid Party Games". By 10.15pm she was searching for "Whitney Houston"; then, in the course of the next hour, 29 searches on "black porn for women" and similar subjects.

By the end of April, she was looking for a legal aid lawyer in New York City, a swimsuit, a credit card and a holiday in the Bahamas.

These stories, with all the revealing information they contain, cannot always easily be tied to a specific individual, but sometimes they can. The social security number, with which all Americans are issued, conforms to a recognisable pattern which is easy to search for in the data that AOL released. So, too, are telephone numbers. On the internet, you can buy anything from anywhere, but there are some things, such as pet care, which people mainly buy locally, so it is easy to spot where they live. People often search for their own names, which can then be cross- referenced with the telephone book.

At least one person in the AOL group, a blameless grandmother in Alabama, was identified by the New York Times within days of the AOL data release. And though it may be hard to identify complete strangers, it is very much easier to recognise in the AOL data details of someone you may already know. A church lady in the midwest, whose quest for Christian quilted wall hangings was interspersed with inquiries about vibrators and arousing frigid wives, is probably easy for anyone in her congregation to identify.

This is knowledge beyond the dreams of any secret police in history. Earlier this year Google fought a lawsuit to keep a week's worth of random search data out of the hands of the US government, but other search companies have handed over their data without complaint and nobody has yet discovered what deals have been struck between search engines and the Chinese government. China is generally thought of as attempting to censor the internet, which it does; search engines that do business in China must censor their own results if they are to succeed. But the real power for a totalitarian government is no longer just censorship. It is to allow its citizens to search for anything they want - and then remember it.

No western government, so far as we know, has gone that far. But if one ever does, it will know where the information is kept that will tell it almost everything about almost everyone. This morning, as I logged in to Googletalk, to chat with my sister, the programme silently upgraded itself. "Would you like to show friends what music you're playing now?" it asked.

From spying on the wife to motorcycle insurance

This edited list of searches by Florida AOL user 14162375 shows what intimate details are held by internet databases

March

marriage counseling 2006-03-19 17:50:31

spy on the wife 2006-03-19 17:52:47

spy on the wife 2006-03-19 17:52:47

spy on the wife 2006-03-19 17:52:47

spy on the wife 2006-03-19 17:52:47

spy on the wife 2006-03-19 17:58:58

spy recorders 2006-03-19 18:02:34

signs of cheating 2006-03-19 18:05:52

videos 2006-03-20 17:56:16

postal service stamps 2006-03-21 09:27:46

tracking cell phone numbers 2006-03-21 11:00:13

divorce 2006-03-23 14:10:27

divorce lawyers 2006-03-24 00:38:47

cheating wives 2006-03-24 06:07:00

cheating wives 2006-03-24 06:07:00

divorce lawyers 2006-03-24 13:10:32

saving a marriege 2006-03-24 13:42:04

saving a marriege 2006-03-24 15:02:24

saving a marriege 2006-03-24 15:02:24

saving a marriege 2006-03-24 15:20:13

fitness gyms 2006-03-24 16:32:50

womes wellness 2006-03-24 16:35:33

hypertension 2006-03-24 17:07:33

e-cards 2006-03-26 23:40:56

saving a marriage 2006-03-26 23:50:11

saving a marriage 2006-03-26 23:50:11

saving a marriage 2006-03-26 23:50:11

sexual techiques 2006-03-27 10:39:27

greenting cards 2006-03-27 12:45:53

standar times 2006-03-27 23:09:25

news papers 2006-03-27 23:09:56

stop your divorce 2006-03-27 23:49:06

stop your divorce 2006-03-27 23:53:30

stop your divorce 2006-03-28 00:06:53

alchool withdrawl 2006-03-28 10:43:51

alchool withdrawl sintoms 2006-03-28 10:45:38

disfunctional erection 2006-03-28 10:46:46

cheating therapy 2006-03-30 16:49:56

women's urine blood 2006-03-30 18:21:16

spy from a distance 2006-03-31 21:11:29

spy from a distance 2006-03-31 21:11:29

spy from a distance 2006-03-31 21:15:55

spy from a distance 2006-03-31 21:15:56

listentrough walls 2006-03-31 21:16:22

listen through walls 2006-03-31 21:16:25

car sound recorder 2006-03-31 21:20:07

car conversation spy 2006-03-31 21:20:24

April

spy on wife 2006-03-31 21:21:29

phico card readers 2006-04-01 22:03:08

bruchas 2006-04-01 22:04:17

phyco card readers 2006-04-01 22:06:43

phyco card readers 2006-04-01 22:07:10

predict my futur 2006-04-01 22:20:24

psychic 2006-04-02 10:14:07

i want my wyfe back 2006-04-02 23:14:28

i want revenge to my wife 2006-04-02 23:27:54

i want revenge to my wife 2006-04-02 23:27:54

get revenge from a wife cheater 2006-04-02 23:41:22

munchies 2006-04-03 11:54:59

lisbon jobs 2006-04-03 11:58:20

divorce and kids 2006-04-03 12:19:46

llllfkkgjnnvjjfokrb 2006-04-03 18:20:11

vvvvbmkmjk 2006-04-03 18:20:36

vvglhkitopppfoppr 2006-04-03 18:22:04

www.whitepages 2006-04-06 06:14:07

my wife wants to leave me 2006-04-07 16:35:03

how do i get my wife love me again 2006-04-08 17:10:55

need help getting my wife back 2006-04-08 19:27:2

i need my wife to get back to me 2006-04-08 19:29:11

i need my wife to get back to me 2006-04-08 19:29:11

my wife doesnt love animore 2006-04-08 19:30:58

i still live whith my wife can i get her bach 2006-04-08 19:32:15

i want revenge towards my wife 2006-04-08 19:32:59

i want revenge towards my wife 2006-04-08 19:32:59

i want revenge towards my wife 2006-04-08 19:32:59

i want revenge towards my wife 2006-04-08 19:36:58

making my wife suffer as i do 2006-04-09 13:19:54

get my wife back 2006-04-09 14:03:28

avoid breaking up 2006-04-09 14:04:11

avoid breaking up 2006-04-09 14:04:11

stop breaking up 2006-04-09 15:10:47

get even with my wife 2006-04-09 15:15:16

husband revenge 2006-04-09 15:23:37

husband revenge 2006-04-09 15:23:37

husband revenge 2006-04-09 15:23:37

how to harm my wifes lover 2006-04-10 13:11:28

infidelity 2006-04-10 14:32:02

whow to talk on the phone with youor wife 2006-04-10 14:43:07

catch your wife aving an affair 2006-04-10 14:44:32

baby monitors 2006-04-15 17:15:31

baby monitors 2006-04-15 17:15:31

my cheating wife 2006-04-16 16:48:06

my cheating wife 2006-04-16 16:48:06

my cheating wife 2006-04-16 16:48:06

i want to kill myself 2006-04-16 19:55:51

kill my wifes mistress 2006-04-16 20:26:49

my wifes ass 2006-04-16 20:38:37

cheating wives 2006-04-18 16:45:12

recording home survellence 2006-04-18 16:54:43

recording home surveillance 2006-04-18 16:54:53

audio roome surveillance 2006-04-18 16:55:40

audio roome surveillance 2006-04-18 16:55:43

sore muscules 2006-04-23 17:32:00

sore muscles 2006-04-23 17:32:06

sore muscles 2006-04-23 17:32:06

sore muscles 2006-04-23 17:32:06

alcoolism 2006-04-24 08:10:53

men acting like winners 2006-04-25 16:02:09

make the infidelity suffer 2006-04-25 16:03:20

the portuguese mafia 2006-04-25 16:24:04

May

motorcycle inurance 2006-05-29 18:31:19

motorcycle insurance 2006-05-29 18:31:29

private eye 2006-05-30 21:12:07

video surveillance 2006-05-30 21:20:18

video surveillance 2006-05-30 21:21:05

video surveillance 2006-05-30 21:21:24

white pages 2006-05-31 05:55:41

· AOL user search history data, released by AOL, August 2006.

    They know all about you, G, 28.8.2006, http://technology.guardian.co.uk/online/search/story/0,,1859785,00.html

A Face Is Exposed

for AOL Searcher No. 4417749

August 9, 2006
The New York Times
By MICHAEL BARBARO and TOM ZELLER Jr.

Buried in a list of 20 million Web search queries collected by AOL and recently released on the Internet is user No. 4417749. The number was assigned by the company to protect the searcher’s anonymity, but it was not much of a shield.

No. 4417749 conducted hundreds of searches over a three-month period on topics ranging from “numb fingers” to “60 single men” to “dog that urinates on everything.”

And search by search, click by click, the identity of AOL user No. 4417749 became easier to discern. There are queries for “landscapers in Lilburn, Ga,” several people with the last name Arnold and “homes sold in shadow lake subdivision gwinnett county georgia.”

It did not take much investigating to follow that data trail to Thelma Arnold, a 62-year-old widow who lives in Lilburn, Ga., frequently researches her friends’ medical ailments and loves her three dogs. “Those are my searches,” she said, after a reporter read part of the list to her.

AOL removed the search data from its site over the weekend and apologized for its release, saying it was an unauthorized move by a team that had hoped it would benefit academic researchers.

But the detailed records of searches conducted by Ms. Arnold and 657,000 other Americans, copies of which continue to circulate online, underscore how much people unintentionally reveal about themselves when they use search engines — and how risky it can be for companies like AOL, Google and Yahoo to compile such data.

Those risks have long pitted privacy advocates against online marketers and other Internet companies seeking to profit from the Internet’s unique ability to track the comings and goings of users, allowing for more focused and therefore more lucrative advertising.

But the unintended consequences of all that data being compiled, stored and cross-linked are what Marc Rotenberg, the executive director of the Electronic Privacy Information Center, a privacy rights group in Washington, called “a ticking privacy time bomb.”

Mr. Rotenberg pointed to Google’s own joust earlier this year with the Justice Department over a subpoena for some of its search data. The company successfully fended off the agency’s demand in court, but several other search companies, including AOL, complied. The Justice Department sought the information to help it defend a challenge to a law that is meant to shield children from sexually explicit material.

“We supported Google at the time,” Mr. Rotenberg said, “but we also said that it was a mistake for Google to be saving so much information because it creates a risk.”

Ms. Arnold, who agreed to discuss her searches with a reporter, said she was shocked to hear that AOL had saved and published three months’ worth of them. “My goodness, it’s my whole personal life,” she said. “I had no idea somebody was looking over my shoulder.”

In the privacy of her four-bedroom home, Ms. Arnold searched for the answers to scores of life’s questions, big and small. How could she buy “school supplies for Iraq children”? What is the “safest place to live”? What is “the best season to visit Italy”?

Her searches are a catalog of intentions, curiosity, anxieties and quotidian questions. There was the day in May, for example, when she typed in “termites,” then “tea for good health” then “mature living,” all within a few hours.

Her queries mirror millions of those captured in AOL’s database, which reveal the concerns of expectant mothers, cancer patients, college students and music lovers. User No. 2178 searches for “foods to avoid when breast feeding.” No. 3482401 seeks guidance on “calorie counting.” No. 3483689 searches for the songs “Time After Time” and “Wind Beneath My Wings.”

At times, the searches appear to betray intimate emotions and personal dilemmas. No. 3505202 asks about “depression and medical leave.” No. 7268042 types “fear that spouse contemplating cheating.”

There are also many thousands of sexual queries, along with searches about “child porno” and “how to kill oneself by natural gas” that raise questions about what legal authorities can and should do with such information.

But while these searches can tell the casual observer — or the sociologist or the marketer — much about the person who typed them, they can also prove highly misleading.

At first glace, it might appear that Ms. Arnold fears she is suffering from a wide range of ailments. Her search history includes “hand tremors,” “nicotine effects on the body,” “dry mouth” and “bipolar.” But in an interview, Ms. Arnold said she routinely researched medical conditions for her friends to assuage their anxieties. Explaining her queries about nicotine, for example, she said: “I have a friend who needs to quit smoking and I want to help her do it.”

Asked about Ms. Arnold, an AOL spokesman, Andrew Weinstein, reiterated the company’s position that the data release was a mistake. “We apologize specifically to her,” he said. “There is not a whole lot we can do.”

Mr. Weinstein said he knew of no other cases thus far where users had been identified as a result of the search data, but he was not surprised. “We acknowledged that there was information that could potentially lead to people being identified, which is why we were so angry.”

AOL keeps a record of each user’s search queries for one month, Mr. Weinstein said. This allows users to refer back to previous searches and is also used by AOL to improve the quality of its search technology. The three-month data that was released came from a special system meant for AOL’s internal researchers that does not record the users’ AOL screen names, he said.

Several bloggers claimed yesterday to have identified other AOL users by examining data, while others hunted for particularly entertaining or shocking search histories. Some programmers made this easier by setting up Web sites that let people search the database of searches.

John Battelle, the author of the 2005 book “The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture,” said AOL’s misstep, while unfortunate, could have a silver lining if people began to understand just what was at stake. In his book, he says search engines are mining the priceless “database of intentions” formed by the world’s search requests.

“It’s only by these kinds of screw-ups and unintended behind-the-curtain views that we can push this dialogue along,” Mr. Battelle said. “As unhappy as I am to see this data on people leaked, I’m heartened that we will have this conversation as a culture, which is long overdue.”

Ms. Arnold says she loves online research, but the disclosure of her searches has left her disillusioned. In response, she plans to drop her AOL subscription. “We all have a right to privacy,” she said. “Nobody should have found this all out.”

Saul Hansell contributed reporting for this article.

    A Face Is Exposed for AOL Searcher No. 4417749, NYT, 9.8.2006, http://www.nytimes.com/2006/08/09/technology/09aol.html?hp&ex=1155182400&en=9b5fd9ff341e3216&ei=5094&partner=homepage

Google Deal Will Give News Corp.

Huge Payoff

August 8, 2006
The New York Times
By SAUL HANSELL

Google has won a bidding war to provide search services and advertising to MySpace.com, the social networking phenomenon, and other Web sites owned by the News Corporation.

The deal promises to pay the News Corporation a minimum of $900 million over three and half years, a handsome payoff for its aggressive strategy of Internet acquisitions under its chairman and chief executive, Rupert Murdoch.

“In one fell swoop, we have paid for two-thirds of our Internet acquisitions,” Peter Chernin, the company’s president, said in a conference call with investors and reporters yesterday.

The News Corporation paid $649 million last year to buy the parent company of MySpace. It has now spent a total of $1.3 billion to buy Internet companies that also include IGN.com, a game site, and Scout, a series of local sports sites.

MySpace, which has become hugely popular among young people, allows users to create pages on which they express their interests and receive messages from their friends. It shows more pages than any site except Yahoo, and it expects to reach 100 million members by today.

Indeed, the sheer size of the MySpace audience presents a challenge for potential providers of advertising. There are so many pages on which to display ads that there may not be enough demand for them from advertisers, leading to low prices. Indeed, many advertisers think the personal nature and frequently risqué subject matter of MySpace pages is not the most conducive environment for plying their wares.

Eric E. Schmidt, Google’s chief executive, said the company had decided that it would not display ads on every page.

“We are not going to cover MySpace with ads,” he said, noting that Google carefully analyzes what sort of ads encourage users to click on what sort of pages to produce the most revenue.

“It turns out the right answer is to show fewer, better ads.”

Google’s competitors in the bidding were the other big search engines, Yahoo, IAC/InterActiveCorp’s Ask.com and Microsoft’s MSN.

Under the arrangement announced yesterday, which will begin by the end of this year, Google will handle searches initiated from MySpace pages, of both MySpace itself and of the overall Web. MySpace has a box for search queries on almost every page that now leads to results, and advertising, provided by Yahoo.

Google will provide not only ads on the search-result pages but also text advertisements on many MySpace member pages as well as other pages on News Corporation sites. Until now, MySpace has run a single banner ad at the top of each member page. Its inventory of pages was so high, and its sales force so small, that MySpace had to fill many of its banners with advertisements sold by networks that trade in remnant advertising space. And it earned only pennies for every thousand ads displayed.

Google will sell the advertisements on its auction system, in which advertisers bid for how much they will pay if a user clicks on their ad. Google will in turn pay a large portion of the revenue to News Corporation for the ads displayed on its sites.

One of the more notable aspects of this deal is that Google is given the right of first refusal to sell those remnant banner ads, in addition to the text ads that are its main business. Google has started selling graphical ads, with modest success.

But analysts say the size of MySpace’s inventory will make Google a major player in banner ads.

“This is definitely critical mass,” said Jordan Rohan, an analyst with RBC Capital Markets. “It is massively critical.” Interestingly, the biggest loser from this aspect of the deal is Advertising.com, the largest remnant ad network, which is owned by AOL, a company in which Google just invested $1 billion.

Some have wondered whether MySpace’s growth will falter if its young users find a newer place to hang out. That has not happened yet, as MySpace is much larger and growing faster than its rivals. MySpace had 52 million visitors in June, triple the number a year earlier, comScore Media Metrix reported. That dwarfs the next biggest network, Facebook, which had 14 million users, followed by MSN Spaces, with 8.7 million. Still, Google has hedged its risk by making its $900 million payment contingent on certain minimum traffic levels, which it did not disclose.

After running tests of search advertisements with potential partners for several months, the News Corporation demanded final proposals last week as its executives convened for an annual conference at Pebble Beach, Calif.

As world leaders like Prime Minister Tony Blair of Britain, Deputy Prime Minister Shimon Peres of Israel and former President Bill Clinton spoke, News Corporation negotiators were bargaining with search-company representatives in nearby rooms, one executive involved in the talks said. Google and the News Corporation worked around the clock over the weekend to work out a deal.

Analysts said Google had been able to outbid Yahoo most likely because its advertising technology was superior and it could earn more from each page displayed. Yahoo’s attempt to develop an improved advertising system has been repeatedly delayed. Yahoo historically has not bid for business on which it loses money, Mr. Rohan said.

While Microsoft has sometimes been aggressive in bidding for business, its MSN search engine and advertising system are much newer.

Microsoft officials did not return calls for comment. In a statement, Yahoo said: “We only participate in partnerships that also meet Yahoo’s standards. We did not see this opportunity as financially prudent or in the best interest of our advertisers.”

    Google Deal Will Give News Corp. Huge Payoff, NYT, 8.8.2006, http://www.nytimes.com/2006/08/08/technology/08google.html

The Many Voices of Wikipedia,

Heard in One Place

August 7, 2006
The New York Times
By ROBERT LEVINE

CAMBRIDGE, Mass., Aug. 6 — As hard-core Wikipedia contributors gathered here during the weekend to consider the next phase of the online encyclopedia’s life cycle, Jimmy Wales, the site’s founder, said that the emphasis going forward would be on quality, not quantity.

With 1.2 million entries in Wikipedia, “there’s a sense in the English community that we’re going from the era of growth to the era of quality,” Mr. Wales said in an interview. “That could mean quality control — making sure the information is accurate — and it could mean a clearer presentation, or more information.”

Wikipedia has become known as the online encyclopedia that anyone can edit, but in practical terms, it is mostly a cadre of devotees who contribute to the site and obsess over it.

About 400 of them paid to attend the second annual Wikimania conference, an event that showed far more professional trappings than the first. It was held at Harvard Law School rather than a German youth hostel, the organizer was paid for her work and the corporate sponsors included Amazon.com, Nokia and Coca-Cola.

“This has a different scale,” said Delphine Ménard, the organizer, who planned Wikimania 2005 as a volunteer. “We have a public we need to reach.”

Although there have been some well-publicized errors — some intentional, some not — published on Wikipedia, the site has also earned some good marks for accuracy. A survey in the science journal Nature found four errors in Wikipedia for every three in the Encyclopaedia Britannica.

Then again, as several contributors at Wikimania acknowledged, the site could be judged more harshly on other criteria. Entries can ramble, and there are times when the idiosyncratic enthusiasms of contributors rule the day. (The “wiki” name is derived from a Hawaiian term meaning quick or fast, according to the site.)

“One of the running jokes is that there are better articles on Pokémon than on certain kinds of science,” said Alex Schenck, 19, a volunteer site administrator who delivered a presentation on the factors behind Wikipedia’s success. “That could be true.”

Mr. Wales said that the frequency of changes could decrease, suggesting that, as time passed, the Wikipedia product would become more important than the collaborative process supporting it.

For instance, he said, the German-language Wikipedia will soon begin creating some “stable entries,” good enough to publish in a textbook or other traditional media. Most likely, he said, these entries will exist in two versions, one of which can still be changed by the public.

If that experiment goes well, Mr. Wales said, the English-language version of Wikipedia could follow suit in the next year.

“Stability is important not in itself, but in the sense of feeling more comfortable that we’re presenting our best work,” he said.

Mr. Wales said he expected less of a free-for-all atmosphere as the site grew up. “There was a time when you could come to Wikipedia and there was a red link to Africa, and you could write that Africa was a continent,” he said. “Now the links that are left are less and less famous, less and less big.”

Angela Beesley, a board member of the Wikimedia Foundation, the nonprofit entity that supervises the site, said in an interview that she was less concerned with the sprawling nature of some Wikipedia entries than with “accuracy, then balance.”

As for the sometimes choppy writing, “it’s difficult to organize whole articles, so people don’t edit them as a whole,” she said. “That’s something we need to encourage.”

At times the conference itself seemed to be dealing with the same issues. One member of the foundation’s board, Florence Nibart-Devouard, stormed out of a news conference because she had not been told about the announcement being made. And on Thursday afternoon, signs concerning registration had the opening time crossed out, replaced by the word “later.”

“It’s a funny thing,” Mr. Wales said. “I had no idea that anyone was putting up signs. Someone somewhere said there should be signs, and someone did it. It’s effective.”

“But,” he added, “it’s chaotic.”

    The Many Voices of Wikipedia, Heard in One Place, NYT, 7.8.2006, http://www.nytimes.com/2006/08/07/technology/07wiki.html

In these online searches,

lives are on the line

Posted 8/6/2006 8:48 PM ET
USA TODAY
By Beth Walton

When Kristina Helbig's 15-year-old half sister ran away from a drug rehabilitation center in Florida in July, her parents turned to the police. She turned to the Internet.

Helbig enlisted the help of Tim Caya of Brookings, S.D., who uses his page on the social networking service MySpace to help find missing persons.

Caya, 38, helped Helbig create an online bulletin that she circulated to Caya's network of more than 18,000 other MySpace users, who can relay it to other users around the world.

Within hours, Helbig says, she got e-mails from her sister's friends and even strangers who had spotted her. One provided a phone number her sister had used to make an outgoing call. Helbig, 27, who lives in Cleveland, used the Internet to track down the location of that phone, and then called her stepfather in Florida to say she thought she had found her missing sister.

"I'm 1,200 miles away, and I'm telling my family who is 10 miles from her where to find her," she says. The girl was found at the house where she was staying with a teenage boy and his family. The family did not realize she was a runaway, Helbig says.

Her experience illustrates just one of the many ways individuals as well as authorities are using the power and reach of the Internet to find missing persons and hunt down wanted fugitives. Other examples:

•Nancy McBride, national safety director for the National Center for Missing & Exploited Children, says the Internet has changed the way information on missing persons is disseminated to the public. Today, NCMEC can post a flier about a missing child online within an hour instead of needing days to distribute it.

•Randi Hess, 43, of Tifton, Ga. has three different MySpace pages dedicated to missing persons. After two girls disappeared near her hometown, Hess was upset that the media focused on only one of them. The Internet gave her a way to spread the word on many cases.

•Tina Gorman of Webster, Fla., has been searching for 3½ years for her missing son, John Townsend, 31, who has bipolar disorder. She posts messages on the Internet in hopes someone with information will contact her. She also included a link on her work website to her son's profile at the National Center for Missing Adults.

•James Keene of Dominica, an island nation in the Caribbean, set up a site to seek help tracking his children, who he says were kidnapped by their mother more than 10 years ago in a custody dispute. "The Internet has empowered the little guy tremendously," he says.

•The FBI's most-wanted-fugitives page gets 2 million to 3 million visitors a month and is the most popular part of the bureau's site, says Rex Tomb, the FBI's chief of investigative publicity. The FBI has tracked down 36 fugitives and one piece of stolen art using Internet tips, he says. Bank robber Leslie Rogge, who was on the FBI's most-wanted list for six years, was arrested in Guatemala after a tip from someone who saw his photo on the FBI's website.

Caya, whose MySpace page helped Helbig find her half sister, works out of a cluttered bedroom in Brookings. He began posting information about missing persons two months ago and has helped track down two missing teens. His page used to be devoted only to fugitives, but the father of three says he added missing persons after hearing a drumbeat of reports of sex offenders and missing children.

"I just felt like there are a lot of people that weren't being reached by the news, mainly the 16-26 age group, and I thought maybe this (MySpace) would reach them better," Caya says.

Caya doesn't just circulate bulletins on the Web. He also uses the Internet to track down leads. When a case surfaces, he takes note of where authorities or family members say they think the person might have gone. Then he searches the 95 million profiles set up by MySpace members to find users in those areas and alerts them with photos and information about the missing.

Two weeks ago, one of Caya's bulletins produced a tip that led police to a missing 17-year old girl from Sandy, Utah, who was found at a hotel in Aurora, Colo., with an older companion, said Carrie Conner of the Bullhead City (Ariz.) Police Department.

Caya first heard about the teenager, who went missing in April, through the NCMEC website. Background information on the case indicated that she might be in Bullhead City. After finding the teenager's MySpace page, Caya saw that she had a MySpace "friend" — a person in her network — in Bullhead City.

He then posted a bulletin about the missing teen, including pictures he found on MySpace of the girl and her "friend." Soon, Caya got a message from another MySpace user who claimed to know the whereabouts of the pair, which Caya then forwarded to police.

More and more authorities and investigative organizations are looking to the Web for clues, says Georgia Hilgeman-Hammond, executive director and founder of the Vanished Children's Alliance. The San Jose, Calif., organization was able to find missing children who had been abducted by their mother when authorities learned she was planning to get married. Caseworkers searched online bridal gift registries, found where the woman had registered and tracked her down.

Missing teens won't always have as extensive a paper trail as adults, but it is often easy to find them on the Internet, says Eric Teklu, family abduction investigator for Child Quest International in San Jose. He says investigators often are able to glean information on missing children by going to online networks such as MySpace and chatting while pretending to be someone else. "It's just amazing to me how easy it is for kids to put their information out there and how easy it is to grab it," Teklu says.

    In these online searches, lives are on the line, UT, 6.8.2006, http://www.usatoday.com/tech/news/techinnovations/2006-08-06-net-missing_x.htm

Music Publishers Sue

Owner of Web File-Sharing Program

August 5, 2006
The New York Times
By THE ASSOCIATED PRESS

LOS ANGELES, Aug. 4 — A coalition of record companies sued the operators of the file-sharing program LimeWire for copyright infringement on Friday, claiming the company encouraged users to trade music without permission.

The Recording Industry Association of America said in a statement that it had sued the Lime Group, the corporation’s executives, and the subsidiaries that designed and distributed LimeWire. The suit was filed in Federal District Court in Manhattan.

The case is the first piracy lawsuit brought against a distributor of file-sharing software since the Supreme Court ruled last year that technology companies could be sued for copyright infringement on the grounds that they encouraged customers to steal music and movies over the Internet.

The record companies — Sony BMG Music Entertainment, Vivendi’s Universal Music Group, Time Warner’s Warner Music Group and EMI Music — are seeking compensatory and punitive damages, including at least $150,000 for each instance in which a copyrighted song was distributed without permission.

A LimeWire spokeswoman, Katie Catillaz, declined comment Friday.

In the complaint, the record companies contend that LimeWire’s operators are “actively facilitating, encouraging and enticing” computer users to steal music by failing to block access to copyright works and building a business model that allows them to profit directly from piracy.

Like similar programs, LimeWire allows computer users to make files on their PC’s available to a multitude of other people all connected to each other, a method known as peer-to-peer file-sharing.

The original Napster software first popularized such swapping of files online before it was forced to shut down in 2001 after record companies sued.

In the LimeWire complaint, the record companies contend that LimeWire, which began operating in 2000, has grown into the leading file-sharing software for stealing music as other Napster clones have shut down or gone legitimate.

Last fall, LimeWire was among several file-sharing services to receive warning letters from the Recording Industry Association of America, which represents the major record labels.

The trade group said LimeWire’s operators did not show adequate interest in developing a licensed business model or agree to shut down.

    Music Publishers Sue Owner of Web File-Sharing Program, NYT, 5.8.2006, http://www.nytimes.com/2006/08/05/technology/05patent.html

Blogger Jailed

After Defying Court Orders

August 2, 2006
The New York Times
By JESSE McKINLEY

SAN FRANCISCO, Aug. 1 — A freelance journalist and blogger was jailed on Tuesday after refusing to turn over video he took at an anticapitalist protest here last summer and after refusing to testify before a grand jury looking into accusations that crimes were committed at the protest.

The freelancer, Josh Wolf, 24, was taken into custody just before noon after a hearing in front of Judge William Alsup of Federal District Court. Found in contempt, Mr. Wolf was later moved to a federal prison in Dublin, Calif., and could be imprisoned until next summer, when the grand jury term expires, said his lawyer, Jose Luis Fuentes.

Earlier this year, federal prosecutors subpoenaed Mr. Wolf to testify before a grand jury and turn over video from the demonstration, held in the Mission District on July 8, 2005. The protest, tied to a Group of 8 meeting of world economic leaders in Scotland, ended in a clash between demonstrators and the San Francisco police, with one officer sustaining a fractured skull.

A smoke bomb or a firework was also put under a police car, and investigators are looking into whether arson was attempted on a government-financed vehicle.

Mr. Wolf, who posted some of the edited video on his Web site, www.joshwolf.net , and sold some of it to local television stations, met with investigators, who wanted to see the raw video. But Mr. Wolf refused to hand over the tapes, arguing that he had the right as a journalist to shield his sources.

On Tuesday, Judge Alsup disagreed, ruling that the grand jury “has a legitimate need” to see what Mr. Wolf filmed.

Mr. Wolf, a recent college graduate, is the latest journalist to face prison time for refusing to cooperate with federal investigators. Last year, the New York Times reporter Judith Miller served nearly three months in jail after refusing to divulge her sources in the investigation of the leak of a covert C.I.A. agent’s name.

Jane Kirtley, a professor of media ethics and law at the University of Minnesota, said that although the jailing of journalists had become more common, Mr. Wolf’s case was the first she had heard of in which a blogger had been pursued and eventually jailed by federal authorities.

“There is a tendency on the part of the prosecutors to go aggressively after people not perceived to have a big gun behind them,” Ms. Kirtley said. “They are the most vulnerable links in the chain.”

While California has a so-called shield law meant to protect journalists and their sources, no such law exists at the federal level. Even if there was such a law, Ms. Kirtley said, it is unclear whether a blogger and freelancer would fall under it.

According to his Web site, Mr. Wolf has been active in his defense, holding news conferences and posting interviews and newspaper articles on his site. On Tuesday, however, the site’s last message read, “This blog will be updated sometime shortly after my hearing ... wish me luck guys!”

Mr. Wolf has attracted supporters, including the American Civil Liberties Union and the San Francisco Board of Supervisors, which introduced a resolution objecting to the federal government’s role in the investigation. The Society of Professional Journalists contributed to Mr. Wolf’s legal defense fund.

Mr. Fuentes said he had already prepared an appeal and would file it immediately. He also planned to ask for bail, though he was not certain where the money to post it would come from. “His mother has been trying to fund-raise,” Mr. Fuentes said. “But he might lose his job.”

    Blogger Jailed After Defying Court Orders, NYT, 2.8.2006, http://www.nytimes.com/2006/08/02/us/02protest.html

E-Commerce Report

Newspapers to Use Links to Rivals

on Web Sites

July 31, 2006
The New York Times
By BOB TEDESCHI

Want the latest news on Floyd Landis’s positive drug test from The Los Angeles Times, The New York Times or USA Today?

Soon, it will all be on Washingtonpost.com.

The Washington Post, The New York Sun and The Daily Oklahoman, in Oklahoma City, have contracted with an online news aggregator, Inform.com, to scan hundreds of news and blog sites and deliver content related to articles appearing on their Web sites, regardless of who published those articles. Links to those articles will appear in a box beside the site’s original article or within the text of the story.

Newspaper Web sites, which commonly post articles from sister publications, wire services and even blogs, have typically stopped short of providing generous doses of news from competitors. The move made by these papers is not a result of cooperation across the industry as it is a counterattack by publishers against Google and Yahoo, which have stolen readers and advertisers from newspapers in recent years, both with their search engines and their own news aggregation services.

“This lets us be a search engine,” said Kelly Dyer Fry, director of multimedia for Opubco Communications Group, which publishes the Oklahoman and its Web site, NewsOK.com. “We look at it like we just hired 30,000 journalists, because now we can give you our story and what the rest of the world is saying about it.”

The site’s roughly 700,000 registered users view about 36 million pages online each month, with each user viewing three to five pages per visit. And that is not enough to satisfy the demands of advertisers. Because Inform gives readers an easy way to find related stories that were published earlier on NewsOK.com, Ms. Fry said she expected the number of page views on the site to increase by at least threefold.

“People aren’t just reading one story,” she said. “They’ll click deeper because of this, and I can load ads deeper into those pages. It really beefs up the site.”

For a newspaper industry that has watched its advertisers flee to cable television, junk mail and Web sites like Google, Yahoo and Craigslist, online advertising revenues have become Topic A in boardrooms and newsrooms alike. While growing, these Web sales have not been enough to offset the cash lost to other media.

Online media outlets like Slate or Salon prominently feature their links to other sites and some, particularly blogs, are built around the strength of their links. But newspapers have been reluctant to direct readers outside their own gates. These deals with Inform are but one indication that newspapers may be reconsidering long-held beliefs about how to compete, and cooperate, with other publishers.

“Five years ago, everybody said you have to keep readers on your site, with no links out to other sites,” said Caroline H. Little, chief executive and publisher of Washingtonpost.Newsweek Interactive, the online division of the Washington Post Company. “But ultimately, people will go where they want to go.”

“To the extent we can provide them more Washington Post video or more information from around the Web, we’re all for it,” Ms. Little added. “And we get the benefit of that, too, because we get a lot of referrals from the Web, also.”

Inform, which is privately-held and based in New York, would not say how much revenue these deals were expected to generate. The company says it was able to convince publishers to try its linking service because newspapers had already seen success in putting up related content, but found no reliable or easy way to automate the process.

This, analysts say, is the selling point of services like Inform, which costs between a few thousand and tens of thousands of dollars monthly. A site like NewsOK.com attracts frequent users, but they only read a few pages per visit, hardly the kind of audience that will help newspapers replace revenues from their shrinking paper editions.

The amount of revenue gleaned from a newspaper’s Web site varies widely depending on the publication, but according to the Newspaper Association of America, 5.5 percent of the newspaper industry’s revenues come from their online divisions.

“Newspaper sites have a lot of rich content, but they have trouble helping people see all that’s there on their sites,” said Greg Sterling, an online media analyst. “This creates many more opportunities for readers to drill down on a topic, and that means more opportunities for advertising revenue.”

Web sites that already work with Inform, like the Daily Oklahoman’s Web site, surround stories with related links from the newspaper’s current edition and its archives, as well as links to related stories, videos, blogs, slide shows and podcasts from other sites. Links also appear in the text of stories.

For instance, a story last week about an injured Marine returning home to the state was mostly bordered by links to stories from the Daily Oklahoman about the war in Iraq. But links on the left of the story and highlighted words within the story also led to a list of articles from Newsweek, The New York Times and smaller regional publications, as well as blog postings.

These links did not whisk readers away to another site. They instead opened a new window in the browser with the new story so readers could keep their original NewsOK page up.

Ms. Little said the Washington Post Web site would begin using Inform’s service in September or October, and would initially surround its stories with related content from other Washingtonpost.Newsweek Interactive sites, like Slate.com, Newsweek.com and BudgetTravelOnline.com. After that, it would include links to stories from around the Web, possibly from other nationally-oriented newspapers.

There are instances where the Post’s Web site already links to stories from these competitors. For instance, in the online version of his “White House Briefing” column last week, Dan Froomkin included a link to a New York Times story from the previous week. According to Jim Brady, the executive editor of Washingtonpost.com, reporters or Web producers can insert links to another paper’s site when they see fit.

“We think it’s the right thing to do,” Mr. Brady said. “It seems limiting to tell people about something another news organization has reported and not point them to it. It goes against the Web’s DNA.”

But the Inform service will generate links automatically. To put a link within or near a story now (as Mr. Froomkin’s did), most publications must do so manually or at least review the link that its technology system has suggested. Inform’s technology scans each story from a client’s Web site as well as other content from the Web, then automatically inserts links on the client’s site. Inform also updates the links continuously to point readers to more recent content.

Inform’s executives said that competing publishers are generally pleased to be linked to, given that it helps attract readers they might not otherwise find.

The New York Times has no plans to use Inform, according to Catherine Mathis, a spokeswoman. Ms. Mathis said the Web site planned to link to bloggers on various topics in the future, using technology from Blogrunner, which the Times bought last year for an undisclosed sum.

“So we have both of the elements of Inform,” Ms. Mathis said. Not only does the company link to related stories from within the Times organization, but “we have the ability to go outside and grab other high-quality information on related topics that would be useful to a reader.”

    Newspapers to Use Links to Rivals on Web Sites, NYT, 31.7.2006, http://www.nytimes.com/2006/07/31/technology/31ecom.html

Police Describe Seattle Shooting as a Hate Crime

July 30, 2006
The New York Times
By WILLIAM YARDLEY

SEATTLE, July 29 — A day after a gunman killed one woman and wounded five others in the offices of the Jewish Federation of Greater Seattle, the police identified a Muslim man on Saturday as the suspect and said he used the Internet to select the federation as a random target for his anger toward Jews.

As Jewish groups across the Puget Sound region moved to increase security on Saturday, the police identified the suspect as Naveed Afzal Haq, 30, whose family lives in Pasco, in southeast Washington, about 180 miles from Seattle.

At a court hearing on Saturday, a judge ordered Mr. Haq held on $50 million bail at the King County Jail pending formal charges of murder and attempted murder, The Associated Press reported. Mr. Haq entered the courtroom in handcuffs, chains and leg shackles, and a white jail shirt that labeled him an “ultra security inmate.”

The police are treating the shooting as a hate crime based on what they say Mr. Haq told a 911 dispatcher shortly before surrendering.

“He said he wanted the United States to leave Iraq, that his people were being mistreated and that the United States was harming his people,” Chief R. Gil Kerlikowske of the Seattle Police said Saturday at a news conference. “And he pointedly blamed the Jewish people for all of these problems. He stated he didn’t care if he lived.”

The chief said the gunman apparently selected the federation as a target by randomly searching the Internet for Jewish organizations in the area. The police confiscated at least three computers, he said.

Chief Kerlikowske described an intense and violent scene inside the federation, with some of the 18 people present jumping out of second-story windows and one young pregnant woman crawling to call 911 after being shot in the arm as she covered her abdomen. When the gunman later encountered her on the phone with emergency dispatchers, she refused to hang up.

“She was able to get him to take the telephone,” the chief said, calling her “a hero.”

A neighbor of Mr. Haq’s family in Pasco said Mr. Haq had spoken of Jews as recently as 10 days ago, sometimes using stereotypes about Jewish influence in the United States.

“He was saying he wasn’t trying to be racial about it but how they had control over a lot of the newscasts and things, ownership and stuff,” said the neighbor, Caleb Hales, 21.

Colleagues of the victims said the gunman had identified himself as “a Muslim-American” who was “angry at Israel.”

The A.P., citing a statement of probable cause, reported that Mr. Haq had told a 911 dispatcher, “These are Jews and I’m tired of getting pushed around and our people getting pushed around by the situation in the Middle East."

The Seattle Times reported Saturday that Mr. Haq was also facing a charge of lewd conduct in Benton County, in southeast Washington, accused of exposing himself in public.

The police and the Federal Bureau of Investigation have said they believe Mr. Haq was acting alone.

The chief said the Mr. Haq “was so enraged at first” but later calmed down and followed the emergency dispatchers’ instructions to leave the building with his hands up. He surrendered to the police at the federation offices near downtown 12 minutes after the shootings were first reported to 911.

The police have not released the names of the victims, all women. Three of the survivors were in serious condition on Saturday and two were in satisfactory condition, according to the media relations office at the Harborview Medical Center. They range in age from their early 20’s to 40’s and had gunshot wounds in the knee, groin, abdomen and arm. Federation officials said the woman who was killed was Pam Waechter, 58, its director of annual giving.

Federation officials identified the wounded women as Dayna Klein, 37; Cheryl Stumbo, 43; Layla Bush, 23; and Carol Goldman, 35; and Christina Rexroad, whose age was not known.

Asked to describe her group’s general relations with area Muslim groups, Amy Wasser-Simpson, the federation’s vice president, said, “We have had no negative interactions with the Muslim community whatsoever.”

Robert S. Jacobs, regional director for the Pacific Northwest Region of the Anti-Defamation League, who knew several of the victims, said that the three with serious injuries are not Jewish, including Cheryl Stumbo, the federation’s marketing director.

“These were really good, hard-working people who cared about the community and cared about their jobs,” he said.

The gunman apparently hid behind a plant at the federation’s offices and waited for someone to enter the building, and then forced his way inside at gunpoint when a teenager opened a locked door, Chief Kerlikowske said. The gunman had two semiautomatic pistols.

A half-hour before the shooting, Mr. Haq was ticketed for a minor traffic infraction on Third Avenue, the same street where the federation has its offices, the chief said.

Mr. Hales, the neighbor of Mr. Haq’s family, said he spoke with Mr. Haq on July 20,. Mr. Hales, whose family is Mormon, said Mr. Haq had talked about finding a job, perhaps in engineering. The conversation wandered, Mr. Hales said, with Mr. Haq expressing curiosity about Mr. Hales’s religion. “He told me he would stay up late up at night reading about people’s religions and cultural backgrounds,” Mr. Hales said.

His mother, Maureen Hales, said she believed that the Haqs were originally from Pakistan and that Mr. Haq’s father, Mian Haq, was an engineer who worked at the Hanford Nuclear Reservation.

    Police Describe Seattle Shooting as a Hate Crime, NYT, 30.7.2006, http://www.nytimes.com/2006/07/30/us/30seattle.html

The Gambling Is Virtual; the Money Is Real

July 25, 2006
The New York Times
By MATT RICHTEL and HEATHER TIMMONS

Can the United States handcuff online wagering?

Glen Walker, a professional sports bettor in North Carolina who places up to 70 bets a week of $2,000 to $5,000 each during football season, does not think so. “They’re not going to stop the offshore sports books,” Mr. Walker said. A crackdown will “just force it back to the black market.”

Last week, one such wagering site, BetOnSports.com, a publicly traded company in Britain, became the focal point of an American crackdown on offshore casinos, where gamblers anywhere in the world can use the highly profitable sites to place wagers on sporting events. They can also play casino games like blackjack and poker from their personal computers.

Federal agents arrested the British chief executive of BetOnSports, David Carruthers, who was in the United States on a flight layover. He is in custody in Fort Worth; the betting site has temporarily suspended operations to satisfy a temporary restraining order that prohibits the company from taking bets from United States residents. Mr. Carruthers is awaiting a hearing on his detention.

In Washington, the House overwhelmingly approved legislation recently that would clamp down on Internet casinos in part by restricting the ability of American financial institutions to process wagers.

The legislative-prosecutorial one-two punch appears to be the most concerted effort yet by the federal government to undermine Internet gambling in an era of well-organized, publicly owned offshore casinos. For the first time, Washington has succeeded in temporarily shutting down a publicly owned site and its effort has gained the attention of the operators, whose share prices plummeted last week.

Still, few experts expect the crackdown to do anything more than dent the industry. Sebastian Sinclair, an analyst with Christiansen Capital Advisors, which tracks online gambling trends, said offshore gambling could be “curtailed but it cannot be stopped.”

Other experts see the recent moves as little more than an elaborate cat-and-mouse game serving only to benefit Las Vegas and Atlantic City casinos, along with Indian gambling operations, rather than seriously protecting Americans from falling prey to excessive gambling.

Some eight million Americans like Mr. Walker wager $6 billion annually through the Internet, many making bets on their favorite sports team or the N.C.A.A. basketball pool. About half of all online wagers come from the United States.

Critics say that online gambling is the equivalent of putting a slot machine in every home, providing an easy chance to lose money with a few mouse clicks, all without the social controls at a bricks-and-mortar casino.

Mr. Walker disagrees. “We’re not doing anything immoral or illegal,’’ he insisted. “I just don’t see that I’m harming anyone.”

While prosecutors argue that Internet casinos violate the law, there is no federal prohibition against actually placing a bet. So how much success the federal push can have “is a very profound question,” said Representative Jim Leach, Republican of Iowa, the co-author of the legislation, who says the gambling is detrimental to families and the economy.

But even he concedes that Washington’s best efforts will lead only “to a reduction but not necessarily to an ending” of online gambling.

The question of further curbing Internet gambling has been a perennial issue in Congress in recent years. But people involved with the legislation say the reason for its success, at least in the House, is mainly explained by lawmakers wanting to distance themselves from the corruption scandal involving the convicted lobbyist Jack Abramoff and his association with Indian casinos. Mr. Abramoff had lobbied vigorously against versions of the bill in the past. Still, some politicians in the House came out strongly against the bill, including Representative Barney Frank, Democrat of Massachusetts, who called it “cultural authoritarianism.”

Industry executives and analysts say similar bills have failed in the Senate, and many feel that it is unlikely to gain traction there. Analysts from Dresdner Kleinwort in London call the measure inconsistent and unenforceable.

Nevertheless, executives, lawyers and analysts say that Washington, depending on the resources it is willing to commit, can at least make life more miserable for the offshore casinos. They say the effort resembles attempts to restrict the sex and drug trades, an endless pursuit in which users and suppliers constantly develop new ways to skirt law enforcement.

Offshore casinos “are going to continue to thumb their noses at the Department of Justice,” Mr. Sinclair said. “The operators will say, ‘I’m sitting here in Costa Rica drinking a mai tai. What are you going to do?’ ”

And, he said, if the government succeeds in shutting some sites, others will pop up.

This is not the first time that the American government has taken on Internet gambling. In 2001, a federal court sentenced Jay Cohen, the operator of an Internet sports book in Costa Rica, to 21 months in prison for taking bets from Americans.

But there is a new intensity to this latest crackdown, particularly with the simultaneous attacks from Congress and law enforcement. Legislators and prosecutors said their efforts were not coordinated, but industry analysts view it as a powerful combination.

And by going after Mr. Carruthers, a British citizen who runs a company listed on the London Stock Exchange, Washington has upped the ante. “This is absolutely a legitimate business in the U.K.,” said Tim Evans, a lawyer representing Mr. Carruthers.

Mr. Carruthers, among the outspoken executives in the industry, has traveled frequently to the United States to meet with investors and media companies, and to debate the merits of online gambling. In April, he took part in a debate on the subject with Representative Leach.

Catherine L. Hanaway, the United States attorney for the Eastern District of Missouri, who brought the indictment against Mr. Carruthers, said the fact that the activity was legal in Britain and Costa Rica, where BetOnSports has major operations, “does not entitle them to do business in the United States.”

Asked if Mr. Carruthers’s British citizenship created a problem for the prosecutors, Ms. Hanaway said, “thus far, no.”

Mr. Evans said his client faced up to 20 years if convicted of conspiring to operate an illegal gambling operation.

Lawrence Walters, a lawyer who specializes in Internet gambling law, said prosecutors faced serious jurisdictional questions. One central question is whether any illegal activity is taking place on American soil; the bettors, he said, are not breaking the law, because placing a wager is legal.

Further, he said, there are legal questions about whether prosecutors can establish that offshore casinos have met the test for “minimum contact” in the United States, a standard needed for prosecutors to have jurisdiction.

“The government has to show that BetOnSports has sufficient ties and contacts with the U.S.,” he said. “That’s an open question — they have no offices or representatives here.’’

Many online gambling companies based outside Britain list on the London Stock Exchange because the British government made offshore gambling companies legal as part of a sweeping Gambling Act passed in 2005. The government’s intent is to regulate the industry and stop gambling proceeds from going to criminal interests.

The investors in the companies have included some of America’s largest investment houses, among them Goldman Sachs and the FMR Corporation, parent of Fidelity Investments, which bought shares for some of its mutual funds. Share prices of those funds plummeted after the arrest of Mr. Carruthers, but have recovered somewhat in recent trading.

The issue has fueled a political fire in Britain, where the United States recently extradited several white-collar suspects in an effort to prosecute them for actions that Britain did not consider illegal, or that British courts chose not to prosecute.

Opponents say that United States prosecutors are reaching outside their boundaries and the opponents are lobbying the British government to protect its own citizens.

But Mr. Walters said prosecutors might be able to mitigate the jurisdictional challenges because they also brought charges against BetOnSports’ founder, Gary Kaplan, and several of his relatives, who worked for the company and are American citizens.

The government could argue that the company has a fundamentally American origin and continuing ties, he said.

The case could dictate how much breadth and power prosecutors have to enforce gambling laws. It “could be a chance to clear up the gray area that’s always existed” as to the legality of offshore casinos, said Kevin Smith, a spokesman for BetOnSports.

Prosecutors argue that the Wire Act of 1961 prohibits not just Internet sports betting but also casino games, including online poker. Some industry executives, legal experts and analysts, even those without a vested interest, say it is not clear that the Wire Act was intended to cover those casino games.

The legislation approved by the House would make it explicit that the wire act covers these games. It also seeks to create a new enforcement mechanism by criminalizing the processing of payments for Internet gambling. It would prohibit banks, credit card companies and online payment processors, like PayPal, from transacting such business.

“For the first time, we have a methodology that has enforcement clout,” Mr. Leach said. “This legislation has a lot of teeth.”

Yet this is not the first effort to cut off payment methods. In November 2001, many major banks that issue credit cards began voluntarily refusing to process credit card payments for gambling. That gave rise to new overseas payment processors, like Neteller and FirePay, in which customers can deposit money to be forwarded to offshore casinos.

Having new overseas processors can spring up does present a problem, Mr. Leach said. But if the bill becomes law, it would also prohibit American financial institutions from transferring money to overseas payment processors known to do a lot of business with casinos. In turn, it could make people work harder to place bets.

“It could quite effectively reduce impulse betting,” Mr. Leach said. “It might be a slightly less-effective barrier to some of the poker kinds of games. I aspire to total curtailment. But I cannot guarantee that will occur.”

    The Gambling Is Virtual; the Money Is Real, NYT, 25.7.2006, http://www.nytimes.com/2006/07/25/business/25gamble.html

E-Commerce Report

After Delving Into 33 Other Lines, Amazon Finally Gets Around to Food

July 24, 2006
The New York Times
By BOB TEDESCHI

NOW sitting atop Amazon.com’s best-seller list: coffee. Not the book. The bean.

Amazon introduced a grocery store last week, complete with sales rankings, customer reviews and recommendations. (For the record, customers who bought Froot Loops also bought digital pedometers. Who knew?) It is the 34th product category Amazon has rolled out since it started expanding in the late 1990’s, but for some it is the most puzzling, since it calls to mind some of the worst Internet business debacles on record.

“I’m a little baffled by this,” said Sucharita Mulpuru, an analyst with Forrester Research. “Groceries are a $500 billion business, and Amazon has never had a piece of that action, but economically I just don’t know how much sense this makes.”

Webvan and Pets.com tried to defy fiscal logic by selling goods with profit margins as low as their shipping costs were high. But these and other companies quickly learned that there was no easy way to make up the money lost on selling 50-pound bags of dog food or 20-pound packages of diapers.

Amazon’s approach is at least slightly different. The company will not ship perishable items, and will instead concentrate on dry goods like packaged cereals and canned food. Many of those items come packaged in groups, like last week’s best seller, the 4-pack of Senseo Douwe Egberts Dark Roast Coffee Pods. The 72 single-serve pods cost $16.40.

Shipping adds about $6 more, but Amazon is betting many of its grocery customers will instead use the site’s Prime service, which, for $79 annually, gives customers unlimited two-day shipping on most Amazon items, including all groceries.

Amazon does not disclose sales results for individual product categories, making it difficult for analysts to track the progress of its new stores. Its jewelry store, which was rolled out in late 2003, has been a notable exception, generating enough sales growth for the company to highlight the store in its quarterly results over the last year. But other more recent additions, like its wedding store and its beauty store, have not generated as much fanfare.

Wall Street analysts are suspicious of Prime, since cheaper shipping threatens to diminish Amazon’s profit margins, which have rebounded over the last year after slumping for years. Gross margins for the company’s American businesses have reached about 27 percent, after dropping to about 24 percent in 2004.

Amazon’s chief executive, Jeffrey P. Bezos, has defended the program as costly but necessary to maintaining long-term customer loyalty.

The introduction of the grocery store promises to intensify that debate, since it could accelerate customer demand for the program. Even if Prime subscribers make enough grocery purchases to get free shipping on many items, though, the site can still protect profit margins, said Maria Renz, who, among other duties, helps oversees Amazon’s grocery section.

“The items we’re selling really aren’t that heavy,” Ms. Renz said. “A box of diapers, at 20 pounds, weighs about the same as a KitchenAid mixer, which we ship for free.” (Of course, the mixer costs $190, and carries a considerably higher profit margin than diapers.)

But according to Forrester, there appears to be a correlation between those who buy a lot of groceries offline and those who spend aggressively online. Web shoppers who spent more than $250 online in the past three months bought more than $800 worth of groceries during that time. Those who spent less than $250 online bought about $660 in groceries. A grocery store, then, could be a way to reach more big Web spenders.

To do that, Amazon gave itself time to work out the logistics and economics of shipping food. The company started selling gourmet food and health-related items in 2003, giving it experience with major packaged goods vendors like Procter & Gamble, Kraft and others. In response to customer requests, the site continued to expand its food selection until late last year, when Amazon decided groceries could sustain their own store.

“We sit down and I say I want all 80-plus flavors of Jell-O gelatin,” Ms. Renz said. “No brand manager is used to having that sort of conversation.”

The store currently carries 14,000 items, about the same amount of dry goods that an average grocery store would carry. The difference is that Amazon includes many niche products that conventional grocers cannot carry — like some high-end or regional brands of granola and gluten-free spaghetti — because the products have such limited appeal.

As is typical for the company, Amazon will not disclose much about the behavior of its grocery customers, such as whether they are likely to also fill their shopping baskets with higher-profit goods from other parts of the site. Ms. Renz said the typical customer is a “busy working mom and dad, looking for a good price and the most convenient way to buy what they need.”

From the looks of it, busy office managers may also be visiting the store, said Andrew B. Parkinson, president of Peapod, the online grocery division of Ahold, which owns Stop & Shop, Topps and other chains in the Northeast.

Because many of Amazon’s items come in bundles, Mr. Parkinson said, “they could appeal more to businesses than consumers.’’

“It might be attractive for filling the pantry at work, for instance.”

Still, Mr. Parkinson said Amazon’s entry into the category “is something to take notice of,” given the site’s customer base and expertise in online selling and shipping.

The nation’s biggest grocery stores, including chains like Stop & Shop, continue to take their time with their online sales efforts. In stark contrast to the ambitious plans of Webvan, which had hoped to set up delivery operations quickly throughout the country, traditional grocers have waited for demand to build before offering the service in new markets.

Peapod, for instance, will usually refrain from offering online ordering and delivery to new towns unless those towns have the population density, and enough high-speed Internet users, to ensure success. By now, Mr. Parkinson said, Peapod’s service covers 60 percent of the markets of Ahold’s United States stores.

Ahold does not disclose revenue or profitability figures for its online shopping division, but Mr. Parkinson said the operation had become more profitable in recent years as it relied on better technology and techniques for more efficient product handling and shipping.

The company has tweaked delivery prices, too. Customers used to pay $10 for orders between $50 and $75, and $5 for orders over $75. Now they pay $10 for orders under $100 and $7 for orders above.

One big difference between Amazon and traditional grocers, of course, is that grocery stores can sell perishables. And because Peapod customers are usually stocking up on all of their grocery purchases for the week, average order sizes are considerably higher than those at the offline stores.

But perhaps the bigger difference between the online grocery efforts of traditional stores and Amazon is their purpose. Both look to Internet grocery sales to build the bottom line, but for grocers with both an online and offline component, the effect is more indirect.

“I wouldn’t say our online customers are more profitable than our store customers, but this service keeps them more loyal,” Mr. Parkinson said. “That’s an important part of any grocery chain’s profitability.”

    After Delving Into 33 Other Lines, Amazon Finally Gets Around to Food, NYT, 24.7.2006, http://www.nytimes.com/2006/07/24/technology/24ecom.html

In the Race With Google, It’s Consistency vs. ‘Wow’

July 24, 2006
The New York Times
By SAUL HANSELL

When Google introduced its mapping service last year, it did something that made its competitors look antiquated. Users could click on a map and drag it to see an adjacent area, a much faster approach than those offered by rival mapping services.

But today, Google Maps still does not offer some of the pedestrian conveniences of Yahoo Maps and MapQuest from AOL. For example, it does not remember addresses, so users need to tell it where they live every time they want driving directions.

Alan Eustace, a senior vice president for engineering and research at Google, said in an interview last week that the company had made a conscious choice to play down copycat features: “We are trying to come up with something that is new and different, that makes people say ‘Wow.’ ”

Do Internet users prefer services that are consistent and predictable, like those offered by Yahoo, or are they more interested in Google’s wow factor? These two approaches define a pivotal front in the battle for online loyalty between the major players in the Internet search business.

Both companies see e-mail and other services as ways to display more advertising — and, even more important, as a way to keep their brands in front of users so they stick around for more searches.

“The battle is about one thing: getting that search box in front of as many people in as many places as possible,” said Jim Lanzone, the chief executive of Ask.com, the search service owned by IAC/InterActiveCorp.

Yahoo is on the defensive in the broader fight, where Web search advertising is the biggest prize.

Google is continuing to extend its lead in users and revenue from Web search, while Yahoo’s attempt to compete is foundering. Last week, Yahoo reported weak search revenue and said it would delay a critical search advertising system, sending its shares down 22 percent to a two-year low.

With AOL and MSN from Microsoft losing share and plagued by strategic confusion, Yahoo is in a position to further solidify its lead as the Web’s most popular full-service Internet portal, so any incursions by Google into areas like e-mail and maps are a threat.

Yahoo is trying to fend off its rival by emphasizing the wide range and consistent approach of its Swiss army knife of services. And since 200 million of its users have registered Yahoo accounts, it can use information about them, like their addresses and contact information, to save them time and personalize their experience.

“Our philosophy is that being part of the Yahoo network is a huge advantage and a huge competitive differentiator,” said Ash Patel, Yahoo’s chief product officer. “When we build a product that takes advantage of the Yahoo network, it doesn’t feel like an orphan.”

Google has tied some products together — for example, combining its instant messaging and e-mail services on the same Web page. But those links are often created after a product is introduced.

“There is a tradeoff between integration and speed,” Mr. Eustace said. “We are living and dying by being an innovative, fast-moving company.”

Sometimes this penchant for speed and innovation can cause Google to zoom past the basics. When asked about the lack of an address book in Google Maps in an interview last fall, Marissa Mayer, Google’s vice president for search products and user experience, said it was a gap in the product. She said it was much easier to get the company’s engineers to spend time developing pioneering new technology than a much more prosaic address storage system.

There are risks in each approach. Google tends to introduce a lot of new products and then watch to see what works. This has the potential to alienate users if there are too many half-baked ideas or false starts. At the same time, Yahoo risks being seen as irrelevant if it tries to put so many features into each product that it is always months late to market with any good idea.

“Yahoo has lost its appetite for experimentation,” said Toni Schneider, a former product development executive at Yahoo who is now chief executive of Automattic, a blogging software company. “They used to be a lot more like Google, where someone would come up with a cool idea and run with it.”

While Yahoo’s processes have become too bureaucratic, it is still attracting an audience, Mr. Schneider said. “Google’s products may be more innovative, but at the end of the day, Yahoo is pretty good at nailing what the user really wants.”

So far, outside of the Web search business, neither company appears to be able to make a significant dent in the position of the other. Both companies are gaining users as AOL and MSN decline. Yahoo is the No. 1 site for e-mail and online news in the United States, while it is second in instant messaging, behind AOL, according to data from comScore Media Metrix.

Google, by contrast, is much less consistent. Its map service is now a very close third behind MapQuest and Yahoo. And the two-year-old Gmail is now the No. 4 e-mail service in the country, with 8.6 million users in June. That is not bad in a market where people do not switch e-mail addresses casually. But over the last year, according to comScore, Yahoo added 11.8 million e-mail users, more than Gmail’s entire user base.

Moreover, some of Google’s products are languishing. Its Google Talk chat software had only 44,000 users in June, according to comScore. And its Orkut social networking service had 279,000 users in the United States, although it is quite popular in Brazil.

Yahoo’s social networking service, Yahoo 360, had 4.7 million United States users in June. That is not a small number, but the service is tiny compared with the 52 million people who used MySpace, which was acquired by the News Corporation last year. And it is less popular than Facebook, Xanga and several other independent networks.

Mr. Patel said he expected that use of Yahoo 360 would increase because it was now woven more closely into the new version of the company’s instant messaging program.

Yahoo’s difficulty in gaining traction in social networking is especially troublesome for the company, because it has made a big bet that contributions from users would help differentiate its offerings from those of Google. It has bought some start-ups that generated buzz in Silicon Valley, like Flickr, a photo-sharing service, and Del.icio.us, which lets people share links to Web sites. And it has started other services, like Yahoo Answers, an information exchange that has quickly built a following.

In typical Yahoo fashion, the company has tried to link all these services together. Its new technology news service uses Yahoo Answers as a way to provide user help, and product reviews contributed by users are automatically displayed on their Yahoo 360 profile pages.

So far, it is unclear whether most of these attempts to add community features are catching on with Yahoo’s mainstream audience. Indeed, some argue that Yahoo’s dalliance with trendy concepts like tagging — a way for users to add labels to Internet content — is too obscure for its mainstream audience, and that it may be ceding to Google its position as the most streamlined, easy-to-use service.

“Google is simpler, more focused on real and basic customer needs, with some exceptions for their experiments, and less focused on some of the fads driving Silicon Valley today,” said Phil Terry, chief executive of Creative Good, a user experience consulting firm.

Mr. Patel said Yahoo’s product design has had to evolve now that some people have a decade of experience using the Internet while many others are still neophytes. He said the company was trying to use its personalization features to treat new and more experienced users differently.

Google has started several services that allow users to create content, but they are separate islands. Its Orkut social network, the Blogger blogging service, the Google Pages home page service and the new Web Albums feature of Google’s Picasa photo software are, so far, not connected. Also standing apart are Google Coop and Google Notebook, two different approaches to letting users identify interesting Web pages to share with others.

Mr. Eustace said that there were so many services that let people post content to the Web that Google did not put a high priority on creating its own integrated service.

Over the last several years, Yahoo has devoted so much of its resources to building up its search business that it has been slow to improve many of its other offerings. This has allowed Google to gain the initiative in areas like e-mail and maps. Indeed, even in stock market information — where Yahoo Finance is the dominant product — Google was the first to offer an interactive stock-price graph, a feature Yahoo has just started testing.

Mr. Patel said Yahoo was not simply playing catch-up and had been working on a new version of Yahoo Finance before Google’s service was introduced. Still, he acknowledged that upstarts often have an advantage.

“Google is a new player on the scene and doesn’t have to deal with legacy issues,” he said. “Take Yahoo Mail, with 200 million users. We could change the entire user interface and say ‘like it or lump it.’” Instead, he said, the company preferred to give users a smoother transition to the more modern e-mail system it is testing.

Google is now making some moves toward integrating its products more closely.

Sergey Brin, the company’s co-founder and its president of technology, said in an interview last week that he had been encouraging engineers to develop their ideas as add-ons for existing Google products, rather than as stand-alone services. For example, after Google Talk failed to attract much of a user base, the company added an instant message feature to Gmail that allows users to chat with people on the same Web page that displays their e-mail.

With this approach, Mr. Brin said, Google can take advantage of the users it already has, rather than trying to build new followings for each new offering.

Moreover, he added, “It’s getting hard to follow all the different products.”

Meanwhile, Yahoo says it is now trying to emulate Google’s faster method of creating products. Like most big companies, it used to develop software by first creating a comprehensive design that defined how features would be written and tested. Instead, it is now trying what is known as a scrum method, where it will plan, build and test parts of a product every 30 days..

“We may not know how everything fits together,” Mr. Patel said. But by creating partly completed products that can be shown to customers, “We can get insights from users and react to that over a three- or four-month period to put it all together,” he said.

    In the Race With Google, It’s Consistency vs. ‘Wow’ , NYT, 24.7.2006, http://www.nytimes.com/2006/07/24/technology/24yahoo.html

Police: Predator Used Web to Lure Victims

July 21, 2006
By THE ASSOCIATED PRESS
Filed at 12:51 p.m. ET
The New York Times

CENTRAL ISLIP, N.Y. (AP) -- A man who prosecutors say lured underage girls he met on a vampire-related Internet site to cemeteries for sex pleaded not guilty to rape and sodomy charges.

Eric Fischer, 23, was ordered held on $350,000 bail after entering the plea Thursday on a 25-count indictment that included charges of rape, criminal sexual act and endangering the welfare of a child, according to the Suffolk County district attorney's office.

Prosecutors said he contacted his victims using a Gothic culture Web site and arranged to meet them in cemeteries on Long Island, east of New York City, prosecutors said.

Fischer was first arrested in March and an incident involving a 16-year-old girl he met on the Web site, police said. A month later, he was accused of luring someone he believed was a 13-year-old girl -- but who turned out to be a detective in the Suffolk police computer crimes squad.

Suffolk Assistant District Attorney Julie Walsh said a further investigation uncovered five other potential victims, ranging in age from 14 to 16.

Fischer's attorney, John Ammerman, declined to comment.

    Police: Predator Used Web to Lure Victims, NYT, 21.7.2006, http://www.nytimes.com/aponline/us/AP-Internet-Predator.html

Google Profit Surges on Strong Search Advertising

July 21, 2006
The New York Times
By SAUL HANSELL

Google’s profits more than doubled in the second quarter, as the company continued to increase its share of the lucrative search advertising market.

The company, which announced results yesterday, exceeded analysts’ expectations for both sales and profit. That is in contrast to Yahoo, which disappointed Wall Street Tuesday with lower-than-expected revenue from search-related advertising. Yahoo met profit expectations because it postponed some hiring and advertising spending.

In after-hours trading, shares of Google rose nearly 1 percent, to $390.55. The stock has fallen this week in sympathy with Yahoo, which dropped 22 percent on Wednesday. Shares of Yahoo rose 0.3 percent yesterday, to $25.27.

Google, based in Mountain View, Calif., attributed its success to several areas in which Yahoo fell short. The company said it continued to develop technology that increases the advertising revenue it earns from each search, while Yahoo said its already delayed effort to build such technology would be another three months late.

Google also continued to expand the number of sites that display advertising it sells, while Yahoo is still absorbing the loss of its largest advertising client, MSN from Microsoft, which is selling its own advertising.

“We did really, really well in a quarter that is seasonally slow,” said Eric Schmidt, Google’s chief executive, in an interview. “Big companies as they get larger seem to slow down. We continue to innovate.”

Google earned $721.1 million, or $2.33 a share in the quarter, compared with $342.8 million, or $1.19 a share, in the period a year ago. Excluding charges related to stock-based compensation and a gain from the sale of its shares in Baidu, the Chinese Internet company, Google earned $2.49 a share. Analysts had expected the company to earn $2.22 on that basis.

Google’s revenue was $2.46 billion, up 77 percent.

Excluding the payments it makes to companies like AOL that carry its search advertising, Google’s revenue was $1.67 billion, up 88 percent. That is a bit higher than the $1.65 billion that analysts expected.

In a conference call with investors, Mr. Schmidt said that one top company priority was to expand its advertising business. One aspect of this is to build services for graphical and video advertisements of interest to brand marketers, the strongest area of Yahoo’s business.

It also wants to expand its advertising auction system into other media; in that system, advertisers bid to have ads displayed on Web pages. Within three months, Mr. Schmidt said, Google will integrate the radio advertising system from its acquisition of DMark Broadcasting into its main service. He did not say what this integration would entail.

The company hopes to start selling advertisements on mobile phones, a service it offers in Japan.

Google continued its breakneck expansion, adding 1,152 employees in the second quarter, leaving it with 7,942 employees on June 30.

Sergey Brin, Google’s president for technology, said the rate of hiring had slowed. The employee base grew 20 percent in the first quarter but only 17 percent in the second quarter.

“That gives us more time for people to get up to speed,” he said.

Safa Rashtchy, an analyst with Piper Jaffray & Company, said that Google did seem to be able to manage the expansion. “They are on a hiring frenzy, yet their expenses seem to be under control,” he said.

Mr. Rashtchy noted that spending on marketing was lower than he expected, given that Google had announced some high-profile deals, like an arrangement to install software on computers made by Dell Inc.

Google spent $699 million on capital projects in the quarter, including $319 million on real estate. The rest went for computer servers and related technology, mainly to support its search service.

George Reyes, the chief financial officer, said that capital expenses would probably increase over time. He assured investors that these investments were “prudently thought out” and the company was purchasing property, rather than leasing it, because it would save money in the long run.

Google’s revenue from its own network of Web sites continued to grow faster than that from other sites for which it sells advertising.

Google’s sites produced revenue of $1.43 billion, up 94 percent.

Revenue from sales on other sites — deducting the payments made to those sites — was $212 million, up 56 percent.

The company said its business was especially strong in Europe but that it lagged in most of Asia.

    Google Profit Surges on Strong Search Advertising, NYT, 21.7.2006, http://www.nytimes.com/2006/07/21/business/21google.html

Technology Rewrites the Book

July 20, 2006
The New York Times
By PETER WAYNER

When Steve Mandel, a management trainer from Santa Cruz, Calif., wants to show his friends why he stays up late to peer through a telescope, he pulls out a copy of his latest book, “Light in the Sky,” filled with pictures he has taken of distant nebulae, star clusters and galaxies.

“I consistently get a very big ‘Wow!’ The printing of my photos was spectacular — I did not really expect them to come out so well.” he said. “This is as good as any book in a bookstore.”

Mr. Mandel, 56, put his book together himself with free software from Blurb.com. The 119-page edition is printed on coated paper, bound with a linen fabric hard cover, and then wrapped with a dust jacket. Anyone who wants one can buy it for $37.95, and Blurb will make a copy just for that buyer.

The print-on-demand business is gradually moving toward the center of the marketplace. What began as a way for publishers to reduce their inventory and stop wasting paper is becoming a tool for anyone who needs a bound document. Short-run presses can turn out books economically in small quantities or singly, and new software simplifies the process of designing a book.

As the technology becomes simpler, the market is expanding beyond the earliest adopters, the aspiring authors. The first companies like AuthorHouse, Xlibris, iUniverse and others pushed themselves as new models of publishing, with an eye on shaking up the dusty book business. They aimed at authors looking for someone to edit a manuscript, lay out the book and bring it to market.

The newer ventures also produce bound books, but they do not offer the same hand-holding or the same drive for the best-seller list. Blurb’s product will appeal to people searching for a publisher, but its business is aimed at anyone who needs a professional-looking book, from architects with plans to present to clients, to travelers looking to immortalize a trip.

Blurb.com’s design software, which is still in beta testing, comes with a number of templates for different genres like cookbooks, photo collections and poetry books. Once one is chosen, it automatically lays out the page and lets the designer fill in the photographs and text by cutting and pasting. If the designer wants to tweak some details of the template — say, the position of a page number or a background color — the changes affect all the pages.

The software is markedly easier to use — although less capable — than InDesign from Adobe or Quark XPress, professional publishing packages that cost around $700. It is also free because Blurb expects to make money from printing the book. Prices start at $29.95 for books of 1 to 40 pages and rise to $79.95 for books of 301 to 440 pages.

Blurb, based in San Francisco, has many plans for expanding its software. Eileen Gittins, the chief executive, said the company would push new tools for “bookifying” data, beginning with a tool that “slurps” the entries from a blog and places them into the appropriate templates.

The potential market for these books is attracting a number of start-ups and established companies, most of them focusing on producing bound photo albums. Online photo processing sites like Kodak Gallery (formerly Ofoto), Snapfish and Shutterfly and popular packages like the iPhoto software from Apple let their customers order bound volumes of their prints.

These companies offer a wide variety of binding fabrics, papers, templates and background images, although the styles are dominated by pink and blue pastels. Snapfish offers wire-bound “flipbooks” that begin at $4.99. Kodak Gallery offers a “Legacy Photo Book” made with heavier paper and bound in either linen or leather. It starts at $69.99. Apple makes a tiny 2.6-by-3.5-inch softbound book that costs $3.99 for 20 pages and 29 cents for each additional page.

The nature and style of these options are changing as customers develop new applications. “Most of the people who use our products are moms with kids,” says Kevin McCurdy, a co-founder of Picaboo.com in Palo Alto, Calif. But he said there had been hundreds of applications the company never anticipated: teachers who make a yearbook for their class, people who want to commemorate a party and businesses that just want a high-end brochure or catalog.

Picaboo, like Blurb, distributes a free copy of its book design software, which runs on the user’s computer. Mr. McCurdy said that running the software on the user’s machine saves users the time and trouble of uploading pictures. The companies that offer Web-based design packages, however, point out that their systems do not require installing any software and also offer a backup for the user’s photos.

As more companies enter the market, they are searching for niches. One small shop in Duvall, Wash., called SharedInk.com, emphasizes its traditional production techniques and the quality of its product. Chris Hickman, the founder, said that each of his books was printed and stitched together by “two bookbinders who’ve been in the industry for 30 or 40 years.” The result, he said, is a higher level of quality that appeals to professional photographers and others willing to pay a bit more. Books of 20 pages start at $39.95.

Some companies continue to produce black-and-white books. Lulu.com is a combination printer and order-fulfillment house that prints both color and black-and-white books, takes orders for them and places them with bookstores like Amazon.com.

Lulu works from a PDF file, an approach that forces users to rely on basic word processors or professional design packages. If this is too complex, Lulu offers a marketplace where book designers offer their services. Lulu does offer a special cover design package that will create a book’s cover from an image and handle the specialized calculations that compute the size of the spine from the number of pages and the weight of the paper.

A 6-by-9-inch softcover book with 150 black-and-white pages from Lulu would cost $7.53 per single copy.

These packages are adding features that stretch the concept of a book, in some cases undermining the permanent, fixed nature that has been part of a book’s appeal. The software from SharedInk.com, for instance, lets a user leave out pages from some versions of the book. If Chris does not like Pat, for instance, then the copy going to Chris could be missing the pages with Pat’s pictures.

Blurb is expanding its software to let a community build a book. Soon, it plans to introduce a tool that would allow group projects, like a Junior League recipe book, to be created through Blurb’s Web site. The project leader would send out an e-mail message inviting people to visit the site and add their contributions to customized templates, which would then be converted into book pages.

“Books are breaking wide open,” Ms. Gittins said. “Books are becoming vehicles that aren’t static things.”

    Technology Rewrites the Book, NYT, 20.7.2006, http://www.nytimes.com/2006/07/20/technology/20basics.html?ex=1153627200&en=9346e0a25d019b32&ei=5087%0A

Survey of the Blogosphere Finds 12 Million Voices

July 20, 2006
The New York Times
By FELICIA R. LEE

Bloggers are a mostly young, racially diverse group of people who have never been published anywhere else and who most often use cyberspace to talk about their personal lives, according to a report on blogging released yesterday by the Pew Internet & American Life Project.

The report also said that 8 percent of Internet users, or about 12 million American adults, keep a blog, and that 39 percent of Internet users, or about 57 million American adults, read blogs.

“This is a decent portrait of the long tail of the blogosphere,” Lee Rainie, director of the project, said in an interview yesterday. “These are the average, everyday folks who blog. They are different from the A-list bloggers who get so much media attention. This is the first attempt or one of the first attempts at a representative sample of bloggers.”

The report, called “Bloggers: A Portrait of the Internet’s New Storytellers,” relied on two telephone surveys conducted over the last year. The first survey, taken from July 2005 to February 2006, asked in-depth questions of 233 people, who were a nationally representative sample of bloggers. The survey’s margin of error was plus or minus 7 percent.

Additionally, from November 2005 to April 2006, 7,012 adults (including 4,753 Internet users) were surveyed by telephone. That survey had a margin of error of plus or minus 3 percent for the Internet users and 2 percent for the entire group.

Amanda Lenhart, the senior research specialist for the project, said that while the number of bloggers surveyed was not large, only 4 percent of all Americans have blogs.

“Certainly, as a research center, we get asked about blogging,’’ Ms. Lenhart said of the reason for the surveys. “It was something igniting the American consciousness. Blogs were perceived as having a big impact on politics, technology and journalism. We wanted to go in and see what bloggers were doing.”

Pew is a nonprofit, nonpartisan research center based in Washington.

So far it appears that most bloggers view blogging as a hobby that they share with a few people, Ms. Lenhart said. “The new voices are being read in relatively limited spheres,’’ she said.

Among the report’s findings was that while many well-known blogs are political in nature, 37 percent of bloggers use them as personal journals. Among other popular topics were politics and government (11 percent), entertainment (7 percent), sports (6 percent) and general news and current events (5 percent). Only 34 percent of bloggers considered blogging a form of journalism, and most were heavy Internet users.

More than half of bloggers (54 percent) are under 30, the report said, evenly divided between men and women. More than half live in the suburbs, a third live in urban areas and 13 percent in rural areas. Bloggers, the report said, are also less likely to be white than the general Internet population: 60 percent are white, 11 percent are African-American, 19 percent are English-speaking Hispanic and 10 percent identify themselves as members of some other race. By contract, 74 percent of Internet users are white.

Despite a potentially vast audience in cyberspace, the Pew project found that 52 percent of bloggers said they blogged mostly for themselves. When asked for a major reason for blogging, 52 percent said it was to express themselves creatively and 50 percent said it was to document and share personal experiences.

Chris Anderson, the editor in chief of Wired, a magazine about technology and culture, said the Pew report was accurate. “The finding that jumped out at me was the recognition that people are talking about the subjects that matter in their personal lives,” he said.

Mr. Anderson, the author of the book “The Long Tail: Why the Future of Business Is Selling Less of More” (Hyperion), said that the Pew report shows how the blogosphere is unlike traditional media. “It’s narrow, niche subjects,” he said. “It’s a granularity of media that we in the commercial media could not scale down to. Niche media is ‘me’ media, and the blogosphere is the ultimate manifestation of that.”

    Survey of the Blogosphere Finds 12 Million Voices, NYT, 20.7.2006, http://www.nytimes.com/2006/07/20/arts/20blog.html

Weak Sales of Text Ads at Yahoo; Shares Dip

July 19, 2006
The New York Times
By SAUL HANSELL

Shares of Yahoo fell to their lowest level in nearly two years in after-hours trading yesterday as it reported weak revenue from Internet search advertising in the second quarter and a delay in a critical project that is meant to increase search revenue.

While Yahoo, which runs the world’s most popular Internet site, has a booming business selling graphical advertising, it has been struggling to rebuild its search service.

Google, which continues to increase its share of both users and advertising revenue, produces 40 percent more revenue from each search than Yahoo does, industry experts say, thanks to software that is better at selecting relevant text advertisements to place on a page of search results.

Terry Semel, Yahoo’s chief executive, told investors in a conference call yesterday afternoon that Project Panama, the company’s effort to match Google’s ad-selection technology, would be delayed by at least three months. Instead of being introduced this quarter, the new advertising system will not be switched on until at least the fourth quarter. The two-year-old project is already many months behind its original schedule.

In an interview, Mr. Semel said the latest delay came after Yahoo’s engineers said the new service needed more time for testing with clients.

“I didn’t want to take it to the market if it was not quite ready and not quite the quality it should be,” he said. “So I said to them, do the best job you can.”

Mr. Semel added that he was wary of changing the system that now accounts for the bulk of Yahoo’s revenue too close to the holiday shopping season, which is also the peak time for advertising. That raises the possibility that the company could wait until next year to switch to the new system, which analysts expect to produce more than $100 million in additional revenue each quarter.

Safa Rashtchy, an analyst with Piper Jaffray, said he was not satisfied with Yahoo’s explanation for the delays.

“I find it troubling,” he said. “I would much prefer if it were two quarters late and they could say it was this issue or that issue, rather than to give a nonanswer.”

After Yahoo’s results were released yesterday afternoon, the company’s shares fell to $27.80 in late trading, down 14 percent from the regular market close. They rose 40 cents earlier in the day.

Yahoo earned $164 million in the second quarter, ended June 30. It earned $755 million a year earlier, when its profits were bolstered by $552 million from the sale of Google stock and the settlement of a patent suit.

On a per-share basis, Yahoo earned 11 cents, matching analysts’ expectations. The company’s revenue was $1.58 billion, up 26 percent from a year earlier.

Excluding payments to sites that display its ads — known as traffic acquisition costs — Yahoo’s revenue was $1.12 billion, up 28 percent. Analysts had expected revenue of $1.14 billion excluding the traffic costs.

Over all, Mr. Rashtchy said, Yahoo’s profit met Wall Street’s expectations because lower-than-expected costs compensated for lower-than-expected revenue.

Mr. Semel said expenses were lower because Yahoo had not been able to hire as many people as it planned, and because it had delayed some advertising campaigns. That hiring and advertising spending, he said, was not cut but was pushed later into this year. Yahoo increased its employee count by 400, to 10,500 full-time workers.

Yahoo’s revenue from selling advertising and other marketing services was $1.39 billion, up 27 percent.

Mr. Rashtchy said he estimated that Yahoo’s revenue from search advertising actually fell in the quarter, to $521 million. That is a decline of 4 percent, instead of the 4 percent gain he expected. Sales of banners and other graphic advertisements, by contrast, increased by 36 percent, to $358 million, Mr. Rashtchy estimated, more than he expected. Yahoo does not provide breakdowns of those sales categories.

There were some signs that the growth of Yahoo’s vast audience had stopped. It reported 208 million registered users, the same level as three months ago, although still up 20 percent over last year. Its total users rose only 2 percent in the quarter, to 412 million. The company said the early summer was always a slow season for Internet usage.

The company maintained its predictions for revenue and operating cash flow for this year. It expects revenue, excluding traffic acquisition costs, of $4.6 billion to $4.85 billion, and it expects operating cash flow of $1.92 billion to $2.06 billion.

Jordan Rohan, an analyst with RBC Capital Markets, said that while Yahoo’s forecasts remained constant, investors were likely to scale back their expectations for the company.

“The low end of their range is now much more believable than the high end,” he said.

    Weak Sales of Text Ads at Yahoo; Shares Dip, NYT, 19.7.2006, http://www.nytimes.com/2006/07/19/technology/19yahoo.html

Downloading Service to Allow Film Watching on TV Screens

July 19, 2006
The New York Times
By SAUL HANSELL

Several large studios will start letting people create DVD’s of movies in their homes today using a new feature of CinemaNow, an online movie-downloading site.

The movie industry has been experimenting with ways to rent and sell downloaded movies, but these efforts have been hampered because the movies generally had to be watched on computer screens. The new service allows the movies to be seen on any television set connected to a DVD player.

“People like to watch movies in their living rooms, and this solves their problem,” said Curt Marvis, chief executive of CinemaNow, which is offering the download-to-DVD service. The studios participating include Sony, Disney, Universal, MGM and Lions Gate, which is a major shareholder in CinemaNow.

CinemaNow has been selling downloaded movies since April from these and some other studios, but the movies were restricted to computer viewing, and the downloads included only the film. The new offering also includes the bonus material on DVD discs, like filmmakers’ commentary and extra scenes.

The picture quality of the discs made through the downloading will not be as high as those on commercial DVD’s because the files need to be compressed to reduce the downloading time. Even so, it will take about three hours to download and burn a movie, hardly allowing for impulse purchases.

Mr. Marvis said users would not be inconvenienced by the time. “I was testing the service over the weekend with my family,” he said. “We picked out a movie to see, launched the service, cooked dinner, ate and by the time we washed and put away the dishes, there was the movie.”

And the studios are not yet allowing new releases to be sold in a form that can be copied to DVD’s. Initially, CinemaNow will offer about 100 older titles, including “Scent of a Woman,” “Charlie’s Angels: Full Throttle” and “Barbershop.” Prices will be about $9 to $15, the same as the films sold in versions that could be downloaded only to computers.

Mr. Marvis said the response to the initial offering had been tepid. One reason is that studios have fixed wholesale prices so that CinemaNow charges $19.95 for many new releases, more than customers pay at chain stores, which sell DVD’s at a loss as a way to draw in shoppers.

Even though many computers are now sold with drives that can burn DVD’s, allowing users to burn their own copies of movies has been a legal and technical challenge. The system that is used to keep commercial DVD’s from being copied is controlled by an agreement between electronics and production companies that does not allow it to be used for making discs in homes.

CinemaNow has chosen to use different copy-protection technology made by a German company, Ace.

MovieLink, a rival downloading service owned by a group of major studios, announced Monday that it planned to allow users to burn their own DVD’s of movies, but that it did not expect to have the feature available until the middle of next year. One reason is that it hopes the DVD consortium will modify its agreement to create a standard method for allowing movies to be copied onto discs at home.

    Downloading Service to Allow Film Watching on TV Screens, NYT, 19.7.2006, http://www.nytimes.com/2006/07/19/technology/19download.html

Competitors Concerned After the Arrest of a Major Figure in Internet Gambling

July 19, 2006
The New York Times
By HEATHER TIMMONS

LONDON, July 18 — The multibillion-dollar online gambling industry was thrown into turmoil Tuesday after the United States government arrested a top executive from a London-based betting company, leaving his competitors wondering whether they could be next.

Stock prices of the industry’s biggest names, including PartyGaming and SportingBet, plummeted on Tuesday on fears that they could fall under the Department of Justice’s spotlight next after prosecutors in St. Louis charged the London company, BetOnSports, with criminal racketeering and wire fraud on Monday.

In addition to arresting the chief executive of BetOnSports, David Carruthers, when he touched down in the United States on a flight from Britain to Costa Rica, prosecutors charged the company and 10 others who worked with the company.

Investors and executives are concerned that the charges reflect a new get-tough posture on the part of prosecutors as well as legislators. The House of Representatives passed a bill last week that would ban Internet gambling sites from knowingly accepting money from United States citizens. The Senate has not voted on the bill.

“This is clearly sending a message that Washington is paying attention,” said Sebastian Sinclair, president of Christiansen Capital Advisors, an industry research company.

The arrest of Mr. Carruthers, whose 10-year-old 2,000-employee company is one of the top sports betting Web sites, is a sign of how serious prosecutors are about cracking down, Mr. Sinclair said.

The industry has “some real cowboys and some real shady characters, but David is not one of them,” Mr. Sinclair said.

The BetOnSports Web site continued operating on Tuesday, though trading in its stock, which fell 17 percent on Monday, was suspended. Stock in PartyGaming, which is based in Gibraltar, fell 17 percent on Tuesday on the London Stock Exchange; its decline even dragged the exchange’s FTSE index lower. SportingBet, which is also based in London, fell 36 percent Tuesday after falling 13 percent on Monday.

Analysts in London said that investors overreacted.

“The indictment seems to be very BetOnSports specific and the market seems to be treating all online gaming companies in the same manner,” said Wayne Brown, an analyst with Altium Securities in London.

Companies and analysts combed through the 27-page BetOnSports indictment Tuesday, trying to predict where the Department of Justice could be headed next. The indictment listed charges against executives stemming back to 1992 and focuses on the company’s sports betting operations, which it says violate a federal wire act that prohibits making sports bets across state lines. That gave some companies that have only casino games hope they could be left alone.

On Tuesday, some online gambling executives challenged the idea that their business would be affected. Others conceded they were consulting with lawyers and not planning any trips to the United States. None, though, wanted to speak on the record for fear of drawing the attention and ire of the authorities in the United States.

“This has nothing to do with us whatsoever,” insisted an executive from one of the largest online gambling sites listed in London when asked about the BetOnSports situation. Still, the company would not comment on the issue, he said.

Online betting has grown to an industry that generates $12 billion profit a year, a figure that is expected to double by 2010.

In addition to attracting customers from the United States and Europe, companies are turning to Asia for growth.

Some forms of online gambling are illegal in countries outside the United States. Playing online casino games for money is illegal in Australia, for example. But the United States has been the most aggressive about prosecuting the operators.

It is illegal to operate an online gambling site in the United States, but many lawyers say that the legality of a Web site that is based elsewhere, but attracts American customers, is up for interpretation. An American bookie, Jay Cohen, who ran a gambling Web site out of Antigua, served jail time after being convicted in 2000 of violating the wire act.

The Federal Bureau of Investigation’s actions come as sentiment against United States prosecutors is running high in Britain’s business circles.

It follows the extradition last week of three British bankers to a Houston court to face Enron-related charges; their extradition prompted protests in Britain. Now, the concern is that the same controversial extradition treaty could be used to force British online gambling executives to stand trial in the United States.

    Competitors Concerned After the Arrest of a Major Figure in Internet Gambling, NYT, 19.7.2006, http://www.nytimes.com/2006/07/19/business/worldbusiness/19gamble.html

Arrest Made in Crackdown on Internet Betting

July 18, 2006
The New York Times
By MATT RICHTEL

In a sharp escalation of their crackdown on Internet gambling, United States prosecutors said yesterday that they were pressing charges against the chief executive of BetOnSports, a prominent Internet gambling company that is publicly traded in Britain, and against several other current and former company officers.

Federal authorities arrested the chief executive, David Carruthers, late Sunday as he was on layover at Dallas-Fort Worth International Airport on his way from Britain to Costa Rica. In a hearing yesterday in Federal District Court in Fort Worth, he was charged with racketeering conspiracy for participating in an illegal gambling enterprise.

Also at the hearing, the court granted the government’s request for a temporary restraining order preventing BetOnSports from accepting wagers from customers in the United States and requiring it to return money held in the accounts of American customers.

In addition to Mr. Carruthers, the government filed charges against 10 other people involved with BetOnSports and with three Florida marketing companies that prosecutors say were involved in promoting illegal gambling.

The charges, particularly those against Mr. Carruthers, who runs a company that has been a symbol of the investment potential of offshore casinos, raise complex legal and political questions. And they are the most direct attack in several years on offshore Internet casinos, setting up a showdown with an industry that has grown increasingly brazen in promoting online wagering in the United States.

The gambling sites allow people to place bets on sporting events and play casino games like blackjack from their computers. The companies keep their computer servers in places like the Isle of Man, Antigua and Costa Rica, where BetOnSports has its operating headquarters.

A BetOnSports spokesman declined to comment, saying the company’s board was meeting late last night to assess the situation. Some industry executives have said the offshore casinos cannot be prosecuted because while they take wagers from American bettors, the physical operations are outside United States jurisdiction.

Prosecutors assert that under the Federal Wire Act of 1961, the providers and promoters of Internet sports books and casinos are participants in a criminal enterprise.

The fact that these operations are legal in their home jurisdictions “does not entitle them to do business in the United States,” said Catherine L. Hanaway, the United States attorney for the Eastern District of Missouri, which brought the indictment. The charges announced yesterday indicate that “their efforts to avoid U.S. law enforcement will be challenged and brought to justice whenever possible.”

In addition to Mr. Carruthers, prosecutors brought charges against Peter Wilson, BetOnSports’s media director; Gary Kaplan, the company’s founder; and several of Mr. Kaplan’s relatives, whom the indictment alleges were involved in the business. The indictment was returned June 1 but was sealed until yesterday.

Also charged were operators of Direct Mail Expertise Inc., DME Global Marketing and Fulfillment Inc. and Mobile Promotions Inc., Florida-based companies that prosecutors say helped promote the offshore casinos in advertisements. Those accused are charged with various counts of racketeering, conspiracy and fraud for providing and promoting illegal gambling.

A woman who answered the telephone yesterday at a number listed for Direct Mail Expertise said she knew nothing about the company or its legal problems. A message left on the answering machine of DME Global Marketing yesterday was not answered. No listing was available in Florida for Mobile Promotions.

The indictment seeks to have the accused forfeit $4.5 billion in holdings.

The restraining order, issued by Judge Catherine D. Perry of United States District Court, lists more than a hundred casino Web sites that it says are controlled by the defendants.

“This is a shot across the bow,” said Lawrence G. Walters, a Florida lawyer who specializes in Internet gambling law. “They’re letting the industry know, ‘We’re about to come after you.’ ”

The indictment sent BetOnSports’s shares skidding; they fell 16.5 percent to close at $122.50. According to the indictment, marketing materials from BetOnSports claimed that in 2004 and 2005, the company took 98 percent of its wagers from customers in the United States.

The company’s spokesman said yesterday that that figure was now down to between 70 percent and 80 percent.

The charges reinforce a growing divide between the United States’ policy on Internet gambling and its popularity in much of the rest of the world, not just among gamblers but also with investors. Some popular sites have sold shares to the public and are experiencing growing revenue and, in turn, interest even from major American investment houses, which hold shares of the online casinos in their mutual funds.

There is also a disconnect between the government’s efforts to prohibit online casinos and the activities of hundreds of thousands of Americans who regularly place bets over the Internet.

Last week the House of Representatives overwhelmingly approved legislation to crack down on Internet gambling operations, including criminalizing the processing of payments to such operations by financial institutions. The Senate has not yet voted on the bill.

This is not the first time prosecutors have gone after the operator of an Internet gambling site. In 1998, federal prosecutors indicted Jay Cohen for operating a sports betting Web site that violated the Wire Act, and in 2000 he was sentenced to 21 months in prison.

But operators of offshore casinos have been emboldened in recent years, in part because they have received the stamp of legitimacy from foreign governments. They have expanded their efforts to market in American magazines and on radio and television, and with success: analysts say that more than half of all Internet wagers come from residents of the United States.

Mr. Carruthers has been particularly outspoken about trying to get the United States to change its policies, visiting frequently to press his case with the news media and investors.

“He’s been very vocal and didn’t think that there was anything the government could do,” Mr. Walters said.

Ms. Hanaway, the United States attorney in Missouri, said the arrest happened during this visit because “it’s when we knew he was coming.” Asked whether it presented a challenge to prosecutors that Mr. Carruthers is not an American citizen, Ms. Hanaway said, “Thus far, no.”

Sue Schneider, publisher of Interactive Gaming News, an online magazine focusing on the Internet casino industry, said the charges would have at least one major chilling effect on the industry’s officers. “I imagine the number of executives coming through the U.S. on connecting flights will come to a screeching halt,” she said.

Mary Williams Walsh contributed reporting for this article.

    Arrest Made in Crackdown on Internet Betting, NYT, 18.7.2006, http://www.nytimes.com/2006/07/18/technology/18gamble.html?hp&ex=1153281600&en=a0bdda533bcf7ec5&ei=5094&partner=homepage

Windows Is Ready to Tout PC’s as Gaming Devices

July 18, 2006
The New York Times
By SETH SCHIESEL

Quick, name the world’s most popular electronic game system.

If PlayStation or Xbox popped into your head, that’s understandable. Sony and Microsoft, the companies that make those machines, have spent rafts of cash over the years trying to make those brands synonymous with video games. But however understandable, if you answered PlayStation or Xbox or even Nintendo, you were also wrong.

In fact, the world’s most popular game machine is the personal computer. And that doesn’t mean Macintoshes; Macs are essentially nowhere in the game world. That means PC’s based on Microsoft’s Windows operating system. Hundreds of millions of people around the world use Windows PC’s and in Microsoft surveys about half of them report playing games. That doesn’t include the legions of office-bound Solitaire and Minesweeper addicts who don’t even think of themselves as gamers. (You are, though!)

But as popular as PC gaming is and has been, the general public has never really thought of the home computer as a primary game system. That is no accident. For the first few decades of the digital age, Microsoft’s top goal was to get computers into as many homes as possible. Bill Gates and friends knew that a family was more likely to spend $1,000 on its first computer if was meant to help little Johnny with his homework, or send baby pictures to Grandma, or help with the taxes, rather than if the family was thinking about the PC’s ability to send them into outer space or the depths of a dragon’s lair.

Well, here come the dragons.

After years of treating games, game players and game makers as the vaguely disreputable loons of the PC family, Microsoft is making a major strategic shift. Just as games are becoming a core part of mainstream entertainment, Microsoft is beginning to embrace gaming as a core part of using a computer. That means marketing the PC as the world’s most powerful gaming system and revamping Windows to make it more game-friendly.

Now that the computer business is about convincing people who already have PC’s to buy new ones (rather than their first one), Microsoft executives say they have realized that emphasizing games is a great way to do that.

“Previously we’ve had game technology built into Windows, but we didn’t approach gaming as one of Windows’ fundamental applications, and that’s what we want to start to do,” Rich Wickham, the director of Microsoft’s Windows gaming group, said during a recent visit to New York. “That means supporting developers more closely, seeding great games, making games easier to install and play, and having a unified marketing presence.”

The bigger picture is that PC gaming is surging these days even without Microsoft’s help. A few years ago, the conventional wisdom in game circles (even at Microsoft) was that PC gaming was stagnant, a niche backwater that would soon be swamped by consoles like PlayStation and Xbox.

The tsunami most game executives didn’t see coming was the rise in subscription-based online PC gaming, which wasn’t reflected in the retail sales charts that dominate big screens in boardrooms. Online PC games like Lineage II and World of Warcraft are on pace to take in more than $2 billion this year worldwide.

At the same time, publishers are coming to appreciate that having a strong portfolio of PC games can help them through the tough times that accompany the transition to a new generation of consoles every few years. With the introduction of the Xbox 360 just last November and the scheduled debuts of Sony’s PlayStation 3 and Nintendo’s Wii this fall, game publishers have been suffering as customers adjust and wait for the new consoles. Perhaps the biggest hit of the year has been the Elder Scrolls IV: Oblivion, a game with a fanatical PC fan base (though the game has sold more copies for the Xbox 360).

So with the two new Japanese consoles coming this fall, Microsoft will try to blunt their impact in two ways. The first is an all-but-certain price cut on the Xbox 360. The second will be a new marketing and branding campaign around Windows gaming. That means advertising, but just as important, it also means some long overdue help for the sad patch of real estate known as the PC games section in stores.

“There’s no question about it: Windows games at retail is a disaster,” Mr. Wickham said, “and we’re going to fix that.”

This is what he means: If you walk into a game store or the game section at a Wal-Mart these days, the PlayStation games have a clearly marked area of their own. All the PlayStation game boxes look somewhat similar, and the overall impression is that PlayStation is a unified community of games and products. Same with the Xbox area. Same with the Nintendo area. This is because Sony, Microsoft’s Xbox group and Nintendo try to make their products as attractive as possible in stores and offer financial incentives to retailers to make that happen.

The PC games area, however, usually looks like a dump. Games may be organized haphazardly, they all look different, and they are probably stacked on some dusty shelf in the back of the store. For decades PC games have been the children of a hundred mothers, with each publisher pursuing its own retail strategy, if any at all. Having learned how to do retail marketing correctly with the Xbox, look for Microsoft to apply most of those lessons to PC games this fall.

So there will certainly be some new buzz around computer games this holiday season. But that will hardly compare with what the general public should expect to hear about PC gaming from Microsoft early next year as the company trots out its next version of Windows, called Vista. As Microsoft tries to persuade millions of people around the world to upgrade to Vista, enhanced support for gaming is going to be one of the main selling points.

So even if your current computer does the taxes just fine, there may be dragons in your future.

    Windows Is Ready to Tout PC’s as Gaming Devices, NYT, 18.7.2006, http://www.nytimes.com/2006/07/18/technology/18vide.html

House Backs Crackdown on Gambling on Internet

July 12, 2006
The New York Times
By KATE PHILLIPS

WASHINGTON, July 11 — With bipartisan support and the Jack Abramoff lobbying scandal haunting Republican efforts to pass antigambling legislation, the House approved a crackdown on Internet wagering that would ban not only sports bets but also online poker and other games that have become increasingly popular.

Voting 317 to 93, the House approved a bill that would make it illegal for financial institutions or intermediaries to process payments to offshore casinos through bettors’ electronic funds, checks, debits and other e-wallet transactions. In addition, the bill updates the Wire Act of 1961, which forbade the transmission of betting over telephone lines, to specifically outlaw online gambling through any communication network. Criminal penalties would increase to a maximum of five years in prison, from two years.

Intensive lobbying, led previously by Mr. Abramoff and others, has swirled around various versions of the bill for years, with newcomers like celebrity poker players joining the fray this time around.

Both sides of the debate cited figures that showed how the online wagering business has skyrocketed, quadrupling to nearly $12 billion worldwide since legislation was first proposed to choke off its growth. A broad coalition of the major sports leagues, banking institutions, law enforcement, family values advocates and religious groups rallied on the bill’s behalf.

Its chances in the Senate for passage this year are unclear, given the Senate’s crowded work schedule and limited amount of time in session before the November elections.

Bob Stevenson, a spokesman for Senator Bill Frist of Tennessee, the majority leader, said on Tuesday that the Republican leadership hoped to bring a similar bill to the floor by the end of this year.

On the Democratic side, Senator Harry Reid of Nevada, the minority leader and a former Nevada gaming commissioner, has expressed reservations about the ability to regulate Internet gambling.

The Justice Department has always considered online gambling illegal, and the Bush administration expressed overall support for the House bill.

But while supporters and opponents of the bill expressed worries on Tuesday about the addiction and debt risks that Internet gambling posed, critics were quick to point out what they considered contradictions. The House bill spares Powerball and some other games, for example, and preserves states’ rights to regulate gambling individually. They also criticized efforts to regulate cyberspace, with its lack of state lines (or even international ones).

Representative Shelley Berkley, Democrat of Nevada, said the business of Internet gambling was projected to reach $25 billion by the end of the decade.

“There is nothing in this bill — nothing in this bill — that will shut down these offshore companies who operate legally in other countries,” Ms. Berkley said. “The very nature of a free World Wide Web will continue to make online gambling available.”

Others considered the legislation an infringement on individual rights to privacy through mouse-clicking at home. Representative Barney Frank, Democrat of Massachusetts, contended that the measure was a form of Prohibition. As long as individuals were not harming anyone else, Mr. Frank argued, they should be free to spend their money as they choose.

Some, including Ms. Berkley, who pushed unsuccessfully for an amendment that would strip out exemptions, sharply criticized what they called the bill’s “carve-outs” for the horse racing industry. Representative Robert W. Goodlatte, Republican of Virginia and a longstanding sponsor of the bill, insisted that horse racing was already regulated by the Interstate Horseracing Act.

Under the House measure, the dog-track industry would be barred from promoting interstate parimutuel wagering because it has no other law protecting it.

Other games will have to revise their rules, too. Players of fantasy sports games cannot bet on individual players or on team wins or losses, according to the House bill, but trying to guess online who is going to surpass Joe DiMaggio’s 56-game hitting streak will still be allowed.

The name most invoked on Tuesday was that of Mr. Abramoff, whose powerful lobbying on behalf of online lotteries and other clients killed earlier versions of the bill. Mr. Goodlatte bears “personal scars from influence peddlers,” said Representative Jim Leach, Republican of Iowa, the primary co-sponsor of this bill.

The previous measures died, Mr. Goodlatte said, “based on the misleading representations and the flow of enormous amounts of money by Jack Abramoff, he and others carrying his water, his dirty laundry.”

He continued, “Many in this House are very determined that they have the opportunity today to purge the smear on this Congress.”

    House Backs Crackdown on Gambling on Internet, NYT, 12.7.2006, http://www.nytimes.com/2006/07/12/washington/12gamble.html?hp&ex=1152763200&en=d0de011836c82add&ei=5094&partner=homepage

Computer Hackers Attack State Dept.

July 12, 2006
By THE ASSOCIATED PRESS
The New York Times

WASHINGTON, July 11 (AP) — The State Department is recovering from large-scale computer break-ins worldwide over the past several weeks that appeared to be directed at its headquarters and at offices dealing with Asia.

Investigators believe hackers stole sensitive information and passwords, and implanted “back doors” in unclassified computers to allow them to return, said officials familiar with the hacking. They spoke on condition of anonymity because of the delicacy of the intrusions and the resulting investigation.

The break-ins and the department’s response severely limited Internet access at many locations, including some headquarters offices in Washington, the officials said. Nearly all Internet connections have been restored since the break-ins were recognized in mid-June.

Asked what information was stolen, a department spokesman, Kurtis Cooper, said, “Because the investigation is continuing, I don’t think we even know.”

Employees said the hackers appeared to hit computers especially hard at the Bureau of East Asian and Pacific Affairs.

    Computer Hackers Attack State Dept., NYT, 12.7.2006, http://www.nytimes.com/2006/07/12/washington/12hacker.html

An Internet Lifeline for Troops in Iraq and Loved Ones at Home

July 8, 2006
The New York Times
By LIZETTE ALVAREZ

With mortar shells exploding near him sometimes twice a day in Ramadi, Iraq, Sgt. Mark Grelak found a way to shut out the heat, the noise, and all the demands of his job — sweeping the local highway for bombs left by insurgents. In a tiny space in his barracks, he would flip open his laptop, adjust his Web camera and watch his daughter Katie take her first halting steps.

From 6,000 miles away, Sergeant Grelak, 35, drew flowers with Sara, Katie's older sister, and witnessed, almost in real time, her first day of preschool. The soldier and his wife, Jennifer, 26, even bought a house in Baltimore together, e-mailing pictures and appraisals back and forth. Through instant messaging, they discussed the new landscaping and camping equipment as if they were sitting just across the kitchen table from each other.

"Do you care if I take out the crape myrtle?" Ms. Grelak messaged him in March.

"Why not leave it for now," her husband suggested.

Later, she messaged, "If you have some time, take a look on eBay for a tent. I'd like to go camping this year."

Military deployments have a way of chewing up marriages, turning daily life upside down and making strangers out of husbands and wives. But for this generation of soldiers, the Internet, which is now widely available on bases, has softened the blow of long separations, helping loved ones stay in daily touch and keeping service members informed of family decisions — important and mundane.

Most soldiers deploy with a laptop in hand and a hookup to the Internet in their barracks. Others, particularly those with young children, pay for Web cameras, a trend that began in earnest two years ago.

Mental health experts and military commanders say that the tens of millions of dollars spent on technology in Iraq for Internet cafes, computers and Web cameras have helped ease the isolation of soldiers' lives, as well as the turbulence of coming home, an often-bumpy transition from combat to kiddie pool and from commanding to compromising.

"It's rejuvenating," said Sergeant Grelak, an Army National Guard soldier who was gone for 18 months and is now at Fort Benning, Ga., awaiting his release from active duty. "It keeps you from getting detached from the person you left behind. You go outside, and you run the risk of getting shot and blown up. That changes people. If I didn't have that connection, I would feel like a stranger."

Those who benefit most are often families with young children, said Jaine Darwin, a psychologist and the co-director of Strategic Outreach to Families of All Reservists, based in Cambridge, Mass., which counsels reservists and families. "They make families much more connected to the soldiers. A voice is not the same as seeing a person," Ms. Darwin said.

Military spouses were once left to make all child-rearing, household and work decisions by themselves for months at a time; telephone calls were simply too brief, unpredictable and expensive. Now the burden is a little less lopsided and an answer is only a few hours away.

The constant communication makes for fewer unpleasant surprises after couples reunite, though there can be a downside: It brings the anxieties of the living room into the war. "Who wants to hear that your daughter got a tattoo?" Ms. Darwin asked. "Any piece of news that makes you preoccupied is not good for you in a war zone."

Sergeant Grelak, for example, became alarmed when he learned that Katie had an ear infection. "I had to be a shoulder for Jennifer," he said, but, he added, "I was 110 percent concentrating."

Ms. Darwin pointed out that soldiers, for their part, can have too much Web access between missions "and it's quite disruptive to a family," she said. "It poses a hard conflict between the wish to get every moment they can with their soldier and the need for life to go on. Talking to your soldier can become a full-time job."

Internet cafes with computers began to spring up at military camps during the crisis in the Balkans in the 1990's, but mostly in fits and starts. Since then the military and private organizations like the Freedom Calls Foundation have spent millions of dollars to wire camps in Iraqi war zones. The Defense Department alone has spent more than $165 million in the past two years to set up cybercafes in Iraq. In 2004, they began with 36 cafes, and now there are more than 170. The use of satellites has made the job considerably easier. Freedom Calls, which raises private funds to build satellite links and provide communications hardware for soldiers in Iraq, has enabled 30,000 service members in four camps to reach relatives free in the past two years, setting up live teleconferencing to broadcast the births of babies, birthday parties, weddings and graduations. About 1,000 families in the United States have been equipped with screens in their homes.

"A person can now keep his commitment to his family and keep his commitment to his country," said John Harlow, the executive director of Freedom Calls.

Specialist Kevin Groll, of the Michigan National Guard, took a virtual seat at the Thanksgiving Day children's table last year, a Groll family tradition. The family Web camera was positioned right next to the children's table. "Boy, you did it again," Specialist Groll joked with his mother, Vicki Groll. "I'm not even near the kiddies, and I still had to sit at the table. The kids just loved it."

While the divorce rate for returning soldiers remains relatively high, a testament to the difficulties of war and the number of pre-deployment leaps to the altar, commanders agree that the Internet has helped morale considerably. Yet such easy access to families also poses problems in terms of controlling the release of classified information. Service members are not allowed to discuss where they are going, what they are carrying, how they will get there or how long they will stay, for example. All communications on a base are typically shut down after a casualty or injury is reported until family members can be contacted, which can take anywhere from a few hours to two days.

Web logs relating to official duties must be registered with a service member's chain of command, but personal Web pages set up by people back home can run into trouble.

One mother, Robin Vaughan, whose son was a military policeman in Iraq and who created a Web site for people who wanted support and information about the unit, said soldiers and their relatives were told not to view her site because it was not an official, registered site.

But monitoring all calls, e-mails and Internet traffic is impossible, so to a large degree, the military relies on self-censorship. "It's a big challenge," said Maj. Sean Wilson, a public affairs officer at Fort Drum, N.Y.

"Soldiers are naturally proud of what they do. They want to tell somebody about it."

Juggling home and battle can prove stressful. The immediacy of the Internet allows little time for reflection, and rather than let a bad mood pass, a spouse may rush to the computer and rant, which is not always wise, Ms. Darwin said.

Rumors, too, can run rampant, even those about infidelity, she added. And not hearing from someone can be painful and frightening, on both sides of the divide, particularly when daily e-mail contact has been the rule, the families said. Breakups via the Internet do occur, in a contemporary equivalent of the Dear John letter.

Sherri Cropper, 30, said she e-mailed her husband, Sgt. William Cropper, in Iraq every day. It was her way of making sure he was all right. But it also helped her to cope with the demands of what seems the equivalent of single motherhood, and to express how she was changing, becoming more independent. "It did ease the transition a lot," said Mrs. Cropper, who lives at Fort Drum. "It wasn't bam, in your face, there are a thousand things that went on and I will sit here in the next two days and talk you to death."

The happiness of a reunion tends to wear off quickly, she said. "Then, it's, 'O.K., you missed nine months of baby-sitting and I'm out of here,' " Mrs. Cropper added. "I think this gives the person who is deployed a good grasp or perspective on how it will be when you get back."

Dixie Clark of Harrisburg, Pa., said she was lucky to get a quick phone call once a month from her husband in the 1980's when he was a marine.

Recently she had three family members to fret over. Her two oldest sons and her husband, all Army National Guardsmen, were all deployed to Iraq at the same time, posted to the same base.

This time around, she routinely watched her "three guys" on a Web camera. Once when a mortar shell hit the camp, Mrs. Clark e-mailed one son and demanded that all three appear in front of the camera to assure her that they were fine.

"My son comes running into the barracks saying, 'Mom is on the Internet and she wants us to get up there; she has to see everybody,' " Sgt. First Class James Clark Sr. recalled. "I didn't even know he had a Webcam set up at that time. We all huddled up and said, 'Here we are.' "

Every day, Mrs. Clark and her husband sat down for a 90-minute round of instant messaging, which cost a pittance compared with telephone calls.

They planned the renewal of their wedding vows together online. He chose the menu — chicken, roast turkey and broccoli and cheese. And when things went wrong with the house, she knew that an answer was a few hours away. "Honey, where is the furnace?" she messaged him. "I ran out of oil."

Colin Moynihan contributed reporting for this article.

    An Internet Lifeline for Troops in Iraq and Loved Ones at Home, NYT, 8.7.2006, http://www.nytimes.com/2006/07/08/us/08FAMILY.html?hp&ex=1152417600&en=5f40992366f0ccb3&ei=5094&partner=homepage

TV Is Now Interactive, Minus Images, on the Web

July 8, 2006
The New York Times
By MARIA ASPAN

Many "Rescue Me" viewers weren't happy, and they weren't being quiet about it.

The June 20 episode of the series, on FX, concluded with a violent sex scene between the main character, played by Denis Leary, and his estranged wife. Bloggers and other online fans protested, saying that the scene depicted — and appeared to endorse — rape.

So the executive producer of "Rescue Me," Peter Tolan, who had written the episode with Mr. Leary, resorted to an increasingly popular site for television writers who want to defend their editorial choices. Mr. Tolan went to the Internet.

In a June 21 posting on the discussion boards of the Web site Televisionwithoutpity.com Mr. Tolan tried to appease "Rescue Me" fans. "Welcome to writing a television drama," he wrote at the end of his lengthy first message. "We're trying to do something different," he explained. "Sometimes we succeed, sometimes we don't."

His readers might have retorted, "Welcome to the Internet." Mr. Tolan is not the first television writer to defend his choices online, nor even the first to communicate via Television Without Pity.

But his attempt to reach out to his show's viewers reflects a growing awareness among television writers of their shows' online communities, as well as of a variety of ways to engage them.

Mr. Tolan did not respond to requests for an interview. But according to John Solberg, a spokesman for FX, Mr. Tolan now regrets trying to explain himself on Television Without Pity. Rather than defusing the controversy over the episode, his response "stirred it up more," Mr. Solberg said.

"If he had to do it again," Mr. Solberg continued, "he wouldn't do it."

Tara Ariano, a co-founder and co-editor of Television Without Pity, said she was surprised by the amount of attention Mr. Tolan's response had received. But she also sounded bemused by writers like him who debate their online critics without apparently anticipating any negative response. "Any way that you interact with your fans online is potentially reckless," she said. "When you write a script like that, you've got to expect some controversy."

That type of controversy might have been easier for writers and producers like Mr. Tolan to ignore in the past. Internet fans — and occasional writer interaction with them — have existed since the birth of the Internet, although until recently they were mostly confined to science-fiction or cult series, like "Star Trek" and "Buffy the Vampire Slayer."

But in the age of widespread broadband access, iTunes video and video sites like Youtube.com, television viewers are migrating en masse to the Internet, looking not only to watch their favorite shows online but also for ways to discuss and engage with those shows.

As a result, the blogs, communities like livejournal.com and message boards devoted to television shows are becoming more popular — and mainstream — forums for viewer discussion and feedback. And the people behind the shows have taken note. "As fractured as the media market has become, the Internet has become a great means of rising above the noise," said James Duff, the creator and executive producer of "The Closer" on TNT.

"The Internet is going to turn television into the equivalent of AM radio," he predicted. "People will be talking about their shows and watching their shows in the same place."

Many writers welcome the increased feedback from online viewers. "Television writers really work in isolation," said Ronald D. Moore, who, with David Eick, is the executive producer of the Peabody Award-winning Sci-Fi Channel series "Battlestar Galactica."

"You have to fight this feeling that you're doing this show for yourself, your wife and your friends, who are the only people you watch it with," he said. "The Internet really changed the immediacy of the contact" between writers and viewers. Networks and producers are now cultivating that contact, often creating Internet-based content to accompany their series and attract online viewers.

Mr. Moore releases a podcast to accompany almost every new episode of "Battlestar Galactica," while Mr. Eick appears in mockumentary-style behind-the-scenes "video blogs" on the Sci-Fi Channel's Web site, www.scifi.com. Even highly rated, more mainstream series like ABC's "Grey's Anatomy" and NBC's "Office" have thriving online communities devoted to viewer discussion, which have yielded attempts by series creators to engage those communities via writers' blogs or cast members' pages on myspace.com.

Mr. Duff, who writes a blog about "The Closer" for TVGuide.com, said he focused primarily on the production, rather than on the specific episodes or storylines.

"I'm not using my blog to supplement the program," Mr. Duff said in an interview. "If you have to explain what you said in a television program, then you've left some stuff out."

According to Michael Ausiello, a senior writer for TV Guide and TVGuide.com, certain shows lend themselves more to attempts to cultivate Internet fandom than others. "Serialized shows succeed more," Mr. Ausiello said, citing ABC's "Lost" and "Veronica Mars," which is in transition from UPN to the new CW, as examples. "You're not going to see fans of the procedural shows up all night dissecting the shows," he said.

As more television show creators communicate with their online fans, they often discover that their shows already have passionate, and often critical, Internet communities. Television Without Pity, a site that Ms. Ariano began with Sarah D. Bunting and David T. Cole in 1998 as Dawsonswrap.com, is one of the most prominent and established of these forums, with about one million unique visitors a month, according to Ms. Ariano and Nielsen/NetRatings. The site blends irreverent commentary on episodes of shows ranging from "The Apprentice" to "The Sopranos" with an array of discussion boards devoted to almost every show ever broadcast.

Although many television writers may keep an eye on its boards, few get directly involved with the fans, Ms. Ariano said. Rob Thomas, the creator and executive producer of "Veronica Mars" and one of the few such "show runners" to post openly on the Web site's forums, said in an interview that Television Without Pity functioned "as a big focus group."

"They're very intense fans," he added, "the really devoted ones."

But, Mr. Thomas added ruefully, as viewer response to "Veronica Mars" became more critical in the show's second season, the experience of reading the site was "like being in a room with a thousand ex-girlfriends," he said.

"The new shine wore off," he added.

Mr. Thomas conceded that his awareness of the fans' reactions had occasionally influenced the way he wrote "Veronica Mars." Fans hated a second-season character played by Tessa Thompson, he said, leading him to overcompensate in an effort to make the character likable. "I feel like I sold out a little," Mr. Thomas said. "She became a little saintly by the end. If I had to do it over again, I'd leave her a little more complicated."

The consequences of Mr. Thomas's communication with his fans may be relatively unusual. But other writers and producers interviewed also said they regarded their fans with a mixture of gratitude and caution. Mr. Eick of "Battlestar Galactica" said online fandom could "be a very powerful weapon to help you develop the audience of your show."

"But," he continued, "you can't rely on it too heavily, or the show becomes too inside, and you end up marginalizing your larger audience."

Mr. Moore, who reads fan boards and occasionally responds to viewer concerns via his scifi.com blog, said he felt obligated to acknowledge the devotion of online "Galactica" fans. "I was a fan, too," he said. "I'm always impressed; they really pay attention. It forces you to deal with the criticism. It's easy to read the good stuff."

    TV Is Now Interactive, Minus Images, on the Web, NYT, 8.7.2006, http://www.nytimes.com/2006/07/08/arts/television/08fans.html

Publishers unite against Google

Search engine's plans could revolutionise book industry as much as Gutenberg did

Thursday July 6, 2006
Guardian
Richard Wray and Dan Milmo


Invoking the name of Google is enough to spook most media businesses grappling with the impact of the internet but the search giant's foray into the realm of books has created a firestorm. The book-publishing industry's portrayal of Google conjures up images of Guy Montag, the "hero" of Ray Bradbury's 1950s book-burning masterpiece Fahrenheit 451, gleefully destroying works of literature.

The row is a classic clash between the old and the new; between an industry that can trace its roots back to Johannes Gutenberg and other printers of the 15th century and one that has erupted in just half a decade.

Pessimists in the printed world have drawn parallels between Google's digitisation of books and the ending of Britain's net book agreement in the early 1990s. But just as relaxing restrictions on how books are priced led to a renaissance in reading, as booksellers launched marketing ploys such as "three for two" offers, Google's attempt to free the knowledge locked in pen and ink could be a revolution for the better.

Google's Book Search programme has two sides. It has co-opted thousands of publishers into its partner programme, which gives Google's millions of users a chance to discover and then buy books, but it is Google's library project that has infuriated those same publishers.

The fire was lit over a year ago when Google announced plans to work with five libraries - the New York public library, the Bodleian in Oxford and the libraries of Stanford, Harvard and the University of Michigan - to digitise their books as part of its Print Library project, and make the information gleaned accessible within its online search engine through Google Book Search, already available in test form.

The publishing industry raised the alarm, claiming the process infringed its most valuable asset, copyright. Nigel Newton, chief executive of Bloomsbury, the publisher of the Harry Potter series, tore into Google, labelling the search engine's plans as "literary predation". In a speech to mark World Book Day this year, he added that copyright laws were being flouted to provide "window-dressing for a search engine".

Injunction

The French publisher La Martinière and Germany's WBG took legal action against Google, though the latter's request for an injunction was thrown out by a Hamburg court last week. In the US, there are two lawsuits pending. "This is a plain and brazen violation of copyright law," said Nick Taylor, president of one of the US plaintiffs, the Authors Guild, last September. "It's not up to Google or anyone other than the authors - the rightful owners of these copyrights - to decide whether and how their works will be copied."

Five US publishers - the McGraw-Hill Companies, Pearson Education, Penguin, Simon & Schuster and John Wiley & Sons - launched a separate action on behalf of the Association of American Publishers. Its president, Patricia Schroeder, said: "The bottom line is that under its current plan Google is seeking to make millions of dollars by freeloading on the talent and property of authors and publishers."

Google, however, feels its intentions have been misrepresented by a publishing industry that is desperately trying to come to terms with the web. Jans Redmer, director of Google Book Search Europe, said: "Google Book Search is about tapping into an incredible amount of offline content. It's not about putting whole books online; it's not about online reading; it's about book discovery. Ultimately, what we are trying to do is provide links to books in every single Google search request."

While books that are out of copyright are fully searchable, if a search request brings back information from a book under copyright, access is restricted. Users in the US, which has a "fair use" approach to copyright, get bibliographic data plus a few short sentences or "snippets" related to the search term. European users, however, get no more than the title of the book and its author.

The problem is that to compile the index Google uses for its search engine, it has to scan the entire book. Publishers claim this infringes copyright and want Google to ask permission for each book. The trouble is that only 20% or so of books are in print and because many titles are "orphaned" when publishers go out of business, finding out who to ask for permission could take years.

Jigsaw

Extending this concept to the internet would mean search engines having to ask permission of the owner of a website before it could be included in an index, making search engines - the "atlases" of the internet - impossible to create.

Behind the attacks on Google's library scheme seems to be the fear that once it has copied a book, it can do whatever it likes with it. But Redmer stresses that Google does not intend to undermine publishing. "We don't want to tell the publishing industry how to run their businesses; all we want to do is help them shape their own future. We can be a small puzzle piece of a much larger jigsaw." That "piece" is Google's partner programme and the five US publishers suing the company are all involved. Launched in 2004 in the US and in Europe the next year, it digitises books in the same way as the library project and they become part of search results.

But, crucially, users are directed to an entire page from the book, which contains the information being searched for. They are then able to look two pages back and forward. Some pages - chosen by the publisher - are blocked so the full text is never visible. Illustrations can also be pulled. The page carries advertisements and Google shares the revenue generated with the publisher.

When a book is returned as part of a search request, a list of booksellers appears on the page with the publisher's website given top billing, if it sells the book online. But Google is also looking at selling digital editions of books, which it will host on the internet for readers. Last month it launched Google Checkout, an online payment service that could be used to pay for these.

Google is also looking at linking book searches with publishers able to print books on demand or allowing publishers to put entire books on the web for free, with the cost met through advertising.

John Makinson, Penguin's chief executive, believes digital publishing allows new sales wheezes such as selling books by the chapter or the page. He says: "The availability of traditional printed material in new formats and the emergence of new digital distribution channels is overwhelmingly positive for authors, for consumers and for us. Whenever the consumer is offered more choice ... more content is sold."

British sales of non-specialist books have grown at about 5% a year since 2000 and last year stood at £1.65bn, according to Nielsen BookScan, and the suggestion is that online publishing could be the next driver of sales.

Some in the industry see Amazon, rather than publishers, as the likely loser. But Dan Rose, director of digital media at the online retailer, points out that Amazon started scanning books for its "search inside the book" service in 2003. Excerpts from hundreds of thousands of books are online, covering half the books sold on the US site. "It makes a lot of sense ... when you go to a bookstore and decide what book to buy, you flick through the pages," he said.

Last month Amazon began offering a digital copy with the hard copy, at up to 20% over the usual price. But digital versions are still an adjunct to rather than a replacement for books. Rose says: "There are a lot of people who will want to read books in a physical form."

Joel Rickett, deputy editor of the Bookseller, says publishers are tempted to back Google in its partner programme because there are no devices in much of the world on to which a scanned book could be downloaded so the threat posed is limited. But that could change.

"Now you can search the text but you still need to buy the book," he says. "However, in less than five years' time an application will almost certainly be invented that makes leisure reading a more comfortable experience in digital format. So if you agree in principle that Google can scan anything it likes from a library, and feed it into its search engine, then it effectively becomes the backlist publisher and starts to destroy the basis of your business."

    Publishers unite against Google, G, 6.7.2006, http://technology.guardian.co.uk/news/story/0,,1813701,00.html

After Delays, Wireless Web Comes to Parks

July 6, 2006
The New York Times
By SEWELL CHAN

By the end of August, wireless networks will be established at 18 locations in 10 of New York City's most prominent parks — including Central, Prospect and Riverside Parks — in a major citywide expansion of free Internet access, according to city officials.

The development, to be announced today, would end months of delay for a city project that has faced considerable logistical and technical hurdles since it was announced in June 2003. Wi-Fi Salon, a small start-up company that won the contract for the work in October 2004, said yesterday that Nokia, a Finnish manufacturer of telecommunications devices, had signed on as a sponsor, giving it a well-financed partner that could finally turn the plan into reality.

Wi-Fi Salon intends to activate 18 wireless "hot spots" by the end of next month at Battery, Central and Riverside Parks and in Washington and Union Squares in Manhattan; at Prospect Park in Brooklyn; at the Flushing Meadows-Corona Park in Queens; and at Pelham Bay and Van Cortlandt Parks and Orchard Beach in the Bronx.

Eight of the hot spots will be in Central Park and two in Prospect Park. The first of the 18 locations — a stretch of Battery Park, from the Battery Gardens restaurant to the Castle Clinton National Monument — is to be activated today, with the other 17 to follow, in stages, through the end of next month.

At those locations, users with laptops configured for wireless networking will be able to check e-mail, browse the Internet and download files while sitting on a park bench or sipping a coffee at a concession stand, all at no cost.

"The expanded Wi-Fi network will give park visitors even more options to enjoy," Adrian Benepe, the parks commissioner, said in a statement. "Park patrons can throw a pitch, score a goal, catch a wave or surf the Internet at some of our city's greatest parks."

Park advocates said they were delighted to hear that the parks department and Wi-Fi Salon were getting the project moving. "We're glad that they seem to have gotten their ducks in a row," said Christian DiPalermo, executive director of New Yorkers for Parks, an advocacy group that is not involved in the project. "It's long overdue and long awaited by park users."

Four years ago, the Bryant Park Restoration Corporation created a Wi-Fi hot spot encompassing the six-acre park in Midtown. It has been a huge success, with use of the network rising each summer since the service began in June 2002. About 250 people now use the network each day during the peak summer months.

Following that example, the Alliance for Downtown New York, a business improvement district in Lower Manhattan, set up wireless hot spots at eight sites from 2003 to 2005, including City Hall Park, Bowling Green and the new Wall Street Park. Some cities, including Philadelphia and San Francisco, have begun to explore creating citywide wireless networks.

The parks department's own effort, covering some of the city's largest and most heavily used parks, began around the same time but has proceeded in fits and starts. Verizon Communications initially won the contract in April 2004, only to withdraw a month later after concluding that the venture would not be cost-effective.

Wi-Fi Salon, a small company started by an Upper East Side entrepreneur, Marshall W. Brown, won the three-year contract in October 2004, agreeing to make quarterly payments of $7,500 — totaling $90,000 over three years — or 10 percent of gross receipts from advertising and other sources, whichever is greater.

Councilwoman Gale A. Brewer of Manhattan, chairwoman of the City Council's Committee on Technology in Government and a major proponent of the project, said that Internet access should be viewed as a public service and that the city's effort to derive revenue from the project was a strategic error.

"There's no revenue to be made, and I knew that and said that from the beginning," she said.

In an interview yesterday at Battery Park, Mr. Brown, 47, described Nokia's support as critical. "We looked for a long time to find the right partner — somebody who not only understood the future of Wi-Fi but was willing to commit the resources and vision to make that happen," he said.

At each hot spot, users will encounter an initial Web portal with information about the park and local history and advertisements for Nokia and other sponsors, which could include retail kiosks that do business in the parks.

Floris van de Klashorst, a director in the multimedia unit at Nokia's office in White Plains, said he believed that traditional park activities — reading newspapers and listening to music — were increasingly being done using mobile communications devices, in addition to watching television and sending e-mail.

"Wi-Fi in the parks provides an excellent podium for us to showcase these new kinds of applications," he said. Nokia is marketing several portable devices — essentially scaled-down computers for casual Internet browsing — that can tap into Wi-Fi hot spots. (The most popular "smart phones," including most models of the BlackBerry and the Palm Treo, rely on cellphone networks.)

Mr. Brown and Mr. van de Klashorst would not discuss the terms of the sponsorship arrangement, saying it was confidential.

Robert L. Garafola, the deputy commissioner for management and budget at the parks department, said that Wi-Fi Salon still needed final approval for the eight sites in Central Park from the Central Park Conservancy, the nonprofit group that manages the park under a long-term contract that was renewed in April for another eight years.

Mr. Garafola said he was optimistic about the project after the repeated delays. "I'm feeling pretty good, but we're going to watch it very closely and hold them to the schedule," he said.

Wi-Fi Salon and Nokia said they planned an extensive marketing campaign, but declined to discuss specifics. Warner Johnston, a parks department spokesman, said he believed that if the system worked, word of mouth would be powerful enough. "I have no question in my mind that once this is active in Central Park, word is going to spread like wildfire," he said.

    After Delays, Wireless Web Comes to Parks, NYT, 6.7.2006, http://www.nytimes.com/2006/07/06/nyregion/06wifi.html

Looking to Take On Apple's iPod, Microsoft Plans Its Own Hand-Held Player

July 6, 2006
The New York Times
By JEFF LEEDS

Microsoft has been developing its own hand-held music and video player to challenge Apple Computer's iPod and expects to have it in stores in time for the holiday season, entertainment industry executives briefed on the company's plans said last night.

Microsoft's digital device would be equipped with at least one feature the iPod lacks: wireless Internet capability that would allow users to download music without being connected to a PC.

Microsoft's device, which is similar to an existing player that uses the company's software, would also have a more advanced video screen, according to the executives, who did not want to be identified because they were not authorized to discuss the device.

The company has also held negotiations, the executives said, with major record companies and some major television networks in order to settle on terms that would allow it to sell music and video content online through a service similar to Apple's iTunes Music Store.

The portable player would represent Microsoft's most ambitious effort yet to compete with the iPod, which has generated billions of dollars in sales and turned Apple into the dominant retailer of digital players and music.

Until now, Microsoft has largely bet that hardware manufacturers like Samsung could come up with a device that would use Microsoft's software and cut into Apple's lead. But the company's plans to develop its own device are an indication that it may no longer be satisfied with that strategy.

"If this is true, then this is them trying to take more control over the situation," said Mike McGuire, vice president for research on mobile devices at Gartner, which tracks the electronics market. "In effect, they're basically saying, 'We think we can do something better' " than the existing hardware makers.

The shift is likely to anger Samsung, Sony, Creative Technology and other manufacturers that were persuaded to use Microsoft's software in their devices, because a Microsoft player would compete with theirs. The Xbox video game console, Microsoft's strongest move into consumer electronics, uses software that does not run on any other player.

A Microsoft spokesman, Mark Murray, would not comment on the company's plans.

A senior executive at a major TV network said Microsoft had not yet received commitments from the networks to supply programming to its online store. But the executive said that the networks would welcome competition for Apple in downloads.

Music industry executives in particular have complained about Apple's control over the digital music market and its power to determine pricing of songs and albums.

Steve Lohr and Bill Carter contributed reporting for this article.

    Looking to Take On Apple's iPod, Microsoft Plans Its Own Hand-Held Player, NYT, 6.7.2006, http://www.nytimes.com/2006/07/06/technology/06ipod.html

Interest Groups Lining Up to Lobby on Web Gambling

July 4, 2006
The New York Times
By KATE PHILLIPS

WASHINGTON, July 3 — While Internet gamblers lay down big money on World Cup soccer this summer, teams of lobbyists are facing off on Capitol Hill in a contest over whether the United States should choke off the growth of wagering on the Web.

Faced with bills to curb online betting, which attracts an estimated $12 billion a year in wagers worldwide, an array of interest groups like casinos here and abroad, as well as sports leagues, antigambling coalitions and even poker players, has dispatched lobbyists to argue what should be legal and what should not.

Major League Baseball wants to make sure that any measures do not diminish fantasy sports games, which it credits for a resurgence in its popularity.

The big Las Vegas casinos, which have been neutral over online betting, have embraced a proposal in the House to establish a study commission. Convenience stores are watching to see whether sales of lottery tickets might be affected, though Powerball seems to be safe for now.

The horse racing industry seems sanguine, but dog tracks are worried. Offshore casinos are fighting any restrictions.

The Justice Department has always considered Internet gambling illegal. But that has not stopped online wagering from flourishing.

Gambling opponents are pushing for bills to put teeth into enforcement. In the House, proponents of a crackdown merged two bills. The majority leader, Representative John A. Boehner, Republican of Ohio, announced a few days ago that the measure would be voted on this summer as part of what the Republicans call their American Values Agenda.

The odds of a bill's becoming law this year appear long. Beyond that, nearly everyone agrees that online betting may be unstoppable because of the reach of the Internet and the difficulty in regulating its activity.

David O. Stewart, an analyst and a lawyer who produced a study of online gambling for the American Gaming Association, a client of his firm, paraphrased an adage used by the Supreme Court in a campaign finance case, saying: "Money, like water, will find its way. And I really think that applies to this. The money will find a way to get to the offshore sites."

Proponents of Internet gambling argue that the Congressional trend goes against the growing tide of international wagering. As many as 80 countries allow it in some form.

The most prominent model is Britain, which through revisions of its gambling laws is about to devise a tax-and-regulatory structure that it hopes will entice offshore gambling companies to locate there.

Britain is sponsoring a fall symposium on instituting such changes.

Other countries are eyeing rulings of the World Trade Organization, where tiny Antigua, with its offshore casinos, continues to press the trade body to find that the United States is violating trade agreements by trying to block access to online gambling.

"Americans are already gaming in large numbers because it's entertainment," said Mike McComb, a spokesman for Betmaker.com, based in Costa Rica. "It's an extension of entertainment. In England, what they've found is that it's just something that needs to be regulated to protect consumers. And it's a great source of revenue."

In the United States, the fight is set to resume when Congress returns from its Fourth of July recess. The House proposal would make it illegal to use a banking instrument like a check or credit card to settle Internet wagers, and it would penalize institutions that act as intermediaries channeling money between the offshore gambling enterprises and American bettors.

The measure would also update the Wire Act of 1961 to prohibit Internet gambling specifically.

"It will not be a perfect preclusive approach, but it will be pretty strong," said Representative Jim Leach, Republican of Iowa, a co-sponsor of the bill.

The Poker Players Alliance, a relatively new player on the Hill, and others that would be affected by a ban point to big-money interests like horse racing that are is not covered under the proposal.

The bill, said Michael Bolcerek, an amateur player who is president of the alliance, is "picking winners and losers."

Celebrity players have even dealt a few hands to lawmakers in an effort to show that poker is a game of skill, not chance, a critical legal distinction in the debate.

Mr. Leach said the poker players offered a fairly persuasive argument. But he added that he still believed that there were no social benefit and few "happy aspects" to Internet gambling. Not only can gambling be addictive, with debts racked up quickly online, Mr. Leach said, but from a moral standpoint, gambling also breaks apart families and poses a danger to under-age players.

Some gambling opponents want an even broader bill. The Traditional Values Coalition, a conservative group, wrote in a letter to Congress in the spring that the exemption of horse racing showed that it paid "to pony up."

The Center for Responsive Politics calculated that a sizable part of the racing industry has contributed more than $3 million to lawmakers, presidential candidates and state and federal political action committees since 2000. Far more than half the total went to Republicans, the center said.

Mr. Leach bristled at the notion that special interests or campaign contributions influenced him. He said he did not accept PAC money.

Kathryn Rexrode, a spokeswoman for Representative Robert W. Goodlatte, the Virginia Republican who is a co-sponsor of the merged bills, said the horse racing industry contributed when Mr. Goodlatte was not sponsoring such legislation, but when he was chairman of the Agriculture Committee.

Mr. Leach said that "we authorize nothing new for horse racing," because it is regulated under the Interstate Horseracing Act. Even fantasy sports games, he added, would be further restricted under the bill, with bans on betting on individual teams or players.

Mr. Leach pointed to the coalition of supporters for the bills, including churches that represent many denominations, like Christian fundamentalists, that tend to have a consensus on little else.

"I just think the stars are in alignment, that Congress knows it has to deal with this issue," he said.

On the Senate side, Mr. Leach is counting on two Republicans, the majority leader, Bill Frist of Tennessee, and Jon Kyl of Arizona. The Democratic leader, Senator Harry Reid, a former gambling commissioner in Nevada, "has serious concerns about our ability to properly regulate Internet gaming," his spokesman, Jim Manley, wrote in an e-mail message.

    Interest Groups Lining Up to Lobby on Web Gambling, NYT, 4.7.2006, http://www.nytimes.com/2006/07/04/washington/04gambling.html

Stolen Lives

Identity Thief Finds Easy Money Hard to Resist

July 4, 2006
The New York Times
By TOM ZELLER Jr.

By the time of Shiva Brent Sharma's third arrest for identity theft, at the age of 20, he had taken in well over $150,000 in cash and merchandise in his brief career. After a certain point, investigators stopped counting.

The biggest money was coming in at the end, postal inspectors said, after Mr. Sharma had figured out how to buy access to stolen credit card accounts online, change the cardholder information and reliably wire money to himself — sometimes using false identities for which he had created pristine driver's licenses.

But Mr. Sharma, now 22, says he never really kept track of his earnings.

"I don't know how much I made altogether, but the most I ever made in a quick period was like $20,000 in a day and a half or something," he said, sitting in the empty meeting hall at the Mohawk Correctional Facility in Rome, N.Y., where he is serving a two- to four-year term. "Working like three hours today, three hours tomorrow — $20,000."

And once he knew what he was doing, it was all too easy.

"It's an addiction, no doubt about that," said Mr. Sharma, who inflected his words with the sort of street cadence adopted by smart kids trying to be cool. "I get scared that when I get out, I might have a problem and relapse because it would be so easy to take $300 and turn it into several thousand."

That ease accounts for the sizable ranks of identity-fraud victims, whose acquaintance with the crime often begins with unexplained credit card charges, a drained bank account or worse. The victims' tales have become alarmingly familiar, but usually lack a protagonist — the perpetrator. Mr. Sharma's account of his own exploits provides the missing piece: an insight into both the tools and the motivation of a persistent thief.

Identity theft can, of course, have its origins in a pilfered wallet or an emptied mailbox. But for computer-savvy thieves like Mr. Sharma, the Internet has forged new conduits for the crime, both as a means of stealing identity and account information and as the place to use it.

The Secret Service and the Federal Bureau of Investigation have invested millions of dollars in monitoring Internet sites where thousands of users from around the world congregate to swap tips about identity theft and to buy and sell personal data. Mr. Sharma frequented such sites from their earliest days, and the techniques he learned there have become textbook-variety scams.

"Shiva Sharma was probably one of the first, and he was certainly one of the first to get caught," said Diane M. Peress, a former Queens County prosecutor who handled all three of Mr. Sharma's cases and who is now the chief of economic crimes with the Nassau County district attorney's office. "But the kinds of methods that he used are being used all the time."

As far back as 2002, Mr. Sharma began picking the locks on consumer credit lines using a computer, the Internet and a deep understanding of online commerce, Internet security and simple human nature, obtained through years of trading insights with like-minded thieves in online forums. And he deployed the now-common rods and reels of data theft — e-mail solicitations and phony Web sites — that fleece the unwitting.

Much of this unfolded from the basement of a middle-class family home in Richmond Hill, Queens, at the hands of a high school student with a knack for problem solving and an inability, even after multiple arrests, to resist the challenge of making a scheme pay off.

That is what worries Mr. Sharma's wife, Damaris, 21, who has no time for the Internet as she raises the couple's 1-year-old daughter, Bellamarie.

"I hate computers," she said. "I think they're the devil."

A Thief's Tool Kit

Mr. Sharma is soft-spoken, but he does not shrink from the spotlight. He gained fleeting attention after his first arrest, as the first person charged under a New York State identity-theft statute — and later, at his high school graduation at the Rikers Island jail, where he was the class valedictorian.

For a prison interview, he has applied gel to his mane of black hair. He is Hollywood handsome, with deceptively sleepy eyes and smiles that come as tics in reaction to nearly every stimulus — a question, a noise. Prosecutors interpreted those smiles as evidence of smug indifference.

A tattoo of Shiva, the Hindu god of destruction and his namesake, is just visible on Mr. Sharma's right arm, under the short sleeve of his green prison jumpsuit.

Recalling his youth, Mr. Sharma said he was not unlike many other young people growing up with the mating calls of modems and unprecedented access to people, sounds, software and other thrills streaming into the family's home over the Internet.

As the youngest of three children in a family of immigrants from Trinidad — his parents brought the family to Queens when he was 6 — Mr. Sharma said sibling battles for access to the computer were common. He studied programming at Brooklyn Tech, one of New York's most selective public high schools, where he met Damaris.

He enjoyed chatting on AOL and was drawn, along with millions of his peers in the early days of file sharing, to downloading MP3's.

As he got older, he began hanging out on Internet-based chat channels that dealt with bigger game, like bootleg software. And amid the chatter were whispers of other something-for-nothing sites — ones where thieves had set up bazaars involving credit cards, banks and account numbers.

"So I ended up registering and then I started just looking, really," Mr. Sharma said. "Not really taking anything in, just looking and seeing what's going on there."

Mr. Sharma said he chiefly visited two such sites, Carderplanet.com and Shadowcrew.com, where he was known by the screen name sniper5984 (the number denoted his birthdate). The sites were shut down in 2004, but many others have sprung up to replace them.

"For the aspiring little computer hacker in the United States, they're an excellent opportunity to learn," said Greg Crabb, the assistant director for economic crimes at the United States Postal Inspection Service's international group in Washington. On Carderplanet, for example, "a person could learn how to set up a drop, receive packages, develop other relationships and generally get started in the business."

Mr. Sharma got started with phishing — sending e-mail meant to dupe recipients into revealing their personal or financial data, which can then be exploited. He told investigators that he paid $60 to someone he had met on Carderplanet to buy a program designed to harvest AOL e-mail addresses.

"I pretty much stuck with AOL because I knew AOL is most likely people new to the Internet," Mr. Sharma explained, "people who don't use the Internet for much but chat rooms."

He managed to gather about 100,000 addresses, and crafted an e-mail message that told recipients, "We regret to inform you, but due to a recent system flush, the billing information for your account was deleted." Recipients were instructed to follow a link to a Web page to remedy the situation.

The Web page, which mimicked AOL's look and feel, including a bogus AOL Web address, had form fields requesting everything from name and address to mother's maiden name, Social Security number, date of birth, credit card number, expiration date and bank.

The "submit" button sent the data to Mr. Sharma's e-mail account. He then went shopping.

From the 100,000 phishing e-mails Mr. Sharma sent, investigators say, about 100 recipients were duped into clicking through to the phony AOL Web page he created and filling out the form. Mr. Sharma said he did even better, with about 250 to 300 responses.

And Mr. Sharma went on to more elaborate and lucrative schemes. By the end, he said, he had become well known at Carderplanet and Shadowcrew for being able to "cash out" victims' credit accounts by making large wire transfers from their accounts to himself.

"I cash them out all the time," sniper5984 wrote at Carderplanet on July 5, 2004. "Here's two examples of Citi Cards I have used last month just to show."

Sniper5984 then provided links to two images of the account statement of the victim, a California resident, showing, amid various legitimate charges, nearly $10,000 in Western Union wire transfers made over three days in June 2004.

There were also two charges for Domino's pizza in Ozone Park, Queens.

"There was always a challenge," Mr. Sharma said. "You know, like it's always something like, wow, can I take it to the next step, you know?"

Ms. Sharma recalled that on trips to a Six Flags amusement park, her husband rarely took to the rides, preferring instead the games of chance. "The ones where you win a giant stuffed animal if you can throw some ball into a bucket or something like that, but there's obviously some trick to it," she said. "Well, he would always know the trick."

She also recalled one evening in the summer of 2004, when Mr. Sharma came to her apartment with $27,000 in cash and asked her to hold onto it overnight. The next morning he picked up the money and returned later with a new Acura RSX.

"He liked to race cars," Ms. Sharma said.

Back at the correctional facility, Mr. Sharma struggled to find a clear explanation for his crimes. At times he suggested he was taking aim at a usurious banking industry. At other moments he offered that it was simply a game, that he was young, that he was not thinking clearly.

"Well, you know — I mean there's no, there's no justification behind it at all," he said. "You know it was wrong, and I did it — it was wrong."

He also suggested it all became too easy too fast.

"The challenge was really stopping, you know?" he said. "That was the hardest challenge of them all."

'It's Sharma Again'

The tools that allowed Mr. Sharma to profit from his thievery were also his undoing, more than once.

On Sept. 19, 2002, William Robertson, a 73-year-old retired physical education teacher in Ormond Beach, Fla., received one of the 100,000 e-mail lures that Mr. Sharma's had sent out from Queens, and he fell for the scam.

"I don't know what made me fill out that whole form," Mr. Robertson said. "At that time I was a fairly new user of the computer. And after I did it, I just didn't feel right. But it wasn't until after the credit card company called me that I knew I'd done anything wrong."

A $3,000 Eltron photo ID printer had been bought on his Chase credit card from an online store in Buffalo. He canceled the card and made a report to the Flagler County police. The police determined that the printer had been shipped to a Brent Sharma in Queens.

Just over a month later, on Nov. 8, Peter Ruh, a United States postal inspector, arrived at Mr. Sharma's parents' home wearing a postal delivery uniform and carrying a box of high-end racing car parts that Mr. Sharma had ordered using another credit card account he had hijacked. When Mr. Sharma identified himself and signed for the package, Mr. Ruh, wearing a wire, gave a pre-arranged signal and his fellow inspectors, along with New York City police officers, moved in.

Among the items seized from his parents' basement were a computer, two digital cameras, a scanner, nearly 500 blank plastic identity cards with magnetic strips, two Marine Corps ID's — with Mr. Sharma's name and photo — and a newer model Eltron photo ID printer. A search of his computer revealed personal identifying information on hundreds of people from across the country.

"We were surprised at how forthcoming he was," Mr. Ruh said. "He was very proud of his accomplishments."

It was the first of many encounters that Queens postal investigators would have with Mr. Sharma over the next two years. "I'd get a call from someone over at Postal and they'd say, 'You're not going to believe this,' " Ms. Peress said. "And then they'd say, 'It's Sharma again.' "

Even with charges of identity theft pending in the AOL case, Mr. Sharma was arrested and charged again, in May 2003, for schemes involving the hijacking of Amazon.com accounts, moving fraudulently bought merchandise through auctions at eBay and Yahoo, and enlisting the father of a friend to receive shipments at his home in exchange for a digital camera.

Four months later, as part of a combined plea agreement, Mr. Sharma was permitted to plead guilty in the first case as a youthful offender, avoiding a felony designation. He pleaded guilty in the second case to two felony counts of identity theft and unlawful possession of personal identification information. In November 2003 he was sentenced to five years' probation and 350 hours of community service and was ordered to pay $5,000 in restitution.

But within a month, on Jan. 21, 2004, sniper5984 was active again at Carderplanet. "I am looking for partners," he wrote.

Logging Off

By the summer of 2004, investigators had begun piecing together a string of complaints from out-of-state consumers whose credit card accounts had been hijacked for tens of thousands of dollars in bogus charges, and they quickly recognized the modus operandi.

Mr. Sharma was arrested again in October while accepting a package under the watch of postal inspectors. A search of his apartment in Ozone Park on Oct. 16, 2004, the day after his final arrest, turned up consumers' credit bureau reports, assorted hand-written notations of credit card accounts and Social Security numbers and printed chats showing him negotiating online for the purchase of FirstUSA and MBNA credit cards.

Mr. Sharma remembers making heavy use, just before his last arrest, of the credit card of a commercial airline pilot from Florida.

Receipts show that a Jean Pascal Francis, presenting a Michigan state identification card, signed in Queens for nearly $5,500 in Western Union cash transfers charged to the pilot's account on a single Friday afternoon in July 2004. A Michigan state identification card with that name and Mr. Sharma's photograph was among the documents later found in Mr. Sharma's apartment.

"I thought it was horrible," recalled the airline pilot, who did not want to be named because he feared it would invite other thieves to take a crack at him. "You just feel violated in terms of your privacy."

Meanwhile, Mr. Sharma, whose family had moved to Florida, was largely on his own in New York and was burning through cash like rocket fuel.

"I tried every five-star hotel in Manhattan," he said. "That's why they say, 'Oh, he stayed at the Parker Meridien, the Regency, the Waldorf-Astoria.' You know, I went to all those and just stayed. The Mandarin Oriental is by my wife's house, and that's supposed to be the nicest one and the newest one, so I went there and it's like $3,500 a night."

"The more you make," he added, "it's like, it becomes a different kind of lifestyle."

The question now is whether Mr. Sharma, who has a parole hearing in August, can adapt to a less lucrative lifestyle when he gets out.

He says he is determined to stay clean long enough for his knowledge of fraud techniques to become obsolete. "I've just got to stay with my daughter and just try and stick it through another year or two," Mr. Sharma said, "because by then things have changed so much that it will be kind of hard for me to just go back in there and do everything."

His wife understands the temptations that will lurk in the meantime.

"I do worry a whole lot because — I don't want to say I agree, but I understand his mentality," Ms. Sharma said. "People work really hard for eight hours a day and make minimum wage. And he knows he can get out and make the same thing with the computer in half an hour."

Kassie Bracken contributed reporting for this article.

    Identity Thief Finds Easy Money Hard to Resist, NYT, 4.7.2006, http://www.nytimes.com/2006/07/04/us/04identity.html?hp&ex=1152072000&en=e3bafcce91529410&ei=5094&partner=homepage

A Search Engine That's Becoming an Inventor

July 3, 2006
The New York Times
By SAUL HANSELL and JOHN MARKOFF

When Google was a graduate-school project being run from a Silicon Valley garage, its founders, Larry Page and Sergey Brin, built their own computers out of cheap parts meant for personal computers. They wanted to save money, and they felt that they could design a network of computers that would search the Web more efficiently than those available from traditional manufacturers.

Google no longer needs to pinch pennies. It is a solid member of the Fortune 500 with $9 billion in cash. Still, it is stubbornly sticking to its do-it-yourself approach to technology. Even as it spends more than $1.5 billion this year on operations centers and technology, most of the hundreds of thousands of servers it will deploy are being custom-made based on Google's own eccentric designs.

To be closer to its users and speed response time, it is building a worldwide string of data centers, including a huge site in The Dalles, Ore., with technologies it designed to reduce its ravenous need for electricity. These computers in turn use software developed with advanced tools that Google also designed itself. There are signs that Google is even preparing to create its own custom microchips.

"Google is as much about infrastructure as it is about the search engine," said Martin Reynolds, an analyst with the Gartner Group. "They are building an enormous computing resource on a scale that is almost unimaginable." He said he believed that Google was the world's fourth-largest maker of computer servers, after Dell, Hewlett-Packard and I.B.M.

Google's biggest rivals, Microsoft and Yahoo, certainly write much of their own software, and they work to configure their computers and data centers to their own needs. But they largely buy machines from existing manufactures like Dell, Sun Microsystems and Rackable Systems.

"At some point you have to ask yourself what is your core business," said Kevin Timmons, Yahoo's vice president for operations. "Are you going to design your own router, or are you going to build the world's most popular Web site? It is very difficult to do both."

Google, in fact, has decided it will do both. In many ways, it still has the head of an graduate-school project grafted onto the body of an multinational corporation. The central tenet of its strategy is that its growing cadre of world-class computer scientists can design a network of machines that can store and process more information more efficiently than anyone else.

Mr. Reynolds estimated that Google's computing costs are half those of other large Internet companies and a tenth those of traditional corporate technology users.

Google will not comment on its costs, but it does claim an advantage. "We don't think our competitors can deploy systems cheaper, faster or at scale," Alan Eustace, Google's vice president for research and systems engineering, told analysts in March. "That will give us a two-, three-, five-year lead."

Despite those boasts, some argue that Google's home-brew approach is unnecessary and inefficient, a headstrong indulgence masked for now by the growth and profitability of its advertising business. And Google's rivals say their networks are plenty efficient and powerful.

"Google doesn't have anything magic here," Bill Gates, the Microsoft chairman, said in an interview. "We spend a little bit more per machine. But to do the same tasks, we have less machines."

Google is notoriously secretive about its technology. Yet it also has published papers on some of its developments and been granted patents on others. These, along with the public statements of Google executives and interviews with current and former employees, vendors and other technology executives, paint a picture of a company devoted to pushing the boundaries of modern computer science, and applying those concepts on a vast scale.

"Google took the best ideas from the supercomputer research community and wove them into a working system," said Stephen E. Arnold, a technology consultant to investors and the author of "The Google Legacy" (Infonortics, 2005), a book on Google's technology.

Some of its innovations are designed to wring pennies from its growing spending on technology. Last year, it was granted a patent (06906920) on a "drive-cooling baffle," meant to funnel air into a rack of computers held together with Velcro, a Google design signature.

But some innovations are bolder, like a series of software tools that simplify the way it can divide a problem to be handled by thousands of processors simultaneously, an approach called parallel processing.

One such program, called MapReduce, is based on ideas discussed in computer science literature for decades, according to Urs Hölzle, Google's senior vice president for operations. "What surprised us was how useful it turned out to be in our environment," he said.

MapReduce, he said, "allows Joe Schmo software engineer to process large amounts of data and take advantage of our infrastructure."

Mr. Arnold, the consultant, said these tools created a significant cost advantage. "If you talk to guys who work in massively parallel computing operations, as much as 30 percent of their coding time is spent trying to figure out how to get the thing to run," he said. Google "has figured out how they can reduce a lot of the hassle and work of creating parallel applications."

Mr. Gates acknowledged that MapReduce was a significant technology, but he asserted that Microsoft was building its own parallel processing software, opening another front in the technological war between the two companies.

"They did MapReduce; we have this thing called Driad that's better," Mr. Gates said. "But they'll do one that's better."

Moreover, Google's focus on building general purpose tools and systems is different from that of most companies, which develop systems tailored to specific applications. And it is building these systems rapidly, with the billions of dollars in cash it generates and the thousands of engineers it hires each year. It hopes that it can build a lead that will allow it to create products that do more, for less money, than its rivals.

"If they can get a 30 percent cost advantage, in operating a service on the Internet that is a huge difference," said John M. Lervik, the chief executive of Fast Search & Transfer, a Norwegian search company.

Google's academic approach can be traced not only to its founders' graduate work in computer science, but even to their early home life, Mr. Arnold said, noting that Mr. Page and Mr. Brin had come from families with expertise in computer science and mathematics.

"The stuff they did in 1996 to 1998 was not as immature as it should have been," he said of the Google founders. He said that told him the two men learned a lot "when their parents were talking at the kitchen table."

By the time Mr. Page and Mr. Brin were designing Google, parallel processing was more than an academic dream; it was enabled on a large scale by the low prices of processors, memory and disk drives used to make personal computers. These components were hardly of the highest quality and could be counted on to fail often.

Mr. Page designed the initial Google servers, with the assumption that parts would fail on a regular basis. At first he tried to simplify assembly — and reduce the presumed repair time — by not fastening components to the servers at all but simply laying them on a bed of cork. This proved to be unstable, and so parts were connected with Velcro.

"Nobody builds servers as unreliably as we do," Mr. Hölzle said in a speech last year at CERN, the Swiss particle physics institute. Google is reducing cost while maintaining performance by shifting the burden of reliability from hardware to software — individual hardware components can fail, but software automatically shifts the local task and the data to other machines.

For example, Google designed a software system it calls the Google File System that keeps copies of data in several places so Google does not have to worry when one of its cheap servers fails. This approach also means that it does not have to make regular backup copies of its data as other companies do.

Another system, called the Google Work Queue, allows a big pool of servers to be assigned to various tasks as needed and reassigned to other projects later. This concept, called "virtualization," has become a trend among large data center operators, which also want to reduce the expense of having separate servers dedicated to each system. But most companies buy commercial software to track which computers are doing what, a complex process.

While Google's servers are built on inexpensive parts, the designs it uses have been modified every year or so, to improve their efficiency and increasingly to customize them to Google's applications. The current generation uses the powerful Opteron chip from Advanced Micro Devices, which uses less power than the Intel chips Google had used.

Google is among Advanced Micro's five largest clients, and the largest that does not make computers to resell, according to a semiconductor industry executive with knowledge of Advanced Micro's business.

Google is increasingly doing business with Sun Microsystems as well. Sun, known for systems that are both reliable and expensive, would not seem a natural match for a company that emphasizes economy and self-sufficiency. But Eric E. Schmidt, Google's chief executive, is a former Sun executive, and Sun has developed a new microchip that is especially efficient in electricity use.

Moreover, Google increasingly needs systems that are less likely to fail than those it uses for its search engine in order to handle important information, like e-mail and payments in its new Google Checkout service.

Beyond servers, there are signs that Google is now designing its own microchips. The company has hired many of the engineers responsible for the Digital Equipment Corporation's well-regarded Alpha chip.

"Google's next step is to build high-performance silicon," said Mark Stahlman, an independent technology analyst.

Mr. Hölzle said Google had considered custom semiconductor design, but he declined to say if the company had built any. He said that, in general, Google did not want to build anything from scratch if it could buy something that was just as good.

But he added that Google continued to believe that its approach to designing its own cheap and fast computer networks gave it an edge.

"Having lots of relatively unreliable machines and turning them into a reliable service is a hard problem," Mr. Hölzle said. "That is what we have been doing for a while."

    A Search Engine That's Becoming an Inventor, NYT, 3.7.2006, http://www.nytimes.com/2006/07/03/technology/03google.html

Internet Calling Pressures Bells to Lower Rates

July 3, 2006
The New York Times
By MATT RICHTEL and KEN BELSON

Competition in the phone business, intensifying this year as Internet-based calling has taken root, has reached the point where many industry experts are anticipating an era of remarkably cheap and even free calls.

That era would be built on a vast migration of phone service from traditional networks to the Internet, where the calls become just another way to use Internet connections that consumers are paying for anyway.

"People are going to look at voice communications as something they expect to get for free," said Henry Gomez, general manager of Skype, which eBay bought last year for $2.6 billion. The company usually charges a few cents a minute for calls from computers to regular phones, but in May it eliminated those fees through the end of the year for users in the United States and Canada.

New competitors, including the major cable companies and start-ups like Vonage and SunRocket, are putting intense pressure on traditional phone companies like AT&T and Verizon that have built multibillion-dollar empires by selling phone service over copper wires. On the defensive, AT&T and Verizon are discounting heavily and pushing customers toward packages of more advanced services.

Online services like Skype that offer free calls from computer to computer for users with headsets have attracted the tech-savvy and are trying to push into the mainstream. In the process, they are dragging down everyone else's prices and pointing the way toward a time when it will be harder and harder for companies to charge anything for a basic home phone line on its own.

There are signs that changes in the business of calling are also altering the way people use these voice services. Mr. Gomez said some Skype users take language classes over the phone, unconcerned about the length of their calls. He has also heard of parents going out and leaving their child with a babysitter, but using the free voice link as a baby monitor to listen in on their child's room.

"When the cost is so little, you start to see people using voice differently," he said.

Internet-based calling is not new, but the momentum behind it is growing. In 2005, the number of subscribers to Internet-based calling services nearly tripled from the year before, to 5.5 million, or about 3 percent of the overall market. By 2010, the research firm TeleGeography expects Internet phone providers to win about a quarter of the traditional local phone business.

To stem the tide, the traditional Bell operating companies have been moving into new businesses like television and strategically dropping the price of traditional phone service. In New York, Verizon recently sent letters to customers offering a calling plan that includes unlimited phone service for $35 a month, instead of $60, a 42 percent cut. For people signing up for service through its Web site, AT&T now offers unlimited local and long distance service for $40, down from $50 a year ago.

The average user of Internet voice calling, known as voice over Internet protocol, or VoIP, pays $25 a month for unlimited calling, according to VoipReview.org, a Web site that tracks the industry. International calls are most often not included in the flat rate, but those prices are also coming down.

The Bells still control the bulk of the country's 180 million landlines and are far from giving up on what has been a giant cash cow. When pushed, they are even offering their own Internet-based calling, but these services are rarely advertised. It is cheaper to cut prices to keep customers, they figure, than to try to win back customers later from a rival.

During the first quarter of this year, the number of traditional telephone lines dropped by 150,000 a week, according to TeleGeography. At the same time, the number of subscribers to Internet telephone services has increased by 100,000 a week.

AT&T, among others, says the drop in lines is not as painful for the Bells as it looks. Many customers cancel phone lines they used for dial-up Internet service, but then sign up for broadband services provided by their phone company. Other customers eliminate a phone line but buy a cellphone plan from Cingular, which AT&T owns with BellSouth.

Even so, the Bell companies' stocks have been undercut by the growing prominence of the cable companies' phone businesses and by having to invest tens of billions of dollars in new businesses like television.

The main reason for falling prices for phone service is that it costs less to deliver voice communications over the Internet than over the traditional phone network.

With the old technology, phone companies use costly equipment that directs a call through complex switches to its destination. On the Internet, phone calls are broken up into small packets of data, just like an e-mail message or a Web page, and then delivered to their destination. Instead of having to build and maintain their own networks, VoIP services generally use the infrastructure of the Internet, which is far cheaper but can sometimes lead to degraded service.

Charles A. White, senior vice president of the research firm TNS Telecoms, said that down the road consumers would "spend less and less for voice" and stop paying a separate fee for calls. Instead, he said, they will "just pay for 'communications services.' "

There are some hurdles to adoption of the new services. To use most of them, consumers must first have a high-speed Internet connection, which can cost $15 to $70 a month. Some of the lowest-cost services, like Skype, require people to download software, and users generally talk through a headset plugged into the computer.

Services like SunRocket, Packet8 and Vonage sell unlimited calling plans that let customers use ordinary phones. Internet-telephone plans from cable companies are often only a few dollars cheaper than comparable offers from the Bells, but are typically more reliable than service from the start-ups.

One recent convert to low-cost calling is Walter Andrews, 66, a retired language teacher in Cambridge, Mass., who signed up for SunRocket early last year, paying up front for a year of unlimited phone service at $16.50 a month. He signed up again this year, but when his annual contract expires in 8 months, he plans to consider other options. SunRocket itself recently had a promotion offering unlimited service for $8.29 a month.

"I'm certainly not going to pay even $16, as cheap as that sounds, if the price drops to nothing," said Mr. Andrews, who spends part of the year in Scotland and uses the technology to communicate with his wife, who lives overseas year round.

In a world in which everyone placed and received calls over the Internet, the cost of transmitting the calls would, in fact, be virtually nothing. But there are government-regulated fees of a fraction of a penny per minute for transferring calls onto the regular phone network, which most people continue to use. VoIP services also have their own costs that they must either pass along to customers or find a different way to subsidize, including administration, marketing and technology.

For example, 8x8 Inc., a company that sells an unlimited Internet telephone service called Packet8 for $20 a month, figures it spends around $7 a month per user to connect calls. The company spends another $4.50 a month on customer service and $4 to cover customer acquisition costs, bringing its expenses to around $15 per user, said Huw Rees, vice president of sales and marketing for 8x8.

In this way, Internet-based calls may often be free, but there is a cost of entry. "Voice calls will never be totally free," said Jeffrey A. Citron, the founder and chairman of Vonage, the largest Internet phone provider with 1.6 million customers. "If you want voice mail, you pay. If you want a phone number, you pay. Suddenly, free is $15."

Still, $15 is one-third of the typical phone bill. As they cope with falling prices, some companies are experimenting with ways of subsidizing calls, either through advertising or by giving away basic phone service and charging only for additional features like caller I.D. EBay sees Skype as a way to help buyers and sellers on its auction site close deals.

Verizon is concentrating on selling a suite of products to customers in its faster-growing markets and is considering pulling out of markets where it sees little profit potential in upgrading its older network for the new technologies. These markets may include Vermont, New Hampshire and Maine, according to people with knowledge of the company's strategy.

AT&T hopes it can offset the loss of land-based lines with gains in wireless phone service, and by shifting the core of its business to the high-speed Internet connections known as digital subscriber lines, or D.S.L., a technology that divides old phone lines into two parts: one for voice and one for data.

"We view D.S.L. as the access line of the future," said Mikal Harn, vice president of consumer marketing for AT&T. As for consumers paying for calls by the minute or the distance the call travels, "I don't think you've seen the death if it," he said. "But there's a point where you drive to that."

New competitors keep jumping into the phone business. The nation's biggest cable companies, including Time Warner Cable, Comcast and Cablevision, are using phone services — which are relatively cheap to offer — as a way to draw consumers to their high-speed Internet and television services.

Earthlink, the Internet access provider, last month opened its first retail store in Seattle, where it is testing out a new service plan: $70 for fast Internet access of up to 8 megabits per second, along with unlimited phone service. It plans to offer the same service soon in San Francisco and Dallas, and then to more cities.

"We're an Internet company and we didn't really view this as us getting into the voice business. It's that the voice business is becoming an Internet business," said Stephen Howe, vice president of voice services at Earthlink.

Perhaps a perverse indication of widespread expectations that phone prices will continue to fall was the botched public offering of Vonage last month. Vonage, an Internet telephone pioneer whose name has become synonymous with the concept, watched its share price fall sharply on its debut.

But Wall Street analysts and industry executives said this was hardly a rejection of the technology, but rather a reflection of the stiffening competition and relentless price pressure.

    Internet Calling Pressures Bells to Lower Rates, NYT, 3.7.2006, http://www.nytimes.com/2006/07/03/technology/03phone.html?hp&ex=1151985600&en=01b7c8f1ac183283&ei=5094&partner=homepage

Push for Government Openness on Right and Left

July 3, 2006
The New York Times
By JASON DePARLE

WASHINGTON, July 2 — Exasperated by his party's failure to cut government spending, Senator Tom Coburn, Republican of Oklahoma, is seeking cyberhelp.

Mr. Coburn wants to create a public database, searchable over the Internet, that would list most government contracts and grants — exposing hundreds of billions in annual spending to instant desktop view.

Type in "Halliburton," the military contractor, or "Sierra Club," the environmental group, for example, and a search engine would show all the federal money they receive. A search for the terms "Alaska" and "bridges" would expose a certain $315 million span to Gravina Island (population 50) that critics call the "Bridge to Nowhere."

While advocating for openness, Mr. Coburn is also placing a philosophical bet that the more the public learns about federal spending, the less it will want.

"Sunshine's the best thing we've got to control waste, fraud and abuse," he said. "It's also the best thing we've got to control stupidity. It'll be a force for the government we need."

But Mr. Coburn's plan, hailed by conservatives, is also sponsored by a Democrat, Senator Barack Obama of Illinois, and applauded by liberal groups that support activist government. The result is a showcase of clashing assumptions and the oddest of coalitions, uniting Phyllis Schlafly, a prominent critic of gay rights, with the National Gay and Lesbian Task Force.

Liberal groups, while also praising openness, are hoping for a new appreciation of what government does, like provide clean water and feed the hungry. "We need to remind people where Uncle Sam helps us each day," said Gary Bass, director of OMB Watch, a liberal group that got its start monitoring the Office of Management and Budget.

The House unanimously passed a version of the proposal in late June, though in a form that had drawn outside criticism. The House bill creates a database that would omit contracts, which typically go to businesses, but would include about $300 billion in grants, which usually go to nonprofit groups.

"Contracts are awarded in a much more competitive environment," said Representative Thomas M. Davis III, a Virginia Republican who was a sponsor of the bill. That makes them more self-policing, he said. Mr. Davis, whose district includes many government contractors, said grants "are more susceptible to abuse."

But liberal critics see a revival of what they call old partisan efforts to "de-fund the left," by reducing grants to liberal groups or adding conditions that limit their activities.

Mr. Coburn joined them in criticizing the House omission of contracts. Including them in the database, he said, is "the only way you're going to bust these indecent relationships of former Pentagon employees working for defense contractors and getting sweetheart deals from buddies inside."

When told of Mr. Coburn's statement, Mr. Davis said, "As usual, I think he's headline grabbing." While Mr. Davis supports more openness in contracting, he said including contracts would "gum up the works" legislatively since more Congressional committees would be involved.

Spending hawks have sought a spending database for years. The Heritage Foundation, a conservative Washington group, tried to build one itself, but search-engine technology now makes the task easier.

On the right, support for the plan reflects an old concern about spending and a new faith in the power of blogs. Supporters picture a citizen army of e-watchdogs, greatly increasing the influence of antispending groups in Washington.

"Now that you've got the Internet, you'll have tens of thousands of watchdogs," said Bridgett G. Wagner of the Heritage Foundation, who is leading a coalition of conservative groups that support the Coburn bill. "That's what people see in it."

Among the bill's leading supporters is Mark Tapscott, the editorial page editor of The Washington Examiner, who has promoted it there and on his blog, Tapscott's Copy Desk. While most spending is already a matter of public record, Mr. Tapscott argues that it is often buried in obscure documents.

"The spending cannot be sufficiently scrubbed," Mr. Tapscott said. Whether the database causes spending to rise or fall (he guesses it will fall), "what's important to me is the principle of the public's right to know," Mr. Tapscott said.

A number of blogs popular among conservatives have praised Mr. Coburn's bill. Instapundit, among the most popular, has pushed it. Seeker Blog called it "the best news I've heard out of D.C. this year." Captain's Quarters demanded "Give us the Pork Database," and Porkopolis hailed the measure with the slogan, "Show Me the Money."

While the bill has few overt critics, it may encounter resistance from Congressional insiders who have used their influence to secure projects back home. When Mr. Coburn tried to attach the measure to a lobbying reform bill this spring, Senator Trent Lott, a Mississippi Republican known for his zeal in aiding his state, killed it on procedural grounds.

Not everyone is convinced more sunshine will matter. "All this information is out there right now" and being mined by watchdog groups, said Douglas Holtz-Eakin, a former director of the Congressional Budget Office. While it was "certainly appropriate" to build a database, he said: "I don't think it would dramatically change public perception of the appropriate size and scope of government. That's a much deeper issue."

One important challenge involves tracking subcontractors. Money awarded, for example, to Lockheed, to build a military plane, might get divided among hundreds of parts suppliers. The database, Mr. Coburn said, would seek to list them all.

The push for openness runs counter to the trend of increased secrecy among government officials who cite the need to protect national security. Criticizing that trend, Mr. Tapscott said, "people in the Pentagon, like bureaucrats everywhere, overclassify too much because of the basic instinct to protect yourself."

But Mr. Coburn said he was comfortable with the overall level of secrecy. His database would adhere to current disclosure rules, he said.

What if sunlight so cleanses the government that the public wants more of it? Grover Norquist, an antitax advocate who supports the House bill, just laughed. "They might say, 'Oh my goodness, look at all the good work that's being done,' " he said. "But I'm willing to take that chance."

    Push for Government Openness on Right and Left, NYT, 3.7.2006, http://www.nytimes.com/2006/07/03/washington/03cyber.html

Online Effort Is Planned Against Child Pornography

June 27, 2006
The New York Times
By SAUL HANSELL

In the face of government pressure, a group of Internet companies is undertaking a cooperative effort to help combat child pornography online.

The group, organized last week by AOL, includes Yahoo, Microsoft, Earthlink and United Online. It will initially pay $1 million for a new project of the National Center for Missing and Exploited Children that will develop systems meant to help identify child exploitation on the Internet and refer cases to law enforcement.

The first project is to create a central database that could help identify images of child pornography sent by e-mail.

John Ryan, chief counsel of AOL, said the groups were cooperating on pornography as they already have on spam and identity theft. The effort comes in response to proposals made last month by Attorney General Alberto R. Gonzales asking Internet companies to preserve data that could help catch purveyors of child pornography, he said.

"When the attorney general announced and asked for support in coming up with ideas to combat child pornography, it was natural for the same companies to put our heads together about what we could do collectively to rise to this challenge," Mr. Ryan said.

The announcement is timed to coincide with two days of hearings by a House subcommittee, beginning today, that will look at how Internet service providers and social networking sites are used by child pornographers and sexual predators.

The panel, the Subcommittee on Oversight and Investigations of the House Energy and Commerce Committee, held hearings in April and May looking at online sexual exploitation of children. Law enforcement officials said then that investigations had been thwarted because Internet companies did not retain evidence that prosecutors needed.

Later in May, the Justice Department convened a group of Internet companies and asked if they would consider retaining records of user activities — like senders and recipients of e-mail, and Web sites visited — for as long as two years.

If those records are kept, prosecutors can gain access to them through subpoenas. While some Justice Department officials have said that the proposal will help all sorts of investigations, including terrorism cases, the department says it is mainly hoping to fight child pornography.

Many Internet companies raised objections to those proposals, saying they would be expensive to comply with and might compromise the privacy of their users.

Still, at the hearing today, subcommittee members are likely to ask representatives of Internet companies about their policies on retaining data that may be of interest to prosecutors, a spokesman for the subcommittee said.

Currently, AOL keeps records of child-pornography images it is made aware of, mainly through complaints from its users. While it is illegal for any company to keep the pornographic images, AOL records an electronic signature that can identify the images if they are sent again.

Every piece of e-mail that AOL processes is scanned for files that match its list of signatures. Those that do are sent to the National Center for Missing and Exploited Children, which by law is the clearinghouse for criminal referrals for child pornography.

In the cooperative project organized by AOL, the participating Internet companies would contribute signatures to a central database, allowing more offending images to be identified, and their senders referred for prosecution.

"We felt this was ingenious and exactly the kind of serious step that needs to take place if we are not to put a dent in this problem but eliminate it," said Ernie Allen, the center's chief executive.

The group invited Google, also a major provider of e-mail accounts, to joint the consortium, but it has not yet decided to do so. It did not invite the News Corporation, the owner of MySpace, the popular social networking site that has raised concerns because of its use by child predators. But Andrew Weinstein, a spokesman for AOL, said that the News Corporation would be welcome to join.

    Online Effort Is Planned Against Child Pornography, NYT, 27.6.2006, http://www.nytimes.com/2006/06/27/technology/27porn.html

Field Notes

www.watchmegetmarried.com

June 25, 2006
The New York Times
By ABBY ELLIN

ONLY two guests — both strangers —were in attendance on May 18, when Dawn Westman and Einar Ollander of Tarpon Springs, Fla., were married in the chapel of the Grand Princess, a cruise ship sailing the Mediterranean. But dozens were watching from home.

The audience included the bride's father and stepmother, who witnessed the event from their home in Worcester, Mass.; the bridegroom's mother in Tarpon Springs; and the bridegroom's brother in Gainesville, Fla. All awakened around 4 a.m. and flicked on their home computers so they could view the wedding couple walking down the aisle, live over the Internet.

"None of our friends or family were there in person," said the new Mrs. Ollander, 39, who, like her husband, had been married once before. "But they were able to watch it on the Webcam."

This Webcast concept perfectly melds America's couch-potato culture and its obsession with weddings. Now there is no need to rise, dress up and go. Observers can quickly take in a niece's ceremony and openly engage in catty commentary, all from the privacy of home. For the couples it offers a high-tech, low-cost way to have their "destination wedding" and connect with friends and family, too.

"I think big weddings are overblown and expensive," said Carol Angell Beauvais, who watched her cousin's Caribbean wedding last year from her den in Westport, N.Y. "You should save your money for a down payment on a house."

It would surprise few to learn that Nevada, land of drive-through weddings and Elvis impersonators, has rapidly embraced online ceremonies.

About 5,000 couples have made use of Webcams perched in the chapels at the Treasure Island and MGM Grand hotels in Las Vegas. "One of the reasons we chose Treasure Island was because of the Webcast," said Shauntea Tolliver, 29, of Beach Park, Ill., who married Ransley Denton, 33, on May 2. Only 10 people witnessed the wedding in person, but a gaggle of relatives in five states tuned in.

How do people let guests know of their Webcasting plans? Via electronic invitation, naturally.

Marc Finkel, the chief operating officer of Cashman Enterprises ( www.cashmanpro.com ), a Las Vegas photography and video service which began offering Webcasting three years ago, asks the bride and bridegroom to provide the names and the e-mail addresses of all guests. Mr. Finkel then sends digital invitations.

Two years ago, Larry Fair began noticing how few guests were present at ceremonies he witnessed on Honolulu's beaches. "Obviously not everybody could come," Mr. Fair said. So he and a partner established a business there called Live Internet Weddings that charges $400 over the cost of producing the wedding video itself to stream it live on the Internet. His company ( www.liveinternetweddings.com ) keeps it online for two weeks, in case people miss it live.

Stephanie Coontz, the author of "Marriage, a History: How Love Conquered Marriage" (Penguin), has considered this phenomenon and declared it a mixed bag. "We no longer have cookie-cutter marriages, and people are very interested in using their wedding ceremony to indicate how unique their marriage is going to be," she said.

Some tech-savvy suitors are even getting engaged via the Web. On May 20, James Lee, 27, a Yale medical student, proposed to Uschi Lang, 26, a student at Mount Sinai School of Medicine, by Internet. Knowing that a round-the-clock Webcam had been set up in the new Apple Store on Fifth Avenue in Manhattan, Mr. Lee stood outside it at 5 a.m. and held up three signs that read: "Uschi Lang. I love you. Will you marry me?"

Ms. Lang watched his proposal and "started crying," she recalled. "And of course said yes."

She was not the only one watching. They sent the link to their relatives in Seattle, China, Hawaii, Germany and Peru. And then, of course, there were the thousands of bloggers who mentioned the event on their Web sites. "I started realizing the implications," said Mr. Lee, who is undecided about doing a repeat performance when they marry. "In retrospect, it was a crazy thing."

For those who view a friend's wedding on the Web and wonder if they need to send a gift, Ms. Coontz has an answer: "My gift is watching it."

    www.watchmegetmarried.com, NYT, 25.6.2006, http://www.nytimes.com/2006/06/25/fashion/25fiel.html

Young People's Web Postings Worry Summer Camp Directors

June 22, 2006
The New York Times
By PAM BELLUCK

Summer camp directors have a new scourge, and it is not mosquitoes or impetigo. It is the Internet, specifically sites like MySpace, Facebook and Friendster, where young people often post personal or revealing information.

Camps say they are increasingly concerned about being identified in photographs or comments on these sites, even innocuously. They worry about online predators tracking children to camp and about their image being tarnished by inappropriate Internet juxtapositions — a mention, say, of the camp on a site that also has crude language or sexually suggestive pictures.

"This is probably the No. 1 issue facing all camp programs," said Norman E. Friedman, a partner at AMSkier Insurance, a major camp insurer.

Some camps are banning or limiting digital cameras, fearful that images could wind up in undesirable places online. Some are telling counselors, parents and campers to remove camp references from personal Web pages, blogs or social networking sites like MySpace or Xanga.

"The biggest concern is the safety of the campers," said Peg Smith, chief executive officer of the American Camp Association, which is urging camps to monitor Web sites, contact parents, and set rules about what counselors and campers can post. "The information that kids share today often is personal and private information that allows predators to track them down. We're also concerned about cyber-bullying."

Some camps, like Camp Fernwood, a girls camp in Poland, Me., are trademarking their names, logos or slogans so they can legally order others not to use them online.

In addition, "We are asking local police enforcement for more of a presence and are beefing up internal security, all of that directly because of MySpace," said Fritz Seving, Fernwood's director. "We're bringing in a child psychologist to spend two days with campers talking about good decision-making."

Some camps are banning or limiting more electronics. Camp Runoia in Belgrade Lakes, Me., is suggesting campers bring disposable cameras, not digital ones. Camp Nashoba North in Raymond, Me., allows digital cameras, but is banning iPods that play movies because "a child or anyone could put something inappropriate on it," Sarah Seaward, the director, said.

AMSkier became aware of the Internet issue several months ago when a camp director searching MySpace found his camp's name over a photograph of a naked woman, Mr. Friedman said. The insurer recently wrote hundreds of camps urging them to ask parents to have children remove "confidential information" from Web pages and tell counselors not to post pictures of campers or communicate with campers through personal Web pages.

Directors of many camps, like Riverview in Mentone, Ala., and Gesher Summer Program in Livingston, N.J., are also searching counselors' Web sites for content they consider inappropriate.

Island Lake camp in Starrucca, Pa., recently asked campers to take its name off Web sites, concerned about cyber-bullying, safety and image.

"There were some things that we found that some of the kids posted that were really kind of nasty, saying bad things about counselors," said Mark Stoltz, an Island Lake director. "Most of the sites were not negative," Mr. Stoltz said, and "most of the kids who had stuff up there were nice kids," but all references had to go.

One innocuous site belonged to Xander Green, 15, of Manhattan, a longtime Island Lake camper who formed a MySpace group for about 30 campers active in Island Lake theater. When a camp newsletter said campers should delete Island Lake references and use its official message board for all camp chatter, Xander called the camp and was told to remove his group.

"Everyone was kind of really mad about it and some people didn't understand," Xander said. "It was a drag because the group was a way for everybody to communicate in our own way without being on their monitored message board."

At Camp Runoia, Pam Cobb, the director, said she looked up new counselors on MySpace and Facebook and found "people who we had hired who had things on their Web site that were inappropriate."

She told counselors "they need to clean up their sites or make them private, or they can choose not to work with us."

One counselor, she said, chose the last option, apparently reluctant to remove a "beer-drinking party scene."

Another counselor, Jessica Scott, 22, made her Web presence camp-appropriate, removing a blog and making her Facebook entry available only to close friends. She said her Facebook page "was just pictures of being at parties with friends, not that crazy, but at camp they don't even want us to have pictures with a cup in your hand."

Ms. Scott said her blog discussed "regular college 22-year-old life — things that were frustrating me, who's getting along with who, where am I going, and how's school and relationships." Because it did not mention her surname, "I didn't think anybody could connect it to me." Still, she took it down.

Mr. Seving, the director of Camp Fernwood, said he found campers' Web pages with "our ZIP code in their name or 'Fernwood forever' or 'Fernwood girl.' "

He added: "The good side of that is that they identify with our community. The bad side is it's also a direct road map, and we don't want to have to deal with that kind of exposure. This takes camp, a place that kids feel really safe about, and it adds this element of danger to it."

Many directors are less concerned about Internet activity at camp itself, since many already ban gadgets like cellphones and laptops to create an "unplugged" experience. A bigger concern is off-season as campers or counselors discuss camp with each other online.

"One camp director called me in a panic," said Christopher Thurber, a psychologist who advises camps. "She had Googled her camp's name and linked to a soft-core porn site where she found pictures of her campers in their bathing suits. And what's in the background? The camp banner."

Scott Lantzman, director of Gesher Summer Program, a day camp, created his own MySpace account and invites every counselor to be on his friends list, so he can more easily gain access to their sites.

"You really get a lot of information that you can't ask for in a job interview, but you go on the Web and it's all there," said Mr. Lantzman, who asked one counselor to remove a photograph of herself in a bikini holding a beer.

Aaron Marcus, 17, another counselor, said a few counselors objected to such scrutiny, but "I kind of think it's a good idea."

Parents of campers contacted by camp directors seem to generally share that impression.

"I think it's important that they really want kids and parents to be aware, to go and check the sites," said Karen Segal, Xander Green's mother.

Ms. Seaward said that when she contacted one mother about her daughter's site, which had photographs of the girl and friends with champagne glasses, "the mother's first reaction was she doesn't have a site. Then she said, 'Well maybe she does, but I think I've looked at it and it's fine.' "

But, Ms. Seaward said, "she called me back the next day and said, 'Upon further review, we have had her shut her site to make it private.' "

    Young People's Web Postings Worry Summer Camp Directors, NYT, 22.6.2006, http://www.nytimes.com/2006/06/22/technology/22camp.html

MySpace to Add Restrictions to Protect Younger Teenagers

June 21, 2006
The New York Times
By SAUL HANSELL

Starting next week, MySpace, the popular online hangout, will make it harder for strangers to send messages to younger teenagers.

The site, which has more than 70 million members, has been under pressure because members are frequently subjected to lewd or inappropriate messages and occasionally lured into dangerous real-world encounters.

The site will also stop showing advertisements for certain products — like online dating sites — to those under 18.

The owner of MySpace, the News Corporation, has been working to address concerns about the safety of the many teenage users of the site, while not clamping down on the freewheeling and flirtatious interchanges that are the source of its appeal.

Next week, the site will restrict how users over 18 can contact those aged 14 and 15. Older users sending a message asking to become friends with younger users will have to enter the recipients' actual first and last names or their e-mail addresses, rather than simply their user names.

The new policy still allows people under 18 to send messages to those under 16 without knowing their full names or e-mail addresses.

"A lot of 14- and 15-year-olds are friends in school with 16- and 17-year-olds," said Hemanshu Nigam, the chief security officer of News Corporation's Internet unit. "We want to balance the openness of our community with the interest of protecting the member."

Mr. Nigam declined to say how often strangers made such contact with people under 16 or whether such contacts figure into any of the cases where predators have used MySpace.

MySpace will also start to allow all members to designate their profiles as private and thus available only to their named list of friends. MySpace had allowed and encouraged those under 16 to set their profiles to be private, but profiles of anyone older than that have been available for any visitor to the site to read.

Parry Aftab, the executive director of WiredSafety, a group that promotes online privacy for young people, dismissed the change in the contact rules for those under 16 as ineffectual.

"Kids that want to do the open stuff will set their ages to 16," she said. MySpace does not verify users' ages.

But Ms. Aftab praised the change that allows anyone to have a private profile. "I know adults who set their age to be 14," she said, "not to lure kids, but because they want their profiles private."

    MySpace to Add Restrictions to Protect Younger Teenagers, NYT, 21.6.2006, http://www.nytimes.com/2006/06/21/technology/21myspace.html

Why mom enlisted an online sleuth to keep tabs on child

Posted 6/20/2006 6:42 PM ET
The Christian Science Monitor
By Daniel B. Wood
USA Today

LOS ANGELES — Author Vicki Courtney in Texas keeps close tabs on her 13-year-old son, Hayden, by monitoring his instant messages (IMs) from a computer in the next room. Sometimes Hayden knows. Sometimes he doesn't.

Carolina Aitken, a mom in Santa Rosa, Calif., took her two teenage sons on the Dr. Phil show after she exposed their Internet misuse. She had contacted them via e-mail as "Candy Sweetness," a fictitious 16-year-old girl, to see if she could get them to give up their home phone number. One did.

A mother in State College, Pa., who asked to remain anonymous because she's embarrassed by her Internet naiveté, recruited a techno-savvy friend to search for unpublished Web log addresses of her 12-year-old daughter. The friend found the girl posing as an 18-year-old on MySpace.com, a social-networking site for teens.

Amid hand-wringing over the increasing sophistication of online sexual predators, financial scammers, and other cyber-solicitors, more moms and dads are resolving to become their children's "Big Brothers" — in both the collegial and the Orwellian sense, but too few parents are doing as much as they should, Internet experts say.

"A larger percentage of parents are getting involved in ways to advise, watch over and even control what their kids are doing," says Ken Colburn, founder and president of Data Doctors Computer Services, a nationwide computer service, which also publishes warning signs to identify net-addicted teens, safety tips, parental advice, and family contracts for Internet use. "But that involvement is still not anywhere close to where it needs to be."

Officials say 750,000 sexual predators have been identified on the Web. One in five children between grades 7 and 11 has been contacted on the Web by someone asking to meet, according to Rob Nickel, author of Staying Safe in a Wired World: A Parent's Guide to Internet Safety.

"Internet predators haven't changed over the years, but what has changed are the ways they can contact and infiltrate through cellphones, IMs, blogs, social websites and a number of other Internet tools," says Mr. Colburn.

Generally, parents are not as involved partly because of the rise of two-income families (i.e. two absent parents) as well as the increased number of computers and child-owned cellphones per household, and the technological generation gap that has kept cyber-sophisticated children light-years ahead of their techno-befuddled guardians.

But now, more are beginning to recognize the dangers of such neglect. Using an array of new monitoring, blocking, and filtering technology, they are more determined to protect their kids from the consequences they have seen in the media.

Just last week, the FBI released a story of a 16-year-old girl in Michigan who flew to the Middle East to meet a man in the West Bank that she came to know on MySpace.com.

"Parents are waking up because there are more and more stories where a family friend or inner circle member has been affected," says Colburn. "Parents are realizing, hey, if that can happen to them, maybe it can happen to us, too."

To keep up with technology's onslaught of new lures, moms and dads are trying everything from a fresh dose of familial heart-to-hearts (including written contracts of computer rules) to stealth software that can pinpoint every keystroke, e-mail, pop-up ad, and website visited on their children's laptops.

Ms. Courtney put two kinds of protection on her family's three computers to monitor her three children. One, SafeEyes, costs $60 from Safebrowse.com, and requires 13-year-old Hayden to plug in a special password, and then limits his Internet access — those he contacts and those who contact him — based on categories Ms. Courtney chose from a long list including ways to limit sexual content, words, language, and gambling.

She also customizes his daily and weekly hours on the computer, occasionally cutting him off when she is away on weekends or has gone to bed.

"Sometimes I hear these bloodcurdling screams from the next room when the computer has cut him off in the middle of a game," says Courtney.

A second software, called eBlaster, documents every keystroke, IM, e-mail, and website visited on the computer her 16- and 18-year-olds use. Courtney can get a log of the day's activities or watch online activity in real time, with a slight delay.

About a year ago, she was watching as a young girl sent Hayden an obscene phrase and link to a sexual website.

"I was watching this all from the next room and holding my breath, and then he didn't click on it," recalls Courtney. She praised him for doing the right thing, but decided to suspend his IM privileges because he could be vulnerable to such suggestions from online acquaintances.

"These put me in control, let me create the boundaries for each and change them at will," says Courtney. Her eldest son ribs her and her husband for "stalking his every move," but on Father's Day he thanked them for the rules that have kept him out of trouble.

Houston computer software developer Larry Estes and his wife Lisa, who also have three kids (ages 11, 13, and 16), have placed monitoring technology on their computers. The family policy is "zero expectation of privacy" says Mr. Estes, and all computers are face out in an open room. "They can't hide what they are doing," he says.

The family has regular dinner discussions over the dangers of the Internet, including posting personal information, engaging in suggestive conversations, or writing commentary that could be screened by future employers.

"We feel education is the best form of control," says Estes. "If we tried to control everything, they would just go out and seek it somewhere else."

Brian Gibbs in Calgary, says he blocks his 10-year-old stepson and 18-year-old foster son from accessing websites that are known as "hunting grounds" for predators. His older son has a "lack of impulse control and lack of understanding as to what is and is not appropriate (sexual conversation, etc.)," he says. He found a product called K9 Web Protection to monitor his use.

"I set my foster son up on the computer, and told him to look up every nasty thing he could possibly think of in every manner possible. I left him to it for about an hour. After this time, he came to me in my office to announce his results: zilch. He couldn't get anything. He was much less pleased than I was with this news. I was thrilled. Finally, a filtering application that is truly kid-proof," says Mr. Gibbs.

Many Internet watchers say that parental involvement with kids should go hand in hand with increased Internet monitoring. To help with this, some websites carry new technology and provide "Do's and Don'ts" lists for Internet safety.

"The point for now is that kids are both more savvy and sophisticated in using the Internet but still naive about the ways of the adult world," says Mr. Nickel.

    Why mom enlisted an online sleuth to keep tabs on child, UT, 20.6.2006, http://www.usatoday.com/tech/news/internetprivacy/2006-06-20-parent-cyber-sleuths_x.htm

The Web Site of All Mothers

June 18, 2006
By DAVID HOCHMAN
Culver City, Calif.

TRAFFIC on the Yahoo parents' group known as Peachhead, based in Los Angeles, slowed for a few hours last Sunday. One mother desperately needed a large portrait painted from a photograph of four children. Another was ballyhooing a Pacific Palisades dental office "where you get all kinds of spa services while you get your teeth worked on."

The real action, however, was happening off line at a park in Culver City where more than 500 members of the group — some pushing expensive baby carriages, others in teeny Elmo T-shirts (and those were just the moms) — were stepping away from their computers for the fourth annual Peachhead Day.

Peachhead is the offhand brainchild of Linda Perry, who started it to e-mail 15 friends in her new-mothers group after her daughter Amber was born in 1997. "None of us knew much about dealing with babies," said Ms. Perry, 41, who, with two children, is as exuberant as a high school cheerleader.

The group now has 3,000 members, and Ms. Perry bookends her workdays as a secretary in a Santa Monica law office with hours at home in Venice spent answering posts and selecting new members.

Unlike some of the larger sites for parents, like Urbanbaby.com and iVillage.com, Peachhead does not accept advertising or sponsors. Ms. Perry personally screens all members and monitors the discussion.

This combination of factors has made her disproportionately powerful in the small community of businesses that serve affluent mothers on the fashionable West Side of Los Angeles. A rave or a thumbs-down from her can make or break, say, a children's hair salon or even a pediatric practice. This clout has made her the don to a kind of mommy mafia in the hyperattentive child-rearing circles.

As the day began, Ms. Perry greeted people near a cake shaped like a stack of Dr. Seuss books and inscribed, "Dear Linda, Thank You for Peachhead!!!" Nearby, two Peachhead mothers, Judye Hendish and Leesa Zelkin, launched into an impromptu showdown about who had gotten more help from the group.

"I got my housekeeper from Peachhead," Ms Hendish said. "Party-planning advice, tips on strollers and where to get the kids' underwear — "

Ms. Zelkin interrupted: "The guy who built my backyard play structure. The woman who cleans for us on Fridays — and what an angel!"

"Infertility advice," Ms. Hendish said.

The women, who had never met before the event but knew each other intimately from Peachhead postings, noted that various warring factions had emerged in the group, and they cautiously peered around at name tags to see if any noncircumcisers or family-bed-sharers or anti-immunizers were lurking.

The Peachheader they most hoped to meet was LimoBunny1, who set off a firestorm in April after venting about a "weird, rude encounter" with a Hollywood actress at a Beverly Hills passport office. Apparently, the actress didn't appreciate the fuss LimoBunny1 was making over her daughter, LimoBunny1's post said. The actress told LimoBunny1 that "the world doesn't revolve around your 3-year-old." LimoBunny1 shot back via Peachhead, saying the actress was "jealous of my gorgeous baby who was getting MORE attention than she was."

Another post that had people talking was by a breast-feeding Malibu mother who "broke down" and had a cigarette the day her best friend died.

Dozens of largely supportive responses followed, including one from a pediatrician who wrote, "no harm whatsoever ... from that one cigarette." But then someone posted a link suggesting that nicotine in breast milk could cause brain damage, and a second torrent of posts began.

"Peachhead's about as up-to-the-second a picture as you can get of the thousand little things moms wonder and worry about in L.A.," said Ms. Perry, who admitted that even she was occasionally surprised by how picayune certain exchanges could be. "I'll log in first thing in the morning and see dozens of fresh posts about, like, clipping a baby's fingernails, and just go, 'Aye yi yi.' "

Peachhead Day put faces to the mostly anonymous mothers (and the fewer fathers, including this writer) in the group, but it was also an opportunity for local businesses to pander openly to this highly critical and influential group of potential customers.

As baffled-looking children watched demonstrations of baby sign language, representatives from Ben's Ranch, a home electronics company that helps Peachhead families link their iPods, Xboxes and home theater systems, were passing out FAQ sheets and push-up ice cream pops.

At the tent for Snigglezoo, a boutique entertainment company, Bugaboo strollers were double-parked as John Lanza, its chief executive, pitched a DVD, "The Money Mammals," which uses dancing puppets to teach toddlers how to save and prudently spend their allowances.

"We've seen kids watch the video and then save their ice cream change for later, so it definitely works," Mr. Lanza said.

Nobody was getting more attention on Peachhead Day than Ms. Perry. Parents and children in peach-colored bracelets ($5 each, to help finance a commercial Peachhead Web site) posed with her for photographs or told her how grateful they were for the group.

Ms. Perry's husband, Michael, a lawyer, stood off to one side in a Jimmy Buffett-style party shirt, looking slightly wary of all the fuss.

"Linda, she's like a rock star, and she deserves it," he said, but he admitted she sometimes missed their favorite TV programs on nights she was deluged by new postings. (Mr. Perry inspired the group's name, a nod to one of his favorite Allman Brothers albums, "Eat a Peach.")

He said he looked forward to the day Peachhead would be more than just a hobby for Ms. Perry, something he fully expected to happen given the community response to the group.

Glancing over at Ms. Perry, who was being presented with toddler art made from pressed peach designs, Mr. Perry sighed. "Honestly, I always thought we'd retire based on my earnings as a lawyer," he said. "Seeing all this, I'm not so sure anymore. I think it's going to be her."

By late afternoon, the Peachheaders were back at their keyboards. Some cheered Ms. Perry for an enjoyable day out, but mostly, the posts were classic Peachhead. One member wanted "end-of-season gift suggestions for Little League coaches." Another was having problems with soiled pull-up diapers.

The next day, LimoBunny1, who had put in an appearance at the park, posted a note to say she had a crib mattress with a waterproof cover to give away. There were no immediate takers.

    The Web Site of All Mothers, NYT, 18.6.2006, http://www.nytimes.com/2006/06/18/fashion/sundaystyles/18PEACH.html

Growing Wikipedia Revises Its 'Anyone Can Edit' Policy

June 17, 2006
The New York Times
By KATIE HAFNER

Wikipedia is the online encyclopedia that "anyone can edit." Unless you want to edit the entries on Albert Einstein, human rights in China or Christina Aguilera.

Wikipedia's come-one, come-all invitation to write and edit articles, and the surprisingly successful results, have captured the public imagination. But it is not the experiment in freewheeling collective creativity it might seem to be, because maintaining so much openness inevitably involves some tradeoffs.

At its core, Wikipedia is not just a reference work but also an online community that has built itself a bureaucracy of sorts — one that, in response to well-publicized problems with some entries, has recently grown more elaborate. It has a clear power structure that gives volunteer administrators the authority to exercise editorial control, delete unsuitable articles and protect those that are vulnerable to vandalism.

Those measures can put some entries outside of the "anyone can edit" realm. The list changes rapidly, but as of yesterday, the entries for Einstein and Ms. Aguilera were among 82 that administrators had "protected" from all editing, mostly because of repeated vandalism or disputes over what should be said. Another 179 entries — including those for George W. Bush, Islam and Adolf Hitler — were "semi-protected," open to editing only by people who had been registered at the site for at least four days. (See a List of Protected Entries)

While these measures may appear to undermine the site's democratic principles, Jimmy Wales, Wikipedia's founder, notes that protection is usually temporary and affects a tiny fraction of the 1.2 million entries on the English-language site.

"Protection is a tool for quality control, but it hardly defines Wikipedia," Mr. Wales said. "What does define Wikipedia is the volunteer community and the open participation."

From the start, Mr. Wales gave the site a clear mission: to offer free knowledge to everybody on the planet. At the same time, he put in place a set of rules and policies that he continues to promote, like the need to present information with a neutral point of view.

The system seems to be working. Wikipedia is now the Web's third-most-popular news and information source, beating the sites of CNN and Yahoo News, according to Nielsen NetRatings.

The bulk of the writing and editing on Wikipedia is done by a geographically diffuse group of 1,000 or so regulars, many of whom are administrators on the site.

"A lot of people think of Wikipedia as being 10 million people, each adding one sentence," Mr. Wales said. "But really the vast majority of work is done by this small core community."

The administrators are all volunteers, most of them in their 20's. They are in constant communication — in real-time online chats, on "talk" pages connected to each entry and via Internet mailing lists. The volunteers share the job of watching for vandalism, or what Mr. Wales called "drive-by nonsense." Customized software — written by volunteers — also monitors changes to articles.

Mr. Wales calls vandalism to the encyclopedia "a minimal problem, a dull roar in the background." Yet early this year, amid heightened publicity about false information on the site, the community decided to introduce semi-protection of some articles. The four-day waiting period is meant to function something like the one imposed on gun buyers.

Once the assaults have died down, the semi-protected page is often reset to "anyone can edit" mode. An entry on Bill Gates was semi-protected for just a few days in January, but some entries, like the article on President Bush, stay that way indefinitely. Other semi-protected subjects as of yesterday were Opus Dei, Tony Blair and sex.

To some critics, protection policies make a mockery of the "anyone can edit" notion.

"As Wikipedia has tried to improve its quality, it's beginning to look more and more like an editorial structure," said Nicholas Carr, a technology writer who recently criticized Wikipedia on his blog. "To say that great work can be created by an army of amateurs with very little control is a distortion of what Wikipedia really is."

But Mr. Wales dismissed such criticism, saying there had always been protections and filters on the site.

Wikipedia's defenders say it usually takes just a few days for all but the most determined vandals to retreat.

"A cooling-off period is a wonderful mediative technique," said Ross Mayfield, chief executive of a company called Socialtext that is based on the same editing technology that Wikipedia uses.

Full protection often results from a "revert war," in which users madly change the wording back and forth. In such cases, an administrator usually steps in and freezes the page until the warring parties can settle their differences in another venue, usually the talk page for the entry. The Christina Aguilera entry was frozen this week after after fans of the singer fought back against one user's efforts to streamline it.

Much discussion of Wikipedia has focused on its accuracy. Last year, an article in the journal Nature concluded that the incidence of errors in Wikipedia was only slightly higher than in Encyclopaedia Britannica. Officials at Britannica angrily disputed the findings.

"To be able to do an encyclopedia without having the ability to differentiate between experts and the general public is very, very difficult," said Jorge Cauz, the president of Britannica, whose subscription-based online version receives a small fraction of the traffic that Wikipedia gets.

Intentional mischief can go undetected for long periods. In the article about John Seigenthaler Sr., who served in the Kennedy administration, a suggestion that he was involved in the assassinations of both John F. and Robert Kennedy was on the site for more than four months before Mr. Seigenthaler discovered it. He wrote an op-ed article in USA Today about the incident, calling Wikipedia "a flawed and irresponsible research tool."

Yet Wikipedians say that in general the accuracy of an article grows organically. At first, said Wayne Saewyc, a Wikipedia volunteer in Vancouver, British Columbia, "everything is edited mercilessly by idiots who do stupid and weird things to it." But as the article grows, and citations slowly accumulate, Mr. Saewyc said, the article becomes increasingly accurate.

Wikipedians often speak of how powerfully liberating their first contribution felt. Kathleen Walsh, 23, a recent college graduate who majored in music, recalled the first time she added to an article on the contrabassoon.

"I wrote a paragraph of text and there it was," recalled Ms. Walsh. "You write all these pages for college and no one ever sees it, and you write for Wikipedia and the whole world sees it, instantly."

Ms. Walsh is an administrator, a post that others nominated her for in recognition of her contributions to the site. She monitors a list of newly created pages, half of which, she said, end up being good candidates for deletion. Many are "nonsense pages created by kids, like 'Michael is a big dork,' " she said.

Ms. Walsh also serves on the 14-member arbitration committee, which she describes as "the last resort" for disputes on Wikipedia.

Like so many Web-based successes, Wikipedia started more or less by accident.

Six years ago, Mr. Wales, who built up a comfortable nest egg in a brief career as an options trader, started an online encyclopedia called Nupedia.com, with content to be written by experts. But after attracting only a few dozen articles, Mr. Wales started Wikipedia on the side. It grew exponentially.

For the first year or so, Mr. Wales paid the expenses out of his own pocket. Now the Wikimedia Foundation, the nonprofit organization that supports Wikipedia, is financed primarily through donations, most in the $50 to $100 range.

As the donations have risen, so have the costs. The foundation's annual budget doubled in the last year, to $1.5 million, and traffic has grown sharply. Search engines like Google, which often turn up Wikipedia entries at the top of their results, are a big contributor to the site's traffic, but it is increasingly a first stop for knowledge seekers.

Mr. Wales shares the work of running Wikipedia with the administrators and four paid employees of the foundation. Although many decisions are made by consensus within the community, Mr. Wales steps in when an issue is especially contentious. "It's not always obvious when something becomes policy," he said. "One way is when I say it is."

Mr. Wales is a true believer in the power of wiki page-editing technology, which predates Wikipedia. In late 2004, Mr. Wales started Wikia, a commercial start-up financed by venture capital that lets people build Web sites based around a community of interest. Wiki 24, for instance, is an unofficial encyclopedia for the television show "24." Unlike Wikipedia, the site carries advertising.

Mr. Wales, 39, lives with his wife and daughter in St. Petersburg, Fla., where the foundation is based. But Mr. Wales's main habitat these days, he said, is the inside of airplanes. He travels constantly, giving speeches to reverential audiences and visiting Wikipedians around the world.

Wikipedia has inspired its share of imitators. A group of scientists has started the peer-reviewed Encyclopedia of Earth, and Congresspedia is a new encyclopedia with an article about each member of Congress.

But beyond the world of reference works, Wikipedia has become a symbol of the potential of the Web.

"It can tell us a lot about the future of knowledge creation, which will depend much less on individual heroism and more on collaboration," said Mitchell Kapor, a computer industry pioneer who is president of the Open Source Applications Foundation.

Zephyr Teachout, a lawyer in Burlington, Vt., who is involved with Congresspedia, said Wikipedia was reminiscent of old-fashioned civic groups like the Grange, whose members took individual responsibility for the organization's livelihood.

"It blows open what's possible," said Ms. Teachout. "What I hope is that these kinds of things lead to thousands of other experiments like this encyclopedia, which we never imagined could be produced in this way."

    Growing Wikipedia Revises Its 'Anyone Can Edit' Policy, NYT, 17.6.2006, http://www.nytimes.com/2006/06/17/technology/17wiki.html?hp&ex=1150603200&en=7f2dcfa9db8cc0ef&ei=5094&partner=homepage

Your Money

Now, Free Ways to Do Desktop Work on the Web

June 17, 2006
the New York Times
By DAMON DARLIN

The biggest expense in buying a new computer is not always the computer. After all, you can buy a new Dell desktop, and a good one at that, for $300 and get a monitor in the bargain.

The software to make a PC do anything useful can cost you as much as the computer. To accomplish even the most basic functions on the computer, like writing, you could pay $400 for the standard edition of Microsoft's Office suite that includes Word for word processing, Excel for spreadsheets, Outlook for e-mail and PowerPoint for boring everyone with slideshow presentations.

You can find software that is cheaper. Yet a stripped-down student and teacher edition of Word still costs $150 and even Microsoft Works 8.0, a really basic version of Word and Excel, is $50.

There is another way to do almost everything these programs can do — some would say you can actually do more — and you can do it free. A number of smart programmers have developed word processing, spreadsheet, calendar and other software that you operate while in a Web browser.

No one is saying they are a direct substitute for Word or Excel, but they do have a distinct advantage. The programs can be used by several people at different computers to collaborate on a document.

"It's solving an actual real problem," said Sam Schillace, a founder of Upstartle, which makes the Writely software for word processing. Google bought the company for that software this year.

Google is the biggest and best-financed company putting such software online. It is gradually opening to the public the Spreadsheets program it announced last week, and it plans to release a version of a word processing program soon. A number of smaller software companies are doing similar things.

Where is Microsoft, the software giant, in all this? Interesting question. It is expected that Microsoft will offer a similar product via its Net-centric Office Live and Windows Live initiatives, which convert the desktop to the Web top. It may be a tough choice for the company, because it faces the dilemma of cannibalizing its own products or letting someone else take a bite out of them.

Microsoft, which carved a near monopoly in word processing and spreadsheet software, has up to now been able to protect its high prices. But a monopoly, a few laissez-faire economists argue, will eventually succumb to competition. This could become a textbook example: innovators are attracted by the profit pool and undermine the monopoly with something different.

You have always had the ability to edit a document in a browser, including Microsoft's Internet Explorer, by opening the file in HTML format. You can still do that in a pinch, but no one recommends it because that method is pretty bare-bones. You can not automatically check the spelling or easily change to unusual fonts, for example.

The new programs take word processing a step further. If you have already been using a free e-mail program like Yahoo Mail or Google Gmail, you have some experience with substituting tools on the Web for programs residing on the hard drive of your computer. Of course, to take advantage of them, you have to get over two hurdles. One, you can use them only if you are connected to the Internet. And you must be comfortable with the idea that your addresses, your correspondence and your documents don't reside on your hard drive in your computer in your home. They are stored at sites controlled by a giant company.

The new online applications add functions to that basic browser ability by using a set of software tools known among developers as Ajax. These tools enable a host of so-called Web 2.0, or Web services, applications like Google maps posted in Web sites or photos displayed on Flickr.com.

Google Spreadsheets is a good example. (You can find the program at Google Labs, labs.google.com, but to use it you have to sign up for a Google account first. No one said free meant easy.) An alternative is Jotspot (www.jot.com), though its products are aimed more at business users.

Google Spreadsheets has many of the features you use in Excel, like the ability to sort, change typefaces or color and insert a variety of set formulas. The developers plan to add other features like auto fill.

You can save the document to your hard drive or to the Google servers. Once it is there, you can access the spreadsheet from any computer, which means you no longer have to load it onto a disk or flash drive to carry it home or to another office, or send it there by e-mail.

Because the document is stored on the Google servers, you can give permission for other people with Google accounts to open and work on it. A team can work on it together to make changes. The file can also be opened in Excel.

Jonathan Rochelle, product manager for Spreadsheets, said people were using it to create lists and share them with groups, like a soccer team or fellow students. Wedding planning becomes a little easier as couples use the multiple pages of the spreadsheet to track guests, accommodations and menu selection. He used it himself to help his father with a budget while the two were in different cities.

Google's word processing software will work the same way. It has not been released yet, but an early version of the browser tool had every necessary function of Word except auto correct, where misspellings are changed on the fly. That feature is coming, Mr. Schillace said. "We haven't been able to do it smoothly."

He said one early tester of Writely was the daughter of a divorced couple who have joint custody. The father told Mr. Schillace that she had been able to do her homework at either house and never had to worry about forgetting an assignment at one house or the other.

If you don't want to wait for Google, a similar browser application is already available called Zoho Writer at www.zohowriter.com. (I wrote most of this article on Zoho with as much ease as writing with Microsoft Word.) Writeboard (www.writeboard.com) is a competitor. Another program, called Ajax Write (www.ajaxwrite.com), lacks the spell checking and word count functions that Word has taught us to rely upon.

But you need not stop there. Applications for coordinating calendars among friends and family is another popular application that replaces some of the functions of Microsoft's Outlook program. Yahoo and Google have some, but there are others, including one from a start-up named 30Boxes (www.30boxes.com) that is very easy to use. Microsoft is also beginning to offer collaborative Web tools.

If you like the idea of making your Web browser do more work, you might also download the Firefox browser, made by another competitor nipping at Microsoft's heels (at www.mozilla.com/firefox). Then you can start using any of the hundreds of add-ons, called extensions, that independent programmers have created to add functions to the browser, for example, the ability to synchronize bookmarks between computers, block ads or download video faster.

Google Labs offers some of them. One of the most useful is Notebook. It puts a little button on the frame of your browser that organizes snippets of information you find on the Web into folders that are then accessible from any computer. When you are on a Web site and you see something you want to save, you highlight it, right-click your mouse, click on "Note this" in the dropdown menu, and your search is saved.

Clipmarks (www.clipmarks.com) adds an element of the social networking that you find on Facebook or MySpace.

A more fully featured alternative to Google Notebook is coming soon from Plum Ventures, a small start-up company based in San Francisco. You can join the waiting list at www.plum.com. With the application you can collect information, whether Web sites, photos, music or text files, and then annotate it and share it with others.

You can also make your lists public, to share with strangers. A founder, Hans Peter Brondmo, said, "People like to watch what others are doing." He calls this "info-voyeurism."

That you can do it free only makes it better.

    Now, Free Ways to Do Desktop Work on the Web, NYT, 17.6.2006, http://www.nytimes.com/2006/06/17/technology/17money.html

Microsoft Lieutenants Look Ahead, Hoping to Avoid Other Companies' Mistakes

June 17, 2006
The New York Times
By JOHN MARKOFF

REDMOND, Wash., June 16 — Microsoft stands astride the computing world much as another corporate giant, I.B.M., once did. Now its task is to avoid repeating I.B.M.'s mistakes.

As the PC era wanes and the Internet era gathers force, Microsoft's revenues have never been higher and its quarterly profits remain in the billions. But it has yet to find profitability in an array of businesses that it has entered beyond those it has dominated, operating systems and office applications.

Finding the company's way in the new era will largely fall to the successors to Bill Gates, who announced on Thursday that he would leave his day-to-day role at Microsoft in two years. But in an interview on Friday in his office on the Microsoft campus, Mr. Gates said he was confident that the company was positioning itself for success in its fourth decade and beyond.

"I don't think there's any period that's not a transitional period in computing," he said. "Somebody's always driving change." Referring to the relentless increase in computing power, he added, "When you have Moore's Law creating these exponentially new capabilities, we're always in a time of utter change, maybe even accelerating change."

And he insisted that Microsoft was closely focused on adapting to that change — and learning from the legacy of companies that failed to do so.

"We're all students of why didn't Wang make the change," Mr. Gates said. "Why didn't Digital Equipment, which was my favorite company, make the change?"

A more fitting lesson may come from I.B.M., which dominated the mainframe computing era just as Microsoft has ruled the PC age. I.B.M. remained highly profitable in the 1980's even after the advent of the PC produced a growing array of challengers. But by the early 1990's, the eclipse of the mainframe and I.B.M.'s inability to find its way in the PC era forced the company to go through a sweeping makeover in management and culture; it has never regained its previous influence.

Now it is the age of high-speed Internet connections and new digital devices that threaten the formula that established Microsoft's primacy. But Mr. Gates argued that the rapidly increasing availability of computing power, which undid his competitors, will ultimately save Microsoft. As the cost of computing falls, giving rise to new uses and appliances, Microsoft will find new markets and grow, he said.

In that sense, technical advances have a different impact on computing than on other businesses, increasing rather than decreasing demand. "When they invented radial tires, they should have shot the guy," he said. "The whole industry went through a crisis, because it took nine years to squeeze out the extra factory capacity, because the tires lasted longer."

Microsoft's future, he said, lies in applications that will offer new capabilities. He cited an announcement planned for later this month that is intended to extend the Microsoft Office business into the telecommunications world by more tightly linking the power of PC's and telephones.

Even as he pulls back from day-to-day activities, Mr. Gates will play a prominent role as chairman as well as the company's largest shareholder. But on Thursday he said the company's technical leadership would continue to report to him for only another year before shifting to work for Steven A. Ballmer, the chief executive.

It is at that point that the unusual chemistry that the two men have refined over a quarter-century — with Mr. Gates as the technical visionary and Mr. Ballmer as the sales leader — will be most thoroughly tested.

Whether Mr. Ballmer can change his role to take responsibility for both sides of the equation remains to be seen, but there is little doubt that he has the commitment to carry on as Microsoft's chief executive far into the future. Even six years ago, when Mr. Gates first said that he agreed with Mr. Ballmer to remain committed to Microsoft until he was 50 — the age they have now reached — Mr. Ballmer said he often felt that he would leave only by being carried out of the company.

His immediate challenge is to convince Wall Street that he is still the right man for the job, something that is certain to take several successful products.

At a news conference on Thursday at a Microsoft corporate television studio, he and Mr. Gates took pains to stress continuity in the company's leadership — what Mr. Ballmer referred to as the "relentless patience" underlying the company's strategy and long-term planning approach.

In the front row facing the two executives were Ray Ozzie, the veteran computer industry executive to whom Mr. Gates is handing the role of chief software architect, and Craig Mundie, a second veteran who has been the designer of the company's government and international strategy, and who will now formally head research and strategy.

At the back of the room sat the company's three divisional presidents, Jeff Raikes, Robert J. Bach and Kevin Johnson, as well as a handful of key lieutenants, including Rick Rashid, the head of research; Steven Sinofsky, now leading the technical effort in the operating systems business; and J Allard, the original designer of the Xbox video game system, who is now leading an effort to extend the software technology underlying the company's entertainment business.

The collection of executive talent represents the breadth of Microsoft's ambition. Mr. Ozzie, whose résumé includes the conception of Lotus Notes in the 1980's, has risen rapidly to his position of technical leader since he came to Microsoft last year when it acquired his company, Groove Networks.

Mr. Ozzie's ascent is interpreted by some industry executives as an acknowledgment by Mr. Gates that it is time for Microsoft to build a new foundation on the Internet. Brad Silverberg, a previous technical leader at Microsoft, left the company in the 1990's when he became convinced that Mr. Gates was not willing to move quickly enough in breaking with the past.

"Ray is the real DNA in terms of the future of Microsoft's software path," said Mark R. Anderson, an analyst at Strategic News Service, a technology consulting firm. Mr. Gates, he said, has been a "fast follower" who has been able to repeatedly change Microsoft's strategy to rapidly pursue and then overtake competitors with new technologies.

Mr. Ozzie, in contrast, has a record of innovation, first with Notes and then with Groove, a PC-based software system that allows groups of workers to collaborate — a product that is now being integrated into the next version of Office.

"It's easy when you're following the taillights," Mr. Anderson said. "It's a lot harder when you have to invent the car."

One crucial aspect of Mr. Gates's legacy at Microsoft will be its ability to salvage its Windows Vista operating system. The program has entered its second test version and is scheduled to be commercially available early next year.

In interviews during the last two days, Microsoft executives almost universally expressed caution about whether the program, the most complex software undertaking in the company's history, is certain to be on schedule for January shipment — more than five years after the current version, Windows XP.

"We're looking at these incoming bug arrival rates and feeling pretty good," Mr. Gates said. "They're working really hard, they believe they're going to make those dates, but the dates are not a sacrosanct thing."

A number of researchers who follow the company say Vista, a project born under the code name Longhorn, has left psychic wounds from which the company is still trying to recover.

"It is clear to me that Gates lost touch with the core of the company several years ago, as evidenced by the collapse of the Longhorn project and the abyss the Windows group fell into," said Michael A. Cusumano, a management professor at the Massachusetts Institute of Technology, "so this announcement is really just recognizing what already exists — his mind is elsewhere."

On Friday, Mr. Gates acknowledged that he was not following Vista on a daily basis. That job belongs to another executive, Jim Allchin, who has announced that he will leave once the troubled program is shipped successfully.

    Microsoft Lieutenants Look Ahead, Hoping to Avoid Other Companies' Mistakes, NYT, 17.6.2006, http://www.nytimes.com/2006/06/17/technology/17soft.html

Gates to Cede Software Reins in Era Change

June 16, 2006
The New York Times
By JOHN MARKOFF and STEVE LOHR

REDMOND, Wash., June 15 — Three decades after he started Microsoft with the dream of placing a personal computer in every home and business, Bill Gates said Thursday that he would leave his day-to-day role there in two years.

He will shift his energies to the Bill and Melinda Gates Foundation, which his Microsoft fortune has made the world's largest philanthropic organization, dedicated to health and education issues, especially in poor nations.

At a news conference after the close of the stock market, Mr. Gates, 50, said he was not leaving Microsoft altogether. He said he planned to remain as chairman and maintain his large holding in the company.

"I always see myself as being the largest shareholder in Microsoft," Mr. Gates said.

But the move, analysts said, points to the changes sweeping the software industry. Probably more than any other person, Mr. Gates has been identified with personal computer software, while the center of gravity in computing is increasingly shifting to the Internet.

"I think we'll look back at this day as the separation between two eras in software — the first being software in a box, and the second software distributed over the Internet for free and funded by advertising," said George F. Colony, chief executive of Forrester Research. "The new era requires a complete re-examination of Microsoft's business model, which has been one of most profitable the world has ever seen."

Mr. Gates's college classmate and business partner of 26 years, Steven A. Ballmer, also 50, will remain chief executive of the company. He assumed that post in 2000, with Mr. Gates remaining engaged in the daily operation with the title of chief software architect.

Mr. Ballmer emphasized in an interview that Mr. Gates would give the preponderance of his time to Microsoft during the two-year transition.

But the transition will begin immediately, Mr. Gates said, with his role as chief software architect taken over by Ray Ozzie, 50, one of the company's three chief technical officers. Mr. Ozzie, whose software background includes the conception of Lotus Notes in the 1980's, joined Microsoft last year and has been leading its strategic response to the growing Internet challenge the software company faces from companies like Google and Yahoo.

Mr. Gates said that he and Mr. Ballmer had begun discussing a transition some time ago, but that a decision had been made only in the last few weeks. He noted that he had deferred telling Mr. Ballmer of his decision several times, and that his wife, Melinda, a former Microsoft product manager, had reminded him to communicate with his business partner on several occasions.

"I talked with her even before I talked to Steve about this possibility," Mr. Gates said. "I got her advice. For a couple of weeks she said, 'Have you mentioned it to Steve yet?' I said, 'No, it wasn't easy to bring up today, maybe I'll bring it up tomorrow.' "

He said his primary motivation was a desire to spend more time on the issues that he has decided to attack with his foundation, whose resources will continue to swell as Mr. Gates makes good on his commitment to shift most of his fortune, said to be around $50 billion. He remains the largest single shareholder in Microsoft, with 9.6 percent of the stock, a stake currently worth $21.6 billion.

But his decision to begin scaling back at Microsoft comes at a critical juncture for the company, a dominant force in the computing world for a quarter-century. Although revenues are at record levels and the company's profits are running at a stunning $1 billion a month, Wall Street has grown increasingly critical of Microsoft's inability to make significant headway in new markets as diverse as video games, Internet television and Web advertising.

The company's stock has fallen from a high of $28.38 in the last year to close at $22.07 on Thursday. The share price peaked at $58.89 in December 1999. The Gates announcement sent the share price down slightly in after-hours trading.

At the news conference, Mr. Gates spoke about his emotional commitment to the company that he created with Paul G. Allen in New Mexico in 1975, initially selling software stored as punched holes in paper tape to the first generation of personal computer hobbyists.

Microsoft became a dominant force in computing shortly after I.B.M. picked the company, by then based in Bellevue, Wash., to provide the principal operating system for the I.B.M. PC in 1981. In the next decade Mr. Gates, aided by Mr. Ballmer, built a software monopoly by adding a growing array of programs bundled together into a single product called Office.

"When Paul Allen and I started this 30 years ago, we had big dreams about software," Mr. Gates said Thursday at the news conference, held in a television studio on the company's corporate campus here. "I have no doubt that over the next 30 years that Microsoft will play just as important a role as it has over the last 30 years."

Even Mr. Gates's competitors described his role as pivotal in shaping the PC era and transforming modern computing.

"Bill Gates redefined the software industry and redefined the computer industry," said Rob Glaser, a former Microsoft executive who is now a competitor at RealNetworks, a Seattle-based Internet services company. "His retirement from a full-time role is a huge milestone, and it marks the end of this era."

Still to be determined is how quickly Mr. Gates will depart the computer industry stage. As the chairman, he will remain the face of Microsoft to the outside world, giving speeches and visiting customers.

"And he'll still be involved in all the large business decisions," said David B. Yoffie, a professor at the Harvard Business School. "So the structure will change, but whether the outcomes will be different remains to be seen."

As part of the realignment, the company elevated a second chief technical officer, Craig J. Mundie, 56, who will be given the title of chief research and strategy officer. Working with Mr. Gates during the transition, he will take over responsibility for the company's research and product development efforts.

Since both Mr. Mundie and Mr. Ozzie are contemporaries of Mr. Ballmer and Mr. Gates, analysts did not see the moves as designating a future chief executive.

The shift follows a September 2005 change in which Mr. Ballmer reorganized the company into three divisions, focused on operating systems, the Office product group and an entertainment and hardware business.

Mr. Gates took pains Thursday to minimize his role at Microsoft, saying that the company could innovate and continue to lead in the software industry despite his diminished presence.

"The world has had a tendency to focus a disproportionate amount of attention on me," he said. "In reality, Microsoft has had an unbelievable breadth and depth of technical talent."

John Markoff reported from Redmond, Wash., for this article and Steve Lohr from New York.

    Gates to Cede Software Reins in Era Change, NYT, 16.6.2006, http://www.nytimes.com/2006/06/16/technology/16soft.html?hp&ex=1150516800&en=394f96f623e5cd97&ei=5094&partner=homepage

Hiding in Plain Sight, Google Seeks More Power

June 14, 2006
The New York Times
By JOHN MARKOFF and SAUL HANSELL

THE DALLES, Ore., June 8 — On the banks of the windswept Columbia River, Google is working on a secret weapon in its quest to dominate the next generation of Internet computing. But it is hard to keep a secret when it is a computing center as big as two football fields, with twin cooling plants protruding four stories into the sky.

The complex, sprawling like an information-age factory, heralds a substantial expansion of a worldwide computing network handling billions of search queries a day and a growing repertory of other Internet services.

And odd as it may seem, the barren desert land surrounding the Columbia along the Oregon-Washington border — at the intersection of cheap electricity and readily accessible data networking — is the backdrop for a multibillion-dollar face-off among Google, Microsoft and Yahoo that will determine dominance in the online world in the years ahead.

Microsoft and Yahoo have announced that they are building big data centers upstream in Wenatchee and Quincy, Wash., 130 miles to the north. But it is a race in which they are playing catch-up. Google remains far ahead in the global data-center race, and the scale of its complex here is evidence of its extraordinary ambition.

Even before the Oregon center comes online, Google has lashed together a global network of computers — known in the industry as the Googleplex — that is a singular achievement. "Google has constructed the biggest computer in the world, and it's a hidden asset," said Danny Hillis, a supercomputing pioneer and a founder of Applied Minds, a technology consulting firm, referring to the Googleplex.

The design and even the nature of the Google center in this industrial and agricultural outpost 80 miles east of Portland has been a closely guarded corporate secret. "Companies are historically sensitive about where their operational infrastructure is," acknowledged Urs Holzle, Google's senior vice president for operations.

Behind the curtain of secrecy, the two buildings here — and a third that Google has a permit to build — will probably house tens of thousands of inexpensive processors and disks, held together with Velcro tape in a Google practice that makes for easy swapping of components. The cooling plants are essential because of the searing heat produced by so much computing power.

The complex will tap into the region's large surplus of fiber optic networking, a legacy of the dot-com boom.

The fact that Google is behind the data center, referred to locally as Project 02, has been reported in the local press. But many officials in The Dalles, including the city attorney and the city manager, said they could not comment on the project because they signed confidentiality agreements with Google last year.

"No one says the 'G' word," said Diane Sherwood, executive director of the Port of Klickitat, Wash., directly across the river from The Dalles, who is not bound by such agreements. "It's a little bit like He-Who-Must-Not-Be-Named in Harry Potter."

Local residents are at once enthusiastic and puzzled about their affluent but secretive new neighbor, a successor to the aluminum manufacturers that once came seeking the cheap power that flows from the dams holding back the powerful Columbia. The project has created hundreds of construction jobs, caused local real estate prices to jump 40 percent and is expected to create 60 to 200 permanent jobs in a town of 12,000 people when the center opens later this year.

"We're trying to organize our chamber ambassadors to have a ribbon-cutting ceremony, and they're trying to keep us all away," said Susan Huntington, executive director of The Dalles Area Chamber of Commerce. "Our two cultures aren't matching very well."

Culture clashes may be an inevitable byproduct of the urgency with which the search engine war is being waged.

Google, Microsoft and Yahoo are spending vast sums of capital to build out their computing capabilities to run both search engines and a variety of Web services that encompass e-mail, video and music downloads and online commerce.

Microsoft stunned analysts last quarter when it announced that it would spend an unanticipated $2 billion next year, much of it in an effort to catch up with Google. Google said its own capital expenditures would run to at least $1.5 billion. Its center here, whose cost is undisclosed, shows what that money is meant to buy.

Google is known to the world as a search engine, but in many ways it is foremost an effort to build a network of supercomputers, using the latest academic research, that can process more data — faster and cheaper — than its rivals.

"Google wants to raise the barriers to entry by competitors by making the baseline service very expensive," said Brian Reid, a former Google executive who is now director of engineering at the Internet Systems Consortium in Redwood City, Calif.

The rate at which the Google computing system has grown is as remarkable as its size. In March 2001, when the company was serving about 70 million Web pages daily, it had 8,000 computers, according to a Microsoft researcher granted anonymity to talk about a detailed tour he was given at one of Google's Silicon Valley computing centers. By 2003 the number had grown to 100,000.

Today even the closest Google watchers have lost precise count of how big the system is. The best guess is that Google now has more than 450,000 servers spread over at least 25 locations around the world. The company has major operations in Ireland, and a big computing center has recently been completed in Atlanta. Connecting these centers is a high-capacity fiber optic network that the company has assembled over the last few years.

Google has found that for search engines, every millisecond longer it takes to give users their results leads to lower satisfaction. So the speed of light ends up being a constraint, and the company wants to put significant processing power close to all of its users.

Microsoft's Internet computing effort is currently based on 200,000 servers, and the company expects that number to grow to 800,000 by 2011 under its most aggressive forecast, according to a company document.

Computer scientists and computer networking experts caution that it is impossible to compare the two companies' efforts directly. Yet it is the way in which Google has built its globally distributed network that illustrates the daunting task of its competitors in catching up.

"Google is like the Borg," said Milo Medin, a computer networking expert who was a founder of the 1990's online service @Home, referring to the robotic species on "Star Trek" that was forcibly assembled from millions of species and computer components. "I know of no other carrier or enterprise that distributes applications on top of their computing resource as effectively as Google."

Google's inclination to secrecy began in its days as a private company in an effort to keep its rivals from determining the profits it was making from Web search advertising. But its culture of secrecy has grown to pervade virtually all of its dealings with the news media and even its business partners.

In the end, of course, corporate secrets have a short shelf life in a search engine age. Entering "Dalles Google" as a Google query turns up plenty of revealing results. But Google Earth, the satellite mapping service, like its rivals, so far shows the 30-acre parcel here quite undeveloped.

John Markoff reported from The Dalles, Ore., for this article and Saul Hansell from New York.

    Hiding in Plain Sight, Google Seeks More Power, NYT, 14.6.2006, http://www.nytimes.com/2006/06/14/technology/14search.html?hp&ex=1150344000&en=25cfc1be85c1d603&ei=5094&partner=homepage

Google Co - Founder Says Company Is Staying in China

June 9, 2006
By REUTERS
Filed at 0:41 a.m. ET
The New York Times

WASHINGTON (Reuters) - Google Inc. (GOOG.O) is committed to doing business in China despite criticism the company has faced for abiding by Chinese government censorship restrictions, co-founder Sergey Brin said this week.

On Tuesday, after a session with several U.S. senators to discuss telecommunications legislation, Brin made comments that prompted some journalists to speculate Google intended to change or eliminate its operations in China.

In fact, he reiterated Google's intention to move ahead with its google.cn site -- a version of the leading Internet search engine that censors thousands of sites according to Chinese standards -- as well as its global google.com site.

Brin told a small group of invited journalists: ``I think it's perfectly reasonable to do something different. Say, OK, let's stand by the principle against censorship and we won't actually operate there.''

But he then added: ``That's an alternative path. It's not the one we've chosen to take right now.''

Brin, who serves as a co-president of Google, said users in China have two options -- slower speed search which is uncensored at http://www.google.com, or faster search, with limits set by Chinese authorities at http://www.google.cn/.

``If you are a normal Chinese user and you want to use Google, just go to google.com and you actually won't get good service. Eventually you will go to google.cn,'' Brin said.

.COM OR .CN?

The vast majority of Web users inside China -- 99 percent, he said -- use Google.com rather than Google.cn at this time.

Chinese Internet service providers take steps to ensure that the uncensored google.com site does not work as intended, Brin said. The google.cn censored site would presumably not be slowed by Chinese blocking tactics.

``We sort of committed to try out this path and we are still actually trying to get it to work,'' Brin said.

A Google spokeswoman said the company had no further comment on Brin's remarks.

Brin's comments echoed statements by Elliot Schrage, Google's vice president of public affairs, before a U.S. Congressional Human Right committee in Washington last February.

``We think we have made a reasonable decision, though we cannot be sure it will ultimately be proven to be the best one,'' Schrage said at the time. ``We've begun a process that we hope will better serve our Chinese users.''

Schrage said the company hoped to add additional services, if circumstances permitted, beyond search services and Google News.

As part of its plan announced in January to begin operating directly in China, Google declined to offer e-mail, blogging or chat rooms, services where free-wheeling discussion could put the company in hot water with the Chinese authorities.

At a regular news briefing in Beijing on Thursday, Foreign Ministry spokesman Liu Jianchao said the Chinese government viewed Google's involvement in the country positively.

``Any trade and commercial cooperation should be carried out within the framework of laws. We hope the relevant companies, when undertaking business operations, can abide by Chinese laws and regulations,'' Liu said.

    Google Co - Founder Says Company Is Staying in China, NYT, 9.6.2006, http://www.nytimes.com/reuters/technology/tech-google-china.html

Google signals U-turn over Chinese site

Thursday June 8, 2006
Guardian
Oliver Burkeman in New York and Bobbie Johnson


Internet giant Google may reverse its decision to launch a censored version of its search engine in China, one of the company's founders has said.
Sergey Brin said the Californian company had "felt that perhaps we could compromise on our principles, but provide ultimately more information for the Chinese" with Google.cn, which does not link to results for politically incendiary terms such as "Tiananmen Square" or "Falun Gong", the religious movement banned by the Chinese government.

But Mr Brin said he could consider reversing that decision. "Perhaps now the principled approach makes more sense," he told reporters in Washington.

Google was widely accused of ignoring its informal motto, "Don't be evil", in favour of commercial gain when the Chinese service began in January. Campaigners have voiced strong concerns about the conflict between the repressive regime in Beijing and Google's commitment to freedom of information, but representatives for the company have argued that a policy of engagement is more valuable to Chinese internet users than refusing to deal with the authorities. Mr Brin intimated that Google could now be considering another approach.

"It's perfectly reasonable to do something different, to say, 'Look, we're going to stand by the principle against censorship, and we won't actually operate there'. That's an alternate path," said the Russian-born entrepreneur, 31, who founded Google with Larry Page in 1996, when they were at Stanford University.

Google has claimed that Chinese surfers can use its main portal, Google.com, to read material that does not appear on the censored site. But it is thought that Mr Brin's comments may have been precipitated by reports that the international site has been inaccessible throughout much of China for long periods of time - apparently blocked by the so-called Great Firewall, which prevents access to websites the government deems unsavoury.

"I don't think they were that comfortable with the decision in the first place," said Danny Sullivan, editor of the Search Engine Watch website. "But Google.com has never worked perfectly within China - that, after all, is the reason why Google caved in to create an approved Chinese edition."

Two months ago Google's chief executive, Eric Schmidt, said that entering the Chinese market was the right thing to do and that the company had no intention of confronting the government.

"I'm wondering if Google are really hypocritical or just naive," said Julian Pain of media watchdog Reporters Without Borders, which campaigns against online censorship. "They never made a clear statement about what they would accept from the Chinese and what they wouldn't - now they're not sure about how far they can go. I hope they start realising that the internet is a global network and that doing something in one part of the world has an effect in another."

    Google signals U-turn over Chinese site, G, 8.6.2006,http://technology.guardian.co.uk/news/story/0,,1792637,00.html

 2 Charged in Scheme Said to Defraud Internet Phone Providers        NYT        8.6.2006
http://www.nytimes.com/2006/06/08/technology/08voice.html

2 Charged in Scheme

Said to Defraud Internet Phone Providers

June 8, 2006
The New York Times
By KEN BELSON and TOM ZELLER Jr.

Federal authorities yesterday arrested a Miami man who they said made more than $1 million in a hacking scheme involving the resale of Internet telephone service.

The suspect is accused of surreptitiously routing calls through the lines of legitimate Internet phone companies, saddling them with the expense of carrying the traffic while he pocketed the connection fees from customers. A second man was arrested in Washington State, and charged with aiding in the scheme.

The case, representing an elaborate new form of Internet hacking, raises fresh questions about the security of phone traffic over largely unregulated networks.

Prosecutors say that starting in November 2004, Edwin Andres Pena, 23, a Venezuelan who has permanent residency in the United States and lives in Miami, used two companies he started to offer wholesale phone connections at discounted rates. Such companies typically help connect long-distance calls by buying minutes from large carriers and reselling them for a profit to smaller phone companies.

But instead of buying access to other networks to connect his clients' calls, Mr. Pena is said to have conspired with Robert Moore, a 22-year-old hacker in Spokane, Wash., to create "what amounted to 'free' routes by surreptitiously hacking into the computer networks" of unwitting Internet phone providers, and then routing his customers' calls over those providers' systems, the federal complaint says.

To evade detection, Mr. Pena is said to have first funneled the calls through hacked network ports at other companies, including one run by an unsuspecting investment company in Rye Brook, N.Y., after Mr. Moore found that a network router there was unprotected. These steps made it appear as if this company were originating the calls.

In a three-week period, for instance, prosecutors say one victimized Internet phone provider, based in Newark, handled about 500,000 calls made to look as if they came from the company in Rye Brook.

In all, more than 15 Internet phone companies, including the one in Newark, were left having to pay as much as $300,000 each in connection fees for routing the phone traffic to other carriers without receiving any revenue for the calls, prosecutors said.

"Emerging technologies and the Internet represent a sea of opportunity for business but also for sophisticated criminals," Christopher J. Christie, the United States attorney in New Jersey, whose office is prosecuting the case, said in a statement. "The challenge, which we and the F.B.I. continue to meet with investigations and prosecutions like this one, is to stay ahead of the cyber-criminal and protect legitimate commerce."

Mr. Pena was charged with one count of wire fraud, which carries a maximum penalty of 20 years in prison, and one count of computer fraud, with a maximum term of 5 years; each count could also result in a $250,000 fine. Mr. Pena appeared in court in Miami yesterday, and was jailed overnight pending a bail hearing today.

Mr. Moore, who is said to have received about $20,000 from Mr. Pena for his work, was charged with conspiracy, punishable by a five-year jail term and a $250,000 fine. He appeared in court in Spokane and was released on bail.

The companies in Newark and Rye Brook and others said to have been victims were identified only by their initials in the complaint, which was filed in United States District Court in Newark. One affected company in Newark was named N.T.P. in the complaint.

One prominent Internet phone company in Newark is Net2Phone. That company and its parent, IDT, did not return calls for comment.

The Rye Brook company, identified in the complaint as a hedge fund, was referred to by the initials O.H.

To date, most of the concern about the safety of Internet-based communications has focused on the ability of criminals to eavesdrop on calls, to generate fake caller ID's and to steal long-distance phone service.

In this case, however, Mr. Pena is said to have mimicked legitimate telecommunications brokers who often buy "minutes" worth of capacity on large networks at, say, half a cent a minute and resell it to smaller Internet phone providers at 1 cent a minute, keeping the difference.

But instead of buying those minutes, he is accused of manipulating voice-over-Internet services that break conversations into data packets and route them over the Internet. Each packet carries a prefix that identifies the carrier handling the call, and its origin and destination.

Mr. Pena is said to have appended stolen prefixes to his customers' calls, allowing them to piggyback on other phone company networks.

At its core, industry experts say, such a scheme is technologically straightforward for a hacker with knowledge of how Internet phone companies work, particularly new service providers that are sprouting up and spend relatively little securing their servers and routers.

"The technical side of this a 14-year-old can do," said Tom Kershaw, the vice president for voice-over-Internet-protocol services at VeriSign, an Internet security company. "There are many vulnerabilities."

The scheme attributed to Mr. Pena appears to have begun not long after his arrival in the United States. A family friend, Juan Fortes, a 70-year-old Cuban-American, said Mr. Pena landed in Miami a couple of years ago and rented a room in his single-story red brick house in a quiet neighborhood in southwest Miami.

"His mom contacted me some time ago, and she said he didn't have work or a place to stay, so I helped him out; he was a good young man," Mr. Fortes said.

Because Mr. Pena was not a legal resident, he persuaded Mr. Fortes to start a company in September 2004 called Fortes Telecom Inc., Mr. Fortes said. Mr. Fortes, who claims to have only a passing knowledge of computers, said he and Mr. Pena bought PC's together.

A few months later, Mr. Fortes said, Mr. Pena married, obtained a permanent resident's visa and moved out. Fortes Telecom was dissolved, and last September, Mr. Pena started a new company, Miami Tech and Consulting Inc., prosecutors said.

Mr. Fortes said that he had not spoken to Mr. Pena in a long time, and that he had been questioned by the police, who took his computer and bank information.

Federal investigators said the roots of the scheme lay in Mr. Pena's ability to obtain the prefixes used by Internet phone companies to identify their voice calls. He did so, they said, by repeatedly slamming Internet phone networks with test calls, each using a prefix variant — a method known in hacking circles as a "brute-force" attack.

The attack would continue until a prefix match allowed a call to penetrate the network.

According to the complaint, Mr. Pena turned to Mr. Moore, whose Web site, moorer-software.com, was still visible yesterday displaying links to various hacking sites and downloadable software like the Global Brute Forcer, to create cover for the scheme.

Mr. Moore is accused of performing "an exhaustive scan of computer networks of unsuspecting companies and other entities in the United States and around the world, searching for vulnerable ports."

The complaint notes that AT&T recorded some six million scans of its worldwide network attributable to Mr. Moore from June to October of last year. During that period, only two users made more scans of AT&T's network, the complaint said.

Once vulnerable ports were found, prosecutors said, Mr. Moore delivered the network addresses — along with hacked administration names and passwords — to Mr. Pena, who used them to reprogram the routers to allow Internet call traffic to flow through them and obscure the real origin of the calls.

In other cases, the pair would bounce traffic off Internet servers rented under false names, including the aliases "David Hauster" and "Jake Hamilton."

The ease with which Mr. Pena and Mr. Moore are said to have constructed the scheme is an indication that though Internet-based communications have ushered in more flexible and far cheaper phone services, they have also made it easier for hackers to manipulate the system.

"In terms of consumer Internet phone services, it's really the Wild West out there," said Andy Zmolek, a manager in the security planning and strategy group at Avaya, a telephone equipment maker. "This is just the tip of the iceberg."

Prosecutors said Mr. Pena appeared to have used the more than $1 million he received from his customers to go on a spending spree, buying real estate in South Florida, a 40-foot Sea Ray Mercruiser motor boat, and luxury cars, including a Cadillac Escalade and a BMW, which authorities confiscated yesterday.

He did not appear to be shy about showing off his new possessions, frequently posting pictures of his cars on Web sites devoted to car enthusiasts — including unitedbimmer.com, a BMW fan forum where Mr. Pena displayed his 2004 M3.

Tommy Hoyer, a moderator at the site, said Mr. Pena was a generous contributor to the forum's upkeep and activities, including last year's Christmas toy drive, in which he was the single largest contributor.

"He posted pictures and videos of his car, and obviously people were impressed," Mr. Hoyer said. "Many people kept asking, What does he do? What does he do?"

Mr. Hoyer said Mr. Pena, when asked, would say only that he worked at home.

Andrea Zarate contributed reporting from Miami for this article.

    2 Charged in Scheme Said to Defraud Internet Phone Providers, NYT, 8.6.2006,http://www.nytimes.com/2006/06/08/technology/08voice.html

Google Takes Aim at Excel

June 6, 2006
The New York Times
By JOHN MARKOFF

SAN FRANCISCO, June 5 — Stepping up its attack on Microsoft's core business, Google plans to make available on Tuesday a test version of a Web-based spreadsheet program that is intended to make it simple to edit and share lists and data online.

The company said that the free program, called Google Spreadsheets, would be able to read and create files in the format used by Excel, the Microsoft spreadsheet software that is installed on millions of personal computers.

The spreadsheet service is another step in Google's steady march toward creating its own computing universe that is an alternative to desktop PC software now dominated by Microsoft. It comes just months after Google bought a small Silicon Valley company called Upstart, creators of a Web-based word-processing program called Writely.

As Google has been moving into Microsoft's traditional desktop turf, Microsoft has been fighting back by adding online components to its software and building up its Web offerings. It is working especially hard to challenge Google's dominance in Web search services and the lucrative advertising they generate.

Google executives said Monday that the spreadsheet program would make it possible for as many as 10 people to simultaneously edit a spreadsheet document online and chat about it using Google's instant messaging program.

The new service will be able to handle several hundred formulas used to manipulate data in Excel, but not more complex functions like macros, said Jonathan Rochelle, the Google Spreadsheets product manager.

"When people want to share and collaborate, we think this product fits in well," Mr. Rochelle said.

The service was developed by Google's research arm, Google Labs. The company stressed the experimental nature of the product and said that the service would initially be offered to only a limited number of users.

The spreadsheet service is intended to appeal to small groups of business users, or to people who now use spreadsheets as de facto database programs to keep simple lists, Mr. Rochelle said. For example, soccer coaches who are juggling team lists and people planning family reunions might use it to put data in a place where it can be easily viewed and edited by others.

Mr. Rochelle said the ability for many people to collaborate was quite different from the standard method of e-mailing files back and forth. "It's a 'wow' moment with most users," he said.

For now, Google Spreadsheets lacks the ability to chart information. But Google is clearly hoping that the service and Writely will give it a head start on Microsoft in the area of so-called Web services.

Google has played down its efforts in this field. Despite widespread talk that Writely could compete with Microsoft Word, Eric E. Schmidt, Google's chief executive, said at a recent news conference that the company had no intention of using Writely to enter the word-processing marketplace. Rather, he said, Google was hoping to integrate Web-based word processing into many services that it was developing.

Last year, Microsoft responded to the growing availability of online alternatives to traditional desktop programs by announcing Windows Live and Office Live, two Microsoft-oriented Web portals.

Microsoft says that the Office Live Collaboration service permits several users to edit an Excel spreadsheet document simultaneously. But for the service to work, users must have Excel software on their personal computers. Google is hoping that many Web users will find it simpler to share the information by placing it on Google's servers.

Alan Yates, general manager for information worker business strategy at Microsoft, said that the ability to collaborate had been available to Microsoft Office users for some time. Mr. Yates said the company was watching the low end of the market closely, pointing to a number of free and online spreadsheet services now available, including OpenOffice, SimDesk and ThinkFree. But he said Excel's widespread adoption and powerful features made it superior.

"We see most consumers are really looking for more integration with their school or work life," he said. "They want more compatibility and not less."

As is almost always the case, Google executives deflected questions about how it would derive revenue from its new service.

Mr. Rochelle said that for now the company had no plans to connect the service to its AdWords advertising system, which places relevant text advertisements on Web pages.

    Google Takes Aim at Excel, NYT, 6.6.2006, http://www.nytimes.com/2006/06/06/technology/06google.html

E-Commerce Report

New Jewelry Web Site Sends People to Real Stores

June 5, 2006
The New York Times
By BOB TEDESCHI

ONLINE jewelers have built a $4 billion business on the idea that customers don't really need to see a precious stone before paying thousands of dollars to own it. Traditional jewelers want to build an online business too, but with a slight twist. Their motto: Don't buy online.

Last week, the Independent Jewelers Organization, a trade group representing more than 800 small jewelers, introduced IJODiamonds.com, where consumers can select diamonds and have them delivered to a local store for a personal inspection before any money changes hands.

The Independent Jewelers say the initiative is aimed squarely at BlueNile.com and other online-only diamond dealers that have taken a significant chunk — about 4 percent — of their sales in recent years. Analysts said the new initiative faced an uphill battle, but that it at least gave small, independent jewelers a chance to compete against vastly bigger online companies.

"This is about protecting their business, and survival," said Lauren Freedman, president of the E-Tailing Group, a Chicago-based consultancy. "These businesses have been very challenged by the Web, and this gives them a way to leverage the Web in a way they couldn't do on their own."

IJODiamonds.com sells mostly loose diamonds, which are difficult to sell for a high profit because the stones are considered a commodity. But to cover their larger fixed costs, traditional stores typically mark up the price of loose diamonds more than online retailers do.

IJODiamonds.com helps local merchants compete more effectively on price by offering consumers a selection of diamonds not from that local store, but directly from hundreds of diamond wholesalers. The wholesalers list the diamonds on the site, and when a customer selects one, the stone is shipped to a local store so the customer can examine it before taking it home. If the customer likes it, the store shares an undisclosed portion of the selling price with the wholesaler. If not, the customer pays nothing and the stone goes back to the wholesaler.

The jewelers will not say how much less profit they might make from the sale of a diamond through IJODiamonds.com than from the sale of a stone from the store's own inventory, but the fact that the sale is completed in person gives them an opportunity to make more money from the customer in other ways.

For instance, last month, when IJODiamonds.com was testing its site, Sami Saatchi, the owner of SVS Fine Jewelry in Oceanside, N.Y., helped complete the sale of a $9,000, 1.5-carat diamond bought through the site. Mr. Saatchi said the customer actually ordered three stones to review.

"We did a custom setting for him, and it was ready to go in a couple of days," Mr. Saatchi said. "Altogether, he spent about $11,000, and that sale would've never come had it not been for the site."

While IJODiamonds.com will ship directly to consumers, it discourages the practice. The site's home page advises customers: "Never consider buying a diamond without seeing it first."

According to Mary Moses Kinney, who oversees the IJODiamonds.com Web site for the Independent Jewelers, the numeric classifications that determine a diamond's quality and value are reliable, "but there are idiosyncrasies to the crystal that make the stone respond visually in a different way than the numbers might suggest."

Executives at Diamond.com, which the online jeweler Ice.com bought last month for $9.5 million, do not necessarily disagree. But when a stone has a flaw that might upset a customer, they say, they either withdraw that stone from their inventory or tell the customer about it before the sale is complete.

"You just filter out the things you don't want to sell," said Mayer Gniwisch, Diamond.com's president.

Diane Irvine, BlueNile.com's chief financial officer, argues that buying a diamond in a store can actually be a disadvantage for customers. "When people go into a store, they feel intimidated because they don't feel knowledgeable about the product," she said. "Sometimes they feel taken, but they don't know how."

Indeed, industry statistics suggest that a small but growing subset of the jewelry-buying public prefers to buy their jewelry sight unseen.

According to Forrester Research, people bought $3.4 billion worth of jewelry online last year and will spend $4 billion this year. Offline, the growth is but a fraction of that amount.

Ms. Freedman of the E-tailing Group said that there were two possible drawbacks to the IJODiamonds.com approach. First, with only around 850 participating retailers in the United States, the organization does not have enough coverage to satisfy some consumers who do not want to travel far to look at the diamond they selected.

Second — perhaps more important — is that IJODiamonds.com is competing with numerous online diamond dealers that are marketing aggressively on search engines and other sites. Unless the Independent Jewelers Organization commits significant resources to promoting its site online, Ms. Freedman said, the site will not attract much attention.

The organization says it is spending $100,000 to market the site's debut, but the campaign does not include advertisements on search engines. Rather, the group plans to rely on retailers to market the site in their own ads, with the organization providing some in-store marketing materials.

The lack of a sizable online marketing effort may be just as well, said Mr. Gniwisch of Diamond.com.

"Some people want the face-to-face approach, some will say 'I don't need it,' " he said. "But if their customers go online, they're going to say 'Let's also go to Diamond.com, Blue Nile, Amazon.' Once you send them online, you're sending them to the wolves."

    New Jewelry Web Site Sends People to Real Stores, NYT, 5.6.2006, http://www.nytimes.com/2006/06/05/technology/05ecom.html

   How eBay Makes Regulations Disappear        NYT        4.6.2006
http://www.nytimes.com/2006/06/04/business/yourmoney/04ebay.html

How eBay Makes Regulations Disappear

June 4, 2006
The New York Times
By KATIE HAFNER

IN quick succession one morning last month, Louisiana state legislators plowed through a long list of bills, including one to relocate the motor vehicle commission, another to regulate potentially abusive lending practices, and yet another that was the handiwork of eBay, the digital shopping mall that bills itself as "the world's online marketplace."

EBay had worked overtime to ensure the passage of Senate Bill 642, which sought to exempt some Internet transactions — like those that occur on its Web site — from Louisiana licensing requirements for businesses conducting auctions. As the State Senate's Commerce Committee convened to consider the bill, Duane Cowart, an eBay lobbyist, testified that forcing eBay "trading assistants" to fork over $300 for a license was unduly burdensome.

"What they do on the Internet is not an auction, and they are not auctioneers," Mr. Cowart told the committee. Trading assistants take items on consignment from other owners and put them up for bid on eBay, but Mr. Cowart said their activities were more akin to placing classified ads. Louisiana's senators seemed to agree with him wholeheartedly. "I think eBay is great," said one, while another regaled the room about his adventures shopping for a Plymouth Prowler on eBay. State Senator Noble E. Ellington, a Democrat who sponsored the bill at Mr. Cowart's behest, beamed as his colleagues gave the legislation their unanimous support.

EBay's lobbying activities are not confined to Louisiana. As the company has spread its innovative and influential wings across the Internet, it has also woven together a muscular and wily lobbying apparatus that spans 25 states. "It is a fast-moving train, and if you get in front of it you'll get flattened," said Sherrie Wilks, an official with Louisiana's licensing agency, who is concerned that eBay flouts regulatory oversight by persuading state legislators to take the company's side.

Regulators in other states also say that when they try to erect guidelines around eBay's activities, they quickly encounter the realities of the company's political power, raising anew the perennial questions about the proper balance among public policy, consumer protection and business interests. EBay's lobbying tactics, meanwhile, illustrate the spoils to be won when a savvy, resourceful company combines local political persuasion and grass-roots rallying to get lucrative regulatory exemptions that allow it to safeguard its profits.

EBay's efforts have been remarkably successful, and the company, which has worked tirelessly to cultivate its image as a friendly neighborhood bazaar even as it engages in hard-nosed lobbying, is not shy about boasting of its victories. Last year, Ohio passed a law that would have regulated eBay sellers, but the company moved quickly — with the help of seasoned lobbyists — to have a pre-emptive and more favorable bill passed.

"We realized what was there, and we worked with local lobbyists and were able to get the law reversed," said Tod Cohen, eBay's vice president for government relations. He oversees the company's efforts to convince state lawmakers of a core eBay belief: that state regulation can impede the flow of e-commerce.

The Federal Trade Commission, which has loosened regulations across a broad range of industries, appears to agree. Late last week, responding to a request from Mr. Ellington for an analysis of the Louisiana bill, the agency advised that the bill promoted competition and increased consumer choice.

Unlike many other Internet companies, eBay has to be especially fleet-footed when it comes to stopping what it perceives as hostile regulation, whether it involves the growing number of eBay drop-off stores — places like UPS stores and small shops where people take their goods to be sold on eBay — or the more general category of trading assistants. Anyone engaged in selling on the site depends on a relatively friction-free environment in order to make a profit. So does eBay, because its overall corporate goal is to keep sales volumes high.

At any given moment, 89 million items are for sale on eBay, and the mother ship — eBay itself — gets a fee for each successful transaction. It also charges its 193 million registered users listing fees for any products they display on the site. EBay's gross transaction fees for the first quarter of 2006 alone were more than $500 million, a 30 percent increase over the same quarter in 2005. Keeping regulators at bay, particularly those whose efforts might slow down sales traffic, is a particularly high priority for the company.

Regulations are threatening to eBay for another reason as well. They set precedents. Once a law regulating eBay sellers takes hold in one state, other states are more likely to follow suit. And not only do licenses and other regulatory requisites increase the cost of selling items on eBay, but regulations may deter entrepreneurs who are thinking of introducing eBay-based businesses. Although regulations can help rein in con artists and other fraudsters masquerading as legitimate vendors on eBay — which is why most regulators say they favor strict licensing requirements — eBay sees its online community as self-regulating.

Analysts say the company has little room to maneuver when it comes to opposing outside oversight.

"EBay doesn't have a choice," said Ina Steiner, editor of Auctionbytes.com, an online newsletter. "This is such a tight-margin, price-sensitive business that if there are excessive regulations on sellers, it will affect eBay dramatically."

Accordingly, eBay fights regulators who try to categorize it as an auction house — despite the fact that for years eBay has used the word "auction" when describing what takes place on its site. In securities filings from 1998, the year eBay went public, it said that it "pioneered online person-to-person trading by developing a Web-based community in which buyers and sellers are brought together in an efficient and entertaining auction format." In the annual report last year, eBay said it provided the "infrastructure to enable online commerce in a variety of formats, including the traditional auction platform."

Yet eBay contends that such references are informal and says that auction laws — many of them written long before the Internet and eBay even existed — should not apply to its sellers.

Chris Donlay, an eBay spokesman, said the timed auctions on eBay were fundamentally different from "someone who holds a live auction in front of an audience until he has achieved the highest price possible for the client." Instead, as the company says on its Web site, eBay merely "offers an online platform where millions of items are traded each day."

THE headquarters of the Louisiana Auctioneers Licensing Board is a modest, three-room office in Baton Rouge with two employees and a dial-up Internet connection. The agency says its mission is to protect the public from "unqualified, irresponsible or unscrupulous individuals."

Late last year, the agency's seven-member board, concerned about possible abuses, decided that eBay trading assistants doing business in Louisiana needed licenses. Last summer, Jim Steele, a retired police officer who is the agency's investigator, started paying visits to eBay sellers around Louisiana who were registered as trading assistants.

Among those visited by Mr. Steele was Cheryl Brown, who runs a small eBay business out of her modest one-story home in Hammond, about an hour's drive east of Baton Rouge. Ms. Brown keeps an eclectic mix of wares — including shoes, belts and Black & Decker laser levels — piled around a bed in a spare back bedroom. Mr. Steele arrived at Ms. Brown's door last February and told her that she needed to get an auction-business license or face a cease-and-desist order.

Ms. Brown said she was "blown away" to find herself singled out. After all, she said, her sales averaged little more than $2,000 a month. Even so, she paid $300 for the license and an additional $250 for a surety bond the licensing board required.

Ms. Brown has yet to make a single sale as a trading assistant ("I don't want to sell people's old clothing," she said) and says she would rather not have to have a license. But, she said, she also enjoys the extra credential that a license gives her. Further, she said, she believes that her transactions on eBay are, in fact, auctions. "My opinion is that eBay is the one doing the auctioning," she said. "They're in control."

Ms. Brown's opinion is shared by Brian Leleux, an eBay seller at the opposite side of the state and the opposite end of the eBay sales revenue stream. Mr. Leleux employs nearly a dozen people and sells some $120,000 each month in recliners, inflatable air beds and other goods on eBay, making him an eBay "Platinum PowerSeller." He pays eBay about $12,000 every month in listing and transaction fees and an additional $2,100 to PayPal, eBay's automated payment subsidiary.

Mr. Leleux operates his business, MassageKing.com, in a large warehouse near Lafayette, and Mr. Steele visited him there earlier this year. Mr. Leleux had signed up with eBay as a trading assistant but done very few consignment sales. Still, he paid the state's fee and applied for the license. Like Ms. Brown, Mr. Leleux said that he did not want a license but that it did give him "one more bit of legitimacy," a notion that appealed to him. And he, too, says he believes that eBay is an auction house.

Still, not every eBay trading assistant was so compliant when Mr. Steele came calling. Barry Simpson has a computer equipment store in Morgan City and sells items on eBay as a sideline. Earlier this year, Mr. Simpson said, Mr. Steele visited him and insisted that he be licensed, even after Mr. Simpson said he would prefer to stop being a trading assistant. Mr. Simpson refused to get a license and complained to eBay, after which the company stepped up its legislative push in Louisiana.

"At that point, we decided we needed to act," said Mr. Donlay, the eBay spokesman.

Mr. Simpson says he believes that complying with certain regulations just does not add up. "If someone comes in and tells me I need a license and I'm selling something for someone else, and I don't do enough of that business, I'll quit," he said.

Unlike most entrepreneurs, Mr. Simpson has a well-heeled and influential corporation — as vigilant about its own interests as it is about his — ready to take on regulators. And eBay appears to be prepared to contest regulators in almost any state where it feels that its prerogatives are threatened.

In California last year, a bill that would have subjected eBay drop-off stores to restrictions now placed on pawnbrokers died quickly after eBay executives — including Meg Whitman, the chief executive — met with leaders of the Republican caucus of the Legislature. "The Republican votes we thought we had withered away," said Leland Y. Yee, the Democratic California assemblyman who sponsored the bill.

Last year, after eBay waged a protracted lobbying effort in Illinois, the state revised its laws to allow Internet auction sites to compete with licensed ticket brokers and sell tickets for more than their face value. New York and Florida have passed similar amendments after eBay lobbied for changes.

Auctioneering laws like those in Louisiana are another focus for eBay. In Maine and Tennessee, after eBay intervened, laws were changed to exempt Internet auctions from licensing requirements.

All of this is just a matter of common sense, according to some people involved in the debate. Ms. Steiner, the newsletter editor, says that many eBay sellers do their trading part time or in addition to another job. "If they are overregulated by licensing fees," she said, "they will abandon their eBay business." For its part, eBay is leaving little to chance.

Over the last eight years, eBay has built a stable of local lobbyists in 25 states. Those lobbyists — who work on retainers that can reach $10,000 a month, according to state lobbying registration documents — have also made contributions to individual politicians who sponsor bills favorable to eBay. For example, Mr. Cowart's political action committee in Louisiana contributed $2,000 to Mr. Ellington in 2005. And eBay lobbyists in Illinois have contributed thousands of dollars to politicians who supported the ticket-scalping bill.

EBay combines its politics-as-usual approach with more creative grass-roots tactics. It keeps its membership informed about regulatory issues as soon as they crop up, using mass e-mail messages and a year-old Web-based initiative called "eBay Main Street," which sends out "legislative alerts" and provides letters that users can send to government officials. Bowing to the traditions of ward politicos adept at turning out the vote, eBay routinely summons its sellers and sends them on personal visits to statehouses around the country to meet with legislators.

"What better way to get a response than to get to the grass roots, which is eBay's members," said Kathy Greer, an eBay seller in New Hampshire, where there has been continuing debate about regulating eBay sellers. "Let them go out and fight your battle."

WHEN eBay sent e-mail messages in April to its Louisiana members to tell them their livelihoods could be threatened by the state's intention to require licenses — and urged them to take action — Ms. Wilks, the licensing agency's sole administrator, was besieged with phone calls and e-mail messages from angry eBay sellers. After she explained that the board intended to require that only about 460 registered eBay trading assistants be licensed, the hubbub died down.

But some sellers who joined in the campaign say they felt that eBay had misled them by making it appear that the proposed regulations were more sweeping. "They approached it in a very underhanded way," said Stephen Dille, a Baton Rouge accountant who sells items intermittently on eBay but received the alert and sent an e-mail message to Ms. Wilks. "I always thought of them as a good company, but now I'm questioning their culture, and their ethics."

Anna Dow, a lawyer for the Louisiana licensing board, put it more forcefully. "They're being deliberately misrepresentational of what's going on," she said.

For their part, eBay officials say that the licensing board has repeatedly refused to give the company a clear answer on whom it plans to regulate, so it has sent e-mail messages to a wide variety of recipients. EBay's anti-regulatory stance extends to storefront drop-off centers, which have been proliferating rapidly around the country. Vendors welcome the company's help.

Debbie Gordon, the owner of Snappy Auctions, a nationwide chain of eBay drop-off stores that is based in Nashville, says she believes that all eBay consignment stores should follow certain practices to make sure that customers are protected. But she was outraged two years ago when Tennessee regulators told her that she would have to get an auctioneer's license and attend a week of auctioneering school.

Ms. Gordon paid $700 for a license and other fees and spent what she called "five days I'll never get back" at a training course for auctioneers. "Ninety-nine percent of the course had nothing to do with our business," she recalled. "It was about traditional auctioneering, cattle and land and firearms."

Soon after a local newspaper publicized Ms. Gordon's experience, eBay stepped in. It convinced lawmakers that not only did outfits like Ms. Gordon's have no relationship to hog calling, but also that because of the timed nature of an eBay auction, the transactions were altogether different and thus not subject to auctioneering laws.

"We fundamentally believe that auctioneering laws are not applicable, are detrimental and are being used to harm competition," said Mr. Cohen of eBay in an interview. "They protect entrenched incumbents rather than enhancing competition, consumer choice and entrepreneurial spirit."

BUT Ms. Wilks of the Louisiana licensing board says that if trading assistants on eBay are not required to have licenses, people like Linda Williams will have nowhere to turn. Earlier this year, Ms. Williams, who lives near Baton Rouge, gave an antique couch to someone to sell on consignment on eBay, she said. The couch was sold, Ms. Williams said, but she did not see a penny of the proceeds.

Ms. Williams called the licensing board, which found that the seller was an auctioneer who was already facing a separate investigation. A bank seized his assets — which included a warehouse filled with items he had taken on consignment from dozens of people, including Ms. Williams — and his license was revoked, according to Ms. Wilks and Ms. Dow. "They were very helpful, and told me to call any time," said Ms. Williams of her experience with the licensing board. "If it wasn't for them, there would be nothing I could do."

EBay executives say that stories like this do not mean that more laws are required. They point out that law enforcement agencies are set up to investigate Internet fraud. "Regulators regulate — that is their job," Mr. Cohen said. "But we have an obligation as a company to protect our community."

Shortly after the first legislative hearing on Senate Bill 642 in Louisiana, eBay sent out another e-mail alert, this time to its biggest sellers in the state. The company asked sellers to attend a meeting late last month to update them on the bill and to brief them on other potential impediments to their businesses. Some 50 sellers from around the state attended the meeting at a Baton Rouge Marriott. Michelle Peacock, eBay's director of state government relations, flew in from California to join Mr. Cowart, the lobbyist. Large colorful billboards outlining "barriers to e-commerce" decorated the room.

Ms. Peacock discussed the proposed revisions to Louisiana's auctioneer statute and talked about a bill supporting the elimination of restrictions on the resale of tickets on the Internet. After the meeting, several attendees piled onto a shuttle bus that eBay provided and drove to the Capitol to talk with their state representatives about Senate Bill 642.

The next day, the Commerce Committee of the Louisiana House of Representatives took up the bill, which the State Senate had already passed. The bill received unanimous support in the committee. Mr. Ellington, the state senator, said in an interview last week that he expected to see the bill pass the full House this week — without a hitch.

Iris Smalbrugge contributed reporting for this article.

    How eBay Makes Regulations Disappear, NYT, 4.6.2006, http://www.nytimes.com/2006/06/04/business/yourmoney/04ebay.html