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Old 21-09-06, 09:45 AM   #1
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Default Peer-To-Peer News - The Week In Review - September 23rd, '06

"I have managed to get people talking about the Internet because of something interesting rather than pedophiles and viruses." – Luca Mori

"It was a breathtakingly incompetent investigation ... a disaster." – Marlys Edwardh

"It just goes to show in a market dominated by overlapping and incompatible [music download] services there is just not going to be room for every player. There is no way the market will be able to support all these closed ecosystems." – Michael Gartenberg

"We think this is a really good experiment, because copy protection is not doing anything to stop people from stealing when you can just get unprotected tracks off of a CD or get music illegally online. We think it's good to make it easy for consumers to get digital music on whatever device they want and for companies like us to not be reliant on one particular technology company for how our consumers can access music." – Dave Goldberg

"During the early tapings of 'Soap,' Mr. Johnson recalled, the boom operator kept turning the microphone toward the puppet for his lines." – Jesse Green

"They combed out Ann Miller’s hair and found the Lindbergh baby." – Charlie Hauck

"I stopped her on the street because I recognized her from the gym. She was the one sitting around naked in the locker room the longest. I remember looking at her and thinking that with a body like that, I would too." –Amy Arbus

September 23rd, '06

Voters Keelhaul Pirate Party
Quinn Norton

The Swedish national elections on Sunday ushered in a huge shift in the political landscape of that country -- but failed to bring the copyright reform movement its first political victory.

The Pirate Party not only failed to score the 4 percent required for a seat in Sweden's Parliament, but appears to have missed the 1 percent that would have afforded the party state assistance with printing ballots and funding staff in the next election.

Final numbers won't be in until Wednesday the 20th, but the Pirate Party appears to be pulling .62 percent of the vote, or about 33,000 votes, according to party leader Rick Falkvinge. "This percentage may change somewhat as more districts are counted ... but I don't expect it to change to a significantly different number."

The results were surprising and disappointing for the party, which has been bathed in online buzz since it was founded. But U.S. and other elections have shown that online momentum often fails to turn up political results.

The Pirate Party's single-issue platform includes a 5-year limit to commercial copyright, the abolition of patents and stronger privacy protections online.

Falkvinge says the party plans to marshal on. "Morale in the group is good and we are learning from this experience, as we are taking new aims for the European Union election in 2009 and the next Swedish election in 2010," says Falkvinge

The ruling Social Democrats lost power to the Moderate Party in a razor-thin election result that centered around economic issues, such as unemployment and reform of the welfare system. The close election likely diverted some sympathetic voters back into traditional voting blocks.

"Politics that limits itself to certain questions, and specifically takes no standpoint in others, is probably very hard," says Rasmus Fleischer, of Piratbyran -- the Swedish pro-piracy advocacy group. Fleischer doesn't believe the election result will deeply impact copyright reform movements in Sweden or abroad. "Lots of people have joined the Pirate Party based on a general will to act, to do something for a changed copyright climate, and the election campaign has been the big thing... I'm quite sure that these questions will not cool down in Sweden."

Many in the piracy movement won't be sad to see the backside of the Social Democrats, who expanded enforcement against copyright violators, resulting in this year's raid against the Pirate Bay torrent site and a scandal over American copyright holders' influence with the government.

"I think that copyright-related policy has played some part in the election, contributing to a general dislike of the Social Democratic government," says Fleischer. But how the next government will act on these issues is anyone's guess.

DRM is Old and Busted, According to BitTorrent Cofounder
Jacqui Cheng

BitTorrent cofounder Ashwin Navin believes that DRM is not the answer to legal online video services despite his company's getting ready to launch its own DRM-based movie service in the near future. In an interview with IDG News Service, Navin said that he believes the only reason DRM is so widespread is that the industry is immature and doesn't know how else to protect their profit margins.

Navin says that DRMed files are bad for both consumers and the content providers because "typically a DRM ties a user to one hardware platform," citing iTunes for not allowing consumers to transfer purchases between platforms or hardware environments. TV and movie content providers don't really want to limit users so strictly, he believes, because they want their content to be consumed by as many people on as many platforms as possible.

So what's his solution? Advertising-supported video downloads. This would allow providers to freely distribute videos to everyone, presumably low-cost or free of charge to the consumer, in order to increase their reach without losing money to file sharing. Sound a lot like regular old network television? It is, except via the Internet. Navin says that he sees this as the future for legal downloads, and BitTorrent hopes to eventually help "drive that evolution wherever we can."

For now, though, BitTorrent is sticking to the current industry standby of DRMed downloads to stay current with competition. BitTorrent's movie service will launch in the US later this year and go international sometime next year. He indicates that the service will use BitTorrent's seeding technology to help users download content much quicker, hoping that this will be the feature—along with unique content—that will lure users over to BitTorrent's service.

Navin also mentions that he is working with hardware makers to create devices that will be able to torrent files from the Internet, saying that he hopes to get hardware-makers and content providers to get in on his platform soon. For now, DRM is a must-have for video content providers and Navin is confident that BitTorrent's service will be successful.

Microsoft Media Player Shreds Your Rights

No more backups, or Tivo
Charlie Demerjian

THINK DRM WAS bad already? Think I was joking when I said the plan was to start with barely tolerable incursions on your rights, then turn the thumbscrews? Welcome to Windows Media Player 11, and the rights get chipped away a lot more. Get used to the feeling, if you buy DRM infected media, you will only have this happen with increasing rapidity.

One of the problems with WiMP11 is licensing and backing it up. If you buy media with DRM infections, you can't move the files from PC to PC, or at least you can't and have them play on the new box. If you want the grand privilege of moving that content, you need to get the approval of the content mafia, sign your life away, and use the tools they give you. If you want to do it in other ways, you are either a lawbreaker or following the advice of J Allard. Wait, same thing.

So, in WiMP10, you just backed up your licenses, and stored them in a safe place. Buying DRM infections gets you a bunch of bits and a promise not to sue, but really nothing more. The content mafia will do anything in its power, from buying government to rootkitting you in order to protect those bits, and backing them up leaves a minor loophole while affording the user a whole lot of protection.

Guess which one wins, minor loophole or major consumer rights? Yes, WiMP11 will no longer allow you the privilege of backing up your licenses, they are tied to a single device, and if you lose it, you are really SOL. Remember that feeling I mentioned earlier? This is nothing less than a civil rights coup, and most people are dumb enough to let it happen.

Read the links, the entire page is scary as hell, but the licensing part takes the cake. "Windows Media Player 11 does not permit you to back up your media usage rights (previously known as licenses)", Wow, new terminology, old idea, you are a wallet with legs waiting to be raped. "The store might limit the number of times that you can restore your rights or limit the number of computers on which can use the songs or videos that you obtain from them. Some stores do not permit you to restore media usage rights at all." Translation, not our problem, and get bent, we got your cash.

But it gets worse. If you rip your own CDs, WiMP11 will take your rights away too. If the 'Copy protect music' option is turned on, well, I can't top their 1984 wording. "If the file is a song you ripped from a CD with the Copy protect music option turned on, you might be able to restore your usage rights by playing the file. You will be prompted to connect to a Microsoft Web page that explains how to restore your rights a limited number of times." This says to me it will keep track of your ripping externally, and remove your rights whether or not you ask it to. Can you think of a reason you would need to connect to MS for permission to play the songs you ripped from you own CDs? How long do you think it will be before a service pack, masquerading as a 'critical security patch' takes away the optional part of the 'copy protection'? Now do you understand why they have been testing the waters on WiMP phoning home? Think their firewall will stop it even if you ask?

Then when you go down on the page a bit, it goes on to show that it guts Tivo capabilities. After three days, it kills your recordings for you, how thoughtful of them. Going away for a week? Tough, your rights are inconvenient to their profits, so they have to go. "Recorded TV shows that are protected with media usage rights, such as some TV content recorded on premium channels, will not play back after 3 days when Windows Media Player 11 Beta 2 for Windows XP is installed on Windows XP Media Center Edition 2005. No known workaround to resolve this issue exists at this time." Workaround my *ss, this is wholesale rights removal by design.

What WiMP11 represents is one of the biggest thefts of your rights that I can think of. MS planned this, pushed the various pieces slowly, and this is the first big hammer to drop. Your rights, the promises they made, and anything else that gets in the way of the content mafia making yet more money gets thrown out. Why? Greed. Your rights? History. You were dumb enough to let it happen, don't say I didn't warn you. µ

Ex-RIAA agency "can't find" artists it owes money to, like Public Enemy Fred von Lohmann sez,
Cory Doctorow

SoundExchange (which is in charge of collecting and distributing royalties collected from satellite radio and webcasting) can't seem to locate the artists to whom these royalties are to be paid. If the monies are not disbursed, SoundExchange gets to keep them. Apparently SoundExchange was worried about publishing the list for fear that "middlemen" would try to swipe a piece of the action for connecting artists with their royalties. (Did they ever think to reach out to the fans?)

They finally published a list of the artists they "can't find."

Check out all the major label artists they can't find:

Cassandra Wilson (Blue Note)?
J. J. Cale (Mercury)?
Jane Siberry (Warner)?
Jeff Buckley (Columbia Records -- they're still putting out his stuff posthumously, with help from his mother!)?
Booker T & the MGs?!!!
Public Enemy? !!!!!!

Not to mention major indie artists like:

Pizzicato Five
Pete Rock

And they can't find Public Image Ltd, despite the fact that they found Johnny Rotten's "other band," the Sex Pistols? They can't seem to find "Neko Case & Her Boyfriends", despite the fact that they seem to have found Neko Case?

The only silver lining here is that to look at the list is to realize that webcasters are bringing real musical diversity back to America -- it's a much richer list than you'd get by aggregating playlists from FM radio!

For SoundExchange's sake, I hope there's a reasonable explanation for this.

Update 2: Fred sez, "Turns out SoundExchange WAS part of the RIAA until 2003. Now it's independent -- although each of the major labels has a board seat. Anyhow, the point is the same -- SoundExchange certainly has deep connections with the major label establishment, so. Here's the FAQ re SoundExchange.

Update: Laura sends in links to other pools of unclaimed royalties for artists: EMI, EMI music publishing, Sony BMG, Universal Music, Harry Fox, CMRRA

Copyright Hindering Scholarship In The Humanities And Social Sciences
Press Release

A report from the British Academy, launched on 18 September, expresses fears that the copyright system may in important respects be impeding, rather than stimulating, the production of new ideas and new scholarship in the humanities and social sciences.

It is in the nature of creative activity and scholarship that original material builds on what has gone before – ‘if I have seen further, it is because I had stood on the shoulders of giants’ – therefore provisions that are overly protective of the rights of existing ideas may inhibit the development of new ones.

Existing UK law provides exemption from copyright for fair dealing with material for purposes of private study and non-commercial research, and for criticism and review. “There is, however, little clarity about the precise scope of these exemptions, and an absence of case law” said John Kay, who is Chair of the Working Group which oversaw the Review. “Publishers are risk-averse, and themselves defensive of existing copyrights.”

The situation is aggravated by the increasingly aggressive defence of copyright by commercial rights holders, and the growing role – most of all in music – of media businesses with no interest in or understanding of the needs of scholarship. It is also aggravated by the unsatisfactory EU Database Directive, which is at once vague and wide-ranging, and by the development of digital rights management systems, which may enable publishers to use technology to circumvent the exceptions to copyright which are contained in current legislation.

The Academy publishes with the report a draft set of guidelines for Fellows and scholars on their rights and duties under copyright legislation. They include

• authors and producers of original creative material should understand that their interests in copyright are not necessarily identical with those of publishers and should not rely on publishers to protect them
• the law should be clarified - statutorily if necessary – to make clear that the use of copyright material in the normal course of scholarly research in universities and other public research institutions is covered by the exemptions from the copyright act.
• publishers should not be able to use legal or technological protection through digital rights management systems to circumvent copyright exemptions
• the growth of digital databases should be monitored to ensure that ready access continues to be available for the purposes of scholarship

This report parallels a report from the Royal Society, Keeping science open: the effects of intellectual property on the conduct of science (2003), which expresses related worries about the ways in which intellectual property, its interpretation and its use, impact on the progress of science.

Tech Manufacturers Rally Against Net Neutrality
Anne Broache

Producers of networking hardware and applications gathered around a podium at the U.S. Capitol on Tuesday with a single message: Not all "high-tech" companies support so-called Net neutrality legislation.

At a press conference here, more than a dozen representatives from companies like Corning, Tyco and Motorola urged the U.S. Senate to pass a massive communications bill--attacked by Net neutrality fans for failing to ensure nondiscriminatory treatment of Internet content--as soon as possible.

Rep. Bobby Rush, an Illinois Democrat and a primary sponsor of a narrower House of Representatives measure approved in June by a 321 to 101 vote, joined the industry representatives in calling for Senate action "right away." He stressed that the legislation will "deliver much-needed relief to cable rates" sought by his Chicago-area constituents.

Supporters say the Senate measure, which was approved by a committee vote in June but has since gotten hung up chiefly over Net neutrality, is crucial because it would make it easier for new video service providers--such as telephone companies hoping to roll out IPTV--to enter the market, increase competition for cable, and thus spur lower prices. Among other benefits, they say, it would also permit municipalities to offer their own broadband services.

"There are a lot of good things in this bill," Tim Regan, a vice president with fiber optic cable manufacturer Corning Inc., said of the Senate's efforts. "Let's not let this get tied up over the most contentious thing out there, which is Net neutrality."

"Don't be confused by these spurious complaints about Net neutrality," Rush said. "Net neutrality is a solution in search of a problem."

There are some Net neutrality rules in the Senate bill that would grant more authority to the Federal Communications Commission, but not as much as companies like Google and eBay would like.

Rush's stance differs from that of many of his Democratic colleagues. He told reporters after the press conference that no new legislation is needed both because no problem exists and the FCC has shown it can quickly deal with any complaints. In a 2005 case, a small telephone company agreed to stop blocking voice over Internet Protocol calls after the regulators stepped in.

Not to be upstaged by the recent lobbying efforts of Net neutrality fans, opponents of the regulations have stepped up their activities this week.

Opponents ramping up

On Monday, the Senate Commerce Committee's Republican members, who generally oppose protections sought by Internet companies and consumer groups, presented the findings of a poll of 800 registered voters in Pennsylvania and Ohio. The survey found that 91 percent of respondents had never heard of Net neutrality, although 78 percent said it was important to enact a "consumer bill of rights" that guarantees them full access to legal Internet content and prohibits providers from blocking or interfering with the data they send and receive.

In connection with Tuesday's press conference, more than 100 companies from the networking and communications sector, including Cisco Systems, Nortel Networks and Qualcomm, also signed their names to a letter addressed to Senate Majority Leader Bill Frist and Democratic Leader Harry Reid. The one-page document encouraged them to schedule a vote "in the very near future," adding that it was "too soon to enact network neutrality legislation."

The "consumer bill of rights" approach embedded in the Senate bill is sufficient to protect consumer concerns over access to Web content and services, the companies said. Opponents of the provision, such as Google, Amazon.com and a broad coalition of consumer and advocacy groups, have said it falls short because it would not restrict network operators like Verizon and AT&T from favoring their own content or brokering deals with Internet content companies for special treatment, potentially squeezing out garage innovators who can't afford to pay for such perks.

An aide to Frist said Tuesday that it remains unclear when a vote will be scheduled. She said Frist is still waiting on Senate Commerce Committee Chairman Ted Stevens, the communications bill's chief sponsor, to confirm he has the 60 votes needed to prevent a filibuster.

Kazaa: Hope for a Final Ruling
Simon Hayes

LAWYERS for the recording industry and two senior Sharman Networks and Altnet executives will try to reach a settlement to the last round of the Kazaa legal action today, months after the bulk of the litigation was settled for $US115 million ($153 million).

Sharman Networks, which runs the Kazaa filesharing system, settled the music piracy case with the record companies back in July, but action continues against Sharman chief technology officer Phil Morle, and Anthony Rose, chief technology officer of the company's US business partner Altnet.

The recording industry is seeking undertakings and costs from the two.

The music industry appealed against Justice Wilcox's decision late last year to dismiss with costs the case against Mr Morle and Mr Rose, and the parties did not reach an agreement when the action against Sharman was settled.

Lawyers will meet today for a mediation hearing.

Mr Rose said he had spent more than $1 million defending the case.

"It came as a shock to discover that rather than paying the money that they were ordered by the court to pay me (in legal costs), the Australian music industry lawyers now want money from me," he said.

"As part of the global settlement with the music companies, Sharman and Altnet paid the music companies more than $150 million.

"One would have thought that this would have covered their legal bills.

"Ultimately, this is all a local sideshow.

"Altnet and the music companies are now working together globally as partners, and we are preparing for the next generation of our licensed content distribution business.

"Having been completely exonerated by the court, I look forward to a successful mediation and finalising this outstanding litigation."

Mr Morle was not available for comment.

A spokeswoman for the record companies said they were hopeful of reaching a settlement. "Anthony Rose and Phil Morle elected not to be part of the negotiated settlement with the record companies and Kazaa," she said.

"The record companies are seeking a restraint on Mr Rose and Mr Morle not to infringe copyright. This is the same restraint agreed to by the other parties.

"We hope mediation will achieve a settlement that is acceptable to all parties."

Altnet said last month that it would market an anti-piracy tool that could be applied to a range of peer-to-peer networks.

The company's Global File Registry uses special patented technology to identify pirated files and substitute them with an offer to sell a licensed track instead.

Global File Registry has been endorsed by a number of entertainment industry lobby groups, including the Motion Picture Association of America and the International Federation of Phonographic Industries.

For sale by owner

A Needy Napster Searches for Takers
Arik Hesseldahl

Napster, the subscription music-download service, is looking for a buyer. The company—which got its start as a free music-download, file-sharing site—said Sept. 18 that it has hired UBS Investment Bank to find a major strategic partner or to be acquired completely.

The possible sale is the latest sign of the pressure facing music-download sites, many of which are allying with makers of music-playing consumer electronics devices. Napster lags far behind market leader Apple, with its iPod-iTunes combination, and RealNetworks, owner of the Rhapsody service. Microsoft plans its own music player, called Zune, and download service later this year.

Napster has appeared ripe for a buyout since wireless phone giant Nokia acquired Loudeye in August. "It just goes to show in a market dominated by overlapping and incompatible services there is just not going to be room for every player," says Michael Gartenberg, a digital media analyst with Jupiter Research. He says that between Apple, Real and SanDisk, Nokia and Loudeye, Microsoft, and Sony's download service, there are no fewer than five distinct and incompatible music services, and that more may emerge before the end of the year. "There is no way the market will be able to support all these closed ecosystems," he said.

Shaky Emergence.

Napster sought bankruptcy protection in 2002 amid pressure from music labels. It re-emerged on the digital music scene after Roxio, a digital media software concern (now a unit of Sonic Solutions), acquired the rights to the name and the pressplay music download service, which had been a joint venture of Universal Music and Sony Music Entertainment.

The service was relaunched under the well-known but also well-worn name of Napster 2.0 in October, 2003. Reaction to the launch was underwhelming, and it showed little real business. The main reason for its failure to gain much traction was that by the time of its launch, Apple Computer's iTunes Music Store had already been in business for six months, selling a million songs.

Since then, RealNetworks' Rhapsody service has emerged as a solid No. 2 to iTunes, while other online media outlets, including Yahoo! and Time Warner's AOL, have built music download services in partnership with privately held MusicNet.

Samsung Interested?

Possible acquirers might include Creative, which is finding its role as an also-ran vendor of digital music and media players under attack by SanDisk and could use its own service to integrate with its players. Or with attention on music downloads quickly shifting away from dedicated players toward mobile phones, wireless phone manufacturers such as Motorola or South Korean electronics giant Samsung might show interest. Samsung not only sells wireless phones but digital music players as well, and on Sept. 1 announced a plan to launch a music download service aimed at markets in Britain, France, and Germany in partnership with MusicNet.

Samsung and Napster have a history of partnerships, including the creation of a Samsung-made, Napster-branded player launched in 2003. Other partnerships with Blockbuster, XM Satellite Radio, and Ericsson all showed results, but failed to give Napster the substantial boost in subscriber base it has been seeking.

As of the quarter ended June 30, Napster had sales of $28.1 million with a $9.8 million loss. It reported a subscriber base of 512,000, compared with 1.61 million subscribers to RealNetworks' Rhapsody service.

Yahoo Tests 'Right' to MP3 Downloads

Netco puts McCartney album online
Ben Fritz

Yahoo! is looking to end Apple's and Microsoft's dominance of the technology behind online music.

In a first for mainstream pop music, Yahoo! will sell Jesse McCartney's new album "Right Where You Want Me," from Disney-owned Hollywood Records, in the unprotected MP3 format.

That means consumers will be able to play it on any digital music device, including Apple's iPod. MP3 files are the only type that will play on an iPod besides those downloaded from iTunes.

But because they have no copy protection, MP3 files can be easily traded on peer-to-peer networks, emailed to friends or burned onto an endless number of CDs.

"We're trying to be realistic," said Ken Bunt, senior VP of marketing at Hollywood Records. "Jesse's single is already online and we haven't put it out. Piracy happens regardless of what we do. So we're going to see how Jesse's album goes (as an MP3) and then decide on others going forward."

Yahoo! previously sold an exclusive version of Jessica Simpson song "A Public Affair" as an MP3, but it has never offered a major-label album for sale elsewhere without copy restriction, nor have any of the other digital musicstores (Daily Variety, July 20).

Labels and Netcos will be watching sales of the album, which Yahoo! will promote heavily throughout its network of Web sites to see whether consumers are more interested in buying unprotected MP3 files and whether it has any impact on piracy.

Yahoo! only has rights from Hollywood to sell the album in its entirety, for $9.99, not by individual track. ITunes and other musicstores also will sell "Right Where You Want Me" with copy protection.

Since online music sales started, diskeries have insisted on copy protection in hopes of restricting piracy and promoting Internet sales.

Yahoo!, which has the Net's most popular music Web site but hasn't become a significant player in digital music sales, has been pushing for labels to change their policy and sell music in MP3 format. If it gets more labels on board, Yahoo! could reach the vast audience of iPod owners, as well as those sporting Microsoft's soon-to-launch Zune, which both play only MP3s and songs downloaded from their partner musicstores.

"We think this is a really good experiment, because copy protection is not doing anything to stop people from stealing when you can just get unprotected tracks off of a CD or get music illegally online," said Yahoo! Music topper Dave Goldberg. "We think it's good to make it easy for consumers to get digital music on whatever device they want and for companies like us to not be reliant on one particular technology company for how our consumers can access music."

Because Apple doesn't license the copy-protection technology behind iTunes, musicstores like Yahoo!, Napster and Rhapsody that want to sell major-label music have to use Microsoft's alternative.

EMusic is currently the only online musicstore that sells songs in MP3 format, but it specializes in indie music and doesn't have any major-label tracks.

Philly Orchestra Opens Online Store

The Philadelphia Orchestra will become the first major U.S. orchestra to open its own online music store for consumers who want to download performances.

While other orchestras make their performances available online, they have done so through third-party distributors. The Philadelphia Orchestra will be the first in the U.S. to sell the downloads directly through its Web site, officials said.

"It's one more way we can address the changing media landscape and get the orchestra sound out there," spokeswoman Katherine Blodgett said Thursday.

Prices for MP3-format recordings range from about $5 for major works to $10 for full concerts. A CD-quality format called FLAC will cost a bit more.
The online store comes after the orchestra and its unionized musicians resolved a disagreement over fees for concert recordings and for radio broadcasts, which have resumed after a nearly 10-year absence.

The orchestra expects to offer at least a dozen new downloads each season.


On the Net: http://www.thephiladelphiaorchestra.com

Free, Legal and Ignored

Colleges offer music downloads, but their students just say no; too many strings attached
Nick Timiraos

As a student at Cornell University, Angelo Petrigh had access to free online music via a legal music-downloading service his school provided. Yet the 21-year-old still turned to illegal file-sharing programs.

The reason: While Cornell's online music program, through Napster, gave him and other students free, legal downloads, the email introducing the service explained that students could keep their songs only until they graduated. "After I read that, I decided I didn't want to even try it," says Mr. Petrigh, who will be a senior in the fall at the Ithaca, N.Y., school.

College students don't turn down much that's free. But when it comes to online music, even free hasn't been enough to persuade many students to use such digital download services as Napster, Rhapsody, Ruckus and Cdigix. As a result, some schools have dropped their services, and others are considering doing so or have switched to other providers.

To stop students from pirating music, more than 120 colleges and universities have tried providing free or subsidized access to the legal subscription services over campus networks in the past few years. About 7% of all four-year schools and 31% of private research universities provided one of the legal downloading services, according to a 2005 survey of 500 schools by the Campus Computing Project, a nonprofit that studies how colleges use information technology. Universities typically pay for the services, some with private grants and others through student fees. While a typical monthly subscription to Napster is $9.95, the schools have been able to cut special deals, funded in part by record companies.

Purdue University officials say that lower-than-expected demand among its students stems in part from all the frustrating restrictions that accompany legal downloading. Students at the West Lafayette, Ind., school can play songs free on their laptops but have to pay to burn songs onto CDs or load them onto a digital music device.

There's also the problem of compatibility: The services won't run on Apple Computer Inc. computers, which are owned by 19% of college students, according to a 2006 survey of 1,200 students by the research group Student Monitor. In addition, the files won't play on Apple iPods, which are owned by 42% of college students, according to the survey.

"People still want to have a music collection. Music listeners like owning their music, not renting," says Bill Goodwin, 21, who graduated in May from the University of Southern California in Los Angeles. USC decided last year that it was finished with Napster after fewer than 500 students signed up, and it moved to Ruckus, hoping students would find that service more appealing.

Meanwhile, both Cornell and Purdue will no longer offer their students free music next year. An anonymous donor had paid for Cornell to offer Napster for two years, but the student government passed on a chance to keep the service by charging students a fee. "There hasn't been an overwhelming response to keep it," says Kwame Thomison, Cornell's student assembly president. "Students that enjoyed the service enough can pay for it themselves."

The number of students using Napster at George Washington University dropped by more than half between the first and second year, from one-third to one-seventh of eligible users. Alexa Kim, who oversees the Washington school's program, attributes the higher use at the start to the service's novelty and to press attention during the inaugural year. She adds that the university hasn't decided if it will renew its contract.

Colleges started offering the services in part because they were concerned that the recording industry might try to hold them liable for their students' copyright violations. So far no schools have been sued by the recording industry.

Universities also have another reason for reducing illegal downloading: The large amount of bandwidth used by movie and music downloads chokes universities' computer networks. The subscription services complement university filtering programs that can identify users who are misusing school networks. "The bandwidth that I recovered saved us $75,000 a year in network costs," says Matthew Jett Hall, assistant vice chancellor at Vanderbilt University in Nashville, Tenn. The university's Napster program requires users to pay $2 a month for unlimited downloads.

The Recording Industry Association of America says it has been happy with the progress the program has made so far. "Universities tend to move not all that quick to do things like this, so it's really quite an achievement," says RIAA President Cary Sherman.

Some schools that don't offer free downloads dismiss the subscription services as too costly for the results they achieve, especially because so many students now buy music from Apple's iTunes Music Store. "We were not in a position to offer an alternative to iTunes," says Lev Gonick, the chief information officer at Case Western Reserve University in Cleveland. "The alternatives looked like they had more sizzle than steak."

There is also little consensus among administrators about how successful the services have been in eliminating piracy. Although some say complaints from the recording industry have dropped sharply, no one can tell if that's because fewer students are engaging in illegal file-sharing or if the industry simply doesn't want to go after schools that are spending money to combat the problem. "The RIAA's push to buy into these services strikes me as protection money. Buy in and we'll protect you from our lawsuits," says Kenneth C. Green, the Campus Computing Project's director.

The RIAA denies the charge. "We do sue students and send takedown notices to universities that have legal services all the time," says Mr. Sherman. Universities have a particular responsibility to teach students the value of intellectual property, he adds, because they are "probably the No. 1 creator of intellectual property." And he disputes the idea that the subscription services have fallen out of favor. The number of campuses that subscribe will increase "pretty significantly" in the fall, he says.

Even at schools where more than half of the students use the services, few choose to buy songs. Only 2% of students at the University of Rochester in New York reported buying a song that they had downloaded from Napster in a fall 2005 survey of about 700 students. In the same survey, 10% said they downloaded songs from other services -- not necessarily legally -- after finding one they liked on Napster.

"There isn't that much we can do," acknowledges Aileen Atkins, Napster's senior vice president for business affairs and general counsel. "If they have an iPod, they're going to buy it on iTunes. It's a fact of life."

iPod Fans 'Shunning iTunes Store'

Despite the success of Apple iTunes, few people stock their iPod with tracks from the online store, reports a study.

The Jupiter Research report reveals that, on average, only 20 of the tracks on a iPod will be from the iTunes shop.

Far more important to iPod owners, said the study, was free music ripped from CDs someone already owned or acquired from file-sharing sites.

The report's authors claimed their findings had profound implications for the future of the online music market.

Ripped disks

They estimate that during 2006 Europeans will spend more than 385m euros (£260m) on digital music - the majority of this spending will be on tracks from Apple's iTunes store.

However, the report into the habits of iPod users reveals that 83% of iPod owners do not buy digital music regularly. The minority, 17%, buy and download music, usually single tracks, at least once per month.

On average, the study reports, only 5% of the music on an iPod will be bought from online music stores. The rest will be from CDs the owner of an MP3 player already has or tracks they have downloaded from file-sharing sites.

The report warned against simple characterisations of the music-buying public that divide people into those that pay and those that pirate.

"It is not instructive to think of portable media player owners, nor iPod owners specifically, as homogenous groups," warned the report.

It said: "Digital music buyers do not necessarily stop file-sharing upon buying legally."

The importance of "free" to digital music fans should not be underestimated, warned the report, and should be a factor for newer digital music firms, such as Spiral Frog, which use an ad-supported model.

Perhaps the only salient characteristic shared by all owners of portable music players was that they were more likely to buy more music - especially CDs.

"Digital music purchasing has not yet fundamentally changed the way in which digital music customers buy music," read the report.



You can call college students a lot of things - including stupid. But apparently we're not stupid enough to embrace crappy music services when we can do better using P2P file sharing software.

The Missing Sony Exhibit
Michael Geist

The Canadian Sony rootkit class action settlement heads to court next week amid mounting questions about the deal. The EFF calls attention to a number of missing provisions, including no security reviews and no ongoing obligations to provide uninstallers for the rootkit. There is also a financial hit in Canada, with Canadian consumers receiving roughly ten percent less than U.S. consumers due to currency differences.

By far the biggest difference, however, is that the U.S. agreement is subject to injunctive relief linked to actions brought by several U.S. agencies and attorneys general. The Canadian agreement, by contrast does not include such relief. The justification for this difference is contained in Exhibit C, the only key settlement document that Sony has not provided to the public.

I have now obtained a copy of Exhibit C, which is an affidavit from Christine J. Prudham, Vice President, Legal and Business Affairs of Sony BMG Canada (Prudham is the same person who appeared today at the Copyright Board discussing how Sony BMG Canada released just 16 new Canadian records last year). The affidavit seeks to explain why Sony BMG Canada believes it is appropriate to grant Canadian consumers fewer rights than their U.S. counterparts. While there is the suggestion that Canadians would benefit indirectly from a U.S. injunction, the heart of the argument revolves around a series of copyright-related arguments that are utterly without merit. First, Prudham expresses concern that copyright is a federal matter and that the class action is being heard by a provincial court. This makes no sense - there is concurrent jurisdiction over copyrights (the Robertson v. Thompson copyright case currently before the Supreme Court originated in provincial court) but, more importantly, the case isn't about copyright but rather consumer protection, contractual issues, and privacy.

Second, Prudham argues that there is currently a "legal vacuum around TPMs in Canada", concluding that "Sony BMG Canada is not willing to potentially prejudice itself by agreeing to the Injunctive Provisions in the Canadian Agreement." This argument is simply embarrassing - there is no legal vacuum around TPMs in Canada. While Canada does not have anti-circumvention legislation, this is not a legal vacuum and is in no way relevant to this consumer class action lawsuit. The prejudice that Prudham refers to is not legal prejudice, but rather the "political prejudice" that will arise when Sony appears before a parliamentary committee discussing anti-circumvention legislation and is asked about the $25 million settlement arising from the rootkit fiasco and the fact that the company is subject to a potential injunction over the use of the technologies that it is seeking to protect.

Third, Prudham swears in this affidavit that "to impose in Canada the Injunctive Provisions provided for in the U.S. Settlement because of the U.S. Government Inquiries, based on U.S. legislation, would amount to adopting in Canada the U.S. approach to the 1996 WIPO Treaties without giving the Canadian Government the opportunity [to] decide what its policies will be on TPMs in light of the 1996 WIPO Treaties." This statement is complete rubbish. The U.S. actions have nothing to do with the DMCA and, moreover, the Canadian government is quite capable of doing whatever it wants on TPMs regardless of the terms of this class action settlement.

The Sony rootkit fiasco has been a series of missteps that have demonstrated the dangers of TPMs. This latest twist - shrouded for weeks in secrecy - only serves to place Sony in a further bad light and to cast doubt about its sincerity in addressing a major mistake that has harmed its reputation with consumers, musicians, policy makers, and the politicians.

Belgian Court Rules Against Google News

A Belgian court has ordered Internet search company Google Inc. to stop publishing content from Belgian newspapers without permission or payment of fees, a Belgian press association said Monday.

The Belgian Association of Newspaper Editors, which handles copyright matters for the French- and German-speaking press in the country, lodged the complaint over Google News, a search service in which headlines, excerpts of stories and small versions of photographs are reproduced to refer visitors to full articles on newspaper sites.

The association said the Belgian Court of First Instance has threatened daily fines of $1.27 million in its ruling earlier this month. Margaret Boribon, secretary general of the association, said individual newspapers will have to decide on fees for their articles separately, so it isn't clear how much Google would owe Belgian newspapers for a day's content.

Google currently is defending a separate lawsuit filed in the United States by Agence France-Presse, arguing the service is protected under "fair use" provisions of copyright law.

In the Belgian case, Google spokeswoman Rachel Whetstone said the news service is "entirely consistent" with copyright law and benefits news organizations by referring traffic to their sites.

She added that the Belgian newspapers did not need to take the case to court because Google lets any news organization decline to participate upon request. Google has removed the Belgian newspapers from its Belgium index and is in the process of removing them from its global index, she said.

The Google News service, which debuted in 2002, scans thousands of news outlets and highlights the top stories under common categories such as world and sports.

Many stories carry a small image, or thumbnail, along with the headline and the first sentence or two. Visitors can click on the headline to read the full story at the source Web site.

Legal scholars say Google could argue that the service adds value by significantly improving the news-consuming experience.

But the French news agency AFP sued Google for at least $17.5 million in damages in U.S. District Court in Washington, D.C., arguing that the Google service adds little value because its news site looks much like those of AFP subscribers, albeit one where software and not human editors determine the placement of stories on a page.

Separately, Google has agreed to pay The Associated Press for stories and photographs. Neither Mountain View-based Google nor New York-based AP have disclosed financial terms or other details because of a nondisclosure agreement.

Google has indicated AP's content will serve as the foundation for a new product that will be introduced in the coming months as a complement to its popular Google News service.

Google Won't Follow Belgium Court Order
Rachel Konrad

Google Inc. refused to comply Wednesday with a Belgian court decision that required the company to publish the original text of the ruling on its sites, calling that requirement "unnecessary" and "disproportionate."

Earlier this month, the Belgian Court of First Instance ordered the Internet search engine to stop publishing content from Belgian newspapers without permission or payment of fees. Local newspaper editors argued that Google's popular news site, which features small photos and excerpts from news reported elsewhere, stole traffic from individual newspapers' sites.

Google complied with the ruling, which threatened to impose daily fines of about $1.27 million against the Mountain View-based company. Google is removing the Belgian newspapers from its indexes.

The court also demanded that Google post the original text of the ruling on its Belgian sites, Google.be and news.google.be. The court is scheduled to rule Friday on whether Google must publish the text or face fines of $634,000 per day.

Google spokesman Steven Langdon said he hopes both aspects of the ruling will be overturned.

"We believe that Google News is entirely lawful and brings real benefits to publisher by driving web traffic - and users - to their sites. It is important to remember that we never show more than the headlines and a few snippets of text," Langdon said in an e-mail. "If people want to read the entire story they have to click through to the newspaper's web site.

The company will continue to defy the court's requirement that Google post the judgment to Belgian sites, he said. The company plans to appeal the entire ruling, he said.

"We argued in court today that this was disproportionate and now, given all the publicity the case has received, unnecessary," Langdon wrote.

Google News, which debuted in 2002, scans thousands of news outlets and highlights the top stories under common categories such as world and sports. Many stories carry a small image, or thumbnail, along with the headline and the first sentence or two. Visitors can click on the headline to read the full story at the source Web site.

Legal scholars say Google could argue that the service adds value by significantly improving the news-consuming experience.

The French news agency AFP sued Google for at least $17.5 million in damages in U.S. District Court in Washington, D.C., arguing that the Google service adds little value because its news site looks much like those of AFP subscribers, albeit one where software and not human editors determine the placement of stories on a page.

Separately, Google has agreed to pay The Associated Press for stories and photographs. Neither Mountain View-based Google nor New York-based AP have disclosed financial terms or other details because of a nondisclosure agreement.

Belgium Court Rejects Google Appeal
Aoife White

Google Inc. lost an appeal Friday of a Belgian court's requirement that the Internet search company publish on its home page the ruling in a recent case it lost.

Google spokesman D.J. Collins said the company would appeal again at a Nov. 24 hearing when the court takes up a broader challenge, saying the requirement was "disproportionate and unnecessary." Google faces daily fines of about $640,000 for refusing to post the Sept. 5 ruling on its Belgian home pages, Google.be and news.google.be.

The company plans to appeal the main part of the ruling as well, even as it is already complying. The court ordered Google to stop publishing news excerpts and small photos from Belgian, French and German newspapers without first paying them or getting their permission.

Google said it is removing Belgium's French-language newspapers Le Soir, La Libre Belgique and La Derniere Heure from its indexes, but it did not post the ruling itself.

"We believe it was disproportionate and unnecessary, given the extensive publicity the case has received already, especially while its substance has yet to be debated in court," Collins said.

Google said its service is lawful and drives traffic to newspaper sites because people need to click through to the original publisher to read the full story. Local newspaper editors argued that Google's popular news site stole traffic from individual newspapers' sites.

Collins said it was up to the plaintiff - Copiepresse, the Belgian association that manages copyright for Belgium's French-language newspapers - to decide when the daily fine starts and finishes.

Google did not attend the first hearing on Aug. 29, saying it was unaware of the complaint. Belgian law allows the case to begin again with a clean slate in these circumstances - as it did at another hearing on Wednesday.

Google News, which debuted in 2002, scans thousands of news outlets and highlights the top stories under common categories such as world and sports. Many stories carry a small image, or thumbnail, along with the headline and the first sentence or two. Visitors can click on the headline to read the full story at the source Web site.

The French news agency AFP sued Google for at least $17.5 million in damages in U.S. District Court in Washington, D.C., arguing that the Google service adds little value because its news site looks much like those of AFP subscribers, albeit one where software and not human editors determine the placement of stories on a page.

Separately, Google has agreed to pay The Associated Press for stories and photographs. Neither Google nor New York-based AP have disclosed financial terms or other details because of a nondisclosure agreement.

A group of newspaper trade associations announced plans Friday for a pilot project by year's end to automatically grant republication authorizations to Internet search engines.

The World Association on Newspapers, the European Publishers Council, the International Publishers Association and the European Newspaper Association said jointly that the new tool should answer problems such as Google's dispute with Belgium newspapers and make newspaper content more widely available. The group did not say whether the tool would include a payment mechanism, promising to provide more details within weeks.

DVD Chips 'to Kill Illegal Copying'

Embedded radio transmitter chips to track movie, music and software discs
Simon Burns in Taipei

DVDs will soon be tracked with embedded radio transmitter chips to prevent copying and piracy, according to the company which makes movie discs for Warner, Disney, Fox and other major studios.

The technology, which can also be used for Blu-Ray and HD-DVD discs, will allow movie studios to remotely track individual discs as they travel from factories to retail shelves to consumers' homes.

Home DVD players will eventually be able to check on the chip embedded in a disc, and refuse to play discs which are copied or played in the 'wrong' geographical region, the companies behind the technology expect.

"This technology holds the potential to protect the intellectual property of music companies, film studios, gaming and software developers worldwide," said Gordon Yeh, chief executive of Ritek Corporation.

Ritek is the world's largest DVD maker, and its U-Tech subsidiary will make the discs.

U-Tech and IPICO, the company behind the RFID chips used in the discs, announced today that production of the 'chipped' DVDs will begin at U-Tech's main plant in Taiwan.

U-Tech's global network of factories stamps out some 500 million pre-recorded DVDs and CDs a month for major movie studios, recording studios and video games companies.

After ironing out bugs in the manufacturing process, U-Tech will work with major movie studios on a large-scale test of an RFID-based supply chain management process at its manufacturing plant and distribution centre in Australia.

RFID readers will then be built-in to home DVD players to extend the anti-copying technology into homes as part of a digital rights management system.

U-Tech described this as the "real end game" for the chip-on-disc technology, which would "eliminate optical disc piracy in the entertainment and IT sectors" .

IPICO claims that its RFID tags can be read from at least six metres away, and at a rate of thousands of tags per minute. The passive chips require no battery, as they are powered by the energy in radio waves from the RFID reader.

"I have envisioned using RFID to improve product visibility and enhance security in the optical disc industry for some time," said Yeh.

"Launching the chip-on-disc system has made this dream a reality and holds the potential to protect the intellectual property of music companies, film studios, gaming and software developers worldwide."

Gordon Westwater, president of IPICO, added: "[This is the] first step towards new international standards to safeguard optical media, and the subsequent adoption of the chip-on-disc concept as a global standard."

U-Tech Australia, where the project will undergo a large scale trial, did not reply today to vnunet.com's request for comment on the new embedded RFID chip process and the precise schedule for its rollout.

Press relations staff at U-Tech's office in Taiwan refused to provide more information about the technology.

Podcasters Unite to Challenge Copyright Landgrab

Electronic Frontier Foundation rallies the troops
Will Head

A new broadcasting right proposed by the World Intellectual Property Organization (Wipo) is being opposed by freedom organisation the Electronic Frontier Foundation (EFF).

The Broadcast Treaty seeks to allow 50 years of copyright-like control over the content of broadcasts, even when the broadcaster has no copyright in what it shows, according to the EFF.

The campaign group is urging podcasters to sign a letter opposing the treaty being extended to cover the internet.

"A TV channel broadcasting your Creative Commons-licensed movie could legally demand that no one record or redistribute it, and sue anyone who does," explained the EFF.

"TV companies could use their new rights to go after TiVo or MythTV for daring to let you skip advertisements or record programmes in DRM-free formats. "

Some countries also support expanding the treaty to cover the internet. " That means that anyone who feeds any combination of 'sound and images' through a web server would have a right to meddle with what you do with the webcast simply because they serve as the middleman between you and the creator," said the EFF.

"If the material is already under copyright, you would be forced to clear rights with multiple sets of rights holders. Not only would this hurt innovation and threaten citizens' access to information, it would change the nature of the internet as a communication medium."

The Broadcast Treaty also does not incorporate traditional fair use, a legal defence to copyright infringement, according to EFF fellow and author Cory Doctorow.

"Fair use does not apply to the broadcast right. It will have its own rules for fair use, separate from copyright," Doctorow wrote on the Boing Boing blog.

"You will have to pay your lawyer twice: once to make sure you've got a fair copyright use, and again to make sure you've got a fair broadcast right use. And you might get sued twice: once for violating copyright and again for broadcast right violations."
Doctorow encouraged podcasters to fight the legislation and sign the EFF open letter.

"If you are a podcaster, or better yet a podcasting organisation, sign this letter now," he wrote. "It will be presented on Monday morning to the Wipo committee that's creating the Broadcast Treaty in Geneva. This is your best-ever chance to be heard."

Cross-media world hits European broadcasters

Advertising Revenues Falling for Traditional TV Firms
Robert Jaques

New advertising formats and direct business partnerships between content providers and advertisers pose a "tremendous threat" to the core business of European commercial broadcasters, industry experts have warned.

Yankee Group said that European free-to-air broadcasters are facing a "severe decline" in advertising revenue as a result of this shift.

The analyst firm believes that broadcasters must refocus their traditional business model to retain these budgets and margins, and explore new and emerging TV distribution and merchandising options.

The Yankee Group report noted that free-to-air broadcasters also face significant cost pressure from the analogue switch-off and the transformation to digital.

On average, only 30 per cent of most European broadcasters' revenue comes from channels other than advertising, the study estimates.

As a result, European broadcasters should begin exploring alternative broadcasting methods to generate greater revenue in today's on-demand world.

"European broadcasters cannot escape from branded entertainment and advertisers' demands for cross-media platforms," said Anette Schaefer, Yankee Group director for broadband and media Europe.

"Free-to-air broadcasters should prepare content for the digital switch to internet, IPTV and mobile as well as create new, scalable cross-media platforms while advertisers and brands engage with TV broadcasters to explore new ways to research and interact with consumers."

The study found that, even with lower production costs, the demand for HDTV is on the rise.

To compete in a pan-European or global market, production houses should engage with global brands that have restrictions in their core markets to develop global entertainment programmes.

A Video Business Model Ready to Move Beyond Beta
Richard Siklos

VIDEO mania is in full swing. Amazon is finally doing movie downloads. Apple is touting a new wireless gizmo to beam movies from laptops to TV screens. NBC is introducing a video syndication service that might pit it against Google and Yahoo, and it’s joining the other big networks in putting its shows online for free with advertising. MTV is working with Google to populate its video content all over the Web.

It is wholly unclear which, if any, of these or any of the dozens of other recent efforts that have been announced will break away from the pack, which is why many of them are couched as “tests” and “experiments.” (Whoever thought up this idea of Web sites forever being in “beta” deserves a prize as the spinmeister of their generation.)

Still, a few things are clear from the recent news flow. First of all: yes, the world has gone batty over video. Thirty-second clips, three-minute spoofs, half-hour sitcoms, TV dramas that haven’t been shown in decades, rap videos, Hollywood blockbusters and feeds from TV news outlets big and small are flooding online. The term video itself is already starting to sound old — the equivalent of songs before the advent of MP3’s and downloads.

The good news — and my second point — is that there’s gold in them there hills. Video delivered over the Internet is clearly shaping up to be an actual business that advertisers are interested in. The broadcasting (netcasting?) of television programs and clips on the Web moves the debate away from Internet-versus-TV because if TV executives put their best material online and get paid for it, the proposition becomes Internet-cum-TV.

The research firm eMarketer estimates that video-related advertising will top $2.3 billion within four years. And let’s not forget that Google is on track to exceed $7 billion in revenue this year — and that is predominantly from old-fashioned, Yellow Pages-style text ads. Heck, they don’t even have pictures, let alone moving images.

Much attention has been focused on the economics of selling digital versions of Hollywood movies (like in Amazon’s new Unbox service) as an alternative to DVD sales and rentals and to stem piracy. But what has yet to be exploited — what Google, Yahoo and many other aggregators are vying for — are pieces of the $60 billion or so that will be spent on television advertising in the United States this year.

NBC’s new syndication business, dubbed NBBC, for National Broadband Company, promises to match up content creators with Web sites that might be interested in showing the video. All three parties will get to take a cut of the embedded advertising revenue. There is much to quibble with about the way NBBC came out of the gate; its executives dissed most blogs as unworthy of their content and sneered at the homemade content that is proliferating on YouTube.

On the other hand, any video service using NBBC is nonexclusive, so there is really no reason not to use it (which explains why little corners of NBC competitors like Fox and CBS are participating in the NBBC rollout, through their IGN.com and CSTV businesses, respectively).

Some aspects of the NBBC concept can lead to head-scratching. If I have a great piece of video on my Web site, for instance, is it more valuable to syndicate it through NBBC or to just have it spread virally across the Web? A simple link will take people to the video and any ad accompanying it for free. But that’s why it’s an experiment.

The clever thing about NBBC, though, is that it’s an entirely new business — to the extent it will distribute other companies’ programs — that is designed to bring in new money. Even if free advertiser-supported video on the Web takes off, it’s far from clear whether those ad dollars will be greater than the dollars NBC may lose from viewers who will no longer watch its show on regular TV, or download or DVD and so on.

Which brings us to Apple’s potential convergence-buster, dubbed iTV (the name is — you guessed it — beta). Betting against Steven P. Jobs has not been a sound proposition in recent years, but there are plenty of reasons to be skeptical about whether iTV, which doesn’t actually exist yet, will have the technological wherewithal or enough compelling content to matter. But it does draw people closer to a world where inexpensive liquid crystal displays will moot the long-running debate about convergence because people will just plug in their cable or Internet or Wi-Fi and do what they please.

“The real win here is in high-value, high-quality, high-definition content on your TV set,” said Josh Bernoff, a vice president at Forrester Research. “To do that is going to require more than what Amazon and frankly more than what Apple is doing. We’re still waiting for that device.”

Or maybe it’s here and we just can’t afford it. TiVo last week brought to market its Series 3 digital recording box, which appears to have the ability to do everything from record in high-definition to take video files through a broadband Internet connection either directly or wirelessly. At $799, however, it’s the most expensive TiVo toy yet.

And if you want to really — really — get your hands on as much video as one could possibly enjoy, may I recommend the new DirecTV Titanium service? Introduced recently as the ultimate luxury for anyone who calls their home a “crib” with a straight face, it’s basically everything the satellite provider has to give for a flat fee of $7,500 a year.

That means every regular, pay and high-definition channel, every sports package, pay-per-view movies (at no cost), and a whole bunch of tuners and digital video recorders to do with as you please. There is also 24-hour a day “concierge” service for technical help and anything else.

Best of all, none of it is in beta.

Warner Distribute Videos Through YouTube
Michael Liedtke

Warner Music Group Corp. has agreed to distribute and license its copyrighted songs and other material through online video trendsetter YouTube Inc., marking another significant step in the entertainment industry's migration to the Internet.

Under a revenue-sharing deal announced Monday, New York-based Warner Music has agreed to transfer thousands of its music videos and interviews to YouTube, a San Mateo, Calif.-based startup that has become a cultural touchstone since two 20-something friends launched the company in a Silicon Valley garage 19 months ago.

Perhaps even more important for YouTube is that Warner Music has agreed to license its songs to the millions of ordinary people who upload their homemade videos to the Web site.

"We are very excited," YouTube co-founder and CEO Chad Hurley said in a phone interview Sunday. "This is a real landmark for our company."

Warner Music ranks as the country's third largest recording company with annual revenue of $3.5 billion.

Besides it namesake label, the Warner Music family includes Atlantic, Asylum, Elektra and Rhino - a group that includes vintage recording artists like Led Zeppelin, the Doors and Ray Charles, as well recent hit makers like Linkin Park, Green Day and Faith Hill.

Privately held YouTube is hoping the Warner Music deal will serve as a springboard for similar alliances with other long-established media outlets looking to connect with the Web site's audience, which watches more than 100 million videos per day.

"Technology is changing entertainment, and Warner Music is embracing that innovation," said Warner Music Chairman Edgar Bronfman Jr. "Consumer-empowering destinations like YouTube have created a two-way dialogue that will transform entertainment and media forever."

Many of YouTube's most widely watched videos already include copyrighted music, raising the specter of a legal showdown with record labels and artists seeking to protect their right to be paid for the material.

Universal Music Group CEO Doug Morris signaled the industry's exasperation with YouTube just a few days ago when he indicated the world's largest record label is prepared to sue the site unless it does a better job of preventing copyright violations.

Other labels, though, have recently been experimenting with releasing some of their commercial videos on YouTube. Capitol Records recently posted videos by The Vines, Cherish and OK Go on YouTube.

On the television front, NBC has been using YouTube to promote its fall programming under a partnership announced in June.

Even as rampant copyright violations have popped up on the site, Hurley and his partner Steve Chen have insisted that they want to work with music, movie and television executives to help them take advantage of a new distribution channel as YouTube tries to translates its popularity into profits.

YouTube so far has been subsisting on $11.5 million in venture capital, spurring predictions that the company either will have to raise more money or sell out to a deep-pocketed buyer as it tries to fend off increasing competition from Internet powers Google Inc. and Yahoo Inc.

In Sunday's interview, Hurley reiterated YouTube's intention to remain independent - a goal that may be even more realistic if the Warner Music deal pays off.

The financial terms of YouTube's arrangement with Warner Music weren't disclosed.

Both companies are betting they will be able to make money from the ads that will show up alongside Warner Music's own videos as well as amateur videos featuring copyrighted material.

To make the deal happen, YouTube developed a royalty-tracking system that will detect when homemade videos are using copyrighted material. YouTube says the technology will enable Warner Music to review the video and decide whether it wants to approve or reject it.

U.S. War on Drugs Spreads to YouTube
Ted Bridis

The White House is distributing government-produced, anti-drug videos on YouTube, the trendy Internet service that already features clips of wacky, drug-induced behavior and step-by-step instructions for growing marijuana plants.

The decision to distribute public service announcements and other videos over YouTube represents the first concerted effort by the U.S. government to influence customers of the popular service, which shows more than 100 million videos per day.

The administration was expected to announce its decision later Tuesday. It said it was not paying any money to load its previously produced videos onto YouTube's service, so the program is effectively free. Already by Tuesday, thousands of YouTube users had watched some of the government's videos.

"If just one teen sees this and decides illegal drug use is not the path for them, it will be a success," said Rafael Lemaitre, a spokesman for the White House Office of National Drug Control Policy.

The government's YouTube videos include a previously televised, 30-second ad of a teenager running from a snarling dog and bemoaning pressure from his friends to smoke marijuana.

"Then today, they said I should try to out run Tic Tic, the lumber-yard dog," the teen says. "And I don't think I can. I'm an idiot."

President Bush's top drug-policy adviser, John Walters, said the agency was using emerging technologies to try to reach its audience. "Public institutions must adapt to meet the realities of these promising technologies," he said.

YouTube Inc., a San Mateo, Calif.-based startup, has become one of the Internet's hottest properties since two 20-something friends started the company 19 months ago. The free service allows users to share and view videos, most of which are amateurishly produced and include clips of young people singing and dancing - usually badly.

The government's short public service announcements - all of which were produced previously for television - are highly polished. They will compete for viewership against hundreds of existing, drug-related videos that include shaky footage of college-age kids smoking marijuana and girls dancing wildly after purportedly using cocaine. Other YouTube videos describe how to grow marijuana and how to cook with it.

"Welcome to the great experiment," said Lee Rainie, director of the Pew Internet & American Life Project. He predicted computer-savvy critics of U.S. drug policies will quickly edit the government's videos to produce parodies and distribute those on YouTube. "This seems pretty new and pretty adventurous."

The government linked its videos with the terms "war on drugs," "peer-pressure," "marijuana," "weed," "ONDCP" and "420," so anyone searching for those words on YouTube could find its anti-drug messages. All the videos were associated with a YouTube account named "ONDCPstaff" and identified as an 18-year-old living in Washington. The figure 420 is a popular reference for marijuana, and officials said the White House Office of National Drug Control Policy was created 18 years ago.

Michael Bugeja, who studies how different groups use the Internet, said the White House plan is misdirected because online video services don't afford serious consideration to weighty topics.

"It's the wrong forum and the wrong target," said Bugeja, an author and director of the journalism school at Iowa State University.


On the Net:

U.S. anti-drug videos: http://www.YouTube.com/ONDCP

Truth or Illusion: What's Real on YouTube?
Chris Stevens

A single homemade YouTube video can receive millions of visitors a day, so it's little surprise that advertisers are keen to exploit the site. This presents a unique problem though: how can an advertiser attach itself to video content that is inherently independent, user-generated and unendorsed?

This month, the answer seems to have finally occurred to the advertising industry. Instead of sponsoring easily ignored advertising on the page around YouTube videos, advertisers have taken to manipulating the videos themselves.

Over the past few weeks, visitors have flocked to home videos by a YouTube user known as Lonelygirl15. Her pretty smile and endearing accounts of her life drew many millions of visitors, inspired hundreds of fan sites and set the Internet buzzing with interest. But soon viewers became suspicious. The high quality of video lighting, slick editing and lack of copyrighted music led to accusations that Lonelygirl15 was a hoaxer.

Last week, the Lonelygirl15 videos were indeed exposed as a hoax. The girl depicted was an aspiring actress named Jessica Rose. She subsequently discussed the videos on CNN, The Tonight Show and MTV -- not bad exposure for a previous unknown. The creators of the video were revealed to be film professionals who describe their efforts as a "new art form".

These filmmakers are misguided though -- this isn't art, it's deception for profit. Misrepresenting commercials as independent user-generated content, actors as members of the public, and fiction as fact is not art, it's advertising. The Lonelygirl15 videos were created for the explicit purpose of promoting a product, in this case the actress Jessica Rose.

With Lonelygirl15 the deception seems to have been relatively innocuous: the aim was self-promotion, not the subliminal exhibition of the autumn Gap range. But it makes you wonder what's next. The Internet is notoriously untrustworthy as an information medium, but what appears to be independent user content is generally accepted at face value. At the very least we assume that it's really little Johnny from Utah play-fighting a lightsaber battle with broom handles and not a viral marketing campaign for Lucasfilm.

For companies with massive advertising budgets and a pressing need to engage with an increasingly cynical audience, the Lonelygirl15 advertising model is irresistible. Television advertising, try though it might, finds it harder to overcome the delineation between programming and advertising. We have 'commercial breaks' and the majority of us understand when we're being sold to. But when advertisers mimic the user-generated content on YouTube to promote their products, none of these rules apply.

Subliminal product placement and promotion on YouTube is one thing, but it's beginning to look like the site has given rise to an entirely new and vicious form of trench warfare between competing brands. This new format, dubbed the smear-video, depicts a rival brand's product exhibiting fictitious faults.

Because of the anonymous nature of YouTube, a smear-video can rarely be proven to have originated with a rival brand. The video will appear to show a product exhibiting a fault at the hands of a genuine user, but will in fact be a carefully scripted and executed fraud. Take the 21-second YouTube video entitled 'Samsung handset, easy to break at one try!', which showed a smiling woman snapping a Samsung Ultra Edition mobile phone in two. According to some reports, Samsung says the phone must have been artificially rigged to snap. The video has now been removed from YouTube. Whose agenda does this video serve?

Interestingly, William Gibson predicted these kinds of corporate video manipulations in his book Pattern Recognition. Gibson's 2003 novel describes an advertising exec who is desperate to hunt down and capitalise on an artist whose quirky Internet videos have gained huge popularity. The modern reality is worse than Gibson's vision -- it seems a corporation won't even need to track down an artist when it can provide an absolutely convincing simulacrum of independent user-generated video.

Self-promotion is not a new concept and advertisers have always used actors staging 'customer testimonies' to promote their brands. Most TV advertisements depict a fictitious customer expressing what appears to be their genuinely held belief in the endorsement of a product. But with YouTube we now have to deal with endorsement videos without being given any contextual clue that we're watching an advertisement.

There's no litmus test for genuine user-generated videos on YouTube. So, next time you watch a video of a kid setting his trousers on fire, take a moment to think about whether those Nike Airs he's wearing came from his shoe cupboard, or from the costume department lurking just offscreen.

Microsoft Launching Online Video Service
Elizabeth M. Gillespie

Microsoft Corp. is hoping to tap the explosive popularity of online video sharing by joining startups and major Internet rivals with its own video service.

"Soapbox on MSN Video" will let Internet users watch and post videos, rate or comment on them and share favorites by e-mailing them or linking them to their personal Web pages or blogs.

Rob Bennett, general manager of MSN's entertainment and video services unit, acknowledged that Silicon Valley startup YouTube Inc. has an early lead, having already attracted tens of millions of users in the year and a half since it launched. Rivals Google Inc., Yahoo Inc. and Time Warner Inc.'s AOL also have similar offerings.

But Microsoft believes there is "still plenty of room to innovate, and go beyond what I would say most services provide ... just sort of the basics, a very kind of primitive experience that is not that engaging," Bennett said. "It's not that fun to use. It just gets the job done."

During a preview Monday, Bennett said Soapbox videos will be displayed in slightly larger windows than those competing services offer, and users will be able to expand videos to the full screen while they are playing, rather than having to jump back to the beginning and start over.

Soapbox will group videos in various categories, including most recent, most viewed, most commented on and top favorites. It will let users "tag" clips with keywords designed to make them easier for people to find.

A beta "test" version will initially be available on an invitation-only basis to some Microsoft employees and regular MSN testers, Bennett said. He said Soapbox will be expanded to a wider audience "very quickly," but he could not say how soon.

Though Microsoft has some catching up to do, Jupiter Research analyst Joe Wilcox said it is jumping into online video sharing more quickly than it's done in other newly emerging and competitive fields.

"Right now with video, everybody's throwing spaghetti at the wall to see what sticks," Wilcox said, "and since everybody else is throwing spaghetti, Microsoft is throwing its own."

Wilcox suggested Microsoft's success with Soapbox will hinge on how much traction it gains with people who want to share their videos with tight-knit networks of family and friends.

"YouTube reaches the bazillions," Wilcox said, "but while Soapbox can do that, Microsoft's emphasis will be the people that you know ... me or you at the center with concentric circles going outward."

Microsoft hasn't yet pinned down its strategy for making money off Soapbox. Bennett said the company is considering various options for incorporating advertising, including posting ads directly on pages with videos or hosting advertiser-sponsored contests that seek video contributions from users.

Soapbox will support a maximum file size of 100 megabytes - comparable to YouTube and Yahoo - and will work on computers running both Microsoft Windows and Apple Computer Inc.'s Macintosh computers. It will work with either Microsoft's Internet Explorer or Mozilla's Firefox Web browsers and accept the major media formats, including Windows Media Player and Apple's QuickTime.

Microsoft has a partnership with The Associated Press for a separate service, called the Online Video Network, in which the news cooperative's member Web sites can offer free video news clips and share in advertising revenue the service generates.

Fox Unveils a Division for Religious-Oriented Films
Sharon Waxman

Hollywood took another step toward America’s vast and apparently growing Christian audience on Tuesday, as 20th Century Fox unveiled a new division, FoxFaith, that will release up to a dozen religious-oriented films each year.

Many of the films, with budgets ranging from about $3 million to $20 million each, will be released straight to DVD. But the studio said that at least six a year would be released nationally in theaters by an independent distributor working with Fox, starting on Oct. 6 with “Love’s Abiding Joy,” a western based on the novel by the Christian writer Janette Oke about a couple facing the trials of life on the American frontier.

“What we’re trying to do is create great movies that are story-driven, that happen to tap into Christian values,” said Simon Swart, the general manager of Fox’s North American home entertainment division. “The genesis of the FoxFaith banner is that it’s a Good Housekeeping seal, a marketing umbrella for these pictures, so that people can have confidence the movies won’t violate their core beliefs.”

The move reflects the growing weight of evangelical Christians in popular culture. It is the latest in a series of incremental steps taken by Hollywood studios in recent years to capitalize on the Christian audience.

FoxFaith grew out of Fox’s home entertainment division, which had huge success with the DVD of “The Passion of the Christ,” Mel Gibson’s controversial drama about the Crucifixion, selling 15 million units. After that film became a blockbuster hit in 2004, Hollywood studios, which had traditionally shied away from overtly religious messages, began cautiously creating alliances with Christian movie producers and consultants, mostly through their home entertainment divisions.

At Sony, Peter Lalonde of the Christian-oriented Cloud Ten Pictures worked with the home entertainment division to make and release “Left Behind III: The World at War,” the third in a series based on the popular end-of-times books by Timothy LaHaye, which went straight to DVD last year. The studio will also be releasing films by Provident Films, a Christian production company, starting with “Facing the Giants,” an inspirational story about a small-town football team, to be released in about 30 theaters on Sept. 29.

The Walt Disney Company has gone after the Christian audience on a more ambitious scale, and successfully courted that audience ahead of the release of its big-budget epic “The Chronicles of Narnia: The Lion, The Witch and The Wardrobe” last December. That film, which the studio showed to religious leaders ahead of the release because of its Christian themes, took in $744 million at the worldwide box office.

In another sign of the times, a veteran Hollywood executive turned evangelical Christian, David Kirkpatrick, has founded Good News Holdings, a Christian media company that, among other projects, is developing a film based on the Anne Rice novel “Christ the Lord: Out of Egypt,” slated for production next year. A spokesman said he had no studio partner at the moment.

But the new division at Fox is thus far the biggest concerted effort by a major Hollywood studio to seek out films that will feed what many see as a growing, and underserved, Christian audience.

Matt Crouch, a Christian producer, said the move by Fox was a drift toward the mainstream for religious filmmaking, similar to what happened with Christian music a few years ago. “We have an audience, and we know how to get to that audience,” said Mr. Crouch, who financed and produced “One Night With the King,” a $20 million film telling the biblical story of Queen Esther and King Xerxes.

Mr. Crouch said that movie would be released on Oct. 13 in about 900 theaters, with Fox booking a few dozen of them. Fox will also distribute the DVD of the film, which does not have an overtly Christian point of view, around Easter and the Jewish holiday of Purim, which commemorates the ancient tale.

Theatrical distribution of films acquired by FoxFaith will be handled by another company, the Bigger Picture, which is not owned by Fox or its parent, News Corporation. But the studio will market the movies both theatrically and on DVD and video. Fox has already built a network of 90,000 Christian congregations that receive regular information about its films, and that distribute promotional materials.

Some Christian-oriented films of the last few years have been successful despite generally crude production values and amateurish acting. But budgets have been creeping upward, and the Fox initiative is likely to provide access to more professional talent.

And while up to now Christian movies have featured very few known actors, “One Night With the King” has Omar Sharif and Peter O’Toole in supporting roles.

Fox has already had success selling Christian movies on DVD, including “Love Comes Softly,” “Woman Thou Art Loosed” and “The Visitation,” sold at Christian retail stores and other outlets. Another film, “The End of the Spear,” was released independently on 1,400 screens in January, taking in $12 million at the box office and selling one million DVD’s for Fox. The film tells the story of a family of missionaries who are murdered by Indians in Ecuador. The surviving family members befriend and help the Indian tribe that killed their parents.

“Love’s Abiding Joy,” with a $3 million budget, was directed by Michael Landon Jr., son of the producer and star of the television series “Little House on the Prairie.” The film, about a couple building a farm on the prairie in the 1880’s whose faith helps them to overcome challenges, will be released in about 200 theaters.

Jeff Yordy, Fox Home Entertainment’s vice president for marketing, said the studio was looking to acquire similar films, while avoiding any that might have political overtones — for instance, films with an anti-abortion message.

“That’s the mission: quality, story-driven entertainment that meshes with the values of our target audience,” he said. “But it’s entertainment first. We’re not in the business of proselytizing.”

AIM Bot Creates "Fight Combos" to Spread Exes

Online attackers have created an instant-messaging bot program that chains together a number of executable files, similar to the combination moves in fight games, depending on the attacker's need.

The software, dubbed the AIM Pipeline worm, uses modular executable files to infect machines with different functionality but also to make the bot network's growth more robust: if a Web site hosting one of the components gets shutdown, the other pieces of the worm can still spread.

"These guys have made their files interact with one another, yet managed to keep their standalone functionality intact so they don't go pear-shaped if a link in the chain goes down," Christopher Boyd, the security research manager for FaceTime Security Labs and the webmaster for VitalSecurity.org, stated in a blog posting to that Web site. "The file simply moves onto the next one--or it just gets on with it's business. Randomness is at the heart of this attack; the thousand-strong bot net at the heart of this operation would suggest a thriving business, too."

Boyd likened the technique to the fight combos common in martial arts video games.

America Online has blocked the URLs used in the messages sent by the AIM Pipeline worm since last Tuesday, AOL spokesman Andrew Weinstein said in an e-mail to SecurityFocus.

Bot software has become a major threat in the past few years. In a recent report, Microsoft labeled bot nets and backdoor Trojan horses as the most serious threat its users face. Bots generally are programmed to allow for easily adding new ways of compromising machines, such as the recent flaw in the Windows Server service. Recognizing the threat, law enforcement officials have increasingly focused on tracking down the people who create and spread bot software, such as the writer of the Zotob worm and a man whose bot software caused malfunctions at a Seattle-area hospital.

Toshiba to Recall Sony Laptop Batteries
Yuri Kageyama

Toshiba is recalling 340,000 laptop batteries made by Sony Corp. because of problems with recharging them, the latest in a string of embarrassing defects and production glitches for Sony.

The recall affects 100,000 batteries for laptops sold in the United States, 45,000 in Japan, and the remainder in other parts of the world, Toshiba Corp. spokesman Keisuke Omori said Tuesday, declining to quantify the number of problems reported by customers.

The defect is not directly related to the problem behind last month's recall of Sony laptop batteries by Dell Inc. and Apple Computer Inc., which cited concerns the batteries could overheat and catch fire. Dell asked customers to return 4.1 million faulty batteries, while Apple Computer Inc. recalled 1.8 million.

In both those cases, the troubled lithium-ion batteries were made by Sony Energy Devices Corp., a Japan-based subsidiary of Sony.

The Toshiba recall involves battery packs for Dynabook and Satellite models made from March through May this year, and they will be replaced for free, Omori said. The batteries sometimes stop recharging or run out of power, but no injuries or other accidents have been reported, he said.

The new recall also comes soon after production problems forced Sony to delay some key product launches.

Earlier this month, Sony said it would postpone the European launch of its PlayStation 3 video game machine by four months until March due to problems producing a component. In additional, while the much-awaited console is set to hit stores in November in the United States and Japan as planned, fewer units will be available, according to Ken Kutaragi, the executive in charge of the project.

And last week, Sony said it will postpone by a week until Sept. 23 the Japanese launch of its new digital Walkman because of a malfunction of an unspecified part of the portable music player.

The problems at Sony come as the electronics and entertainment company behind the Walkman portable music player has been trying to bolster its brand image under the leadership of its first foreign executive, Welsh-born Howard Stringer.

Sony has been fighting to make a comeback after falling behind Apple in portable music players and other rivals, including Samsung Electronics Co. of South Korea, in flat-panel TVs. Sony has been successful in selling slimmed down TVs lately with panels made in a joint venture with Samsung.

Sony shares edged down 0.8 percent to close at 4,930 yen ($42) in Tokyo, while Toshiba shares climbed 0.5 percent to 796 yen ($6.70).

Dell Battery Explodes at Yahoo HQ, Hundreds Evacuate

Ryan Block

We just got word that a Yahoo employee's laptop went up in flames today at their Mission College campus down in Silicon Valley, causing hundreds of Yahoo employees to be evacuated from an 8-story building. The culprit: you guessed it, a Dell machine whose faulty cell that should have been replaced (don't they have corporate memos at those big companies?) instead caught fire. From what we now know it doesn't seem like anyone was hurt, but let this be a lesson, people: you have the means, now take Dell up on the freaking recall before something disastrous happens.

Update: So it looks like Yahoo uses HP and Mac laptops -- not Dells -- making it very likely this was someone's personal machine that they brought to work. Wrong day to bring your laptop to the office, man.

China Reports Major Anti-Piracy Move

Chinese law enforcement agencies destroyed nearly 13 million pirated compact discs, DVDs and computer software Saturday in the government's latest campaign to curtail rampant theft of intellectual property, state media reported.

The destroyed items were confiscated in the first half of an ongoing 100-day nationwide campaign against piracy, the Xinhua News Agency said. Police seized the items in raids that took in the scope of pirated goods networks, from unlicensed factories to street vendors, Xinhua said.

Among the seized goods, according to the report, nearly half came from Guangdong, the economically dynamic southern province that abuts Hong Kong.

Over the past two years, China has ratcheted up efforts to stamp out the rampant theft of intellectual property, partly in response to pressure from the United States and European Union and partly to protect new Chinese companies that are starting to produce their own competitive goods. Still, illegally produced CDs, DVDs and computer software are widely available on city streets, and Chinese leaders acknowledge that it will take years to eliminate the practice.

In enforcing the latest crackdown, police and copyright officers closed down 8,907 shops and street vendors, 481 publishing companies and 942 illegal Web sites, Xinhua said. Police have uncovered ten illegal production lines for CDs and DVDs, four of them in Guangdong, the report said.


Microsoft Files 20 Software Lawsuits

Microsoft on Tuesday announced 20 lawsuits against resellers allegedly engaged in the distribution of infringing software and software components. The lawsuits, filed against 20 defendants throughout the United States, focus on companies that allegedly distributed counterfeit software or software components or participated in hard-disk loading, Microsoft said.

Hard-disk loading is the installation of unlicensed software on computers that are then sold to unsuspecting businesses or consumers. Lawsuits were filed against companies in nine states: Connecticut, Florida, Georgia, Kansas, New Jersey, New York, Ohio, Oregon and Texas.

Leonsis to Step Down from AOL Management
Anick Jesdanun

Ted Leonsis, the AOL senior executive who helped steer his company's transition into a provider of free services supported by advertising, will step down from active management while continuing in an advisory capacity.

Leonsis, 50, currently vice chairman of AOL and president of its ad-focused audience business, said Friday he still plans to work every day but wants to avoid burnout by reducing the need to attend constant meetings and pore over reports over the weekend.
Dropping those duties would let him devote more time to such interests as sports and films, he said. He is majority owner of hockey's Washington Capitals and a minority owner of basketball's Washington Wizards. He also is producer of the documentary "Nanking," scheduled to premiere next year.

"I wouldn't mind going to one of my hockey games or taking time off to go to Sundance (film festival) and not feel guilty," Leonsis said in a phone interview from the company's Dulles, Va., headquarters.

Leonsis, who will retain his title of vice chairman, said he will remain influential as a visionary and strategist after the change takes effect Jan. 1.

"I have carte blanche to run in and yell at people and tell them how to change things," he said.

AOL Chief Executive Jonathan Miller credited Leonsis as "the driving force" behind the shift in business models at AOL.

Over the past two years, AOL has been making more and more of its services free, to boost advertising revenue and offset declines in its subscription-based Internet access business. The transition accelerated last month with AOL's decision to give away AOL.com e-mail accounts and various software once reserved for paying subscribers.

AOL is not expected to name a replacement. The company plans to soon announce management changes to reflect last month's strategic shift and said Leonsis' decision was unrelated to that.

Earlier, the Time Warner Inc. unit formerly known as America Online said it expects to drop as many as 5,000 employees from its payroll, out of a global work force of 19,000. Those positions are mostly in marketing and customer service.

Leonsis joined AOL in 1993, when the company acquired Redgate Communications Corp., a new-media marketing company he founded.

He said he plans to pursue other entrepreneurial opportunities, both for AOL and on his own. One idea, he said, was to combine his interests in movies, the Internet and philanthropy to create a platform for filmmakers to make pieces on human rights for distribution in theaters and online.


Annals of Self-Invention
Philip Gefter

FASHION anarchy looks almost quaint in Amy Arbus’s portraits of downtown Manhattan denizens in the 1980’s. Their style was witty, tilted, nose-thumbing, a result of practical concerns about the cost of clothing and an expressive desire to invent a persona of one’s own.

A new book, “On the Street, 1980-1990” (Welcome Books), assembles 70 images from the more than 500 Ms. Arbus made over 10 years for The Village Voice. Her photographs capture the fun — as well as the posturing — in a straightforward documentary style.

“The idea from The Village Voice was for me to go out and find people wearing something that turned my head,” Ms. Arbus said by phone from the Cohen Amador Gallery in Manhattan, where an exhibition of 25 of the photographs is on view through Oct. 14. “I found the subjects by just wandering around my neighborhood.”

“Michiyo Saito, East Seventh Street, 1989,” was taken in front of a shop that sold clothes imported from Japan. Ms. Arbus had walked by one day and looked inside. Everyone who worked there wore clothes from the shop. She photographed each of them outside in the street.

Ms. Arbus said some subjects she stopped in the street to photograph would mention having seen her pictures of their friends in her Voice column. “I wasn’t trying to document a particular group of people,” she noted, “but I eventually realized it was a scene, an extended community.”

The picture of Madonna was taken before her meteoric rise. “I stopped her on the street because I recognized her from the gym,” Ms. Arbus said. “She was the one sitting around naked in the locker room the longest. I remember looking at her and thinking that with a body like that, I would too. In the picture she looks as if she knew what was about to happen to her.”

Inevitably Ms. Arbus’s work will be compared to that of her mother, Diane. “I’m flattered if people see some correlation,” Ms. Arbus said. “But my work is much more intentionally and less technically sophisticated. My work is less confrontational. It was clear to my subjects that I adored how they looked. I tried to make them feel like they were getting an award for their creativity.”

When Is Thin Too Thin?
Eric Wilson

THEY were alarmingly thin. Snejana Onopka, Natasha Poly and Hana Soukupova, models in demand among the fashion designers who showed their collections in New York last week, appeared so gaunt and thin that their knees and elbows were larger than their concave thighs and pipe cleaner arms, and their bobbling heads looked as if a slight breeze could detach them from their frail bodies.

Linda Wells, the editor of the beauty magazine Allure, said there were moments during the shows when she could hear gasps in the audience at their appearance.

“What becomes alarming is when you see bones and start counting ribs,” Ms. Wells said.

At a Vogue party on Monday for a young designer competition, the model Jessica Stam expressed similar dismay. “There are a lot of girls doing the shows who are very thin and frail,” she said. “I don’t know if they are healthy or not, but I don’t think the frail, fragile look is very feminine, and I don’t think it’s attractive.”

Yet there remains an ideal among designers who seem to prize an ever thinner frame to display their clothes. Some who attended the New York shows question whether acceptable boundaries have been crossed, as when fashion glamorized images of heroin abuse in the early 1990’s. Despite perennial complaints that models are too thin, there is a new sense of concern that designers are contributing to unhealthy and potentially life-threatening behavior among models vying to appear in their shows.

“We are minutes away from a catastrophe,” said David Bonnouvrier, the chief executive of DNA Models, which represents many of the top faces in the business. In an interview, Mr. Bonnouvrier said designers and model bookers were encouraging extreme thinness, so much so that several of the models he represents, when asked about their weight, have refused to seek medical attention for what are probable eating disorders.

“This goes against everything we stand for as an industry,” Mr. Bonnouvrier said. “I am kicking and screaming about it now because this should be an industry of beauty and luxury, not famished-looking people that look pale and sick.”

Over the last decade fashion magazines have responded to such criticism by including a range of body types in their layouts, but when designers first show their collections at runway shows, they tend to use models who are little more than spectral wisps, expressionless hangers for their clothes.

Last week the organizers of Madrid fashion week, usually an overlooked event in comparison with the major shows in New York, London (this week), Milan and Paris, said they were banning models with a height-to-weight ratio below what the World Health Organization considered normal. In effect, models who weigh less than 125 pounds are prohibited from working the runways. Organizers of the event said they wanted to project “an image of beauty and health.”

Complaints about the idolization of role models who suggest unhealthy lifestyles are culturally endemic. Celebrities like Nicole Richie, Lindsay Lohan, Paris Hilton and Mischa Barton have all been subjects of tabloid headlines asking, “Are they too thin?” In all likelihood, the answer is yes, but that does not stop magazines from displaying their pictures or, likewise, designers from casting thin models in their shows.

“What’s happening right now is an extreme,” Ms. Wells said. “Some of the models really are too thin, but that is such a tricky thing to say.”

The news media squall about underweight models, which is engulfing the fashion events in Madrid and now in London, centers largely on whether fashion shows perpetuate an unhealthy image of beauty, encouraging eating disorders among young women.

The producers of these fashion events have largely dismissed the concerns. On Saturday a British cabinet member, Culture Secretary Tessa Jowell, called for London designers to follow the example of Madrid by banning underweight models. But the British Fashion Council, led by Stuart Rose, the chief executive of Marks & Spencer, said it would not interfere with the designers’ aesthetic. And some designers said it was misleading to equate thinness with being unhealthy and that the standard cited by the organizers in Madrid did not take into account age and puberty, which may cause a model who is unusually tall to appear frighteningly thin.

“We’re talking about this because Madrid chose to do something now,” said Katie Ford, the chief executive of Ford Models. “Do I think because you’re thin that you’re anorexic? No. The runway represents a very small segment of the entire fashion business. On the runway, model size has been frequently a representation of the designers’ image at that point of time.”

But that debate has overshadowed the likelihood that some of these models, who have thus far been limited to runway shows but who aspire to more lucrative magazine work, are suffering from real eating disorders.

“I feel that people are taking the wrong angle on this whole issue,” Mr. Bonnouvrier said. “These models look sick.”

Although it would seem reasonable that the agencies that represent the models have a responsibility to monitor their health, Mr. Bonnouvrier and other agents described an environment that is dictated by the designers. A model’s success depends on fitting an ideal image. He said that many of the models come from broken homes or poor countries, speak little English and are conforming to those demands as a means of survival. If he complains, he said, they will simply switch to another agency.

“I want to really emphasize the point that we have very little leverage over our clients should they have such problems when they continue to be confirmed by the most important designers, photographers and magazines in this industry,” Mr. Bonnouvrier said. “A young model suffering from eating disorders is an ancient topic. What is new, however, is the alarming number of young models that are suffering and yet still work.”

There has been some resistance among designers. Amanda Brooks, who assists Bryan Bradley of Tuleh with model castings, said a top runway model was turned down because she looked too thin. “You could see her hip bones,” Ms. Brooks said. “We couldn’t imagine putting her in a dress.”

Some designers dispute that they are solely to blame for models’ weight issues. “I think we’re all to blame,” said Michael Vollbracht, the designer of Bill Blass. “I’m very aware of these girls who look too thin or unhealthy, and at one point during the casting I had to walk out of the room. We called a model’s agency and said, ‘Do you even watch these girls?’ ”

Milla Jovovich, the model and designer of a fashion collection called Jovovich-Hawk, said that dangerously thin models have been around since she was modeling as a child, as have the complaints, though little has ever been done in terms of prevention.

“There need to be more rules and regulations within the modeling industry,” Ms. Jovovich said. “A lot of problems that are very gray areas need to be put in black and white.”

Nicholson and Scorsese, Partners in Crime at Last
Dennis McDougal

THERE was a time, not so very long ago, when the first-ever pairing of the director’s director, Martin Scorsese, with the star’s star, Jack Nicholson, would have been a guaranteed hit. But that was before DVD’s, MySpace, YouTube and, most recently, the decline and falter of Tom Cruise. When Viacom’s chairman, Sumner Redstone, evicted Mr. Cruise from Paramount last month, citing his “erratic behavior,” it signaled a new era when no amount of star power could assure that a picture would be seen as an event.

As an exercise in casting of course Mr. Scorsese’s crime drama “The Departed,” set for release by Warner Brothers on Oct. 6, is a considerable achievement. Along with Mr. Nicholson’s performance, it includes contributions by Leonardo DiCaprio, Matt Damon, Mark Wahlberg, Martin Sheen and Alec Baldwin, among others.

But it is the Nicholson-Scorsese match-up that catches the eye, and reminds us how much the game has changed in the last decade.

Ten years ago Mr. Nicholson still packed a punch. The Joker who’d made off with $60 million for his turn in “Batman” in 1989 sauntered away at the age of 60 with his third acting Oscar for “As Good as It Gets” in 1998. And while Scorsese scholars have to go back 16 years to “Goodfellas” (1990) for a bona fide commercial and artistic triumph, this 63-year-old director has stayed in the game largely thanks to the awards-season hoopla around “The Aviator” and “Gangs of New York” and a recent pair of well-received PBS documentaries: “The Blues” (2003) and “No Direction Home: Bob Dylan” (2005).

But in cyberspace a year ago is ancient history; a whole decade ago is prehistoric. A recent Los Angeles Times survey held that 54 percent of those 24 and under — traditionally the target motion picture audience — would rather watch a DVD at home than go to the local multiplex. Why waste $10 and two hours to watch the big screen when there’s a Web to surf free? And would this audience even know that that the movie at the multiplex is a remarkable two-fer?

Graham King, a producer who on “The Departed” is teaming with Mr. Scorsese for the third time following “Gangs” and “The Aviator,” is betting that “there’s a real Friday night audience” for the new movie. He predicts young women will flock to see Matt and Leo, while their dates and their elders will want to see Jack plumb the depths, and Mr. Scorsese execute a good cop/bad cop thriller, packed with twists and surprise.

“It’s incredibly character driven,” Mr. King said. “And Jack,” who plays the fictional Boston mobster Frank Costello, “is the icing on the cake.”

Early Internet reports suggested that Mr. Nicholson had continuously tinkered with William Monahan’s script in an effort to increase Costello’s shock value. But Mr. King preferred the word “collaboration” to characterize the star’s involvement. He disputed the notion that Mr. Nicholson patterned Costello after the notorious Whitey Bulger, who disappeared in 1995 after ruling Boston’s underworld for a generation. Widely reported to be bisexual as well as sadistic, the 77-year-old Mr. Bulger is still wanted by the F.B.I. on 18 counts of murder.

“It’s not unrealistic that we see a criminal character like Costello go off the deep end,” said Mr. King, comparing the character to crazed villains in earlier films by Mr. Scorsese, like those portrayed by Robert DeNiro (“Mean Streets,” “Goodfellas,” “Cape Fear”) and Daniel Day-Lewis (“Gangs of New York”). “There’s nothing indecent or negative in ‘The Departed,’ but he is completely losing his mind.”

Ubiquitous Web reports described Mr. Nicholson, now 69, eating an insect, wielding sex toys, bathed in blood and more or less personifying evil. If the version now being screened for the press is a bit tamer than the buzz advertised, it is not by much.

And yet even that might not be enough to keep these two giants of the 70’s from slipping into anachronism.

So “The Departed” becomes a question-mark film. Will it reintroduce Mr. Nicholson to a new generation, as “Batman” once did? Or will his Frank Costello smack of geriatric retread: “The Last Detail’s” Badass Buddusky meets “The Shining’s” Jack Torrance, only more debauched?

Will this film even the score for Mr. Scorsese, about whose Oscar near-misses Jon Stewart joked, “Three 6 Mafia, one; Scorsese, zero”? Or will it simply provoke nostalgia for an era when Nicholson and Scorsese together would have been a sure thing?

In any case no one can accuse these two old pros of lacking self-awareness. According to a scene included in a trailer for the film, “The Departed” has Frank Costello asking after an acquaintance’s sick mother. Sadly the man tells him, “She’s on her way out.”

“We all are,” growls Mr. Nicholson. “Act accordingly.”

Dennis McDougal is currently at work on “Five Easy Decades,” a biography of Jack Nicholson, for John Wiley & Sons.

My Plan to Save Network Television
Charlie Hauck

LET’S say you’ve created a network television series for the 2006-2007 season. It’s beautifully calibrated to appeal to the only viewers of any value to advertisers: young people. It’s about a family of migrant lifeguards. They travel to beaches all over the world in revealing swimwear, saving lives and drinking popular beverages. They have a soon-to-be-famous catch phrase, which they use in the face of any adversity: “You can’t stop progress.”

The attractive brothers and sisters are in their late teens and early 20’s. Mom is played by a movie hottie still in her 30’s whose film career has stalled. Dad’s reserve unit was called to Iraq. He can come home during sweeps week.

But after your premiere the Nielsen ratings bring distressing news: old people are watching your show. Maybe they like the family’s pet cockatiel. Maybe one of the lifeguards reminds them of the young Alan Ladd. But they are wreaking havoc on your demographics, the lifeblood of a series. Your show is “skewing old.”

Many assume that mature viewers, with their $2 trillion a year in spending power, would be welcomed by the networks. Well, they aren’t. Advertisers want to lock in viewers’ buying habits early in life, not struggle with them to change brands in their last few decades. The key demographic in the weekly Nielsen ratings report is 18-49. Anyone outside that range is undesirable. People over 49 do not buy interesting products. They detract from the hip environment advertisers seek. The shows they watch tend not to become “water cooler” shows. They are not, as one media buyer puts it, “an opportunity audience.”

The majestic glacier that is network television is very gradually melting. Many young viewers, particularly males in their 20’s, have been stolen away by such lures as the Internet, iPods, the Xbox and opera. This makes the young people who do watch all the more valuable to advertisers. They have far greater disposable income than older people, and they actually dispose of it. Advertisers gladly pay steep premiums for those young eyes. But it is more difficult to single them out when older viewers clutter the demographics.

The fact is, mature viewers are threatening the well-being of network television. I have a bold but common-sense suggestion: old people should not be allowed to watch TV.

I anticipate the predictable charges of “discriminatory,” “unfair,” “idiotic.” Well, millions of elderly people live in age-restricted retirement communities, and you don’t hear young people whining about that. Right-thinking older Americans will see this as a chance to do something for their country. Nurturing a nation’s consumer base is as vital as protecting its streams and forests. It’s time for people over 49 to “take one for the team.” Besides, it’s really not such a terrible sacrifice; they have Sudoku now.

Once the necessary “49 and Out” federal legislation is enacted, we’ll need a system in place to block older viewers’ network access. Fingerprinting, iris scans, re-purposed V-chips, psychoacoustic masking? Perhaps it would be possible to borrow some of the amazing technology being developed in the Transportation Security Administration’s laboratories; they aren’t using it at the airports.

Boomers will feel they should be exempt from this law. They’re “younger” than previous old people. They’re in tune with contemporary culture. If you’re a boomer and thinking along those lines, take this simple test:

“They combed out Ann Miller’s hair and found the Lindbergh baby.”

If you laughed at that, if you understood the references, you have no business in front of a television set.

This ban applies only to the Big Four broadcast networks. Older viewers would still be free to tune into the many cable channels. At programs like “The O’Reilly Factor,” an onslaught of people still in their 50’s will be greeted with flowers.

A warning to certain lobbyists for the elderly, who may resort to selfish interpretations of the Constitution to thwart this needed legislation: beware the backlash. Nielsen Media Research, the keeper of the ratings, is owned by VNU, an increasingly powerful media conglomerate headquartered in the Netherlands. The Netherlands, where laws governing euthanasia are extremely lenient. “You can’t stop progress.” I’m just saying.

Top Ten Box Office

Sep. 15 - 17, 2006, in millions

1 Gridiron Gang

2 The Black Dahlia

3 Everyone's Hero

4 The Covenant

5 The Last Kiss

6 Invincible

7 The Illusionist

8 Little Miss Sunshine

9 Hollywoodland

10 Crank


Brits Hit On-Demand

U, U.K.'s Top Up team on PictureBox
Elizabeth Guider

'Bridget Jones: The Edge of Reason' joins a select seven films launching Blighty's new on-demand service.

Universal Pictures and the U.K.'s Top Up TV are launching a subscription-on-demand service in Blighty this fall called PictureBox.

It will be available on Top Up TV's new Anytime service, and will feature a broad array of current and library movies, including titles from NBC Universal.

Arrangement was unveiled Monday by Beth Minehart, senior VP of international on-demand licensing for NBC Universal Intl. Television Distribution and Top Up TV CEO Ian West.

Subscribers will pay a monthly fee to view pics that will be delivered and stored in Top Up's Anytime digital TV recorder. Films will be refreshed constantly, with a new title uploaded daily.

PictureBox will launch with seven movies, including "The Bourne Supremacy," "Bridget Jones: The Edge of Reason," "Shakespeare in Love" and "The Fast and the Furious." PictureBox is owned by Universal Pictures.

Top Up TV launched in March 2004 on the U.K.'s digital terrestrial TV platform Freeview.

It recently unveiled its Anytime service, boosting the program choice available to Freeview customers.

"This deal underscores the rapid growth and success of Freeview in the U.K.," NBC U Intl. TV prexy Belinda Menendez said. "PictureBox is one of the first services of its kind for premier film content."

Top Up TV's Anytime service gives customers the chance to view programs from 18 channels, including UKTV Gold and MTV as well as premium movies from PictureBox.

Iger Downloads a Million

Mouse has sold 125,000 pics through iTunes
Jill Goldsmith

Walt Disney CEO Robert Iger said the Mouse has sold 125,000 movies for about $1 million total since the studio put a handful of pics on iTunes less than a week ago. He predicts the venture will top $50 million easily for the full year.

"It's just a beginning. But it makes a difference," he told investors at the Goldman Sachs media conference in Gotham Tuesday.

Disney's also streaming content on ABC.com. It hasn't been as active moving its content to other platforms, noted Goldman analyst Anthony Noto.

Iger stressed the Apple deals are not exclusive "and certainly Steve Jobs understands that as a major shareholder of Disney."

Asked what Jobs' role at Disney is, Iger said he's a board member and that he's been to two board meetings.

"For me, he's become a tremendous sounding board. To go to Apple and spend the day ... (It's) a great opportunity for me and the company. He's a great ... adviser, and I'm lucky to have him."

("Does that mean it's becoming the Apple Broadcasting Company?" joked one investor in the audience. "He makes it sound like he can't find the men's room without Steve Jobs.")

Addressing recent cuts at the studio, Iger noted that while the 1990s were a time of expansion and growth for Disney, the company is focused now on returns on its investments.

He said the studio movie executives in charge of live action, for instance, are compensated based on the internal rate of return on their slate.

He said the cuts lowered overhead costs by $100 million, as Disney makes only 10 pics a year. "It's quality over quantity ... We were making movies for the wrong reasons," he said.

He sees fiscal 2007 buoyed by DVD releases of "Pirates of the Caribbean: Dead Man's Chest" and "Cars."

At ABC, he acknowledged the network could really use a new hit. "We would take one. Two would be great. Three, fantastic."

Pirates of the Caribbean Hits Billion Dollar Mark

Disney’s Pirates of the Caribbean: Dead Man's Chest has grossed over a billion dollars worldwide after just ten weeks in circulation according to figures provided by Nielsen EDI and Variety. The sequel has garnered $417,140,749.00 domestically and $592,194,000.00 internationally bringing cumulative box-office receipts to $1,009,334,749.00 and making it the third biggest moneymaker of all time. The Johnny Depp fantasy adventure continues finding treasure, hauling in over two million a week with a per screen gross of some $1600.00 and engagements on some 1600 screens.

Meanwhile the undead pirates aren’t buried yet. The DVD is slated for a Christmas release with a third and final installment wrapping principal shooting around Thanksgiving for a scheduled debut next Memorial Day weekend.

Children’s Boot Camp for the Culture Wars
Stephen Holden

“Extreme liberals who look at this should be quaking in their boots,” declares Pastor Becky Fischer with jovial satisfaction in the riveting documentary “Jesus Camp.” Ms. Fischer, an evangelical Christian, helps run Kids on Fire, a summer camp in Devils Lake, N.D., that grooms children to be soldiers in “God’s army.”

A mountainous woman of indefatigable good cheer, Ms. Fischer makes no bones about her expectation that the growing evangelical movement in the United States will one day end the constitutional ban separating church and state. And as the movie explores her highly effective methods of mobilizing God’s army, that expectation seems reasonable.

Ms. Fischer understands full well that the indoctrination of children when they are most impressionable (under 13 and preferably between 7 and 9) with evangelical dogma is the key to the movement’s future growth, and she compares Kids on Fire to militant Palestinian training camps in the Middle East that instill an aggressive Islamist fundamentalism. The term war, as in culture war, is repeatedly invoked to describe the fighting spirit of a movement already embraced by 30 million Americans, mostly in the heartland.

At Kids on Fire we see children in camouflage and face paint practicing war dances with wooden swords and making straight-armed salutes to a soundtrack of Christian heavy metal. We see them weeping and speaking in tongues as they are seized by the Holy Spirit. And we see them in Washington at an anti-abortion demonstration.

Filmed during the Senate confirmation hearings of Supreme Court Justice Samuel A. Alito Jr., the movie visits a church at which the congregation prays in front of a life-size cardboard cutout of President Bush. Justice Alito’s eventual approval is hailed as another step forward in the movement’s eventual goal of outlawing abortion, the No. 1 issue on its agenda.

“Jesus Camp” is the second film by the documentary team of Heidi Ewing and Rachel Grady to explore the molding of young minds. The first, “The Boys of Baraka,” followed a group of “at-risk” African-American boys from a decaying Baltimore middle school to an austere wilderness school in rural Kenya. Removed from a toxic urban environment, they flourish, until tribal conflict in the region forces the school to suspend operation.

The majority of the children in “Jesus Camp” are home-schooled by evangelical parents who teach them creationism and dismiss science. Handsome 12-year-old Levi, who wears his hair in a mullet, is being groomed as a future evangelical preacher. Already exuding star quality, he strides through a group of children, waving his arms and mouthing dogma about how his generation is so important.

Pretty 10-year-old Tory speaks earnestly of dancing “for God” and not “for the flesh.” Nine-year-old Rachael is already an evangelical recruiter who fearlessly approaches adult strangers.

Ms. Fischer speaks of “dead churches” (traditional Protestant churches in which the congregations sit passively and listen to a sermon) and declares these are places that Jesus doesn’t visit. In evangelical churches where people jump, shout, weep and speak in tongues, she contends, the spirit is present.

The great unanswered question is what will happen to these poised, attractive children when their hormones kick in and they venture beyond their sheltered home and church environments.

“Jesus Camp” includes one articulate and alarmed dissenting voice: Mike Papantonio, a talk show personality for Air America. A self-professed Christian of the dead church variety, he engages in a pointed but friendly debate with Ms. Fischer when she calls in to his show. But the only moment of real tension occurs during a side trip to a megachurch in Colorado Springs where the preacher Ted Haggard, president of the National Association of Evangelicals (and a Bush friend), turns to address the camera in a tone of suspicion and hostility. It is the movie’s only glimpse of the evangelical movement’s ugly, vindictive side.

“Jesus Camp” doesn’t pretend to be a comprehensive survey of the charismatic-evangelical phenomenon. It offers no history or sociology and only scattered statistics about its growth. It analyzes the political agenda only glancingly, centering on abortion but not on homosexuality or other items. Because it focuses on the education of children, Ms. Fischer speaks of the evils of Harry Potter. But there is no analysis of Biblical teaching nor mention of “end times” or the rapture.

Who would deny that the movement’s surging vitality is partly a response to the steady coarsening of mass culture, in which the dominant values are commercial and the worldview is Darwinian in its amorality? Spread globally by television, the least-common-denominator brand of “secular humanism” — the evangelicals’ perceived enemy — is indeed repugnant.

It wasn’t so long ago that another puritanical youth army, Mao Zedong’s Red Guards, turned the world’s most populous country inside out. Nowadays the possibility of a right-wing Christian American version of what happened in China no longer seems entirely far-fetched.

“Jesus Camp” is rated PG-13 (Parents strongly cautioned). Its frank discussion of politics and religion could upset.

Broadway for Dummies (and Ventriloquists)
Jesse Green

ALTHOUGH Bob was the first to say hello when I entered the crowded room, he wasn’t especially pleasant. Cute, yes, with apple cheeks and glossy brown hair, but he seemed to smirk at me. And was that a touch of condescension in his voice? Still, I felt compelled to respond: barely three feet tall, with huge, imploring eyes, he was clearly hungry for company, like a lonely child. I later found out that Bob is pushing 30. Still, he’s had so much work done that you might assume he was a stunted ’tween, were it not for the guy with an arm up his back.

That would be Jay Johnson, similarly glossy-haired but blonder, taller and human. He too seems youthful, if not as strikingly boyish as he was three decades ago when he and Bob first appeared on the television satire “Soap”: Mr. Johnson as Chuck, a shy ventriloquist, and Bob as a character sometimes called (but not to his face) Bob the Dummy. (The preferred term is “puppet,” or “wooden-American.”) The show, which ran from 1977 to 1981, made them stars of a certain sort: the sort that appears most often in reruns, on cruise ships, in comedy clubs and at annual meetings of textile workers.

But now the duo, if that’s the right term for the collaboration between a 57-year-old man and a glorified log are in town to star in, of all things, their own Broadway show. It is a sign of how far they’ve come, and how far Broadway has, too, that “Jay Johnson: The Two and Only!” — which starts previews Tuesday — has an open-ended booking in a theater named for the first lady of the American stage.

Sure, their Off Broadway outing at the Atlantic Theater Company in 2004 received ecstatic reviews, but that house seats 165, while the Helen Hayes seats 600. And though Off Broadway has recently done well with aerialists, clowns, synchronized percussionists and other refugees from Novelty World, the uptown climate for such performers has not been exactly balmy. Just ask the Hayes’s most recent tenants, Kiki and Herb.

That pair of boozy losers joined a litany of recent acts, including such formerly dependable perennials as Jackie Mason and Dame Edna, who have come and gone without making a profit. But Mr. Johnson isn’t deterred. “Entertainment is entertainment,” he said. “We have the same chance as any other show that opens its doors. Remember, this is the town that embraced ‘Puppetry of the Penis.’ I would think our show has more universal appeal than that art form.”

Still, Mr. Johnson and his various characters (he voices 11 in the show) are grabbing every publicity opportunity that comes their way: singing “New York, New York” with Martin Short and Donny Osmond at the open-air “Broadway on Broadway” concert last Sunday; agreeing to appear this Tuesday as part of Ventriloquist Week on “Late Night With David Letterman,” despite concerns that the gig might prove undignified.

Dignity may seem a strange thing to worry about when you play with puppets for a living, but Mr. Johnson, despite having appeared on “The Love Boat,” sees himself as part of a noble tradition. He was pleased to reveal that Bob — well, a former and slightly more ethnic-looking Bob — was in negotiations to be inducted into the Smithsonian’s popular entertainment collection.

That might explain why the puppet was so haughty when I met him, taping a public service announcement for the League of Women Voters. But Mr. Johnson, who said he is dyslexic, “like 100 out of 17 people,” kept flubbing his lines, while Bob, who was strangely letter-perfect, seethed. “I can get another ventriloquist, easy,” he snapped. It was at this point that my brain started knotting up, as when faced with a logical pretzel like “This statement is false.”

Ventriloquism (the word roughly translates from the Latin as “belly speaking”) is creepy. So why is it — at least as Mr. Johnson performs it — so powerful? It takes about a nanosecond to accept the illusion: to think of Bob as a separate entity and to look at him when he speaks.

During the early tapings of “Soap,” Mr. Johnson recalled, the boom operator kept turning the microphone toward the puppet for his lines. I too fell into the trap, at one point congratulating Bob on being a better ad libber than his partner. And when Mr. Johnson accused another co-star (Spaulding, a tennis ball) of harassing the makeup woman, I couldn’t figure out who was behaving badly.

As he does for everything regarding ventriloquism, Mr. Johnson has a good explanation for these phenomena. (He’s a doctorate waiting to happen.) Basically it boils down to the supremacy of the senses over the intellect. We believe what we perceive, not what we know. In “The Two and Only,” which is part autobiography, part club act and part dissertation on the history and psychology of the form, he reveals all his best tricks. But that doesn’t matter. His complete demystification of the process does nothing to derail, or decreepify, it.

People want to believe the impossible. Though the show is being marketed in self-affirmative, Oprahesque terms — it’s said to be about “throwing your voice, and finding it” — the emotions that really animate the enterprise are murkier: dread (that unliving things might start talking) and desperation (that they might not).

“The history of ventriloquism comes from necromancy, which is talking to the dead,” Mr. Johnson told me later. He suggested that many people who have claimed to communicate with the spirit world — the oracles at Delphi, Drosselmeyer in “The Nutcracker,” the Wizard of Oz — were just throwing their voices.

Actually, Mr. Johnson explained, the trick at the heart of ventriloquism isn’t “throwing” the voice but “treating” it. Thanks to a throat-muscle manipulation that opera singers call a coup de glotte, the amplitude of the emerging sound waves is constricted in a way that the human ear misinterprets as distance. Keeping the lips immobile and shifting focus supports the illusion. To demonstrate, Mr. Johnson took a hotel keycard from his wallet and carefully rubbed the magnetic strip with the cap of my pen. “Open the door,” the card clearly whispered. No matter how well I knew it was Mr. Johnson making the sound, my brain wouldn’t process it that way. “It’s pure physics,” he said. “And indirection. And once you add a puppet, you’ve got yourself an act.”

We were having a normal, nonventriloquized conversation, without Bob, and in that context Mr. Johnson seemed uncommonly mild. Perhaps it was from a long habit of playing the straight man, or perhaps because the puppet becomes the repository for the wilder drives its master can’t master. Certainly Bob looks capable of violence; his head, with its metallic innards, is often mistaken for a bomb at airport security checkpoints. But Mr. Johnson points out that a calm puppet just isn’t very interesting; the creators of “Soap” told him to lose his first professional sidekick, a sweetheart named Squeaky, because they wanted a more ribald tone. They understood that to compensate for a lack of physical expressiveness, most puppets must be endowed with extreme dispositions. They’re pretty much smart alecks, imbeciles or hags.

Though it takes a lot to make them interesting, Mr. Johnson said, it doesn’t take much to make them seem real. Since the invention of the telephone, a voice alone is enough to imply a body, sufficient proof of existence. How much more alive is a talking manikin, which we can see as well as hear? In any case Bob gets mail, and not from children. When fans come backstage, they do not want to hear that he’s been put in a box; Mr. Johnson has to say he’s in the shower.

Even for ventriloquists the suspension of disbelief can get out of hand. Some answer the phone in their puppets’ voices or include them in family pictures. Candice Bergen, in her memoir “Knock Wood,” suggests that her father, Edgar Bergen, unconsciously instigated a rivalry between her and her “brother,” Charlie McCarthy; his bedroom was bigger than hers.

Several times I caught Mr. Johnson engaging in what I thought was similar behavior: calling a puppet’s face-paint “makeup” and speaking of its skills as if they were independent of his own. When working on television, he admitted, he’s gone even further. “Don’t tell me to have Bob look into the camera,” he instructs directors. “Say, ‘Bob, look into the camera.’ ’’

But these were merely shortcuts, he explained, adding that he disdains anthropomorphic antics; he once broke up with a girlfriend because she sent Squeaky a birthday card. The only time he has ever used his skill “for evil” was in playing Marco Polo in the pool with his kids. Ventriloquism as he sees it is nothing more or less than an art: he is part vocalist, part instrumentalist, part dramatist. Despite this division of roles, he dismisses the split-personality theory as a vestige of more superstitious times, exacerbated by novels like William Goldman’s “Magic” and to some extent by “Soap,” in which lonely, repressed souls act out through their art. Instead of voicing the puppet, the puppet voices them.

At any rate, Mr. Johnson said, he was never lonely or repressed. (He now lives with his wife, Sandra, in a sprawling, gated four-bedroom ranch in the Encino area of Los Angeles; Bob lives in a carrying case in a closet.) What drew him to ventriloquism was merely the fun it seemed to offer. It began with the telephone, with the sound of his hard-of-hearing grandmother yelling across the wires; why couldn’t he have voices like that to play with? Obliging, his mother disconnected the receiver, and Jackie and Gaga (who still appear in Mr. Johnson’s act) were born.

They were not, from the evidence, exceptionally fascinating, except perhaps to a 5-year-old whose imagination was quickly outstripping his family’s. “To buy a doll for a boy from Texas,” he says in the show, “you might as well just send him to New York and be done with it.”

Not so fast; first he had to learn not only the coup de glotte but also how to manipulate real puppets with movable heads, mouths and eyes while sustaining the interaction between real and unreal characters. (Mr. Johnson believes that his dyslexia actually helped in this regard.) Next he needed stage experience, which he got working summers at sweltering theme parks in Texas and Georgia, 10 shows a day. His partner by then was Squeaky, whom he had adapted from a cousin’s Jerry Mahoney toy. Mr. Johnson found the work invigorating, and even after performing the same bit 918 times wanted more. But Squeaky, less sturdily built, was a wreck.

And so at 17, when he’d saved up enough money, Mr. Johnson scoured the puppet makers’ catalogs — “a high school annual for wooden kids,” he said — and contacted a master ventriloquist named Arthur Sieving. Then 70 and living in retirement with Harry O’Shea, his (nonhuman) companion of 50 years, Mr. Sieving believed that a puppet was not a toy or a homunculus but a fine instrument, and should be treated as such.

When he judged Mr. Johnson’s intentions to be sufficiently high-minded, he set about carving a new Squeaky, on the condition that it never be put away without a black cloth over its face. “So that the life you had given him,” Mr. Johnson explained, “would be there when you came back.”

No wonder people roll their eyes (even more than Bob does) when they think of ventriloquists. And — no offense to “The Two and Only,” which is thoughtfully shaped and ultimately touching — the idea of a tarted-up hand puppet succeeding at the Helen Hayes portends a terrifying future in which the next stars of “Phantom” are Topo Gigio and Madame. Already magicians seem to be colonizing the Broadway margins, and by his own admission Mr. Johnson is a step down that ladder. The pecking order among variety acts, he said, goes from magicians to ventriloquists to jugglers to prop comedians and, scraping the bottom, to mimes.

But ventriloquism is more complicated than any of those. Though it involves, like a card trick, the production of awe through indirection, it does not depend on keeping the audience in the dark. With magic, the achievement of the illusion is the end of the story; with ventriloquism it’s just the beginning, a means to an end. What is the end? It seems ludicrous to say it’s the same as in any kind of drama: conflict, empathy, catharsis. Especially when the “art” is so often limited by its stock characters. They are, finally, wooden.

But it’s amazing what your brain fills in when it wants to: from only three moveable parts, expression suddenly appears. From a few changes in pitch come recognizable voices. The desire to make that happen, Mr. Johnson said, is powerfully, and universally, human. Certainly he makes it seem so, toward the end of “The Two and Only,” when he describes visiting Mr. Sieving’s widow a few days after his death in 1974. Grieving, she asks Mr. Johnson to operate Harry O’Shea and have him “talk” to her just one more time.

Is there any doubt that the voice she heard when Mr. Johnson complied was her husband’s? The act may have been flim-flam, but her tears were quite real.

A Scholar Is Alive, Actually, and Hungry for Debate
Marc Santora

At a news conference after his spirited address to the United Nations on Wednesday, President Hugo Chávez of Venezuela expressed one regret: not having met that icon of the American left, the linguist Noam Chomsky, before his death.

Yesterday, a call to Mr. Chomsky’s house found him very much alive. In fact, he was struggling through “10,000 e-mails” he had received since the remarks by Mr. Chávez, who urged Americans to read one of Mr. Chomsky’s books instead of watching Superman and Batman movies, which he said “make people stupid.”

At 77, Mr. Chomsky has joined the exclusive club of luminaries, like the actor Abe Vigoda and Mark Twain, who were reported dead before their time, only to contradict the reports by continuing to breathe.

“I continue to work and write,” he said, speaking from his house in Lexington, Mass.

Mr. Chávez, while addressing world leaders at the United Nations, flagged “Hegemony or Survival: America’s Quest for Global Dominance,” which Mr. Chomsky published in 2003, as a must-read. Mr. Chomsky said he was glad that Mr. Chávez liked his book, but he would not describe himself as flattered.

“We should look at ourselves through our own eyes and not other people’s eyes,” he said.

Mr. Chomsky said he had taken no offense at Mr. Chávez’s remarks about his being dead. In fact, Mr. Chávez’s promotion of the book propelled it yesterday into Amazon’s top 10 best sellers.

While retired from teaching full time, Mr. Chomsky still goes to his office at the Massachusetts Institute of Technology, occasionally lecturing and also working on a new book.

At the United Nations, the remarks by Mr. Chávez on Wednesday set off a firestorm that almost overshadowed the visit by Iran’s president, Mahmoud Ahmadinejad, whose country has been under intense global scrutiny for its nuclear ambitions. From the podium of the General Assembly, the Venezuelan leader said he smelled lingering sulfur, left by President Bush, who had spoken there the day before and whom he branded “the devil.”

Mr. Chávez continued mocking Mr. Bush yesterday in Harlem, where he announced the expansion of a program to send cheap Venezuelan oil to poor families in New York. He told a group gathered on the street that the president was an “ex-alcoholic” who had “a lot of hang-ups” and tried to walk “like John Wayne.”

Mr. Chomsky said that he would not choose to use the same harsh oratory, but added that the Venezuelan leader was simply expressing the views of many in the world. And he said Mr. Chávez’s anger was understandable.

“The Bush administration backed a coup to overthrow his government,” he said. “Suppose Venezuela supported a military coup that overthrew the government of the United States? Would we think it was a joke?”

Proving that he was still up for a lively debate, Mr. Chomsky then went on to talk about income inequality in Latin America, the history of the United Nations, Iraq, Iran, Fidel Castro and, finally, the man who so fervently admires him, Mr. Chávez.

“I have been quite interested in his policies,” Mr. Chomsky said. “Personally, I think many of them are quite constructive.” Most important, he said, Mr. Chávez seems to have the overwhelming support of the people in his country. “He has gone through six closely supervised elections,” he said.

So would Mr. Chomsky oblige Mr. Chávez’s wish for a meeting, helping ensure that the South American leader will not have that regret to live with anymore?

“I would be happy to meet him,” Mr. Chomsky said.

But that encounter may have to wait: Mr. Chávez was to return to Venezuela as soon as today.

News From The North

The TankGirl Diaries


Active Election Day in Sweden

According to Swedish Television, the Swedes have been voting actively in their parliamentary election today. The queues have been hours long in some voting places but everything has gone smoothly and people have waited patiently for their turn to vote.

The doors of voting places will close two hours from now, and at that same moment the Swedish TV will start its traditional 'Valvakan' show - a special program covering the counting of the votes and analysis of the results late to the night. Party leaders and other key people will of course be interviewed a number of times, and live coverage will be provided from the various venues where the members of different parties have gathered to spend the evening. No official results for the small parties - including Pirate Party - will be available today but should any interesting information about the pirates pop up during the Swedish Valvakan, I will pass it to you.


Center-Right Coalition Wins in the Election, Pirates Unlikely to Get to the Parliament

As the counting of the votes continued late into the night in Sweden, the main result of the election started to become clear: Swedes will have a new government soon. The center-right 'Alliance' consisting of four parties seems to get a clear enough majority to form the next coalition government for Sweden. The Alliance victory was due to the sensational success of The Moderate Party - their share of votes was now 26.1 - almost 11 % more than in the previous election, promising to give them 97 seats in the new parliament where they now have only 55 seats. The chairman of the Moderate Party, Fredrik Reinfeldt, will evidently become the next prime minister of Sweden. The present prime minister Göran Persson has already announced to leave his post as the party leader of the Social Democrats due to the poor election result. The Left Party also lost a lot of votes while the Green Party was the only member of the present government coalition to increase its support.

How did the Pirate Party do? All we know at this stage is that the total share of votes for the small parties was 5.7 % - no information about the breakdown of these votes between different small parties is yet available. This share is 2.6 % more than in 2002 parliamentary election but it still seems too small to give Piratpartiet realistic chances to cross the 4 % vote thresold. Judging from the comments on Pirate party's discussion board the pirates themselves do not seem to believe they have made it to the parliament. So they are merely wishing to have a large enough share of that 5.7 % to get certain benefits for the party for its future political work. Even a 1.0 % share of votes would benefit them as they would get the expensive printing and laborous distribution of voting ballots done by the state election officials in the next election. 2.5 % is the next interesting limit, as that would entitle the party to financial support from the Swedish state - the more above 2.5 %, the larger the support.


Small Party Results Starting to Show

After the preliminary counting of the votes during the election night, the official counting began this morning at 8 am in all election districts. With the official counting the results for the small parties have also started to the appear to the web pages of the election officials. A lion's share of small party votes seems to be going to the anti-immigration party Sverigedemokraterna (about 2.5 % of total votes); the Feminist Party seems to come strong second (about 1.2 %); and Pirate Party seems to take a similarly clear third place, its vote share being presently around 0.6 %. The best the pirates can wish for at this stage is to reach 1.0 % of the votes while the counting proceeds, which would make their task much easier in the next election as the Swedish state would print and distribute their ballot papers for them with that result.

The result will no doubt be a disappointment to the pirates who organized themselves fairly well and put up a good campaign despite having existed less than 9 months as a party. But then we have to remember that this was the very first time the emerging political pirate movement has tried to get to the parliament anywhere, and while the Swedes have been focusing on their own election campaign the movement itself has already started to spread around the world, especially in Europe.

The pirates have also already now managed to make a strong impact on the Swedish politics. All parties have had to take their stands on the filesharing issue, and right after the election the Green Party (the only succesful government party in the election) came out with a program demanding legalization of 'downloading' of copyrighted material from the net and only modest fines for public sharing of copyrighted material so that filesharing could not be used as an excuse for violating the privacy of net users with Big Brother type spying methods.


German Pirate Party Goes Official

While the Swedish pirates were beginning the last week of their election campaign and the international focus of the pirates was keenly on Sweden, 53 founding members of the German Pirate Party (Piratenpartei Deutschland) gathered together in Berlin to formally found this sister party to the Swedish Piratpartiet. The founding on September 10th was preceded by a long, active and thorough online discussion on the political principles and the agenda of the new party. Like the Swedish Pirate Party, the German sister party defends the freedom of private citizens to exchange culture and knowledge with each other, is highly critical of the ongoing efforts to build a Big Brother style control society and demands reforms to the patent system which has in practice turned against its original idea of inciting innovation for the good of the entire society.


Final Results of the Swedish Election Ready

The official counting of the votes has been finished in Sweden. Pirate Party ended up as the third largest of the 'small parties' with 34.918 votes, competing tightly for the second place with the Feminist Initiative that took 37.954 votes. By far the largest small party was the anti-immigration party Sweden Democrats who took 162.463 votes, only some 50.000 votes shy of getting their candidates through to the parliament.

The result means that on the average every registered Pirate Party member managed to get about 3 other voters to cast their vote for the pirates. Even if the result did not bring the much-desired parliamentary power to the pirates, they managed to establish themself as a serious candidate in the coming elections, and they will certainly not be ignored by the Swedish media in the future as an insignificant small party. They also managed to make filesharing and privacy issues an important election theme, and the public debate on these issues continues in Sweden.

The Swedish political climate has been very mobile during recent years. This is highlighted by the poor success of June List. This small party had a sensational success in the EU Parliament election in 2004 capturing 14% of the Swedish votes and three EU parliament seats. In this election Pirate Party won June List with a margin of almost 9000 votes.


Swedish Pirate Party to Launch A National Youth Organisation

It did not take long for the Swedish Pirates to recover from their disappointment of not making it to the parliament on the first try. Active discussion on the future political activities is already going on in their forums, and new members keep joining the party daily. The party executives have kept their own post-election meeting and laid out their short and long term plans. In the long term the party will now strengthen its national organization that was put together quickly under the time pressure of the elections. The main long term targets will be success in the 2009 EU Parliament elections - where they will co-operate with other European pirate parties - and in the next Swedish parliamentary election in 2010. The party is still forced to operate on a minimal budget but now they get some extra income from the Relakks anonymizing service that they have helped to promote.

The main short term initiative declared by the party leader Rick Falkvinge will be the launching of a national political youth organization for the party. This organization, called Ung Pirat (Young Pirate), will serve as an umbrella organization for otherwise independent, locally operating pirate youth associations. This move was motivated by the promising success of the pirates in the School Election 2006 - a special election organized for the older basic school and high school students mimicking closely the real parliamentary election. 1286 schools were involved, and a total of 381.896 votes were given in the election. The Pirate Party got 4.5% of the national votes despite having blank ballots only at their use in contrast to the parliamentary parties who had preprinted ballots provided by the Swedish election officials. In some schools the pirates got 20-30% of the votes, and the record was 40%. Now that there is time to build up the political movement, investing in the younger generation seems like a smart move to guarantee success in the future elections.http://www.p2p-zone.com/underground/...t=22742&page=5


Opposition Wins Swedish Election

Stockholm (dpa) - A four-party centre-right coalition has won over the Social Democrats in Sweden's parliamentary elections Sunday, ending 12 years of Social Democratic minority rule.

"The Swedish people have voted for a new government," Fredrik Reinfeldt, leader of the conservative Moderate Party, told enthusiastic party supporters.

Prime Minister Goran Persson of the Social Democrats conceded defeat minutes later, calling the election "a setback."

"When the votes are counted we can see that we are in minority," Persson said after his party dropped from 39.8 per cent in 2002 to 35.3 per cent, the party's poorest showing in decades, according to the tally released by the Election Authority.

Persson said that he would hand in his government's resignation Monday, and announced that he planned to step down as Social Democrat leader at an extra party conference in March 2007.

The 57-year-old Persson has been premier for the last 10 years and was named leader of the Social Democrats in March 1996.

The opposition Alliance for Sweden coalition was formed two years ago in a concerted attempt to challenge the Social Democrats.

With 5,718 of 5,783 districts counted, the alliance scored 48 per cent compared to 46.3 per cent for Persson's ruling Social Democrats and their parliamentary backers, the Green Party and the Left Party.

Translated into seats, the four-party Alliance for Sweden would have 178 seats in the 349-seat parliament compared with 171 for the Social Democrats and their allies.

The 41-year-old Reinfeldt was the clear winner of the elections, winning back voters who fled his party in 2002, and with 26 per cent the Modedrate Party scored its best result in the post-war era.

Reinfeldt's party gained some 11 percentage points from 2002.

During his three years as leader, Reinfeldt has revamped the party, moved it more to the centre and played a key role in forging the two-year-old opposition alliance with three other non-socialist parties - the Centre Party, the Liberal Party and the Christian Democrats.

Reinfeldt underlined that the election victory was the result of "a joint effort" by the four parties.

"After a lot of hard work, Sweden will have a new government," said Goran Hagglund, leader of the Christian Democrats.

Despite a favourable economy, the Social Democrats lost votes, suggesting that the electorate were weary of the party's rule, observers said.

Support for the Left Party also fell, while the Green Party increased slightly.

Several opinion polls had predicted a close race between the two rival blocs but suggested that the minority Social Democrats, who have ruled the country of 9 million people for the last 12 years, would be voted out of office.

In all, 6,891,172 voters were eligible to participate in the parliamentary elections.

Voter turnout was about 80 per cent, on par with 2002 participation.

In addition to national elections, voters were to elect 20 county council assemblies and 290 municipal assemblies.

Local advisory referenda were also held in 22 municipalities. Voters in the capital, Stockholm, and a dozen neighbouring municipalities were to vote on congestion charges.

Study: Interest in Political News Steady
Anick Jesdanun

Despite generally less interest in politics during the summer months and for midterm elections, Americans were as likely to look up political news and information online in August as they did during the peak of the 2004 presidential campaign.

Nineteen percent of U.S. adult Internet users, or 26 million, sought such information on a typical day in August, the Pew Internet and American Life Project said Wednesday. That's about the same as the 18 percent recorded in November 2004.

There was a jump from the last midterm elections - 13 percent sought political information in July 2002.

John B. Horrigan, Pew's associate director, credited greater availability of high-speed Internet connections at home, which tends to boost usage of just about everything online, along with better political materials from campaigns, news organizations, activists and bloggers.

He said the interest in political news appears to be growing faster than the desire for general news, and the study found that younger people were more likely to seek out such information.

Pew conducted the telephone study Aug. 1 to Aug. 31, interviewing 1,021 Internet users. The margin of sampling error is plus or minus 3.5 percentage points.

Sometimes a mouse is just a mouse

Could You be Addicted to the Internet?

I can't live without IE
Dr Stephen Juan

Can you be addicted to the Internet?
Asked by Ian Anderson of Aberdeen, Scotland

Internet Addiction Disorder (IAD) is one of the new psychopathologies of the internet era.

The first mention of "internet addiction" was in a 1996 paper by Drs O.Egger and M Rauterberg of the Swiss Federal Institute of Technology in Lausanne.

The first case of IAD in the clinical literature was presented by Dr KS Young of the Department of Psychology at the University of Pittsburgh campus in Bradford, Pennsylvania and appears in the February 1997 Psychological Reports. Bradford is now the home of the Centre for Internet Addiction.

The case concerns a 43-year-old housewife who was addicted to the internet yet who otherwise had no prior history of any other psychiatric problem.

It is unknown how many people suffer from IAD. There are several symptoms of IAD. These include:

• A need for an ever increasing amount of time on the internet to achieve satisfaction or a dissatisfaction with the continued use of the same amount of time on the internet.
• Two or more withdrawal symptoms developing within days, weeks, or up to a month after a reduction or cessation of internet use. These include distress or impairment of social, personal, or occupational functioning such that there is psychological or psychomotor agitation such as anxiety, restlessness, irritability, trembling, tremors, voluntary or involuntary typing movements of the fingers, obsessive thinking, fantasies, or dreams about the internet.
• Internet engagement to relieve or avoid withdrawal symptoms.
• Internet often accessed more often or for longer periods of time than was intended.
• A significant amount of time is spent in activities related to internet use (for example, internet surfing).
• Important social, occupational, or recreational activities eliminated or reduced due to internet use.
• Risk of loss of a significant relationship, job, educational, or career opportunity due to excessive internet use.
• Internet engagement used as a way of escaping problems or relieving feelings of guilt, helplessness, anxiety, or depression.
• Concealing from or lying to family members about the extent of internet use.
• Internet user driven to financial difficulty due to incurring unaffordable internet fees.

Stephen Juan, Ph.D. is an anthropologist at the University of Sydney. Email your Odd Body questions to s.juan@edfac.usyd.edu.au (mailto:s.juan@edfac.usyd.edu.au)

Google Helps Find Ancient Roman Remains

A computer programmer looking at Google Earth satellite images has reportedly discovered the remains of an ancient Roman villa near Sorbelo, Italy.

Luca Mori of Sorbelo was looking at a satellite image of his area, located near Parma, when he noticed unusual shading near his home, the London Telegraph reported Wednesday.

He said the area had an oval shaded form more than 500 yards long, with some unusual rectangular shadows nearby.

Archaeologists subsequently determined the rectangular lines were, most likely, a buried structure and the oval area was likely the course of an ancient river.

Mori contacted the National Archaeological Museum of Parma, which investigated.

"At first they thought the site might be Bronze Age, but a closer inspection turned up ceramic and stone pieces that showed it was a Roman villa built some time just before the birth of Christ," he told the newspaper.

Mori said he was happy with his discovery. "I have managed to get people talking about the Internet because of something interesting rather than pedophiles and viruses," he told the Telegraph.

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FYI: Skype Calls Regular Phones Free

Don't know how long this will last, end of the year probably (I could ask a developer here lol ) but Skype will freely pirate (promo) calls to regular US landlines and cell phones if you put a + sign and a 1 before the area code & number you're dialing (ie +1 234 555 6789). It works with versions both ancient and new. Bon voyage.

You gotta fight (blarng blarng) for your right (blarng blarng) to Skyyyyyy-yyyype
John Murrell

If you were listing markets that are ripe for Skype, you'd get to college campuses pretty quickly. You've got students on student budgets with far-flung friends and family; you've got faculty on faculty budgets with far-flung colleagues; and you've got them all in well-wired environment. But Skype is getting poor reception on some campuses, including San Jose State University, smack in the center of Silicon Valley. Following in the footsteps of the University of California-Santa Barbara and California State University-Dominguez Hills, SJSU plans to ban use of the pioneering VoIP system on its network because installation of the client software allows machines to serve as third-party relays for phone calls, chat and messages.

In Santa Barbara, this raised only scattered objections, but at techier SJSU the howls were loud. In a plea to keep Skype, Steve Sloan, a teacher and member of the IT department, wrote, "Since I started using Skype daily in my work I have been contacted by educators from Europe, Asia and Australia. Educators have contacted me via Skype to collaborate on teaching and learning methods. One contact was from a group of educators who wanted to use Skype technology, combined with podcasting and iPods, to extend the reach of the Internet into the Outback to reach Aboriginal children. Thanks to Skype, we are able to have easy and free international communications with colleagues. ... Banning Skype, in my opinion, would be like banning the web ten years ago." Student Kyle Hansen pleaded earnestly, "Skype is a tool that expands our universe as students; we now are able to connect with people all over the world in a way never before imaginable. Just think of the possibilities!"

Luckily, eBay, which owns Skype, is located nearby, and the university has invited some company reps to come over on Tuesday and see if there's a way to work things out. Jennifer Caukin, a spokeswoman for eBay, said Skype was looking forward to having "a direct dialogue with SJSU officials to discuss their concerns and educate them about how Skype works." And you better believe Skype will put a lot into that lesson plan, given the stakes should this get to be a trend.

China Builds a Better Internet

Americans have been hogging Internet addresses for decades, leaving late-comers like China to divvy up the few remaining slivers. But China is fighting back by vaulting to an addressing standard that could rewrite the rules of the Internet—and business innovation—for decades to come.
Ben Worthen

On a Friday night in mid-April, a gang of Friendlies, the multicolored, panda-cum-Teletubby-like creatures, which are the official mascots of the 2008 Olympics, mill about awkwardly, waving to confused tourists stumbling out of the bars that ring Houhai Lake in Beijing. Several miles away, construction crews are working around the clock on the Olympic stadium and other venues, trying desperately to keep to their schedules for the opening ceremony two years away.

Meanwhile, out of sight, in research labs throughout China, engineers are busy working on another project that the Chinese government plans to unveil at the Olympics: China's Next Generation Internet (CNGI), a faster, more secure, more mobile version of the current one. And unlike the Friendlies and the stadiums, which the world will forget as soon as the games end, CNGI's impact will be felt for decades.

CNGI is the centerpiece of China's plan to steal leadership away from the United States in all things Internet and information technology.

The strategy, outlined in China's latest five-year plan, calls for the country to transition its economy from one based almost entirely on manufacturing to one that produces its own scientific and technological breakthroughs—using a new and improved version of today's dominant innovation platform, the Internet. "CNGI is the culmination of this revolutionary plan" to turn China into the world's innovation capital, says Wu Hequan, vice president of the Chinese Academy of Engineering and the chairman of the CNGI Expert Committee, the group overseeing the project. "We will use it as a way to break through and be competitive in the global economic market."

The technology at the heart of CNGI is an emerging communication standard called Internet protocol version 6 (IPv6). The Internet protocol is the Internet's version of a postal envelope, containing information such as the destination and return addresses, and details about a package's contents. The current standard, IPv4 (IPv5 never made it out of the lab), doesn't have enough unique addresses for every would-be user in the world to connect to the Internet. IPv6 solves this problem, and is also more secure and efficient than its predecessor. For these and other reasons, most experts agree that a shift to an IPv6-based Internet is inevitable.

China is betting that by moving to the next-generation Internet before the rest of the world, China's researchers, academics and entrepreneurs will be the first ones to develop applications and services that take advantage of the new capabilities. (China isn't alone in this thinking. Japan and Korea have also launched national initiatives to move to IPv6.) If all goes according to plan, those services will be commercialized, making China home to the next wave of eBays and Googles. But China is also working on ways to use IPv6 to enhance its now infamous control over Internet traffic into and out of the country—which could have dramatic security implications for the United States (see "A New Weapon for Control and Intelligence?").

Call CNGI the first-mover advantage to end all first-mover advantages. "[China is] looking to leapfrog the U.S.," says Michael Gallagher, who was assistant secretary of commerce for communications and information, and President Bush's top adviser on Internet issues before joining the law firm Perkins Coie in February. According to Chinese and U.S. sources familiar with the project, the Chinese government has already invested close to $200 million in CNGI and has created a special office of the State Council dedicated solely to the project. China's major telecommunications companies, each of which is responsible for building a portion of the network, have also spent hundreds of millions of dollars so far. Today, CNGI connects 100 universities, 100 research institutes and 100 companies in 20 cities. At the Beijing Olympics in 2008, China plans to use CNGI for everything from broadcasting the events to controlling the Olympic facilities.
The Coming Threat

The United States is still the undisputed leader when it comes to the Internet. "[But] we cannot let our current success become a liability, with a continued reliance on the present protocol, while everyone else moves forward," says Rep. Tom Davis (R-Va.), chairman of the House Committee on Government Reform.

But that's exactly what's happening, in large part because few people in the United States know the threat exists. "Over time IPv6 could revolutionize what we can do with the Internet," says David Powner, director of information technology management issues for the Government Accountability Office. "My concern is that we will get behind."Your Hidden IPv6 Network
Are you building an IPv6 network without even knowing it?
If you’ve bought any new network equipment over the past few years, then chances are yes. Most commercially available routers and switches recognize both IPv4 and IPv6 traffic, as do Windows, Linux and Mac OS. But that doesn’t mean your network is IPv6 ready—that would require a full network redesign. Meanwhile, don’t ignore the IPv6 capabilities you may already have. Most applications, including network monitoring software, won’t register a user connecting with an IPv6 address, making it possible for hackers to enter the network undetected. Disable the IPv6 capabilities wherever possible until you are ready for the transition.

If China gets too big a head start, U.S. CIOs could be in the unfamiliar position of having to play catch up to the rest of the world—while paying as much as 30 percent more to manage their networks, according to estimates by the National Institute of Standards and Technology. Worse, organizations that lag behind the world in IPv6 adoption will be more vulnerable to hackers and other security threats. According to research by the U.S. Department of Commerce, the cost for an enterprise to build an IPv6 infrastructure is minimal if it is spread out over time as part of the normal technology refresh cycle. However, companies that wait until demand for IPv6 services emerge—either from overseas business partners or U.S. customers—could face a massive onetime hit in the ballpark of what it cost to fix the Y2K problem.

And while China's first-mover advantage is by no means a given, China has already established itself as the world's leader for IPv6, and, accordingly, is positioned in IPv6-related standards organizations. That could mean that the next-generation Internet is China-centric, the way the rest of the world feels the current one is U.S.-centric. "We used to be behind on the Internet," says Xiang Yangchao, executive vice president of Digital China Networks. "But we hope that we can become the leader of the IPv6 Internet."

"The Chinese are competing with us," says James Lewis, senior fellow at the Center for Strategic and International Studies. "We need to recognize that and figure out how we are going to compete with them."
Why China Needs a New Internet

The story of China's Next Generation Internet project began here in the United States in 1983, when the Internet, a Department of Defense project connecting a select group of academics and researchers, adopted an addressing system, IPv4, so that computers connected to the Internet could each have a unique identity for recognizing and communicating with each other. The addressing scheme, which uses a series of four decimal values, each of which can be a number from 0 to 255 (also known as 32-bit addressing), has a total of 4.3 billion possible addresses. In 1976, when computer engineers Vint Cerf and Robert Kahn developed IPv4, that seemed like plenty. "[A longer address] sounded just a little excessive in 1976," Cerf said at a government roundtable in 2004. "I mean, after all, [the Internet] was an experiment. So I thought, well, 4.3 billion addresses should be enough for an experiment."
China’s Internet Leap

Senior Writer Ben Worthen went to China earlier this year to research the next generation Internet. Read his travel diary.

At that time, the Internet was a mostly American phenomenon, so U.S. universities, commercial ISPs and some companies gobbled up large blocks of IP addresses on a first come, first served basis. Today, U.S.-based organizations have more than 1.2 billion IP addresses, close to 30 percent of the theoretical total, serving an online population of about 200 million.

That has left relative latecomers to the Internet, like China, in a bind. China, which is expected to surpass the United States as the world's biggest Internet user later this year, has just 2 percent of the world's IP addresses, or around 60 million—about as many as Stanford University. To its credit, the Internet Engineering Task Force, the organization responsible for setting standards on the Internet, saw this problem coming a long time ago and formally adopted a replacement standard, IPv6, in 1994. IPv6 solved the address shortage by increasing the number of decimal values in each address from four to 16 (or 128 bits), resulting in a near infinite number of combinations—enough addresses for every grain of sand on the planet, for example, or for every person alive to have about 50 octillion unique IP addresses. IPv6 can also recognize IPv4 traffic, allowing network operators to phase out the old standard over time.

But before IPv6 could gain any traction, engineers developed a workaround to IPv4's address limitations so they could avoid rebuilding their Internet networks. Dynamically assigned IP addresses allow ISPs to give a user a temporary address that is reclaimed at the end of an online session, and Network Address Translation (NAT) devices allow multiple users to connect to the Internet through a single IP address. This saved the world from a costly infrastructure upgrade, "but NAT also made the Internet more complicated and more fragile," says Nurani Nimpuno, outreach coordinator for APNIC, the registry that covers the Asia-Pacific region. NAT, China's dominant strategy for parsing out precious IP addresses, introduces more intermediate connections between computer users and the Internet, increasing susceptibility to slowdowns and interruptions and complicating high-bandwidth, real-time services like voice over IP or streaming video.

Given that China will have almost twice as many broadband users as the United States by the end of 2007, the sense of injustice among China's Internet officials is palpable. "When 26 Chinese share one Internet protocol address, while each American possesses six IP addresses…this is the quandary facing China in the IPv4 era," Zhao Houlin, director of the International Telecommunications Union, said in 2005. The bottom line for China, says Jiang Lintao, chief engineer at the China Academy of Telecommunications Research, is that "We cannot survive without IPv6."
The Leapfrog Effect

Latif Ladid, organizer of the IPv6 Global Summit, the world's largest IPv6 conference, recalls being unable to order a drink at a café inside the Beijing International Convention Center when the conference was first held there in 2004. In April 2006, sitting at the same café, the conference humming 100 feet away, he had no problem. "Now everyone speaks English," he says.

And that's just the beginning of China's accommodations to the West.

A bellhop at one of the conference hotels has adopted a Western alias, Harrison, to save foreign guests the trouble of having to decipher and pronounce his real name. A Chinese technology PR woman changed her Western pseudonym from Daisy to Edelweiss when she realized she had misidentified her favorite flower and finally settled on Dandelion after surmising that Edelweiss was too hard to pronounce.

It's all part of China's plan to integrate with—and compete against—the West, says Ladid, pointing to the 2,000-plus Chinese engineers on hand at the conference to learn about IPv6. They are the soldiers in the battle for the next Internet, the ones who will build China's new network and design the services that take advantage of it.

The innovation potential provided by IPv6 is enormous. Every device, from cell phones, to street lights, to a household thermostat, can have its own unique position on the Internet and be connected all the time. Utility companies will be able to read meters remotely over the Internet. Consumers parked outside a grocery store will be able to download shopping lists from their Internet-connected refrigerators to their BlackBerrys. Since every computer will have its own permanent IP address, users will be able to authenticate the source of e-mails or other requests, providing the means to track and prevent today's hacking, spam and phishing schemes.

For defense strategists, IPv6 is science fiction come to life. John Stenbit, former CIO of the Department of Defense, says that every soldier, spy plane and even every bullet will eventually have its own IP address, giving the military an incredible level of real-time visibility into combat zones.

The first services built with IPv6 in mind are just hitting the market. Microsoft's upcoming Vista operating system, for example, includes a feature where two IPv6 compatible computers can work in the same Office document without going through a server or other host. This ad hoc networking, where one of the devices essentially acts as the server, has broad implications for computer gaming, sensors and RFID.
Will the Bet Pay Off?

Some Internet experts, such as Paul Francis, a computer science professor at Cornell University who also happened to invent NAT devices, say that upgrading networks to IPv6 will cost so much and take so long that engineers will develop workarounds—be it improvements to NAT devices or something new—that solve the problems with IPv4, keeping the current Internet in place forever. But most people familiar with IPv6 say that the protocol has too much promise and can save CIOs too much money for it not to be adopted. Plus, most equipment makers are already selling IPv6-capable equipment today, meaning you could be building a next-generation network without even knowing it (see "Your Hidden IPv6 Network" on Page 45). "In the next 10 years everyone will [begin] moving to IPv6," says Robert Atkinson, president of the Information Technology and Innovation Foundation, a technology policy think tank. "That is not in doubt." The question, he says, is how long it will take for the United States to reach critical mass on the new protocol.

The federal government is moving now, thanks to an Office of Management and Budget mandate that says agency networks must be IPv6-capable by 2008. But a June 2005 GAO study found that only one agency, the Department of Defense, even has a transition plan in place (an updated report due out this summer is expected to show more agencies making plans, however).

The major U.S. telecommunications companies, meanwhile, are taking a wait-and-see approach to IPv6, says Prodip Sen, director of data and service architecture at Verizon Laboratories. They are buying equipment that can handle both IPv4 and IPv6 traffic, and waiting for demand for the new standard to emerge. The result is a chicken-and-egg dilemma: No one wants to invest in the infrastructure until there are applications that require it, but few companies will develop those applications until there is a network that can run them.

The United States' reluctance to invest in IPv6 makes it more likely that China will be in a position to gain the first-mover advantage it seeks. A draft version of a January 2006 report by the Department of Commerce on IPv6 contained a section on competitiveness that highlighted several threats to U.S. Internet leadership, including a further shift of high-tech R&D and product innovation eastward and less available investment capital because of the higher costs of maintaining IPv4 networks. What remains to be seen is whether China can develop the services that take advantage of the next-generation Internet. But China's researchers are already working on it. At the IPv6 Global Summit in April, China's major telecommunications and Internet companies got up on stage one by one and told the audience that they have research facilities dedicated to developing these services. "CNGI will continue to be the most important topic of research for us," says Zhao Huiling, vice president of the Beijing Research Institute of China Telecom. Similarly, the Chinese government decided that CNGI's first users should be universities, research labs and leading companies precisely because that is where it imagines innovation will come from. Liu Dong, president of the Beijing Internet Institute sums it up succinctly: "We think we can develop the killer applications," he says.
The 2008 Olympics: IPv6 on Display

China plans to show the rest of the world just how advanced its Internet is at the 2008 Olympics in Beijing. CNGI will control the facilities—everything from security cameras to the lighting and thermostats—at the Olympic venues, and events will be broadcast live over the Internet. Even the taxis in Beijing's snarled traffic will connect to CNGI via IPv6 sensors so that dispatchers will be able to direct their drivers away from congestion.

If the United States hopes to maintain its Internet dominance, it must act. But there are few voices spreading the alarm. The Department of Commerce removed the section on the competitive threat of IPv6 from its final report, because the government did not want to be seen as pushing private-sector technology projects, according to former assistant secretary of commerce Gallagher. But he says the government is "acutely aware" of the threat. However, Chairman Davis, who has asked the president to appoint an IPv6 transition czar and is consistently one of Congress's most outspoken advocates on technology issues, doesn't mind offering private-sector CIOs advice of the most urgent kind.

"We need to begin planning now," he says.

The Rise of Baidu (That’s Chinese for Google)
David Barboza


IN the summer of 1998 at a picnic in Silicon Valley, Eric Xu, a 34-year-old biochemist, introduced his shy, reserved friend Robin Li to John Wu, then the head of Yahoo’s search engine team.

Mr. Li, 30 at the time, was a frustrated staff engineer at Infoseek, an Internet search engine partly owned by Disney, a company whose fading commitment to Infoseek did not mesh with Mr. Li’s ongoing passion for search. Like Disney, Mr. Wu and Yahoo were also losing interest in the business prospects of search, and Yahoo — in a colossal corporate blunder — eventually outsourced all of its search functions to a little startup named Google.

Mr. Xu, who had called together some friends for a documentary he was making on Silicon Valley, thought the two search guys would hit it off. Mr. Wu says he exchanged greetings with Robin Li, but what most impressed him was that despite all of the pessimism surrounding search, Mr. Li remained undaunted.

“The people at Yahoo didn’t think search was all that important, and so neither did I,” says Mr. Wu, who is now the chief technology officer at the Chinese Internet company Alibaba.com. “But Robin, he seemed very determined to stick with it. And you have to admire what he accomplished.”

Indeed. A year after the picnic, in 1999, Mr. Li founded his own search company in China, naming it Baidu (pronounced “by-DOO”). Today, Baidu has a market value of $3 billion and operates the fourth-most trafficked Web site in the world. And Baidu is doing what no other Internet company has been able to do: clobbering Google and Yahoo in its home market.

While Baidu continues to gain market share in China — and does so with a Web site that the Chinese government heavily censors and that gives priority to advertising rather than relevant search results — some analysts question whether Baidu can withstand competition from Google and Yahoo, which possess superior technology and global work forces.

But Baidu’s evolution, and Mr. Li’s journey as an entrepreneur, offer textbook examples of the payoffs and perils of doing business in China and suggest that Baidu may prove to be far more resilient than some analysts believe. China has a population of 1.3 billion, about 130 million of whom are Internet users, an online market second in size only to the American market. Because China is the world’s fastest-growing major economy, analysts consider it the next great Internet battleground, with Baidu uniquely positioned to prosper from that competition.

In exchange for letting censors oversee its Web site, Baidu has sealed its dominance with support from the Chinese government, which regularly blocks Google here and imposes strict rules and censorship on other foreign Internet companies.

In addition, analysts say, entrepreneurs in China have a knack for pummeling American Internet giants. “The globally dominant U.S. Internet companies have failed to take the No. 1 market share position in any category,” says Jason D. Brueschke, a Citigroup analyst, of the Chinese market. “And they came with more money and major brand names. And so there’s something fundamentally different about this market.”

So fundamentally different, Mr. Brueschke believes, that Baidu will retain its hammerlock on the Chinese search industry. “The real battle in the competitive landscape is not about who’s No. 1, it’s about who’s going to be No. 2,” he says.

Google, of course, will have none of this, stressing the independence of its search results and the international reach it offers users. “People want information and they want global information,” says Kaifu Lee, the president of Google in China. “We can’t be bought.”

But Mr. Li says Baidu’s model is working supremely well and that the company has built a loyal base of users who value its search capabilities. “At the end of the day, if a user finds relevant information, they’ll come back,” he says.

ON its corporate Web site, Baidu says that it takes its name from a Song Dynasty poem written several centuries ago that “compares the search for a retreating beauty amid chaotic glamour with the search for one’s dream while confronted by life’s many obstacles.”

Mr. Li, born Li Yanhong in 1968 in what was then an impoverished city 200 miles southwest of Beijing, is familiar with life’s obstacles. The fourth of five children, he grew up during China’s brutal Cultural Revolution. Despite the oppression that surrounded him, he said he was always able to focus on stamp collecting, performing traditional opera and other interests — including, eventually, computers. He was bright enough to get into the country’s most prestigious school, Beijing University, where he majored in library science and dabbled in computer science.

The government infamously cracked down on pro-democracy demonstrations in Tiananmen Square in 1989 when Mr. Li was a sophomore, causing his college campus to be shut down. Mr. Li is mum on the events that followed, saying only that he was apolitical. But he does say that a year later he started thinking of studying abroad and that by the time he graduated in 1991 he was ready to leave his homeland.

“China was a depressing place,” he says. “I thought there was no hope.”

He applied to the top three graduate programs in computer science in America, but did not get into any of them (perhaps, he says, because China was considered an also-ran in technology). “I blindly sent out 20 applications,” he says. “SUNY Buffalo was the only program willing to give me a fellowship.”

He enrolled at Buffalo planning to earn a Ph.D. in computer science but grew disillusioned with academia. He completed his master’s degree in 1994 and then joined a New Jersey division of Dow Jones & Company, where he helped develop a software program for The Wall Street Journal’s online edition. During that time, he also became enamored of the technology boom taking shape in Silicon Valley. He spent much of his time trying to solve one of the Internet industry’s earliest problems: sorting information.

A breakthrough came in 1996, he says, when he developed a search mechanism he called “link analysis,” which involved ranking the popularity of a Web site based on how many other Web sites had linked to it.

“The moment I created this thing I was very excited,” he says. “I told my boss and pushed him. But he wasn’t very excited.” Soon after, he attended a computer conference in Silicon Valley and set up his own booth to demonstrate his search findings.

William I. Chang, then the chief technology officer at Infoseek, met Mr. Li at the conference and recruited him to oversee search engine development.

“Robin is possibly the single most brilliant and focused person I know,” Mr. Chang says. “And his inventions, now widely adopted, are still the gold standards in Web search relevance.”

After Disney acquired the small fraction of Infoseek stock it did not already own in 1999, it shifted the company’s focus away from search and toward content, leading Mr. Li to form his own Internet company with Eric Xu, who had a Ph.D. in biochemistry and good contacts in Silicon Valley.

The partners raised $1.2 million from two Silicon Valley venture capital firms, Integrity Partners and Peninsula Capital, and with their seed money in hand flew to China and founded Baidu in a hotel room overlooking Beijing University’s campus. Nine months later, in September 2000, two other venture capital firms, Draper Fisher Jurvetson and IDG Technology Venture, pumped another $10 million into the startup.

So it was that on the eve of the Internet bubble bursting in the United States, Baidu took off in China.

“When I came back I was prepared for a rough life,” Mr. Li says. “It turns out it wasn’t so bad.”

Baidu started out offering search services to other Chinese portals before developing its own stand-alone search engine. Some members of Baidu’s board of directors opposed the shift, saying it would turn customers into competitors. But Mr. Li said he sensed a shift in the market after watching the success of Overture, a company in Pasadena, Calif., that sold advertising space correlated with search results (which meant, for example, that ads for dental clinics might pop up next to search results for cavities).

“We were skeptical about search,” says Scott Walchek, a partner at Integrity Partners and a member of Baidu’s board. “But we weren’t as smart as Robin. Robin said he had a unique opportunity to build a brand around search. And he was right.”

In September 2001, Baidu began its own site — Baidu.com — which looked almost exactly like Google’s no-frills home page. And even before Google did it, Baidu allowed advertisers to bid for ad space and then pay Baidu every time a customer clicked on an ad. Small and medium-size companies loved it, the site became deluged with traffic and Baidu turned a profit in 2004. By then, Mr. Li was pushing for an initial public offering in the United States, insisting it would be a huge branding event for a company that had come to be called “China’s Google.”

BAIDU went public on Aug. 5, 2005, at $27 a share. When trading ended that day, shares of Baidu closed at $122, up 354 percent, the biggest opening on Nasdaq since the dot-com peak in 2000. Suddenly, Baidu was a $4 billion company and Mr. Li held stock worth more than $900 million. But not everyone cheered. Many analysts said that by almost every measure Baidu’s stock was ridiculously over-valued. It eventually tumbled to as low as $44 before rebounding. On Friday, its shares closed up $3.03 in regular trading, to $87.75, giving the company a market capitalization of about $2.94 billion.

At the time of the I.P.O., some critics attacked Baidu’s zealousness for ad revenues. They noted, for example, that a Baidu search for the word “cancer” turned up ads for hospitals that paid for top spots in results rather than returning information on cancer itself. In comparison, Google and Yahoo more clearly separate ads from relevant search results by placing them on the right side of the page.

The company’s revenue jumped 190 percent in the first half of this year, to $40.9 million; profit soared 550 percent, to $11.7 million. Baidu’s Web site is drawing millions of young people eager to download music files, create blogs or search for pictures of China’s “10 Most Beautiful Women.” While Baidu is growing fast, its revenue is still anemic compared with Google’s, which is expected to top $7 billion this year.

Analysts say Baidu is playing to a different audience than Western Internet companies because the Chinese are far more interested in entertainment than news, books or car rental rates. “The fact is 70 percent of China’s Internet users are under the age of 30,” says Richard Ji, an analyst with Morgan Stanley. “Most of them are single, only children. They’re looking for entertainment.”

That may explain why China’s dominant Internet companies are all entertainment focused, like Tencent (which hosts online communities and instant messaging) and Netease and Shanda (which are online gaming sites).

Yet no Internet company in China is growing as fast as Baidu, which had more than 50 percent of the pay-per-click market in the first half of year, up from a 37 percent share in the same period a year ago, according to Analysys, a research firm in Beijing. Google and Yahoo both lost ground, with each company holding 16 percent pay-per-click shares for the first six months of 2006.

Still, Baidu faces significant challenges. The company’s stock is in the stratosphere, putting pressure on management to deliver knockout growth every quarter. Google’s shares closed up $5.90 Friday in regular trading, to $409.88, meaning investors pay a hefty $60 for every $1 of profit in the stock, far more than other Internet companies. But Baidu investors pay a whopping $190 for every $1 of profit.

Baidu also faces legal challenges, including lawsuits claiming it violates copyright laws on music files. Baidu has been sued over the issue, but continues to provide links to sites that offer music files. The company says it does not believe it should be held responsible for simply offering linking to other sites. In a country rampant with claims of click fraud, a Beijing hospital recently claimed that Baidu orchestrated a scheme in which a Baidu affiliate kept clicking on the hospital’s ads to fatten the fees it had to pay Baidu. A Baidu spokeswoman says the company has not reviewed the case, but actively polices click fraud.

LOOMING on the horizon are Google and Yahoo. Google says it plans to spend hundreds of millions of dollars to compete in China, and Yahoo has merged its operations here with Chinese Internet behemoth Alibaba.com.

“Google is fierce,” Morgan Stanley’s Mr. Ji says. “And Alibaba has the best sales force. Baidu could get hurt on the technical side.”

But the Chinese market is littered with the wreckage of American Internet companies that have failed to dominate here. In 2003, eBay bought the largest Chinese auction company — and then lost market share. In 2004, Amazon bought the largest Chinese online merchandiser — and then lost market share.

Now, the real fight begins. Google, which invested $5 million in Baidu just before its public offering last year, sold that stake for a hefty $60 million in June. And now, Google is building up a huge research team in Beijing, not far from Baidu’s headquarters. But analysts say it won’t be easy for Google.

“The American Internet giants are dominant in the U.S. and dominant in Europe,” Mr. Brueschke at Citigroup says. “And then they come to China and fail. And so what I want to know is: What is Google going to do differently?”

For his part, Robin Li seems undaunted.

“Our traffic keeps increasing,” he says confidently. “We’re now the No. 1 Web site in China.”

Linux Spreads its Wings in India
Windows is still No. 1, but open-source software is moving into schools and government offices

With 4,000 students and just 21 computers, the Cotton Hill Girls High School in the south Indian city of Trivandrum wouldn't appear to be at the vanguard of anything related to information technology. Yet the 71-year-old school is abandoning Microsoft (MSFT ) Windows software in favor of its free, open-source rival, Linux. So when students -- typically eight to a machine, seated at two benches -- turn on their PCs they see Linux desktop software that helps them navigate their way to all manner of math, graphics, and writing programs. ``We're using something called Linux,'' says 12-year-old Arya VM as she plays with Tux Paint, a Linux drawing and painting application. And Windows? ``Never heard of it,'' she says.

The school is one of 2,600 in the state of Kerala making the shift. That means each of the state's 1.5 million high school students will grow accustomed to working not in the Windows environment familiar to computer users worldwide, but in Linux. And over the next two years, computer science based on Linux software will be made mandatory in all of the state's high schools. ``As a government that keeps the interest of society over corporations, we are committed to the use and development of free software,'' says V.S. Achutanandan, Kerala's sarong-clad chief minister.

India is shaping up to be a key battleground in the global assault of Linux. The country's long history of snarling at corporate interests, its widespread poverty, and its nascent PC culture make it fertile territory for the communitarian ethic of the upstart computer operating system. Two years ago, New Delhi said the best way to improve computer literacy in India was to adopt open source software in schools. Although Kerala is the first to introduce such a program statewide, 18 of India's 28 states either are using Linux or have pilot projects for its use in various government departments and schools. The education ministries in most states, and in Delhi the federal ministries of defense, transport, communication, and health, are all using the software on server computers. And eight state governments have put their treasury operations on Linux, while the western state of Maharashtra is using it to revamp health-care systems. India ``is one of the key countries I have been focused on,'' says Scott Handy, IBM's (IBM ) global Linux boss. ``India has been a star.''

That's not to say Linux will be knocking Windows off the desktop anytime soon. So far, most of its progress has been in server software, programs that government agencies and businesses use for their Web sites, payroll, and other key tasks. In June, Microsoft Corp. had 68% of the server market, vs. Linux' 21%, compared with 70% for Microsoft and 11% for Linux two years ago. The desktop is a different story: Just 3% of India's PCs use Linux. Still, that's about triple the level in the U.S. ``We expect India to be the first country to use Linux extensively over a large user base across many sectors by the end of the decade,'' says Deepak Phatak, an open-source evangelist from Bombay's famed Indian Institute of Technology. Two years ago, he took a yearlong sabbatical to travel across the subcontinent and make a push for Linux.

Unlike proprietary software from companies such as Microsoft, Linux is based on an open-source model. That means its code is available to developers worldwide, who can tweak it to make it better or adapt it to their own needs. Since the software itself is often given away for free, revenue numbers for Linux don't add up to much. Researcher IDC (IDC ) estimates that the Indian Linux market will grow by 21% annually, to $19.9 million in 2010, mostly for services provided by companies such as Red Hat (RHAT ), IBM, and locals like Wipro (WIT ) and Tata Consultancy Services. That's a modest amount compared with Microsoft's Indian sales of nearly $200 million last year. But Microsoft's lost opportunity is still substantial, since it sells Windows at $50 or more per copy to makers of PCs and servers, and then it typically sells other programs that run on top of it. And if students in the emerging tech powerhouse never get any experience with Windows, the damage a decade from now could be far greater.

The shift in government has spurred more businesses to use Linux, too. One convert is state-owned Life Insurance Corp. of India, which in 2005 switched its servers to Linux. With the $2 million in savings from using the free software, LIC is adding more computers. Today it has 70,000 PCs, all running Linux, and by next year it expects to have more than 100,000. Others are taking a more measured approach. Eighteen months ago, when Bombay-based Unit Trust of India wanted to set up a call center, the bank settled on Linux for its servers even as it continues to use Windows on its PCs. ``The openness of the system appealed to us,'' says UTI President V.K. Ramani. Now, he says, the bank is putting its credit-card system on Linux as well.

Microsoft is fighting back. The company has been working on India-specific products at its development center in the southern city of Hyderabad. One of them is Windows XP Starter Edition, a scaled-down version that can only open three programs at once and doesn't support advanced networking. But it sells for just over $20, or less than half the price of the original. And unlike the full Windows it comes in 10 Indian languages rather than just English and Hindi. While ``it's too early to say'' whether Linux has hurt sales, ``we are concerned'' about its rise, says Radhesh Balakrishnan, Microsoft's director of platform strategy for India, who moved from the U.S. in July. ``We need to demonstrate superior value to our customers,'' he says.

SERVICE TROUBLE. Linux, meanwhile, is having some growing pains. One issue that has slowed its spread is counterfeiting. Since software is widely pirated in India, many users pay nothing for the Windows operating system and other Microsoft applications that they use. Also, since Linux is distributed free, it's not always obvious whom to call for service. Companies such as Red Hat and IBM support the software -- for a fee -- but they're having trouble finding Linux-trained engineers in India.

Those issues have led some companies to abandon Linux. For instance, North Delhi Power Ltd. started using Linux both in its servers and on the desktop in 2002. But the Linux e-mail program it was using, Sendmail, never quite worked right. The company soon switched to Windows and Microsoft's Exchange e-mail server, and it has no plans to go back. ``There were immense maintenance, service, and upgrade issues,'' says Akhil Pandey, NDP's principal executive officer. The good news for Linux? As all those girls from Cotton Hill -- and millions of other students -- grow up using the software, those issues may no longer loom so large.

By Nandini Lakshman, with Steve Hamm in New York and Jay Greene in Seattle

Zero-Day Response Team Launches with Emergency IE Patch
Ryan Naraine

A high-profile group of computer security professionals scattered around the globe has created a third-party patch for the critical VML vulnerability as part of a broader effort to provide an emergency response system for zero-day malware attacks.

The group, known as ZERT (Zero Day Emergency Response Team), was formed in the aftermath of the WMF (Windows Metafile) attacks of December 2005 and is now emerging from stealth mode with an unofficial patch that offers temporary respite from a spate of drive-by malware downloads aimed at users of Microsoft's Internet Explorer browser.

The patch, which was created and tested by a roster of reverse engineering gurus and virus research experts, is available from the ZERT Web site for Windows 2000 SP4, Windows XP (SP1 and SP2), Windows Server 2003 (SP1 and R2 inclusive).

"Something has to be done about Microsoft's patching cycle. In some ways, it works. But, in other ways, it fails us," says Joe Stewart, a senior security researcher with SecureWorks, in Atlanta.

"It is clear that we are dealing with an underground group of people who are writing exploits for profits. They are waiting for Patch Tuesday to pass, then it becomes Exploit Wednesday. We're seeing these zero-days in the wild, timed precisely to guarantee at least an entire month to spread," Stewart said in an interview with eWEEK.

Stewart, who is volunteering his reverse-engineering skills and time to ZERT in his private capacity, wrote an early version of the VML (Vector Markup Language) patch the group released Sept. 22 and worked closely with others to fine-tune the update to minimize potential glitches.

Other volunteers involved with the ZERT initiative include Halvar Flake, CEO and head of research at Sabre Security; Ilfak Guilfanov, author of the IDA Pro binary analysis tool; Paul Vixie, founder of the ISC (Internet Software Consortium; Roger Thompson, chief technology officer of Exploit Prevention Labs; and Florian Weimer, a German computer expert specializing in Linux and DNS (Domain Name System) security..

Gadi Evron, an Internet security operations specialist well-known in botnet-hunting circles, is operations manager for ZERT. Nick FitzGerald, former editor of Virus Bulletin, is serving as liaison between the group and the anti-virus community while Dan Hubbard, senior director of security and technology research at Websense Security Labs, is volunteering technical assistance during zero-day outbreaks.

Hank Nussbacher, an Internet consultant specializing in Cisco IOS, routing design and threat analysis, is serving as go-between for ZERT and FIRST, an international forum for incident response and security teams.

"Whenever there's a vulnerability in the wild that is critical enough to threaten the health of the Internet, we want to have a mechanism to respond immediately. We can't afford to sit around and wait a month for a vendor [to release a patch]," Evron said in an interview.

Evron, who works as a security evangelist for Beyond Security, in Netanya, Israel, said ZERT volunteers have worked "literally around-the-clock" in coordination with several Internet operational security and incident response groups to create and perform quality-assurance testing on the VML patch."We're not here to replace [software] vendors. The idea is to provide quick, immediate response to threats when we determine that a zero-day threat is posing a serious risk to the public and the infrastructure of the Internet. We're saying, 'here's a temporary patch that we tested and we're confident will help mitigate the risk'. We can't guarantee it is fit for every environment, but we're offering it as an option," Evron added.

Microsoft has historically frowned on the idea of third-parties providing security fixes. At the height of the WMF exploits earlier this year, the company slapped a "buyer-beware" tag on an unofficial hotfix created and released by Guilfanov, and although its own fix for the latest VML bug is scheduled for delivery on Oct. 10—more than two weeks away—the company's stance hasn't changed.

Click here to listen to an OnSecurity podcast about third-party patches.

"[We] carefully review and test security updates and workarounds to ensure that they are of high quality and have been evaluated thoroughly for application compatibility. Microsoft cannot provide similar assurance for independent third-party security updates or mitigations," a Microsoft spokesperson said in a statement sent to eWEEK. "Customers should obtain security updates and guidance from the original software vendor," it added.

Evron acknowledged that it's impossible for ZERT to test its patches with every possible system configuration and in every usage scenario. "We [will] validate patches to the best of our ability, noting the environments in which the tests were performed and the test results. We're not pretending to be the official patch, we're simply offering an alternative during high-risk incidents," he added.

He said the nonprofit group will prepare and release emergency patches for any affected vendor if an incident escalates to become a major threat. "We have the expertise to create patches for non-Microsoft related issues, such as network gear and other operating systems," Evron explained.

The source code for all of ZERT's unofficial fixes will be released along with the testing methodologies used during the patch preparation. Any known reduction in functionality as a result of the patch will be noted along with instructions to install or remove the updates.

The group will update the patch if a conflict, instability or vulnerability is discovered in it, and Evron said all ZERT updates will include a complete rollback option. The patches will be provided in GUI and command-prompt versions, he said.

When the official, vendor-supplied update is eventually released, ZERT will withdraw its patch.

The VML patch being released Sept. 22 was the combined effort of SecureWorks' Stewart; Israeli programmer and reverse engineering enthusiast Gil Dabah; Michael Hale Ligh, a vulnerability researcher and computer forensics expert; and a batch of volunteer testers around the world.

Dabah said he started working on the patch on Sept. 19, just hours after the first wave of zero-day VML attacks started dumping a massive collection of bots, Trojan downloaders, spyware and rootkits on Windows machines.

"It's been about 19 hours of work, almost nonstop. It may be easy to build a patch, but testing is a lot of work. There are just too many versions of Windows," he said with a laugh.

Stewart, who wrote a version of the patch and submitted it to the group for consideration, said the creation of the actual fix is "very straightforward."

The challenge, he says, lies in figuring out how to deploy it in a robust fashion, for several different operating system versions and service pack levels.

The group did not coordinate its response with Microsoft and Stewart stressed that the aim is not to serve as a replacement for the software vendor. "Our goal is to get Microsoft to realize that there is a demand out there for an emergency patch. We're not looking for [Windows] users to prefer us over Microsoft. We're simply offering an alternative in a crisis," Stewart added.

"Microsoft needs to start paying attention and recognize that there's a need for an out-of-band patch. It's somewhat irresponsible to tell customers to wait two weeks for Patch Tuesday while computers are being hosed with malware," he declared.

Microsoft's Zune Won't Play Protected Windows Media
Derek Slater

In yesterday's announcement of the new Zune media player and Zune Marketplace, Microsoft (and many press reports) glossed over a remarkable misfeature that should demonstrate once and for all how DRM and the DMCA harm legitimate customers.

Microsoft's Zune will not play protected Windows Media Audio and Video purchased or "rented" from Napster 2.0, Rhapsody, Yahoo! Unlimited, Movielink, Cinemanow, or any other online media service. That's right -- the media that Microsoft promised would Play For Sure doesn't even play on Microsoft's own device. Buried in footnote 4 of its press release, Microsoft clearly states that "Zune software can import audio files in unprotected WMA, MP3, AAC; photos in JPEG; and videos in WMV, MPEG-4, H.264" -- protected WMA and WMV (not to mention iTunes DRMed AAC) are conspicuously absent.

This is a stark example of DRM under the DMCA giving customers a raw deal. Buying DRMed media means you're locked into the limited array of devices that vendors say you can use. You have to rebuy your preexisting DRMed media collection if you want to use it on the Zune. And you'll have to do that over and over again whenever a new, incompatible device with innovative features blows existing players out of the water. Access to MP3s and non-DRMed formats creates the only bridge between these isolated islands of limited devices.

The real culprit here is the DMCA -- but for that bad law, customers could legally convert DRMed files into whatever format they want, and tech creators would be free to reverse engineer the DRM to create compatible devices. Even though those acts have traditionally been and still are non-infringing, the DMCA makes them illegal and stifles fair use, innovation, and competition.

May this be a lesson to those who mistakenly laud certain DRM as "open" and offering customers "freedom of choice" simply because it is more widely-licensed than other formats. With DRM under the DMCA, nothing truly plays for sure, regardless of whether you're purchasing from Apple, Microsoft, or anyone else.

[Postscript: In an interview with Engadget, Microsoft Zune architect J Allard pointed out that Zune has sufficient video format support, in part because there's "Lots of DVD ripping software out there that encodes to those formats, so the most popular formats out there, whether it's MPEG-4 or H.264, we'll support those." Gee, he isn't suggesting that his business model benefits from customers using tools like DeCSS or Handbrake to evade the DRM on DVDs, right? Especially since Microsoft is furiously trying to squash the FairUse4WM tool, that would seem rather hypocritical.]

RealNetworks, SanDisk to Take On iPod
Allison Linn

RealNetworks Inc. is teaming up with SanDisk Corp. to release a portable music player that more closely links with RealNetworks' Rhapsody online music service, in the latest attempt to take on Apple's iPod and iTunes stronghold.

Analysts see the deal, to be announced Monday, as a way for SanDisk and RealNetworks to join forces against a new common foe: Microsoft Corp., which recently announced plans to release its own Zune portable music player and service.

Redmond-based Microsoft has been providing the technology that allowed services such as Rhapsody to transfer songs to portable music players without compromising the digital rights of that content. But many say they think Microsoft's plans to release the Zune service and a player made by Toshiba Corp. could make the software giant a significant competitor.

"This is kind of a way for both Rhapsody and SanDisk to say, 'Well, if you're gong to compete with (us), guess what, we're gong to compete with you,'" said analyst Phil Leigh with Inside Digital Media.

Katy Gentes, a product manager for Microsoft's Zune effort, said Friday that the company remains committed to the Windows Media platform it provides to partners and will continue to invest in it.

Under the deal, RealNetworks and SanDisk plan to release the Sansa Rhapsody, a portable music player based on SanDisk's e200. The companies said they expected the gadget to be available in time for the holidays, but they would not say exactly how much it will cost.

The player will come pre-loaded with hundreds of songs from musicians such as the Dixie Chicks and Jessica Simpson, as part of a free trial of RealNetworks' Rhapsody To Go subscription service. Anyone who buys or already has the music service will then be able to use the gadget to listen to nearly all of the songs available through the core Rhapsody service.

The Rhapsody Unlimited online service charges users a flat fee of $9.99 to essentially rent an unlimited number of songs as long as they subscribe to the service. Users who purchased the Rhapsody To Go service, at $14.99 per month, had previously been able to transfer their Rhapsody songs from their computers onto a portable music player. But the process required using Microsoft's technology for managing digital rights, a process RealNetworks said was clunky and had glitches.

"The fact that one company was making the player, one company was making the software and a third company was making the service meant it was not seamless," said Dan Sheeran, senior vice president of music for Seattle-based RealNetworks.

The Sansa Rhapsody will use RealNetworks' own technology for managing digital rights, which RealNetworks says will work more smoothly and allow the company to offer more bells and whistles. The gadget's release also will coincide with an update of the Rhapsody service.

Eric Bone, SanDisk's director of product marketing for audio/video products, said the goal of the partnership was to help smooth out the bumps that came up for users trying to grapple with the Rhapsody service and Microsoft technology. But he said the device would still include Microsoft's digital rights technology, so people could still use it to run other music services besides Rhapsody.

Sheeran said the company hoped to release more products with Milpitas, Calif.-based SanDisk, and he also wouldn't rule out working with other device manufacturers.

Analyst Michael Gartenberg with Jupiter Research said he thinks Microsoft's move to offer its Zune player and service has left some device makers and music services looking for new partnerships. But he said RealNetworks still has an uphill battle in persuading lots of users to go with this offering.

For one thing, people who use Apple Computer Inc.'s popular iPod and iTunes music service are used to owning their music, whereas Rhapsody works as a rental service. While Rhapsody has been around for a while, Gartenberg said most consumers still aren't familiar with it, and especially with using it on a portable player.

"The notion of renting music is a very strange concept to consumers, and no one has ever really explained it to them," Gartenberg said. "So one of the things that Real's going to need to do is evangelize."

RealNetworks Chief Executive Rob Glaser said in an interview Friday he believes the access to unlimited songs on a portable device will be a major selling point to people who want to take music on the go.

"It extends the value to a whole set of users who previously said, 'Well, I like the idea of a jukebox in the sky but I don't live with my PC," he said.

Leigh said both companies might be able to do a bit better by working together, but he still doubts the partnership stands a chance of making a dent in Apple's market dominance.

News Corp. May Start Chinese MySpace

News Corp. chairman Rupert Murdoch says his Chinese-born wife, Wendi Deng, is in China with the company's executives to help launch a Chinese version of its popular MySpace social networking Web site, a newspaper reported Wednesday.

Murdoch, speaking in New York, said the company is trying to find a way to enter the Chinese market without running into political obstacles and the "heavy weather" that Google Inc. and Yahoo Inc. have encountered, the London-based Financial Times said.

Murdoch bought MySpace last year. The site allows users to share text, pictures and video.

"We have to make MySpace a very Chinese site," Murdoch was quoted as saying Tuesday at a conference organized by investment bank Goldman Sachs Group Inc. "I have sent my wife across there because she understands the language."

Murdoch said MySpace in China was likely to have local partners, who would own about 50 per cent, the Financial Times said. He said that would ensure the content was suitable for a Chinese audience, while the partners would deal with complaints.

News Corp. has tried to expand in China but has been stymied by restrictions on foreign media ownership.

China has the world's second-largest population of Internet users after the United States, with 123 million people online.

The communist government promotes Internet use for education and business but tries to block the public from seeing material considered subversive or pornographic. Dozens of people have been jailed for posting political essays online.

Google, Yahoo and other companies have been criticized by human rights activists for cooperating with government efforts to censor Internet content.

MySpace is adding about 1.5m new users every week and recently surpassed 100 million registered users, according to News Corp.

Marketing on Google: It’s Not Just Text Anymore
Stuart Elliott

Just as Madison Avenue once helped convince consumers that orange juice is “not just for breakfast anymore,” Google is turning to Madison Avenue to help convince marketers that Google is not just for text advertisements in tiny type that appear adjacent to the results of searches on google.com.

Google is teaming up with Goodby, Silverstein & Partners in San Francisco, an Omnicom Group agency known for offbeat creative work, on a project for one of the agency’s largest clients, the Saturn division of General Motors.

The project begins today with a test of a campaign for Saturn, bundling together several Google products and services like clickable video clips, the Google Earth satellite mapping tool and geographic finding of computer users.

Visitors to a variety of Web sites in six cities around the country that are home to 22 Saturn dealerships will see what look like typical banner ads for Aura, a new Saturn midsize sedan. Clicking on an ad will produce a view of the earth that zooms in on the dealership nearest to the computer user.

The doors to the virtual dealership fly open, revealing the general manager, who introduces a brief commercial about Aura. After the spot ends, the general manager returns, standing next to an Aura and offering choices that include spinning the car 360 degrees, inspecting its engine, printing a map with directions to the dealership and visiting the Web sites of Saturn (saturn.com) or the dealer.

The project is intended to stimulate demand for Aura test-drives with a twist: the dealerships will deliver the cars to the homes of consumers. The theme of the project is “Take the 250,000-mile test drive.”

Sellers of online advertising are seeking to persuade mainstream marketers to devote more of their ad dollars to new media. That mission took on added resonance this week when a Google competitor, Yahoo, disclosed an unexpected softening of ad sales in two major categories: automotive and financial services.

Of course, some forays into the online media go more smoothly than others.

For instance, the Air Force this week decided to take down a profile it put up last month on MySpace, the social networking Web site (myspace.com), partly because of concerns about inappropriate content that could be linked to the profile. The decision was reported by AirForceTimes.com.

Colonel Brian Madtes, strategic communications director for the Air Force recruiting service, said yesterday that the Air Force would probably continue to run banner ads on myspace.com but was unlikely to run profiles again. The profile was intended to generate interest among computer users ages 18 to 24 in new Air Force commercials created by GSD&M in Austin, Tex., also owned by Omnicom.

Google is known for its expertise in what is called search engine marketing, epitomized by the text ads that appear next to results from online searches. Google sells the rights to present the ads onscreen when computer users type in keywords.

Google now wants to call attention to its more elaborate types of online advertising, like click-to-play video, and to encourage marketers like General Motors to buy those as well.

“We’ve been out there meeting with a lot of agencies and clients so they understand at a brand level, at a creative level, at a media-planning level, how they can use the palette we have,” said Tim Armstrong, vice president for advertising sales at Google in Mountain View, Calif.

Out of those meetings came the idea to “let the creative brains at Goodby look across our suite of products and services and think about ways those could work for specific clients,” he added. In addition to General Motors, clients of Goodby, Silverstein include Anheuser-Busch, the California milk producers (“Got milk?”), Comcast, Emerald Nuts, Frito-Lay, Hewlett-Packard and Motorola.

Rich Silverstein, co-chairman at Goodby, Silverstein, said the decision was made to have Saturn take part in the test because the local nature of its dealerships meant the brand would be a good guinea pig for the geo-targeting elements of the campaign.

“Google wants to prove it’s an effective way to market,” Mr. Silverstein said. “Saturn wants to sell Auras. And we want to show how we can tell good stories in a 21st-century way.

“The world doesn’t need another area to run a commercial; we’ve got plenty,” Mr. Silverstein said.

“I am so excited,” Mr. Silverstein, who is usually not given to hyperbole, said of the project. “I feel 10 years younger.”

The 22 Saturn dealers involved in the test are in Buffalo; Dallas (Irving is a suburb); Harrisburg, Pa.; Indianapolis; Las Vegas; and Raleigh, N.C. The six markets were chosen because they, and the dealerships, are among the best performers for Saturn.

“We have a key focus on digital this year,” said Dave Smidebush, marketing director at Saturn in Detroit, “and when Goodby approached us with this opportunity after Google approached them, we thought it was a very innovative initiative.

“Seventy percent of all new-car buyers go to the Web for information,” he added, “and the Google Earth technology takes you right through the dealer’s front door.”

The test will run for a month, Mr. Smidebush said, and after that Saturn executives will evaluate “how it drives traffic and how it affects sales, and then we’ll decide next steps from there.”

One possibility would be to roll out the project to the 25 largest markets, Mr. Smidebush said, and another would be to introduce it nationally. The project may be used, he added, to help Saturn bring out another new model, Outlook, a midsize sport utility planned for 2007.

Saturn is paying Google for the test, but Saturn and Google executives would not discuss the budget.

Teams of employees from Goodby, Silverstein visited all 22 dealerships to obtain the video clips of the stores and the general managers.

“Some were ready for prime time,” said Guy Seese, a creative director at Goodby, Silverstein. “Some nailed it in five takes.”

“One poor guy kept us after hours and did it in 22 takes,” he added.

The agency has ideas for Google projects for other clients, Mr. Seese said, declining to discuss them until they are further along.

By that time, there may be additional elements to incorporate into the projects, he added, because “Google is constantly coming up with new technologies.”

Yahoo Inc. Defending its Internet Turf
Michael Liedtke

As its rivals create a bigger buzz on the Internet, Yahoo Inc. is hitting television and radio airwaves to remind people that its Web site remains on the cutting edge of technology and culture.

The advertising blitz, scheduled to begin Thursday, marks the Sunnyvale, Calif.-based company's biggest marketing push in two years.

Besides buying TV and radio time, world's most popular Web site also will be spreading its messages in movie theaters across the United States.

As an added promotional gift, Yahoo will offer coupons for a free cup of coffee at Dunkin' Donuts to anyone who sets Yahoo.com as their home page this Friday.
Yahoo executives bill the multimillion dollar campaign as a celebration of several significant improvements to its Web site, including a makeover of the home page, an e-mail upgrade and a service that enables users to tap into their collective knowledge to find answers to tough questions.

"This is a great time for us to talk to our customers and encourage them to visit the new Yahoo.com," said Allen Olivo, Yahoo's vice president of global brand marketing. "It's an invitation to come back to those who haven't been using us in a while as well as to those who haven't been using us as frequently as they once did."

But the push also reflects the mounting pressure on Yahoo as it struggles to catch up to Google Inc. in the lucrative online search market. Yahoo is also battling perceptions that startups such as MySpace.com have become hipper places to hang out.

Meanwhile, old standbys like Microsoft Corp. and Time Warner Inc.'s AOL are spending heavily to lure traffic away from Yahoo.

"Yahoo is probably feeling some erosion of its brand," said Brad Scott, director of digital branding for San Francisco consulting firm Landor Associates. "They probably want to build some awareness again."

Yahoo claims 412 million users. Last month it attracted nearly 107 million unique U.S. visitors, more than any other online destination, according to Nielsen/NetRatings.

But Yahoo's search engine lags Google's, both for processing requests and distributing ads that will produce revenue-generating clicks - problems that have depressed the company's stock. Yahoo shares ended last week at $29.32, marking a 25 percent decline since the end of last year.

Through July, Google held a 44 percent share of the U.S. search market compared to 29 percent for Yahoo, according to comScore Media Metrix. At the same time in the previous year, Google's lead on Yahoo was only six percentage points.

Mountain View-based Google is far richer, with a market value of $127 billion and about $10 billion in cash. Yahoo has a market value of $39 billion and about $2.7 billion in cash.

To make things worse, Google has become synonymous with looking things up on the Internet without having to spend on expensive TV and radio ads.

"Instead of worrying about branding, Google is able to spend time and money on building better algorithms to help people find information and data," said Regis McKenna, who helped steer the marketing campaigns of high-tech Apple Computer Inc. and Intel Corp.

Google spends heavily to promote its search engine, but it generally eschews traditional advertising channels.

The Mountain View, Calif.-based company announced in May that it would bundle some of its software on Dell Inc.'s personal computers so Google wouldn't have to rely on users downloading its software from the Internet. Financial terms were not disclosed, but analysts estimated that Google could pay up to $1 billion for a three-year deal.

"Google is a very media savvy company," Scott said. "They realize a prime spot on a computer or a Web site can be just as critical as a 30-second spot on prime-time television."

While Google has been winning the search showdown, News Corp.'s youthful MySpace.com has been threatening to dethrone Yahoo as the most viewed site.

In August, Web surfers pulled up 32.7 billion Yahoo pages, up from 31.5 billion pages a year ago, Nielsen/NetRatings said. Meanwhile, the viewership at MySpace nearly tripled to 27.3 billion pages.

Yahoo's decision to turn to television and radio to protect and expand its Internet turf seems ironic.

"I can't say if it's good or bad, but I do know it's not the wave of the future," McKenna said.

Yahoo's Olivo defended the strategy, saying: "We live in a multimedia world and we want to be wherever are customers are."

Yahoo Woos a Social Networking Site
Saul Hansell

Mark Zuckerberg is a member of the Google generation, one too young to remember all the ambitions dashed and fortunes lost when the last dot-com boom ended.

That may be one reason Mr. Zuckerberg, the 22-year-old founder of Facebook, a social networking Web site, has so far shied away from selling his company, rejecting offers that would have made him several hundred million dollars.

“We’re focused on building the company for the long term,” he said yesterday.

When Viacom offered $750 million for Facebook in January, he asked for $2 billion and was rebuffed, according to a person involved in the negotiations. Now, he remains undecided about the latest offer, made in the last few weeks by Yahoo. That offer, first reported by The Wall Street Journal, was confirmed yesterday by two industry executives, one briefed on the deal by Facebook and the other by Yahoo. Both spoke on the condition of anonymity because the negotiations are continuing.

To woo Mr. Zuckerberg, Yahoo has offered about $900 million for Facebook and says it will keep the company somewhat independent, with Mr. Zuckerberg in charge. This has been its model with other acquisitions like Flickr, a photo-sharing site, and Del.icio.us, a social bookmarking service that lets members share lists of their favorite Web sites.

“A lot of people say there are problems with having a 22-year-old C.E.O., but one thing that is good about it is that he doesn’t remember the boom and the bust that followed,” said an adviser to Facebook. “That has distorted the thinking of a lot of people. If they have a good product or service, they sell way too early and they don’t stick with it.”

The adviser spoke on the condition of anonymity because of the sensitivity of continuing negotiations.

Mr. Zuckerberg, through a spokeswoman, declined to comment on any potential acquisition offers.

Money, at least so far, does not seem to draw him. He lives in a barren apartment in Palo Alto, Calif., a short walk from Facebook’s office. He only bought a stereo recently at the request of his girlfriend.

“Mark is the kind of guy you worry needs to get other things in his life,” said David Sze, a partner with Greylock Partners, one of Facebook’s venture capital investors.

By all accounts, Mr. Zuckerberg is motivated by his passion for his invention, which he created less than three years ago as a Harvard undergraduate. The site quickly became an electronic bumblebee, pollinating many American colleges with gossip, flirtation and news of the next fraternity party.

He said the minimalist design sensibility of Google, and also Apple, influenced how Facebook should look.

“I can remember the time when Yahoo was the coolest company, but for me and a lot of people my age, that is how people feel about Google,” Mr. Zuckerberg said in an interview earlier this month.

He also modeled his management style as Facebook’s chief executive on that of Google’s founders — Larry Page and Sergey Brin — as well as Steve Jobs of Apple.

Mr. Zuckerberg keeps tight control over the company’s activities. He still writes some of the site’s program code, designs most of its features and represents the site in public.

And he has been able to keep an unusually high share of the stock in Facebook, giving him the dominant say in its fate.

For Yahoo, an acquisition of Facebook would solve many problems. Yahoo has been trying, with little success, to build its own social networking service called Yahoo 360. Its brand is not seen as relevant by younger people, something the company has been trying to fix. Most of all, its growth has been slowing, increasing the gap between Yahoo and Google, which has become the largest Internet company.

“Yahoo is losing its grip on the younger demographic,” said Jordan Rohan, an analyst at RBC Capital Markets, who said he thought that Yahoo should buy Facebook, even at a high price. “It needs to buy its way out of this.”

Yahoo itself has been inconsistent about its pursuit of Facebook. It made an offer last summer, then withdrew it in July, the day after it announced disappointing second-quarter earnings. And Yahoo, which has prided itself on financial discipline, is still unsure exactly how much it wants to pay for such a small business. Facebook will have revenue of less than $50 million this year, according to two people briefed on the company’s finances, and hopes to take in more than $100 million next year. It has been profitable.

A similar problem faces many large companies these days, both traditional media companies that want to follow their audiences online and older Internet companies that want to reverse their slowing growth. They are interested in buying some of the new crop of Internet companies that have emerged in the last two years. Many of these, from YouTube, the user-contributed video site, to Digg, a news site, have attracted large audiences but little revenue.

In some cases, the larger companies are willing to gamble on growth — as eBay did when it bought the Skype chat service last year for $2.6 billion. But in other cases the asking prices of the entrepreneurs and the offers of their potential acquirers have failed to line up.

For Facebook the key question is whether it will be able to find ways to weave advertising into its site in a way that its audience will accept.

Its larger rival, MySpace, is on a track to do so, spurred on by the News Corporation, which bought it last year. Google recently agreed to pay MySpace at least $900 million over three years to sell text and banner advertisements on its site.

Facebook has recently made a similar but smaller deal with Microsoft. And it is working to create special sections, called groups, for advertisers. But Mr. Zuckerberg’s focus on uncluttered design, like that of Google, is keeping the advertising on each of the site’s main pages far smaller than on MySpace.

Much of Facebook’s hope for growth rests on a planned expansion beyond its core audience in the college market. Sometime soon, it will open up membership to anyone in the world, a change that may alienate its existing members, who have become used to its exclusive college-only atmosphere.

As students returned to campus this fall, Mr. Zuckerberg introduced a new feature meant to give users easer access to what they wanted most from the site. When they log on, they see an up-to-the-minute list of everything their friends have done on the site: made a new friend, posted new pictures, even declared their allegiance to a political cause.

For many users, this took the site, which was already tending toward voyeurism, to an unacceptable extreme. And by the hundreds of thousands, they used Facebook itself to organize a mass protest.

Two days after the changes were introduced, Mr. Zuckerberg came back to a hotel room after a day of press interviews, and at 1 in the morning, made final tweaks on hastily conceived changes to the new feature. The next afternoon, after just a few hours of sleep, Mr. Zuckerberg joined a live discussion with hundreds of Facebook members.

He read their comments while sprawled on a hotel bed, wearing gym shorts and a T-shirt, tapping on a computer while propped up on his elbows. Some members told him they liked the new features or appreciated the modifications, but many expressed their anger in the sort of sharp words the Internet fosters.

“Wow,” Mr. Zuckerberg muttered, as he read one particularly personal comment that began “Mark Zuckerberg is a pretentious Harvard” and ended with an expletive.

“Normally I talk to people, but not everybody at once,” he said. “It’s a bit overwhelming.”

Then after a pause, he added, “It’s neat.”

Al Gore's Current TV, Yahoo Join Forces
David Bauder

Al Gore's Current TV is going into partnership with Yahoo, Inc. to create four new broadband channels that debuted on Wednesday with a video made by Bono during U2's last concert tour.

Like the Current TV network that the former vice president created with Joel Hyatt, the new broadband channels will focus on disseminating video created by young viewers.

"We expect this will be the premier video online experience," Gore told The Associated Press.

One of the four channels, Yahoo! Current Buzz, is being produced by Madeleine Smithberg, co-creator of "The Daily Show," and will "showcase the best of what's buzzing the world and the Web," the companies said.

The other channels will focus on action sports news, automotives and adventure traveling. The latter is where Bono's video - mostly about experiences with fellow band member The Edge - is being featured.

Yahoo was attracted to Current because it shares the goal of giving young people a voice on the Web, said Dan Rosensweig, Yahoo's chief operating officer.

The four channels are separate and distinct from Current's TV network, Gore said. But with Current only available now in 30 million of the nation's 110 million homes with televisions, the deal promises to greatly increase the visibility of its content.

"The distribution reach and community of online viewers that Yahoo serves gives an unparalleled opportunity to connect the online video experience, including video-related content, with a mass audience," Gore said.

The best user-created videos on the Yahoo! Current Network will be featured on Current TV each Monday afternoon.

Four more Yahoo! Current channels are expected to be added by the end of next year, the companies said.

Some Hot Recorders for Those Cool Podcasts
Larry Magid

Broadcasters, musicians and serious audiophiles have long been consumers of high-end portable audio gear, but podcasting has created an expanded market for this equipment.

While it is possible to create a podcast with nothing more than a computer, a microphone and some audio-editing software, there are times when it’s nice to be able to conduct interviews, gather sound or record programs when away from a PC. For that you’ll need some type of portable recording equipment.

Until a few years ago that would probably have been a portable analog cassette tape recorder. More recently, it might have been a MiniDisc recorder or digital audio tape recorder. But today, the hottest recorders do not use tape or discs but record to the same type of nonvolatile flash memory used in digital cameras.

Flash has no moving parts to make noise while you record, and it is compact. An SD flash card, not much bigger than a postage stamp, can hold as much as four gigabytes or up to 130 hours of compressed monaural audio (some recorders, however, do not work with SD cards that store more than two gigabytes). Compact Flash cards can store up to eight gigabytes.

Also, data on a memory card can be easily transferred to a PC or a Mac with a U.S.B. cable or by removing the card from the device and putting it in a PC card reader. Once on a PC, the file can be edited, e-mailed or posted to a server. Because these audio files start out as digital, there is no need to convert them for use on a computer. That saves time and avoids the loss of quality inherent in “dubbing” from one device to another.

There is one drawback. Although flash memory has come down in price substantially over the last couple of years, it remains more expensive per minute of audio than tape or MiniDiscs. That is usually not a problem if you copy the files to a PC, but it can be if you are away from a computer for an extended period or need to deliver a copy of the file in a physical format. Still, with 256-megabyte SD cards selling for as little as $12, it is not all that expensive to carry around extra cards.

Sound quality depends, in part, on the format you use to record. For maximum quality, the higher-end devices can record uncompressed files in the WAV format, but such files take up as much as 10 megabytes a minute for stereo sound. If you are recording speech or music that you are likely to listen to on a portable player like an iPod, you can save a great deal of space by recording as a compressed MP3 file. MP3 is a “lossy” compression, which means some degradation of quality.

There are basically three types of digital flash recorders on the market. There are digital voice recorders like the Olympus VN-3100PC ($69) that are mostly used for dictation and other voice-recording tasks. Also, some digital music players, like the iRiver T30 ($40 for the 512-megabyte model), have recording abilities, and there are accessories for the iPod like the TuneTalk Stereo for iPod ($69) from Belkin.

While those can be used for podcasts, the sound quality and versatility will not be as good as the higher-end dedicated systems like the Marantz PMD 660 ($499), the Edirol by Roland R-09 ($399) and the M-Audio MicroTrack 24/96 ($350).

I tested each of the three recorders and found the sound quality more than adequate for podcasts and professional voice broadcasting like the radio reports I do. I also used them to record music, which sounded very good to my ears, though audiophiles often debate the nuances of sound quality. All are able to record as either uncompressed WAV files or compressed MP3 audio.

Marantz PMD 660

Measuring 7.2 by 4.5 by 1.9 inches and weighing 21 ounces with batteries, the Marantz PMD 660 is not only the biggest and most expensive unit tested, but also has the most professional feel and features. To begin with, it uses XLR microphone inputs — just like studio mixers. The others use the same 1/8-inch minijacks as most consumer audio equipment, though that does not preclude using professional microphones, because it is easy to get microphone cables with 1/8-inch jacks.

The recorder has a stereo microphone embedded in the case, which, in my tests, picked up a bit too much ambient room noise for regular use. An external microphone is a must for any serious recording.

Setting it aside from the competition is a built-in monaural speaker, which can be important for radio reporters who might have to resort to holding the speaker up to a phone to get their reports on the air immediately. Also, the speakers do make it more convenient to review and edit your work if you do not have earphones handy.

Sound files are stored on Compact Flash cards. It comes with a 64-megabyte card — enough for two hours of pretty good quality monaural sound but only five minutes of highest-quality uncompressed stereo music. You can purchase a higher-capacity CF card from SanDisk, Lexar and other vendors.

The device uses four AA batteries and, like all units I tested, comes with an external power supply.

M-Audio MicroTrack

The MicroTrack is compact, measuring 4.3 by 2.4 by 1.1 inches and weighing 5.4 ounces. It has an 1/8-inch input for a stereo microphone and two ¼-inch monaural microphone or line-in jacks as well as RCA line-out jacks and S/PDIF digital audio input for connecting to some CD players and other audio sources.

A well-thought-out user interface makes it exceptionally easy to use. Unlike the others, the MicroTrack does not have an internal microphone. Instead it comes with a small T-shaped stereo microphone that plugs into the 1/8-inch adapter on the top of the unit. The microphone quality is surprisingly good. Like the Marantz, it records onto Compact Flash cards.

There is one drawback. Unlike the other products, the MicroTrack does not use AA batteries. Instead, there is a fixed internal lithium-ion battery that is recharged by plugging its external power supply into an electrical outlet or by plugging the device into the U.S.B. port of a PC or Mac. The battery is not removable, so there is no way to carry spares — a potential problem if you are away from an AC outlet for an extended period.

Roland Edirol R-09

The pocket-sized Edirol R-09 has the same dimensions as the MicroTrack and weighs 5.4 ounces with batteries. It uses two AA batteries and comes with pretty good quality built-in stereo microphones on the left and right top-side of the unit.

These microphones are better than those on the Marantz and acceptable for field interviews, but for music and highest-quality voice recording, you will want to connect an external microphone. It should work with all nonpowered dynamic microphones and has plug-in power that works with low-power electret microphones but does not provide enough power for some microphones.

There is also a line-in jack for a mixer or other sound source. The unit has handy switches on the back for stereo or mono, automatic gain control, microphone gain and a low-cut filter to remove low frequencies like wind noise. Files are stored on an SD card. It comes with a 64-megabyte card.

While any of these devices will provide quality audio, the Edirol’s compact size and use of AA batteries give it a competitive edge.

Clanging New York Subways, Screeches Intact, Go Miniature
Michael Brick

The New York City transit system has been filmed and photographed, drawn and chronicled in hardback and in newsprint. Soon it will be heard.

All week, a man with a microphone has walked the subway platforms to collect the clattering of the rivets and the whistling horns, the distortion in the loudspeaker, the hush in the compressor’s song and the dying of the brake like some wounded thing.

Even in that racket, some find value. The recordings are the chief selling point of a new reproduction of a subway train by the Lionel model train company made under a license from the Metropolitan Transportation Authority for completion by year’s end.

Other companies have made models before, but this one pays unparalleled attention to sonic detail, recreating the subterranean soundscape in elaborate hi-fi to win the favor of collectors and self-styled train geeks, keepers of a nostalgic anachronism to rank alongside comic books and baseball cards.

Among their number count the musician Neil Young, so devoted that he conceived a control system to reproduce the sounds of the rails, then acquired a minority interest in Lionel more than a decade ago.

“Realism is the byword,” Mr. Young said by telephone. “It’s a heavy thing moving down a track, like a real thing even though it’s a miniature.”

The system he championed has been used to recreate old steam engines, the historic diesels of the short lines and the Acelas of the Atlantic seaboard. The subway model will combine the sounds of vintage cars with recreated station announcements from the Brighton Local, a predecessor of the Q train, which runs from Midtown to Coney Island.

To capture the sounds, the company dispatched the man with the microphone, Bruce R. Koball, a Queens native who long ago decamped to Berkeley for its institutionalized counterculture. Mr. Koball, who has a thin white beard and thick glasses, dressed for his assignment with multiple belt accessories and a bulky headset wired to a recording device inside a fabric bag hanging from his neck. His microphone was fastened to the end of a long black pole and covered with a conical silvery reticulum like some futurist’s mosquito net. He looked like a hiker spaceman.

Recording began below Brooklyn on Monday, in the tunnels of the New York Transit Museum. There Mr. Koball was joined by a few transit supervisors and Mark Wolodarsky, an off-duty conductor. Mr. Wolodarsky was standing in the cab of Car 9306, a model R33s introduced in 1963 to run the 20-minute route from Times Square to the 1964 World’s Fair in Queens.

“I’m more or less ready to rock and roll here,” Mr. Koball declared.

Mr. Wolodarsky activated the train’s generator to charge the batteries, then opened and closed the doors. The men on the platform deemed the action too fast, and Mr. Wolodarsky tried again.

“There was no puff of air,” lamented a supervisor, James Harris. Mr. Wolodarsky tried again. In this manner they recorded the compressors and the generator, the brakes and the brake release. There were two long buzzes and two short, signals between conductor and motorman, then a low whistle, a guttural rumble and a high lonesome sound.

Mr. Koball moved his microphone from the platform across the tracks, then through the doors and inside the car, a perspective that will be unavailable in the Lionel version. As a rattle died away, Mr. Harris held up a palm, waving deliberately as though conducting in some other sense.

One at a time came a high horn you could feel in your heart and a low one like a ship’s warning, each emanating from a common diaphragm. Someone asked for another low horn, but Mr. Wolodarsky said the pitch was beyond control.

“I can’t,” he said. “It’s up to the train.”

Then the men emerged from the tunnels with their gearboxes and their tripods to walk the Brooklyn sidewalk like some sonic spelunkers from an alien world, bound for another station, another yard, another car and the sound of a hundred tongues talking and the quack and the hum and the clack and the thud calling one to another while the trains go by.

Outside a railyard near the Green-Wood Cemetery, the party was stopped by a security detail, held up for an hour to wait by a razor-wire fence.

A cellphone rang and Mr. Koball answered.

“Neil!” he said. Then he paced by the tracks for a good long piece, speaking of switches and routers and circuits, happy as a schoolboy. By and by he passed the phone along, and the familiar voice on the line grasped at the grandeur of the city trains.

“It’s a symphony of motion and sound,” Mr. Young said. “New York City. What’s more American than that?”

John Schwartz contributed reporting.

It Was Loud. It Was Fast. But What Did It Mean?
Stephen Holden

It was a guy thing: rampant testosterone; fistfights and epithets; incendiary, harmonically minimal rock as hard, loud and fast as cheap guitars could play it, made by young musicians wanting to blow up the world with noise and attitude.

“American Hardcore,” a documentary chronicle of the hardcore punk movement that flourished outside the rock mainstream through the first half of the 1980’s, imagines that this underground culture, which flamed out in 1986, was more than a new generation’s style of hormonal eruption. To many of the musicians who fondly remember the wild old days when the bands and their audiences melted into a delirious mass of flailing, diving bodies, it had to mean something more than just letting off steam. And maybe it did.

As some remember it the movement, which sprouted an informal network of local bands around the country, was a spontaneous expression of disgust by an alienated fringe with the ascendance of Ronald Reagan, along with all things preppy. The movie names Southern California as the site of hardcore’s birth, and regards New York as a latecomer to the party.

Musically hardcore was a repudiation of almost everything, from disco to the dilution of first-generation punk labeled new wave to, of course, the same high-flying and deeply loathed bands, like the Eagles, Fleetwood Mac and Journey, that the original punks also despised. Hardcore was more than noncommercial; it was anticommercial. No one in the movement made more than spare change, and many lived hand to mouth. Poverty was synonymous with purism.

Directed by Paul Rachman, from a screenplay by Steven Blush based on his book “American Hardcore: A Tribal History,” the film, which is filled with grainy archival clips of hardcore performances, is a toned-down cinematic equivalent of the music: fast and loud, but not too loud. The movie scrambles to cover so much territory that there is room only for musical shards and slivers; few complete songs are heard, and no signature anthems stand out. These excerpts are spliced with pungent bits and pieces from dozens of interviews, the whole crisply edited into a rapid-fire history. If 9 out of 10 bands are groups almost no one ever heard of, the movie’s encyclopedic concept is touchingly thorough.

As the story advances both chronologically and geographically, it moves from Los Angeles to Boston, then up and down the East Coast, with trips back west and a quick jaunt to Canada. Leading the roster are Bad Brains, referred to in tones of reverence, and Black Flag, whose tattooed hunk of a lead singer, Henry Rollins, became the closest thing to a star minted by hardcore.

The documentary might benefit from a broader perspective. The luminaries of punk’s first generation, the Sex Pistols, the Clash and the Ramones, are barely mentioned. Despite passing references to the Beastie Boys and the Red Hot Chili Peppers, those who came after are only glancingly acknowledged. Maybe that’s for the best, since the way the movie tells it, hardcore was its own thing, defiantly glowering in a corner by itself.

The portraits of these rockers, now middle-aged, speak for themselves. As nostalgic as they are for their lost bohemia of fury and dissent, they acknowledge that the hardcore lifestyle has a very short shelf life. But political change also counted; the Reagan re-election landslide is remembered as the final demoralizing blow.

The movie makes a feeble effort to show that women were welcome in the movement. But of the several women interviewed, only Kira Roessler, the bassist for Black Flag, actually played in a band. And she remembers an offensive Black Flag album cover that forced her to question her role. It really was a guy thing.

“American Hardcore” is rated R (Under 17 requires accompanying parent or adult guardian) for profanity.


Opens tomorrow in Manhattan.

Directed and edited by Paul Rachman; written by Steven Blush, based on his book “American Hardcore: A Tribal History”; director of photography, Mr. Rachman; produced by Mr. Blush and Mr. Rachman; released by Sony Pictures Classics. Running time: 98 minutes.

9 Lives and Counting: Cat Power Sobers Up
Winter Miller

Another day, another fifth of Scotch.

And that wasn’t all. Chan Marshall said her mornings began with a minibar’s worth of Jack Daniel’s, Glenlivet and Crown Royal. Mini bottles depleted, this indie singer-songwriter, known as Cat Power, would nurse a bottle of Scotch over the course of the day. On nights she performed, she took the antianxiety drug Xanax.

By the time she would weave onstage, beer in one hand, cigarette in the other, Ms. Marshall, 34, was wasted. And it showed. It would seem that every fan has a Cat Power concert story: the time she mooned the audience, cursed out techies, talked to a squirrel (outdoors), played three chords and changed her mind (song after song) or played fragments of a few songs and then told everyone to get out, even encouraging fans to sue her.

That was the old Chan Marshall.

The new Chan Marshall is, by most accounts, significantly improved, as critics have widely noted this year. Reviewing one of Cat Power’s performances at Town Hall in June, Jon Pareles of The New York Times wrote, “To see her so comfortable onstage was no small surprise to her longtime fans,” and Time Out New York called the shows “triumphant, in the classic show-biz sense.”

Of the New York audiences, Ms. Marshall said: “I never noticed they really liked me before. Man, these people stuck with me.”

Performing at Irving Plaza last week, she playfully plucked and strutted with a sly grin, as if to say, “I see you seeing me, and I like what we see.” Sure, audiences saw trademark kooky behavior, some awkward fidgeting, but she made it through her set, words and music intact.

Afterward Ms. Marshall (whose first name is pronounced shawn) spoke at length for the first time about her hospitalization and recovery. In jeans and a black tank top, wearing large, round copper earrings, she smoked Parliaments and sipped green tea in her room at the Mercer Hotel in SoHo. She said she was sober and happy. She qualified the term sober: she owned up to having had seven drinks in seven months.

Seven months out of the hospital, and with 47 gigs under her belt in that time, Ms. Marshall said that she took Seroquel to calm her enough to sleep, and the antidepressant Effexor, and that she made a concerted effort to eat healthfully. As a result, she said, she is feeling better.

Her drinking began when she was young, she said. Very young. As Ms. Marshall tells it, her mother gave her beer in a baby bottle and she grew up spending time in bars. As a teenager she drank and got stoned, which led to other drugs. She pinpointed her nonstop touring in 1998 as the catalyst for her descent into life-altering, chronic substance abuse.

By 2003 the downward spiral had accelerated. “Even playing all my shows I was always intoxicated, always kind of not there, which led to the depression,” Ms. Marshall said. “It was more about the uncomfortableness with just being in my own skin, and that’s why the alcohol was always with me.”

With bizarre stage antics and aborted concerts, her erratic reputation was firmly established. Reviewing a show in The Times in 1999, the critic Ben Ratliff described her set as “staggering for its inversion of standard rock performance ethics,” adding, “Gone was the idea of exultation, or of showing what one can do; in its place was outrageously passive-aggressive behavior and nonmusicianship.”

Still, fans flocked, some more than once, to see the singer with the long bangs obscuring her face — and to see a train wreck. Yet despite her condition, and with the help of veteran Memphis soul musicians backing her up, she managed in three days in August 2005 to record her now critically lauded seventh album, “The Greatest.”

About two weeks before its release in January, Ms. Marshall said, she lost her mind: “I was looking at death. I wanted to die.” Holed up in her Miami apartment for seven days, she turned off the phone, played Miles Davis on repeat, stopped eating and sleeping. She drank to oblivion and prayed to die.

Susanna Vapnek, a painter, came over to check on her friend. Ms. Marshall was acting bizarrely, obsessively chasing “bad spirits” around her apartment with a lighter and sage. Ms. Vapnek bathed her and stayed by her side. Eight hours later she took Ms. Marshall to Mount Sinai Medical Center in Miami, where she was admitted.

Confined for psychiatric treatment, Ms. Marshall recalled refusing to bathe, hiding from her reflection and wanting to be drunk. “I asked God, I said, I’m tired, I can’t do this,” she said. “I was asking him to just take me.” She was terrified by the other patients who screamed at night and were comatose during the day.

After seven days in the hospital she was allowed to leave. “It was like I was in glue,” she said of the heavy doses of lithium given her.

Even though “The Greatest” was getting good reviews, a tour in support of the record had to be postponed because of her problems. Her label, Matador, estimated that it lost more than $100,000 on marketing and promotion, paying her supporting band (including a onetime member of Al Green’s band) and canceled shows.

Once the tour got under way in April, Matador bought insurance to be on the safe side. But now that the tour is a success, and the album has sold more than 100,000 copies, Matador is rereleasing the record, with new album cover art and a new promotional push.

The onstage anxiety is still there, Ms. Marshall admitted. But she said her self-hatred had abated, and in its place stood a woman ready to engage her fans.

On the heels of 11 shows in September, she plans to take October off to relax and then resume touring in Europe in November. Her next album, “Sun,” is already written, and she talks of a second covers album; top of the list are James Brown and Billie Holiday songs.

Like Will Oldham, another indie-folk rocker who is currently starring in the film “Old Joy,” Ms. Marshall is considering a foray into acting. She said that the cult director Wong Kar-wai invited her to play Jude Law’s ex-lover in the movie he is now shooting. Mr. Wong, she said, told her he was in the habit of playing “The Greatest” for his actors before each scene.

Ms. Marshall spoke of auditioning to join the cast of “Saturday Night Live” next summer. Then again, maybe her future involves domesticity. She said she was ready for a relationship and wanted to have children.

“My favorite things in the world are cookin’, kids and animals and falling in love,” Ms. Marshall said, “but you don’t get to do that all the time.”

Interview with Chan Marshall

Cingular to Sponsor Online Battle of Band
Michael Liedtke

Cingular Wireless LLC has agreed to sponsor an online battle of the bands on YouTube Inc., providing the Internet's most watched video site with a cash infusion as the rapidly growing startup tries to prove it will be able to parlay its popularity into profits.

Financial terms of the deal, scheduled to be announced Wednesday, aren't being disclosed.

The backing of the nation's largest cell phone provider has symbolic as well as financial value for San Mateo, Calif.-based YouTube, which serves up more than 100 million videos per day.

Because many of those videos feature risque and bawdy material, some analysts have questioned whether major companies will want their brands stamped on YouTube's site.

But Cingular, a joint venture of BellSouth Corp. and AT&T Inc., shrugged off those concerns and agreed to pay for a competition that will invite bands without recording contracts to submit videos from Oct. 2 through Oct. 18.

After YouTube users vote for the finalists, winners will be picked in four categories - best song, best music video, best live performance and best creative work.

Atlanta-based Cingular views the sponsorship as a way to promote its efforts to connect with music lovers as it tries to sell more mobile entertainment options.

"We look forward to building our relationship with YouTube and demonstrating our unique approach to mobilizing the music experience for our customers," said John Burbank, Cingular's vice president of marketing.

If it can't win the support of big advertisers like Cingular, YouTube figures to have a tougher time to pay its rising bills - a circumstance that might force the privately held company to raise more money from outside investors or seek a buyer. That's something YouTube co-founders Chad Hurley and Steve Chen have said they don't want to do.

News of the Cingular sponsorship comes just a few days after another major milestone in YouTube's evolution.

Warner Music Group Corp., the nation's third-largest recording label, has agreed to transfer thousands of its commercial videos to YouTube and license its library songs to amateur video makers in a deal that may help ease the piracy concerns looming over the site.

YouTube has been subsisting on credit card debt and $11.5 million in venture capital since Hurley and Chen, a pair of 20-something buddies, launched the company in a Silicon Valley garage 19 months ago.

If Paper Ballots Restore Trust In Elections, Let's Switch
Marc Fisher

Well into the second decade of the television era, the machines still conked out, a lot. "TV's on the fritz again," folks would say. There was such a thing as a TV repairman, who would come to your house. Now, TVs work.

Here in the relatively early stages of the computer era, these vastly more complex machines still lock up and shut down. Yet we're so enraptured by computers' power that we want them to do everything -- even handle the sacred core of our democracy, voting.

But the machines aren't yet reliable, at least not 100 percent. Maryland voters learned this firsthand in last week's primary, and now the state has less than seven weeks to gin up a credible, smooth general election.

The obvious solution, as Gov. Bob Ehrlich said yesterday, is to put the machines in the closet (actually, returning them to the store is an even better idea; does anybody in Annapolis still have that receipt for $106 million?) and go back to paper ballots. The governor bemoaned flaws in the Diebold electronic poll books that Maryland used for the first time last week to check in voters: "Technology is a wonderful thing, but clearly, given their apparent inability to function appropriately -- when in doubt, go paper, go lower technology."

But going back to technology that works means giving up on cutting-edge modernity, admitting error and angering a giant corporation that has been pushing states across the country to go electronic. This will not be easy. Ehrlich said he may even call a special session of the legislature to rework the law requiring Maryland to use electronics rather than paper.

I asked the state's elections administrator, Linda Lamone, whether Maryland wasn't just a bit too quick to adopt electronic voting. Doesn't the computer at your desk ever freeze up on you?

"No," she replied.



But surely people in your office have had that experience?


(Maybe we've found the solution to Maryland's voting problem: Everybody head on down to Linda Lamone's office, where the machines work 100 percent of the time.)

Does this sound like a woman who is open to solving the problem or more like someone beholden to a $106 million contract with Diebold, the machines' Ohio-based manufacturer?

"My role is to run an election with the equipment I have," Lamone said.

Here's the question no one seems able to answer: What, exactly, was so awful about the old, paper-based voting system?

Diebold's marketing guy, Mark Radke, said last week's mess was not the fault of the machines; it's the people running them who cause problems. Seems some of the volunteer poll workers who make Election Day possible "were plugging the poll books into the wall" instead of into a computer hub. Radke thought this was the height of humor.

What Diebold and the politicians who brought us electronic voting don't get is that elections are an inappropriate forum in which to test new technology. Voting is about trust; the goal is to use the least-complicated technology so it is transparent and accessible to all.

At this point, tech-savvy readers will grumble that I'm an unreconstructed Luddite. But I'm in learned company. As Johns Hopkins University computer science professor Avi Rubin puts it, "Computer scientists are pretty unanimous in our opposition" to electronic voting.

"I am the anti-Luddite," said Rubin, an expert on electronic voting who opposes Maryland's system. "I have more gizmos and gadgets than anyone you've probably ever met. But part of technology is having unexpected results. A system like this voting software has millions of lines of code. The technology obfuscates the voting experience for average people. The answer is to move back to a paper-based system."

When I asked Lamone if it's possible to revert to paper by November's election, she stared at me: "Are you crazy?" she said.

Crazy or not, if that's what it takes to restore trust, that's what has to happen. People trust paper ballots because they're real. You can hold them in your hand and count them again if you need to. This isn't about resisting change; it's about rejecting change that enriches one company at the expense of public confidence.

Diebold's contract requires the company to hold six training sessions statewide for poll workers. Never mind that Diebold's project manager, Tom Feehan, told me it would take four hours to train a computer moron like me to run the voter sign-in machine. Diebold held those six sessions. "We fulfilled our obligations," Feehan said. How's that for public service?

As usual, Comptroller William Donald Schaefer cut through the excuses: "Everything's been whitewashed pretty good." Then he wondered about the results of this messy election: "Maybe I didn't lose after all."

Sex Crimes

Justice Dept. Defends Mandatory Web-Labeling Bill
Anne Broache

The U.S. Department of Justice has stepped up its defense of a proposal to imprison Web site operators who don't label pages containing sexually explicit material.

The idea, outlined in an April speech by Attorney General Alberto Gonzales, is approaching a vote in Congress. Even though there have been no hearings, the legislation has been attached to two separate measures--a massive communications bill and a bill to fund large portions of the federal government including the State Department--that are likely to be considered by the full Senate this fall.

The proposed restrictions are no different from requiring multipurpose stores like 7-Eleven to shield pornographic magazines with so-called blinder racks, Larry Rothenberg, an attorney in the Justice Department's Office of Legal Policy, said at a panel discussion here hosted by the Internet Caucus Advisory Committee on Friday.

"We have what we consider to be a rather modest (proposal) to protect consumers," Rothenberg said. "This is not censorship. It's not a major break with First Amendment principles."

His critics, however, remained unconvinced. "There's no way to avoid vagueness, no way to avoid overbreadth, and, more important, no way to avoid chilling free speech," said Leslie Harris, executive director of the Center for Democracy and Technology.

Under the proposal, all commercial Web site operators would have to place "identifiable marks or notices," to be determined by the Federal Trade Commission, in the code of each page that contains "sexually explicit material" as defined by existing U.S. criminal statute. The idea, supporters maintain, is to make it easier for Web-filtering programs to pick up objectionable sites.

Sen. Jon Kyl, an Arizona Republican, was the first politician to latch onto the Justice Department's plan, introducing a bill in June that mirrored its demands but upped the possible prison sentence to a 15-year maximum.

That bill hasn't gone anywhere on its own, but its major components have since appeared in two seemingly unlikely places: as amendments to the massive communications bill approved earlier this summer by the Senate Commerce Committee and to a 2007 spending bill that will fund the Commerce Department, the Justice Department and some science-related agencies. Both amendments reduced the possible prison sentence to two and five years respectively.

Although the future of the Senate's communications bill remains up in the air, thanks to an ongoing tussle over the concept of Net neutrality, the spending bill's approval is a virtual inevitability.

The question that remains is whether the Web-labeling proposal will be altered or rewritten, as it's hardly unusual for amendments to be altered at the last moment. The issue may not be resolved for several weeks. An aide to Senate Majority Leader Bill Frist, who spoke on condition of anonymity, said it's unlikely the spending bill will be voted on until after the November elections. (This is not the first time a measure designed to target sexually explicit speech on the Internet would be attached to a spending bill: It's happened at least once before.)

Civil liberties advocates blast the approach as overly sweeping. That's in part because courts in the past have ruled that the same definition of "sexually explicit" referenced in the legislative proposal could be applied to fully clothed genital areas, making perhaps unintended sites fair game. The proposals do offer one minor carve-out: Content that constitutes only a "small and insignificant part" of a large Web site does not need to be labeled.

"When you have a label that applies to hard-core porn, Victoria's Secret, an episode of 'The Sopranos' from HBO, and an outsider artist that has a Web site, and all of them put the same label on, you don't have a label that empower parents," the CDT's Harris said. "You just have a label that will disappear vast swaths of the Internet from peoples' viewing."

An absence of hearings on the Justice Department's proposal and the hasty amendments indicate that Congress is trying to sneak through a bad proposal without proper vetting, opponents argued. The best way to protect consumers and children from Web content they don't wish to see, they said, is for the government to encourage education, innovation on the filter and parental-control front, and collaboration with the Internet industry.

It may be a good idea for Congress to hear additional testimony on the matter, but that wouldn't diminish the need for such a law, the Justice Department's Rothenberg said, adding: "At the moment we happen to think we're well-intentioned and rightly guided, and that's why we're moving forward."

CNET News.com's Declan McCullagh contributed to this report.


Gonzales Wants ISPs to Save User Data
Hope Yen

Attorney General Alberto Gonzales said Tuesday that Congress should require Internet providers to preserve customer records, asserting that prosecutors need them to fight child pornography.

Gonzales and FBI Director Robert Mueller have met with several Internet providers, including Time Warner Inc.'s AOL, Comcast Corp., Google Inc., Microsoft Corp. and Verizon Communications Inc.

The law enforcement officials have indicated to the companies they must retain customer records, possibly for two years. The companies have discussed strengthening their retention periods - which currently run the gamut from a few days to about a year - to help avoid legislation.

During those meetings, which took place earlier this summer, Justice Department officials asserted that customer records would help them investigate child pornography cases. But the FBI also said during the meetings that such records would help their terrorism investigations, said one person who attended the meetings but spoke on condition of anonymity because the meetings were intended to be private.

Testifying to a Senate panel, Gonzales acknowledged the concerns of some company executives who say legislation might be overly intrusive and encroach on customers' privacy rights. But he said the growing threat of child pornography over the Internet was too great.

"This is a problem that requires federal legislation," Gonzales told the Senate Banking Committee. "We need information. Information helps us makes cases."

He called the government's lack of access to customer data the biggest obstacle to deterring child porn.

"We have to find a way for Internet service providers to retain information for a period of time so we can go back with a legal process to get them," he said.

At Tuesday's hearing, Gonzales said he agreed with the sentiment of 49 state attorneys general who in a June letter to Congress expressed support for a federal law that would require longer retention of customer records.

"We respect civil liberties, but we have to harmonize this so we can get more information," he said.

The subject has prompted some alarm among Internet service provider executives and civil liberties groups after the Justice Department took Google to court earlier this year to force it to turn over information on customer searches. Civil liberties groups also have sued Verizon and other telephone companies, alleging that they are working with the government to provide information without search warrants on subscriber calling records.

Justice Department officials have said that any proposal would not call for the content of communications to be preserved and would keep the information in the companies' hands. The data could be obtained by the government through a subpoena or other lawful process.

House Panel OKs Electronic Surveillance Bill
Grant Gross

A U.S. House of Representatives Committee has approved a controversial bill that would broaden the U.S. government’s ability to conduct electronic surveillance on U.S. residents by making it easier for federal law enforcement officials to get court-issued warrants.

The Electronic Modernization Surveillance Act, opposed by several privacy groups, would also allow federal law enforcement officials to spy on U.S. residents for up to 90 days without a court order in the period after a terrorist attack. The House Judiciary Committee approved the legislation Wednesday by a 20-16 vote, with all committee Democrats present voting against the bill.

The bill, sponsored by Representative Heather Wilson, a New Mexico Republican, would reduce the amount of information required from federal agents applying for a wiretapping warrant from the U.S. Foreign Intelligence Surveillance Court. The bill would clarify that the U.S. government can seek wiretaps on any type of electronic communication, not just telephone- or radio-spectrum-based communication.

Republicans praised the bill, saying it will help the U.S. government fight terrorism. The bill will provide the U.S. intelligence agencies "greater agility and flexibility as they try to thwart our determined and dangerous terrorist enemies," Committee Chairman James Sensenbrenner, a Wisconsin Republican, said in a statement.

The full House is expected to vote on the bill by the end of the month. The committee’s action comes after U.S. President George Bush called on Congress to approve a controversial electronic surveillance program conducted by the U.S. National Security Agency (NSA). The NSA has conducted the program, reportedly targeting U.S. residents speaking with foreigners who have suspected terrorism connections, without getting court warrants.

Bush has asked Congress to authorize the NSA program to ward off multiple court challenges against it. In August, a U.S. judge in Michigan ruled the NSA program is illegal and must be halted. The Bush administration has appealed that ruling.

The Senate Judiciary Committee approved three surveillance bills last week. The Center for Democracy and Technology, a privacy and civil liberties advocacy group, called the Wilson bill and the Senate’s National Security Surveillance Act two of the worst bills now in Congress.

"Couched in the seemingly laudable terms of ’modernization,’ the bills would radically undermine the privacy of innocent Americans -- not just by legitimizing the administration’s warrantless surveillance programs -- but by granting this and future administrations even broader authority to spy on Americans in the United States without judicial review," the CDT said on its website.

While Nixon Campaigned, the F.B.I. Watched John Lennon
Adam Cohen

In December 1971, John Lennon sang at an Ann Arbor, Mich., concert calling for the release of a man who had been given 10 years in prison for possessing two marijuana cigarettes. The song he wrote for the occasion, “John Sinclair,” was remarkably effective. Within days, the Michigan Supreme Court ordered Mr. Sinclair released.

What Lennon did not know at the time was that there were F.B.I. informants in the audience taking notes on everything from the attendance (15,000) to the artistic merits of his new song. (“Lacking Lennon’s usual standards,” his F.B.I. file reports, and “Yoko can’t even remain on key.”) The government spied on Lennon for the next 12 months, and tried to have him deported to England.

This improbable surveillance campaign is the subject of a new documentary, “The U.S. vs. John Lennon.” The film makes two important points about domestic surveillance, one well-known, the other quite surprising. With the nation in the midst of a new domestic spying debate, the story is a cautionary tale.

It focuses on the late 1960’s and early 1970’s, when the former Beatle used his considerable fame and charisma to oppose the Vietnam War. Lennon attracted worldwide attention in 1969 when he and Yoko Ono married and held their much-publicized “bed-ins” in Amsterdam and Montreal, giving interviews about peace from under their honeymoon sheets. Lennon put to music a simple catch phrase — “All we are saying is give peace a chance” — and the antiwar movement had its anthem. Two years later, he released “Imagine.”

The government responded with an extensive surveillance program. Lennon’s F.B.I. files — which are collected in the book “Gimme Some Truth” by Jon Wiener — reveal that the bureau was monitoring everything from his appearance on “The Mike Douglas Show” to far more personal matters, like the whereabouts of Ono’s daughter from a previous marriage.

The F.B.I.’s surveillance of Lennon is a reminder of how easily domestic spying can become unmoored from any legitimate law enforcement purpose. What is more surprising, and ultimately more unsettling, is the degree to which the surveillance turns out to have been intertwined with electoral politics. At the time of the John Sinclair rally, there was talk that Lennon would join a national concert tour aimed at encouraging young people to get involved in the politics — and at defeating President Nixon, who was running for re-election. There were plans to end the tour with a huge rally at the Republican National Convention.

The F.B.I.’s timing is noteworthy. Lennon had been involved in high-profile antiwar activities going back to 1969, but the bureau did not formally open its investigation until January 1972 — the year of Nixon’s re-election campaign. In March, just as the presidential campaign was heating up, the Immigration and Naturalization Service refused to renew Lennon’s visa, and began deportation proceedings. Nixon was re-elected in November, and a month later, the F.B.I. closed its investigation.

If Lennon was considering actively opposing Nixon’s re-election, the spying and the threat of deportation had their intended effect. In May, he announced that he would not be part of any protest activities at the Republican National Convention, and he did not actively participate in the presidential campaign.

After revelations about the many domestic spying abuses of the 1960’s and 1970’s — including the wiretapping of Martin Luther King Jr. — new restrictions were put in place. But these protections are being eroded today, with the president’s claim of sweeping new authority to pursue the war on terror.

Critics of today’s domestic surveillance object largely on privacy grounds. They have focused far less on how easily government surveillance can become an instrument for the people in power to try to hold on to power. “The U.S. vs. John Lennon” would be a sobering film at any time, but it is particularly so right now. It is the story not only of one man being harassed, but of a democracy being undermined.

Canadian Police Errors Led to Man's Torture, Inquiry Finds

Canadian police wrongly identified an Ottawa software engineer as an Islamic extremist, prompting U.S. agents to deport him to Syria, where he was tortured, an official inquiry concluded on Monday.

Maher Arar, who holds Canadian and Syrian nationality, was arrested in New York in September 2002 and accused of being an al-Qaeda member. In fact, said the judge who led the probe, all the signs point to the fact Arar was innocent.

Arar, 36, says he was repeatedly tortured in the year he spent in Damascus jails, and the inquiry agreed that he had been tortured. He was freed in 2003.

Judge Dennis O'Connor, who was asked by the Canadian government in 2004 to examine what had happened, found the Royal Canadian Mounted Police had wrongly told U.S. authorities that Arar was an Islamic extremist.

``The provision of this inaccurate information ...totally unacceptable'' and guaranteed the United States would treat Arar as a serious threat, O'Connor said.

``I am able to say categorically that there is no evidence to indicate that Mr Arar has committed any offense or that his activities constitute a threat to the security of Canada.''

Civil rights advocates said the case of Arar and three other Canadians who ended up in Syrian jails raised suspicions that Canada might be outsourcing interrogation to nations where torture was commonplace.

O'Connor said the case of the other three men was troubling and warranted further investigation. But he found no evidence that the Canadian government had played any direct role in the U.S. decision to deport Arar to Syria.

Arar, calling on the government to hold accountable the officials he said were responsible for his ordeal, had tears in his eyes when asked by reporters for his reaction.

``Today Justice O'Connor has cleared my name and restored my reputation,'' said Arar, who has launched a lawsuit against Ottawa seeking compensation.

O'Connor's three-volume report castigated the Mounties for slipshod work in the wake of the 9/11 suicide attacks.

It said the Mounties exaggerated Arar's importance and later asked U.S. customs agents to put Arar and his wife on a special watch list, calling them ``Islamic extremist individuals suspected of being linked to the Al Qaeda terrorist movement.''

U.S. agencies declined to be questioned by O'Connor as to why they had deported Arar.

``I do conclude it is very likely that they relied on information received from the RCMP in making the decision to remove Mr Arar to Syria,'' the judge wrote.

Public Security Minister Stockwell Day, who has overall responsibility for the forces of law and order, said he was satisfied with the finding that Canadian officials had not played a direct role in the U.S. decision to deport Arar to Syria.

``What happened to Mr Arar is very regrettable. We hope ... never to see this happen again,'' he told reporters.

Arar first came to police attention in October 2001 when he was seen talking to another man already being investigated for possible al-Qaeda links.

O'Connor found that police made a number of serious mistakes in the Arar case.

The unit probing possible terror networks was poorly supervised and was comprised largely of financial fraud experts, who had little experience of national security cases.

Police gave all the files from their probe to the United States without screening the data for inaccuracies or following internal rules that limited what they could hand over.

``It was a breathtakingly incompetent investigation ... a disaster,'' said Marlys Edwardh, a lawyer for Arar.

O'Connor criticized unnamed Canadian officials, whom he said had leaked confidential and sometimes inaccurate information about Arar both before and after his release in a bid to demonstrate he really was a threat to national security.
http://www.nytimes.com/reuters/world...n er=homepage

Deeper Spying Is Seen in Hewlett Review
Damon Darlin

A secret investigation of news leaks at Hewlett-Packard was more elaborate than previously reported, and almost from the start involved the illicit gathering of private phone records and direct surveillance of board members and journalists, according to people briefed on the company’s review of the operation.

The effort received some degree of supervision from three officials — Patricia C. Dunn, the company’s chairwoman, along with its general counsel and another staff attorney — but was quickly farmed out to a network of private investigative firms early last year, according to descriptions of the findings. It is still unclear how much they knew of the details.

Those briefed on the company’s review of the operation say detectives tried to plant software on at least one journalist’s computer that would enable messages to be traced, and also followed directors and possibly a journalist in an attempt to identify a leaker on the board.

The revelations at Hewlett-Packard, the computer and printer maker that helped define Silicon Valley, have provided a rare glimpse of boardroom turmoil — resulting in Ms. Dunn’s agreement to step down as chairwoman in January, and two resignations from the board.

But they have also cast a harsh light on the questionable and possibly illegal techniques used in the episode, raising the possibility of criminal charges.

The account of those briefed on Hewlett-Packard’s review of the matter sheds new light on the scope and timing of the investigative methods, establishing that invasive and possibly illegal techniques were used far earlier than previously known and that the company’s chief ethics officer was among those providing supervision.

The hunt for a boardroom leaker began as early as January 2005, with a focus on disclosures immediately preceding the ouster of Carleton S. Fiorina as chairwoman and chief executive, with a second phase that began a year later. Hewlett-Packard has said that as a public company, it had a responsibility to stop unauthorized disclosures.

But the review reveals that the investigation by its detectives was notable for a lack of close supervision by company officials.

Those briefed on the internal review said that at various times, questions were raised about the legality of the methods used. They did not identify who raised the questions, when, or to whom they were addressed. But a crucial legal opinion, its origins previously undisclosed, was supplied by a Boston firm that shares an address and phone number with a detective firm on the case.

Those speaking about the company’s review would do so only if they were not identified. A Hewlett-Packard spokesman yesterday declined to comment on their account.

In addition to scrutiny by prosecutors, a House subcommittee has entered the case, asking for documents on the internal investigation to be delivered today in advance of a Sept. 28 hearing in Washington.

Some of those documents are expected to reveal that detectives made several attempts at direct surveillance of some directors, and were given photos of reporters to help identify them.

At least one reporter, Dawn Kawamoto of the online technology news service CNET, may have been followed as part of the 2006 investigation, said a person briefed on the investigation. Ms. Kawamoto was a co-author of an article on a senior management meeting in January.

The detectives also tried to plant software in the computer of an unspecified CNET reporter that would communicate back to the detectives, people briefed on the company review said. Ms. Kawamoto said in an interview this month that prosecutors had told her that such a ploy may have been used, but said she was not aware of any surveillance.

Representing themselves as an anonymous tipster, the detectives e-mailed a document to a CNET reporter, according to those briefed on the review. The e-mail was embedded with software that was supposed to trace who the document was forwarded to. The software did not work, however, and the reporter never wrote any story based on the bogus document.

On Saturday, the company identified one of two employees who it said had been a target of scrutiny in the internal operation. It said the private phone records of the employee, Michael Moeller, director of corporate media relations, were taken.

It is not clear why Mr. Moeller, whose job it is to speak with reporters, was included in the operation. Robert Sherbin, Hewlett-Packard’s vice president for external communications and Mr. Moeller’s boss, said yesterday, “Investigators’ suspicions were misdirected and were unfounded.” He would not elaborate.

Although the company said others outside the company were also targets of detectives, it has not identified those people.

According to those briefed on the internal review, the Hewlett-Packard investigation had two stages: from January to August 2005, when nothing of substance was turned up, and again in January 2006, after the CNET article appeared.

The first call for an investigation from the board came in January 2005 after The Wall Street Journal published an article that cited discussion of the board about a management reorganization and changes in the responsibilities of Ms. Fiorina, then chairwoman and chief executive.

An article in The New York Times on Feb. 10, recounting Ms. Fiorina’s ouster by the board, contained extensive details of a directors’ meeting and fueled the desire to plug leaks.

Reporters from those two newspapers, CNET and Business Week have been told by the California attorney general’s office that they were targets in the operation.

Within 60 days, the investigation into the leaks was up and running, according to those briefed on the company review. Responsibility for the investigation was delegated to the company’s global investigations unit, based in the Boston area. Those company officials turned the effort over to Security Outsourcing Solutions, a two-person agency that hires specialists for investigations.

That firm hired Action Research Group, an investigative firm in Melbourne, Fla. The actual work of obtaining the phone records was given to other subcontractors, one of which is said to have worked in or near Omaha. The methods were said to have included the use of subterfuge, a practice known as pretexting, in which investigators pose as those whose records they are seeking.

Previous accounts of the Hewlett-Packard operation have focused on the use of such methods in the 2006 phase of the investigation, but not in its earlier phase.

Federal and California prosecutors, as well as the Congressional subcommittee, are examining the chain of detectives for possible criminal wrongdoing in obtaining phone records. The California attorney general said last week that he had enough evidence to indict people inside and outside the company.

Hewlett-Packard has steadfastly refused to identify any of the investigators it used, including its own.

People briefed on Hewlett-Packard’s review of its internal investigation say that it was authorized by Ms. Dunn, the chairwoman, and put under the supervision of Kevin Hunsaker, a senior counsel who is the company’s director of ethics. But it is not clear what level of supervision he gave to the project.

Ms. Dunn has said in recent interviews that she could not supervise the investigation because she was also a potential target. She has said she turned to the company’s security department in April or May 2005 for an initial investigation, then asked Ann O. Baskins, the company’s general counsel, for help in the further investigation last January. Ms. Baskins supervises a team of more than 100 lawyers around the world.

At at least one point, the company’s lawyers sought a legal opinion. But it did not come from Hewlett-Packard’s own outside counsel, Larry W. Sonsini of Wilson Sonsini Goodrich & Rosati, an eminent Silicon Valley law firm.

Instead, the company asked one of its contractors, Security Outsourcing Solutions, which turned to a Boston lawyer, John Kiernan of Bonner Kiernan Trebach & Crociata, for the opinion. Mr. Kiernan’s office shares a Boston address and phone number with Security Outsourcing Solutions.

The company, in a recent filing with the Securities and Exchange Commission, said it had received an outside counsel’s opinion that the investigative methods were legal, but it did not identify the source.

It is also not clear whether company lawyers were aware of the close business and personal ties between Mr. Kiernan, Ronald R. DeLia, the owner of Security Outsourcing Solutions, and Anthony R. Gentilucci, the Boston-based manager of global investigations for Hewlett-Packard.

Executives and lawyers back in the company’s Palo Alto, Calif., headquarters remained in the dark even after a summary report was produced for them about each of the two phases of the operation, according to those briefed on the review. Neither of the reports, they said, outlined the methods used.

There were discussions of phone numbers and calls in the report. But it is not clear why that fact apparently did not raise alarm among any Hewlett-Packard lawyers about the means used to gain the information.

The findings were presented to the board at a meeting in May, with George A. Keyworth II, the board’s longest-serving member, identified as a source of leaks. He refused an initial request to resign, though he ultimately agreed to do so last week. But a fellow director, Thomas J. Perkins, a Silicon Valley venture capitalist, resigned immediately over the handling of the investigation.

It was only through subsequent inquiries to Mr. Sonsini that Mr. Perkins learned more about the methods used. It was his determination to get the company to acknowledge the reasons for his departure that brought the internal investigation into the spotlight this month.

In an e-mail message to Mr. Sonsini on June 19 , Mr. Perkins asked about the legality of obtaining private phone records without a subpoena. Mr. Sonsini responded that Ms. Baskins had “looked into the legality of every step of the inquiry and was satisfied that it was conducted properly.”

According to those briefed on the company’s review of its investigation, there is no indication that Mr. Sonsini, considered the most powerful lawyer in Silicon Valley, was involved in seeking outside investigators for Hewlett-Packard in 2005 or 2006. He became involved, they said, only when the board asked him for a legal opinion of the investigation and the methods used.

Mr. Sonsini has said that his direct involvement in helping the board trace news leaks was limited to interviews with directors in early 2005.

Mr. Sonsini told the board in August, after his firm’s investigation of the detectives’ methods, that the use of pretexting “was not generally unlawful.” The law firm could not say whether the detective agencies hired by Hewlett-Packard, or the subcontractors any of them used, “complied in all respects with applicable law.”

Kurt Eichenwald contributed reporting.

H.P. Said to Have Studied Infiltrating Newsrooms
Damon Darlin and Kurt Eichenwald

Hewlett-Packard conducted feasibility studies on planting spies in news bureaus of two major publications as part of an investigation of leaks from its board, an individual briefed on the company’s review of the operation said yesterday.

The studies, referred to in a Feb. 2 draft report for a briefing of senior management, are said to have included the possibility of placing investigators acting as clerical employees or cleaning crews in the San Francisco offices of CNET and The Wall Street Journal.

It is not clear whether the plan described in the documents, which were read to a reporter, was ever acted upon.

The report was sent on Feb. 1 by Anthony R. Gentilucci, Hewlett-Packard’s Boston-based manager of global investigations, to four others, including Kevin T. Hunsaker, a senior counsel in Hewlett-Packard’s legal department and the company’s chief ethics officer.

“Feasibility studies are in progress for undercover operations (clerical) in CNET and WSJ offices in SF bureaus,” the memo said, referring to two publications in which reports of the company’s board discussions had appeared.

Under a section labeled “Investigation Activity Update,” with the subtitle “Covert Operations,” it also called for examining the use of cleaning employees at those locations.

Another document, undated but said to be a briefing for the company’s chairwoman, Patricia C. Dunn, is less explicit but refers to plans involving “placement of agent in close proximity to person of interest.”

A Hewlett-Packard spokesman had no comment last night when asked about the documents.

The consideration of undercover agents inside news organizations adds a new element to what is known of the Hewlett-Packard investigation, which prominently included the use of subterfuge to gain the phone records of company directors, employees, journalists and others.

An e-mail message obtained by The New York Times from someone with access to the company’s investigative material shows that leading members of the team supervising the investigation knew of the use of the phone ruses at least as early as January 2006 and raised questions about their legality.

The disclosure came as investigators examined the role of a man from the Omaha area who may have obtained private phone records on Hewlett-Packard’s behalf, according to people briefed on the company’s review of the operation.

California and federal prosecutors are exploring whether laws were broken in the investigation, particularly in the use of pretexting — a technique in which an investigator masquerades as someone else to obtain that person’s calling records from a phone company.

Concern over legality was reflected in an e-mail message sent on Jan. 30 by Mr. Hunsaker, the chief ethics officer, to Mr. Gentilucci, the manager of global investigations. Referring to a private detective in the Boston area, Ronald R. DeLia, whom the company had hired, he asked: “How does Ron get cell and home phone records? Is it all above board?”

Mr. Gentilucci responded that Mr. DeLia, the owner of Security Outsourcing Solutions, had investigators “call operators under some ruse.”

He also wrote: “I think it is on the edge, but above board. We use pretext interviews on a number of investigations to extract information and/or make covert purchases of stolen property, in a sense, all undercover operations.”

Mr. Hunsaker’s e-mail response, in its entirety, said: “I shouldn’t have asked....”

It is unclear who, if anyone, in the company was then briefed on what he had been told. People who have seen other material from Hewlett-Packard’s investigation said that Mr. Hunsaker, in supervising the operation, communicated frequently with Ms. Dunn, the chairwoman, about its progress. But they said it was not clear when Ms. Dunn, who ordered the investigation, learned of the methods used.

Mr. Hunsaker did not respond to a request for comment. Mr. Gentilucci referred all inquiries to Hewlett-Packard’s corporate offices, where a spokesman had no comment.

The Hewlett-Packard investigations were initiated in early 2005, around the time of Carleton S. Fiorina’s ouster as chairwoman and chief executive, and then resumed in January 2006. The two phases — each begun after accounts of board members’ discussions appeared in news articles — were code-named Kona I and Kona II, according to several people who saw the company’s investigative records. The names are intriguing; Ms. Dunn’s vacation home is in Kona, Hawaii.

Not all board members were targets in the investigation, according to people who had seen some of the company’s investigatory materials. The detectives seemed to focus on allies of Thomas J. Perkins, Ms. Dunn’s board antagonist.

In the first phase, the targets were Mr. Perkins, George A. Keyworth II and Robert E. Knowling Jr., a director who stepped down last September. Ms. Fiorina was also a target, the documents show.

In the second phase, Mr. Keyworth, his wife, Mr. Perkins and two other directors — Lucille S. Salhany, a former television executive, and Richard A. Hackborn, a former H.P. executive — were targets. Both phases used pretexting, according to documents the company has given various investigators.

Another target was Shane Robison, an executive vice president and chief strategy and technology officer. Mr. Robison is not on the board but was a liaison to its technology committee, on which Mr. Keyworth and Mr. Perkins served. A company memo, described to a reporter, instructs detectives to obtain the records of Ms. Dunn and Mr. Robison for the sake of completeness.

Mr. Perkins resigned in June in protest over the investigation. Mr. Keyworth, identified as having given information to reporters, agreed last week to resign from the board after Ms. Dunn said she would step down as chairwoman in January.

In addition to Hewlett-Packard directors, nine journalists and two employees, those whose phone records were obtained included Larry W. Sonsini, the outside counsel, a spokeswoman for his law firm, Wilson Sonsini Goodrich & Rosati, said yesterday, confirming a report in The Wall Street Journal.

The identification of a man from the Omaha area as a possible participant in the operation provides a potentially critical link in the investigative chain. The man, Brian Wagoner, has spent several years working for the Action Research Group, a Florida detective agency, according to a relative of Mr. Wagoner.

The Florida agency has been identified by people briefed on Hewlett-Packard’s review of its operation as a contractor for Security Outsourcing Solutions, Mr. DeLia’s firm.

An e-mail message to Mr. Hunsaker, the Hewlett-Packard ethics officer, indicates that he was aware of the involvement of the Action Research Group in the operation. On Feb. 7, Mr. DeLia informed Mr. Hunsaker that he had sent an e-mail message to “my source in FL and asked him if there were any state laws prohibiting pretexting telephone companies for call records.”

Mr. DeLia gave the response from that firm, presumably Action Research: “We are comfortable there are no Federal laws prohibiting the practice.” He added that he had been using the firm for 8 to 10 years.

Mr. DeLia did not respond yesterday to requests for comment.

Action Research and Mr. Wagoner, the Omaha man, had been linked before. His name appeared in connection with Action Research in April, when Congressional investigators studying pretexting interviewed James Rapp, a Denver man convicted in 2000 of illegally obtaining phone records. Rob Douglas, an information security expert who was a consultant to the Congressional investigation, said Mr. Rapp had disclosed his employment for years with the Action Research Group.

Mr. Rapp told investigators that after his own conviction, which led to the shutdown of his business, some of his employees went to work for Action. Among them was Mr. Wagoner, whom Mr. Rapp identified as his nephew during the interview with Congressional investigators, Mr. Douglas said.

Mr. Rapp said yesterday that Brian Wagoner split his time between the Omaha and Denver areas. “I know for a fact there’s been correspondence between he and Action for many, many years,” Mr. Rapp said.

Mr. Rapp said he had spoken with Mr. Wagoner twice yesterday. “He keeps trying to tell me that Action doesn’t do that kind of work anymore,” Mr. Rapp said. But he said Mr. Wagoner had told him that he did believe he had worked on H.P. case. “He did do the work,” Mr. Rapp said. “He does remember that.”

Matt Richtel contributed reporting.

Focus Turns to the Chief of H.P.; Stock Falls
Damon Darlin and Matt Richtel

Pressure is mounting on Hewlett-Packard’s chief executive, Mark V. Hurd, to explain what appears to have been a greater role in the company’s spying operation than was initially indicated.

Mr. Hurd has largely escaped mention in connection with the company’s efforts to obtain private phone records and otherwise trace leaks from its board. But on Thursday, after his name figured in documents newly appearing in the investigation, Hewlett-Packard’s stock price fell significantly for the first time since the revelations began early this month. The shares closed down 5.19 percent, at $34.87.

The California attorney general, Bill Lockyer, threatened at one point Thursday to issue subpoenas to Hewlett-Packard because of what he said was a lack of cooperation in his criminal investigation. But later in the day, a spokesman for his office said H.P. had expressed a willingness to cooperate, as the attorney general wanted.

The problem for Mr. Hurd arises from a sheaf of e-mail messages and other documents obtained by news organizations that suggest that he approved of at least one aspect of the spying operation, offered names of possible targets and may have been briefed by the supervisors of the effort at the start of a crucial phase.

None of the leaked documents directly implicate Mr. Hurd. He did not write any of the e-mail messages, nor is it clear that he was sent copies of others that refer to him and actions attributed to him.

But what may yet emerge — Hewlett-Packard delivered more than 5,000 pages of documents to investigators with the House Committee on Energy and Commerce this week, and more are expected Monday — is what seems to have worried investors and analysts.

“To the degree it impacts the C.E.O., that is something we are nervous about,” said A. M. Sacconaghi, an analyst who tracks Hewlett-Packard for Sanford C. Bernstein & Company. But he said that “at this point the probability is very low” that Mr. Hurd, credited with turning the company around since his hiring in March 2005, might face criminal charges or be forced out.

Mr. Hurd offered Thursday to testify at a House subcommittee hearing on the case next Thursday. Several other Hewlett-Packard executives have also been asked to appear.

In addition, the company said the Securities and Exchange Commission was seeking records and information related to the resignation of Thomas J. Perkins from the board in May. It was Mr. Perkins’s effort to force the company to acknowledge the reason for his resignation — his objection to the leak investigation — that brought the operation into public view.

Since then, documents have shown that Hewlett-Packard’s detectives not only gained phone records of directors, employees, journalists and others, but also tried to plant software on a reporter’s computer to track a bogus document it sent her and even considered infiltrating newsrooms with spies masquerading as clerical workers or cleaners.

E-mail messages between company officials, cited Thursday in The New York Times and The Wall Street Journal, show efforts to organize a briefing for Mr. Hurd last January, when the leak investigation entered an intense phase over a news account of a senior management meeting. It is not clear whether the briefing occurred.

Another message said Mr. Hurd pointed to five potential leakers on the board at that juncture. And The Washington Post reported that e-mail from the company’s chairwoman, Patricia C. Dunn, cited Mr. Hurd as “fine with both the concept and the content” of the software tracking effort.

Mr. Lockyer, the California attorney general, said Thursday that he did not know yet whether the state would find culpability among senior officials in the company. “We haven’t ruled anything in or out,” he said. “We want to know who committed the wrongdoing.”

The company promised that Mr. Hurd would answer questions at a news conference Friday afternoon, after the stock market’s close, but the timing of the events also put investors on edge. “Traditionally in corporate America, bad news is delivered on a Friday after the markets close,” Mr. Sacconaghi said.

Several people with close ties to board members said Mr. Hurd was preparing a plan to present to the board for how get the company beyond its current problems. It may announce dismissals or resignations, though that course could present other problems. Ex-employees have no incentive to protect the company or its executives or managers.

Hewlett-Packard’s chairwoman, Ms. Dunn, has acknowledged that she authorized the internal inquiry, and documents have shown that she involved herself in it. Other documents show that Kevin T. Hunsaker, a senior company lawyer, directed the operation, which involved Hewlett-Packard investigators and several layers of outside detectives and their subcontractors.

Mr. Hunsaker has hired a San Diego criminal defense lawyer, Michael Pancer. Ann O. Baskins, the company’s general counsel, to whom Mr. Hunsaker reported, has hired Cristina C. Arguedas, a white-collar crime specialist with the law firm of Arguedas, Cassman & Headley in Berkeley, Calif.

Mr. Hurd has been popular with investors because he is transforming Hewlett-Packard from a lumbering technology company content to live off the profits of its lucrative ink-cartridge business into a growth company. Hewlett is projected to bring in $91.2 billion in revenue this year — enough to make it the largest technology company in the world.

Oddly, the internal animosities exposed in the disclosures from the leak investigation had their roots in the activities of a board subcommittee established in 2002 to help the company make smarter technology strategy decisions.

After its contentious $25 billion merger with Compaq Computer, the board and some top executives became bitterly divided over how quickly the computer business could grow and how it should invest in the future, according to a person with direct knowledge of the divisions within the board.

Established at the urging of Mr. Perkins, a Silicon Valley venture capitalist who returned to the company as a director after the Compaq merger in 2002, the technology subcommittee routinely met a day before each board meeting to thrash out technology strategy issues and wrestle with how to restart growth at Hewlett-Packard.

The subcommittee was dominated by directors who maintained that the company could grow much more quickly by investing in information technology. Initial members included Mr. Perkins; George A. Keyworth II, a former Reagan administration science adviser; Richard A. Hackborn, a former Hewlett-Packard executive; and Lawrence T. Babbio Jr., vice chairman of Verizon. Shane V. Robison, the executive in charge of research and development, attended the meetings.

Mr. Hurd began attending after he joined the company, succeeding Carleton S. Fiorina as chief executive. It was where the most spirited deliberations about Hewlett-Packard’s future took place, a person briefed on the sessions said.

But Ms. Dunn, who had become chairwoman, did not take part, and some subcommittee members have concluded that her exclusion rankled her. She and several other directors were skeptical of large research investments in computing, a person with detailed knowledge of the subcommittee’s activities said.

“The conflict on the board wasn’t about personalities; it was about growth strategies,” said Mark Stahlman, a financial industry analyst who is now a strategist at Gartner Invest, a Wall Street research firm.

Friends of Ms. Dunn, who asked not to be identified, said some of the animosity could also be traced to the period when Mr. Hurd was hired. Mr. Perkins, Mr. Keyworth and Ms. Dunn were in charge of the search committee, and while they agreed about Mr. Hurd, Ms. Dunn became angry with leaks from the board about the search, those friends said.

Mr. Perkins and Mr. Keyworth became targets in both phases of the leak investigation, around the time of Ms. Fiorina’s dismissal and again early this year. Their resulting confrontation with Ms. Dunn — Mr. Keyworth was identified as a source of unauthorized disclosures — ended in their resignations.

Nonetheless, with Ms. Dunn’s decision last week to step down as chairwoman in January, to be succeeded by Mr. Hurd, the strategic dispute was settled. “The growth faction has now won,” Mr. Stahlman said.

In a filing Thursday with the S.E.C., the company said Mr. Perkins and Mr. Keyworth, who resigned after Ms. Dunn stepped down, had agreed not to sue Hewlett-Packard, and the company had agreed to pay expenses arising from government inquiries or legal proceedings in the spying fiasco. The company and the former directors signed mutual non-disparagement agreements.

John Markoff contributed reporting.

HP CEO Allowed 'Sting' of Reporter

Chairman's e-mails detail operation
Ellen Nakashima and Yuki Noguchi

Hewlett-Packard Co. chief executive Mark V. Hurd approved an elaborate "sting" operation on a reporter in February in an attempt to plug leaks to the media, according to an e-mail message sent by HP Chairman Patricia C. Dunn.

The document, one of more than two dozen e-mails obtained by The Washington Post, for the first time links Hurd to an internal investigation of media leaks that has led to criminal probes and will be the subject of a congressional hearing next week.

Internal e-mails show senior HP employees who were given the task of identifying anonymous news sources concocted a fictitious, high-level HP tipster who sent bogus information to a San Francisco reporter in an attempt to trick her into revealing her sources.

The e-mail sting operation, which was part of a wide-ranging two-part HP investigation that began in March 2005 and ended in May 2006, is the latest in a series of deceptive and possibly illegal tactics that reveal the lengths to which HP went to spy on people inside and outside the company to protect its image and secrets.

HP's leak investigation involved planting false documents, following HP board members and journalists, watching their homes, and obtaining calling records for hundreds of phone numbers belonging to HP directors, journalists and their spouses, according to a consultant's report and the e-mails.

The e-mail operation demonstrated an intense degree of attention by Dunn, who often sent messages via a BlackBerry device, and by senior HP executives attempting to cultivate and trick a news reporter to find the identity of her source. A Hewlett-Packard spokesman declined to comment on the revelations or make Hurd or Dunn available for an interview.

None of the e-mails reviewed by The Post were to or from Hurd, nor do they detail what information Hurd had when he approved the sting operation.

A corporate spying effort this broad and orchestrated has never before been exposed, experts said.

"If you'd laid this out as a science fiction story, it'd be hard to believe it's true," said Ari Schwartz, deputy director of the Center for Democracy & Technology, a District-based privacy watchdog group.

It was unclear whether the e-mail sting operation involved illegal tactics, experts said, but federal and state authorities have launched probes into the legality of HP's methods.

On Sept. 28, Dunn and several other HP executives are scheduled to testify before the House Energy and Commerce investigative subcommittee about their roles in the spy probe. The hearing is part of an inquiry led by committee Chairman Joe Barton (R-Tex.) into the techniques Hewlett-Packard used.

California Attorney General Bill Lockyer said last week that he had enough evidence to issue indictments against people inside and outside HP. The spying scandal erupted into public view this month after it was revealed that board member Thomas J. Perkins had resigned in protest months ago after learning that his personal phone records had been obtained under false pretenses.

The Hewlett-Packard board of directors is scheduled to meet today, and Hurd is to brief board members about developments in the internal review. Hurd is expected to hold a press conference Friday.

After an emergency board meeting last week, Dunn agreed to resign as the board's chairman in January but she is to remain on the board, handing the top job to Hurd. George "Jay" Keyworth, a board member who said he talked to a reporter, resigned last week.

Though nine journalists were apparently targeted in HP's leak investigation, one in particular drew the scrutiny of Dunn and Hurd, according to a series of internal e-mails. Dawn Kawamoto, a reporter for Cnet.com, wrote a fairly straightforward article on Jan. 23 outlining the firm's long-term strategy after a board retreat.

Determined to ferret out the source's identity, HP senior counsel Kevin Hunsaker, who led the HP investigation ordered by Dunn, and an HP colleague in Boston created a fictitious persona, "Jacob," who would pose as a disgruntled HP "senior level executive" and cultivate Kawamoto by saying he was "an avid reader of your columns."

The idea, evidently, was to induce Kawamoto to open an e-mail attachment with a "tracer" in it that would allow them to see who she forwarded it to. They hoped it would pinpoint board member Keyworth as her source, according to the documents.

On Feb. 2, Hunsaker made a PowerPoint presentation to Dunn, called Project Kona II, in which she was shown the "covert" e-mail sent to Kawamoto on Jan. 26. In it, "Jacob" wrote that "tired of broken promises, misguided initiatives and generally bad treatment," he had information to pass on to her.

The computer-generated presentation included a proposed " 'next step' covert e-mail" in which "Jacob" would establish his insider bona fides with Kawamoto by telling her that, contrary to an article she wrote, a potential HP deal with "CSC," or Computer Sciences Corp. was "definitely on HP's radar . . . I know because I was involved in preparing the briefing documents."

After the presentation, Hunsaker sent Dunn an e-mail thanking her for "taking such a big chunk of time" to meet with his team. Dunn replied with an e-mail to Hunsaker, saying that she was "encouraged that this effort is on the right track."

As the project evolved, Hunsaker and Anthony Gentilucci, an HP global investigations manager in Boston, began to refine Jacob's character. "I think we have to figure out who Jacob is, weak, strong, vindictive, a Bill and Dave fan, possibly lower level employee . . . will dictate the tone of the e-mail," Gentilucci wrote on Jan. 28.

Over the next week, HP investigators designed a plan to give Kawamoto a "[small] accurate piece of advance information" about a new handheld product, before they would "spring the false one," referring to a fabricated news tip about HP opening a computer data farm. That first tip, about the handheld device, would be sent in an e-mail that would include the tracking software.

On Feb. 5, Dunn sent an e-mail to Hunsaker: "This sounds promising. I will be in contact with Mark and come back to you with an indication of joint approval as soon as we connect."

Sending someone an e-mail file, even under false pretenses, and then tracking whether it was forwarded may violate confidentiality policies, but is probably not illegal, said Robert Seiden, chief executive of Fortress Global Investigations Corp. If the company used its program to try to access other information from Kawamoto's computer, however, that would be a violation of federal law, he said.

A Feb. 8 e-mail from Ronald DeLia, a Boston security contractor hired to work on the HP leak investigation as part of Hunsaker's team, suggested "a more elaborate sting" involving "electronic bugs" that would allow the tracking of calls between Keyworth and Kawamoto.

If the team wiretapped the calls of Keyworth and Kawamoto, that too would be illegal, Seiden said.

On Feb. 9, in an e-mail to Hunsaker and general counsel Ann O. Baskins, Dunn wrote: "I spoke with Mark and he is on board with the plan to use the info on new handheld" devices and that "he also agrees that we should consider doing something with" the data-farm tip.

On Feb. 16, Kawamoto sent an e-mail to "Jacob" that she would be on vacation the next week. DeLia forwarded her e-mail to his colleagues, saying: "Team, We're alive and kicking." He also noted that, based on her cellphone call records, she was going to Disneyland. "She has made numerous calls to a hotel in Disneyland," he wrote.

On Feb. 22, Hunsaker e-mailed Dunn and Baskins with a copy of a slide showing the bogus handheld product to be launched. "I made up everything in the slide, trying to make it at least somewhat feasible," Hunsaker wrote to Dunn and Baskins. "I won't quit my day job, but hopefully neither will the name nor the information on the slide are terribly off-base."

Dunn replied: "Kevin, I think this is very clever. As a matter of course anything that is going to potentially be seen outside HP should have Mark's approval as well."

On Feb. 23, Hunsaker sent an e-mail to Dunn. "FYI, I spoke to Mark a few minutes ago and he is fine with both the concept and the content."

Staff researcher Richard Drezen contributed to this report.

HP CEO Says He Approved Email Ruse in Leak Probe
Duncan Martell

Hewlett-Packard Co. Chief Executive Officer Mark Hurd said he had approved an e-mail ruse to track down boardroom leaks, admitting for the first time his involvement in a scandal that also on Friday forced out the company's chairman.

HP's board appointed Hurd as chairman after asking Patricia Dunn to resign for her role in a company probe into board leaks to the media. The company said Dunn's departure would remove a distraction and allow the company to move forward.

But analysts were not convinced these moves would end a controversy that has tarnished the reputation of a venerable Silicon Valley company, drawing the attention of California's attorney general, the U.S. Securities and Exchange Commission, the U.S. Justice Committee and a Congressional panel.

"It's tough to say that (Hurd) is definitely in the clear," said Shaw Wu, an analyst at American Technology Research. "I don't think we have all the answers. At minimum, this investigation is still a distraction for the company."

HP Chief Ethics Officer Kevin Hunsaker and Chief Security Officer Anthony Gentilucci also will leave their jobs and are "on their way out" of the company, a person familiar with the matter said.

Hurd, who has won investor support for leading a comeback at HP since taking over as chief executive in April 2005, told a news conference he approved the sending of e-mails from a fictitious source in an effort to root out the media leaks.

He apologized on behalf of the company and vowed to get to the bottom of the HP probe in which investigators used false identities to obtain the phone records of directors, employees and journalists.

"On behalf of HP I extend my sincere apologies to those journalists who were investigated and everyone who was impacted," said Hurd at the news conference which represented the company's most detailed account to date of the probe.

"We believe that these were isolated instances of impropriety and not indicative of how we conduct business atHP."

HP shares rose 1 percent in extended trade following Dunn's resignation on Friday. The stock had been largely unaffected by the controversy, but fell about 5 percent on Thursday on speculation that Hurd might have been closer than thought to the investigation.

Deborah Rhode, a law professor and director of the Center on Ethics at Stanford University, said other top executives should lose their jobs in addition to Dunn but that it was too early to say whether Hurd would go as well.

Dunn, who had been scheduled to step down as chairman in January, will now leave the board altogether and immediately.

"She shouldn't be the only one to fall on her sword at this point," Rhode said. "There are a lot of questions whether Hurd can command the credibility and confidence the company badly needs at this point given the mismanagement of the investigation."

Hurd told reporters HP still did not have all the facts about its inquiry into leaks dating back to 2005, but some of the findings are "disturbing." He acknowledged there was a written report of the investigation that he did not read.

"In the second phase, while many of the right processes were in place, they unfortunately broke down and no one in the management chain, including me, caught them," Hurd said.

"I understand there is also a written report of the investigation (the second phase) addressed to me and others but I did not read it. I could have, and I should have."

Nevertheless, Hurd defended the investigation, saying it was important to discover the source of the leaks and that he believed Dunn had the company's best interests in mind.

"It was the responsibility of the HP chairman to pursue the leak situation," he said at a news conference where he declined to take questions. "This was an appropriate course of action."

Mike Holston, an outside attorney for HP, said the company's investigation ranged from the review of internal e-mails and instant messages, to the surveillance of an HP board member and at least one journalist. He said investigators may have also sifted through individuals' trash.

HP also said it appointed Bart Schwartz, a former U.S. prosecutor, to conduct an independent review of the methods the company used in its leaks investigation. Schwartz will report to Hurd and Chief Financial Officer Bob Wayman.

(Additional reporting by Michael Kahn in San Francisco, Lisa Baertlein in Los Angeles, Herb Lash and Chris Sanders in New York and Daisuke Wakabayashi in Seattle.)

HP Sponsors 'Privacy Innovation' Award
Brian Bergstein

Insert your own punch line: Hewlett-Packard Co., the technology company facing federal and state investigations for spying on board members and journalists, is co-sponsor of an award for "privacy innovation."

Nominees are currently being accepted for the fourth annual HP/IAPP Privacy Innovation award, which Hewlett-Packard gives in conjunction with the Maine-based International Association of Privacy Professionals.

According to the award's Web site, the prize was created to honor "strong and unique contributions to the privacy industry."

"At present, there is not sufficient recognition for organizations that have embraced privacy as a competitive advantage, and as a business/governmental imperative," the site states.

Previous winners of the award have included eBay Inc., Microsoft Corp., Sprint Nextel Corp. and two Canadian provincial offices. No one from HP is a judge.

There are no plans to sever HP's ties to the award, said Trevor Hughes, the IAPP's executive director. He said his organization of corporate privacy officers focuses on consumer issues, where HP has earned high marks.

"A private investigation done through a board of directors is a bit removed from the normal things that we would cover," Hughes said. "Everything I have seen has shown me that HP is actually a very good corporate citizen when it comes to consumer privacy issues."

An HP spokesman did not return a call seeking comment.

HP is facing multiple investigations into the company's surveillance of directors, employees and journalists as it sought the source of boardroom leaks to the media. HP investigators posed as other people to obtain their phone records and sent at least one reporter monitoring "spyware" in an e-mail.

An HP director quit in protest of the methods and another resigned after being outed as a leaker. Questions about HP's methods led the board chair, Patricia Dunn, to agree to cede the post in January, though she plans to remain a director.

One place to read about all this is none other the Privacy Innovation award's Web site. It contains a long list of privacy-related stories in the news, including the HP affair.


On the Net:


DRI Brings Legal Action Over Mass Surveillance

We have now started our legal action against the Government challenging Irish and European laws on data retention. Here’s the full press release.


Irish civil rights group Digital Rights Ireland (DRI) has started a High Court action against the Irish Government challenging new European and Irish laws requiring mass surveillance. DRI Chairman TJ McIntyre said:

These laws require telephone companies and internet service providers to spy on all customers, logging their movements, their telephone calls, their emails, and their internet access, and to store that information for up to three years. This information can then be accessed without any court order or other adequate safeguard. We believe that this is a breach of fundamental rights. We have written to the Government raising our concerns but, as they have failed to take any action, we are now forced to start legal proceedings.

Accordingly, we have now launched a legal challenge to the Irish government’s power to pass these laws. We say that it is contrary to the Irish Constitution as well as Irish and European Data Protection laws.

We also challenge the claim that the European Commission and Parliament had the power to enact the Data Retention Directive. We say that this kind of mass surveillance is a breach of Human Rights, as recognised in the European Convention on Human Rights and the EU Charter on Fundamental Rights which all EU member states have endorsed.

If we are successful, the effect will be to undermine Data Retention laws in all EU states, not just Ireland, and to overturn the Data Retention Directive. A ruling from the European Court of Justice that Data Retention is contrary to Human Rights will be binding on all member states, their courts and the EU institutions.

Attack on Private Life

He continued:

These mass surveillance laws are a direct, deliberate attack on our right to have a private life, without undue interference by the government. That right is underpinned in the laws of European countries and is also explicitly stated in Article 8 of the European Convention on Human Rights. The Article specifies that public authorities may only interfere with this right in narrowly defined circumstances.

The information will be collected and stored on everyone, regardless of whether you are a criminal, a policeman, a journalist, a judge, or an ordinary citizen. Once collected, this information is wide open to misappropriation and misuse. No evidence has been produced to suggest that data retention laws will do anything to stop terrorism or organized crime.

We accept, of course, that law-enforcement agencies should have access to some call data. But access must be proportionate. In particular, there should be clear evidence of a need to move beyond the six months of storage which is already used for billing purposes. Neither the European Commission nor the European police forces have made any case as to why they might require years of data to be retained.

Data Retention, as legislated for in Ireland and mandated by the Data Retention Directive is unjustified mass surveillance. The government is deliberately recording information about innocent citizens without cause.

Legal background

The action challenges the law on data retention contained in the Irish Criminal Justice (Terrorist Offences) Act, 2005 and the European Data Retention Directive passed in 2006. The action has been commenced in the High Court by McGarr solicitors on behalf of DRI and names as defendants the Minister for Communications, Marine and Natural Resources, the Minister for Justice, Equality and Law Reform, the Garda Commissioner, Ireland and the Attorney General. DRI will ask the Irish courts to refer the Directive to the European Court of Justice for a decision on whether it is valid.

International Support

Digital Rights Ireland is the only group bringing a challenge to these laws, but it is supported by many international privacy and civil rights groups. Danny O’Brien of the Electronic Frontier Foundation said:

The EU Data Retention Directive is an excessive invasion of the privacy and security of all Europeans. Mandatory recording and retention of European citizens’ telephone calls by telephone companies and their online behaviour by Internet Service Providers creates a precedent for mass surveillance and is likely to chill freedom of expression on political and social issues that are at the very core of a well-functioning democracy. Digital Rights Ireland’s legal challenge to the directive will help protect not only the fundamental rights of citizens of Europe, but also those of other countries tempted along the same path.

Other organisations supporting the action include Privacy International, the European Foundation for a Free Information Infrastructure, the Czech civil rights group Iuridicum Remedium, Digital Rights (Denmark), the Belgian Liga voor de Mensenrechten (”League for Human Rights”), Electronic Frontier Finland, the UK Open Rights Group, the Italian group, ALCEI (”Electronic Frontiers Italy”), the French IRIS, the Internet Society - Bulgaria, German groups netzwerk Neue Medien (”network New Media”) and FITUG (Förderverein Informationstechnik und Gesellschaft e.V.), and the Austrian groups VIBE!AT (”Austrian Association for Internet Users”) and Quintessenz.

Virtual Keypads are Vulnerable to Snoops
Brian Bergstein

In hopes of fighting Internet fraud, some online banking sites make customers use "virtual keypads" - a method of entering passwords on the screen, generally with a mouse.

The system is designed to thwart keystroke-logging programs that capture everything a user types. Now those virtual keypads appear just as vulnerable to snoops.

A Spanish security company, Hispasec Systems, has revealed details of "Trojan horse" programs that can capture video imagery of an unsuspecting person's computer use. If the user enters a PIN on a bank's virtual keypad, the dastardly program is a witness.
Like most Trojan horses, the ones detected by Hispasec are slipped onto users' computers when they visit certain Web sites, often through spam links, said Hispasec researcher Bernardo Quintero. Often you'd have no clue if you were hit. When Quintero's group tested whether more than 30 anti-virus programs would block a recent video-logging Trojan, only six did so.

Gartner Inc. security analyst Avivah Litan said screen-capture programs that attacked virtual keypads emerged as early as 2003, when banks in Brazil fell prey. She said the technique has remained relatively rare because the programs consume a lot of bandwidth and storage, and there have tended to be a lot of easier targets.

But that may be changing. Quintero said Wednesday that a newly detected Trojan combines keystroke-logging and video-capture functions - and instead of recording the entire screen, the program just grabs images of the immediate area near where the user clicks the mouse. The spy receives a smaller file, making the attack easier to pull off.

All this points to an enduring security truth: No single measure - especially one that is apparent to fraud artists - is likely to guarantee safety.

Litan says banks would be wise to focus more resources on behind-the-scenes software that can analyze Web banking sessions to gauge their legitimacy.

"Banks should stop implementing patchwork solutions and get it right the first time," she said.

Hungarian P2P Revolution

On January 26 this year, Daniel Nagy was defending his PhD on lossless data compression at Queen's University in Kingston, Ontario, Canada.

By February 1 he was back home in Hungary.

And on February 10, "my apartment was being searched by the police because I was the contact person for a server that runs a DC hub among other things," he told p2pnet.

"That's when I decided to organize resistance against the copyright mafia."

The members of the Big Four Organized Music gang have been able to pull off a bizarre propaganda triumph through which copyright infringement has been raised to the height of crimes at the level of murder and rape.

With that as justification, and with the RIAA, their American 'trade' unit leading the way, they now routinely take international police officers off traditional tasks such as protecting the public, which pays them, to acting as cops for the cartel, which doesn't.

This means they're also able to tap into tax-payer funded corporate police resources of all kinds to fulfil purely corporate objectives.

Their victims, meanwhile, are always ordinary men and women and even young children, people who don't even begin to have the financial or legal resources to take on Warner Music (America), EMI (Great Britain), Sony BMG (Japan and Germany) and Vivendi Universal (France) in open court where lawyers argue with lawyers while other lawyers preside.

The Big Four have numerous so-called trade associations around the world supposedly acting for the hundreds of separate corporate labels which together, comprise the vast, multi-billion-dollar record industry.

The trade bodies have names such as the RIAA (Recording Industry Association of America), BAMP (Bulgarian Association of Music Producers), CAPIF (Cámara Argentina de Productores de Fonogramas y Videogramas), CRIA (Canadian Recording Industry Association of America), SNEP (Syndicat National de l'Edition Phonographique), Saudi Arabia's Saudi Arabia SOREMA (Sound Recordings and Multimedia Association), and literally scores more, not to mention Hungary's MAHASZ (Magyar Hanglemezkiadók Szövetsége).

But just as the Big Four in one way or another own, or directly or indirectly control, the many supposedly separate record labels, they also to all intents and purposes own and control the so-called trade associations.

They spend millions of dollars pumping out the message that they're being "devastated" (their word) by file sharers under the wholly unsupported assertion that a file shared equals a sale lost, and the attacks on their own customers around the world are all part of one huge, and blackly cynical, operation under which they're striving to gain total control over how, and by whom, music is distributed online.

Nagy spotted Recording Industry vs The People's Ray Beckerman through his slashdot Q&A and sent him a letter. "It is clear that these folks in Hungary are way ahead of us in thinking this problem through, and in organizing the resistance, and that we have much to learn from them," says Beckerman.

And here's the message from Nagy to people who, like him, are being victimized by the Big Four Organized Music cartel:

Let me inform you that there are others, in other countries, who are fighting the same fight you are.

In particular, we have established a self-defense fund called Elite Defense in Hungary that provides legal assistance to those attacked by RIAA's Hungarian subsidaries. We are providing this service in partnership with an attorney, who actually does the legal representation. His name is dr. Zsolt Dallos. I would like to share our experiences with you in order to avoid reinventing the wheel (by either of us).

Hungarian law with respect to file sharing is more similar to that of Canada than that of the US. On top of that, we have a legal system based on code law rather than common law. This alters the tactics of our adversaries as well as that of most effective defense, but I still think that some of our experience may be useful to you and vice versa.

For instance, I find that the main weapon of the copyright-mafia is intimidation and scare tactics. The actual number of cases is relatively low (compared to the number of people actively involved in file-swapping), but they try to give each one of them big publicity in order to scare the rest of us. Consequently, the actual risk of a person being sued is farsmaller than what the copyright-mafia would want us to believe. This, in turn, implies that there's a market for insurance-like services: for a modest monthly fee (approx. $1/month), we provide free legal representation and a T-shirt (saying: "they wanted to fine me for file-swapping, but all I got was this lousy T-shirt") to those attacked. The T-shirt is actually very important: instead of being something shameful, it shows resistance to these lawsuits to be something to be proud of, which is very important in defeating their very purpose.

Another very important activity of ours is that of countering the record industry's false propaganda. As you have written, the formation of the legal framework is still in progress, thus public opinion matters a lot. It is very important to show the world that it is we, not they, that have the moral and legal high ground. We organize public debates with the representatives of the copyright-mafia on university campuses, where we expose the immoral and hypocritical behavior of these guys, which is motivated by greed and nothing else. Here are some powerful arguments that have been made in these debates:

There is a difference between music and a recording thereof. The recording industry has actually robbed many musicians of an opportunity to make money by playing music: in many places (pubs, markets, skating rinks, etc.) where there was (diverse) live music (for centuries!), now we can only listen to (the same) recorded music. It is more cost-effective for the recording monopolies to hand-pick a small number of performers making them superstars and flooding the whole world with the same (often very shallow) music than to allow for greater cultural diversity. Thereby, they are inflicting enormous damage to humanity's cultural heritage.

There is no better advertising for a musician, than the recording of their performance. If recordings are circulating freely and the music is good, people will notice and demand that music. Now, the recording industry wants to rob musicians of this potent, yet low-cost, marketing tool in order to maintain their control over the tastes of people and to keep the number of popular musicians as low as they can. The overwhelming majority of musicians are actually benefiting from file-sharing, and file-sharing allows for making money by means other than seeking the favors of recording monopolies.

Music copyright has killed folk music. How many folk-songs do you know from the second half of the 20th century? That is because the recording industry has made copyright the only way for musicians to make money. The tradition of taking a song and performing it according to one's own tastes, which lies at the basis of folk-music, was rendered unprofitable and thus almost extinct.

In countries where music copyright is not enforced (Russia is a prime example), there are many more live performances. Even the most popular bands need to tour the country and give concerts in order to earn their living. And guess what, they usually make their mp3's available for download right on their websites for free, because that's how they lure people to performances. That is, from the society's point of view, a far better situation that what you have in America and other countries with zealously enforced music copyright.

The marginal costs of making another copy of a recording is, for all practical purposes, zero. This is reflected in the fact that Universal Music is now offering free downloads. At this point, the claimed damage per shared song should be closer to $0, than to the RIAA's standard $750 (there is a different figure in Hungary, but that's not relevant in your case).


(Cheers, Ray, and Cheers Daniel)

Suit: Blogger Posted Target Trade Secrets
Justin Rubner

Target Corp. is on the hunt for a feisty blogger who has allegedly posted the retail giant's secrets on the Internet.

The Minneapolis-based company is suing the unidentified "John Doe," who is believed to live in Georgia, in federal court for posting Target's anti-theft procedures on Web sites and various retail-employee forums on the Internet in July.

The information is used to secure Target's merchandise from shoplifters and other wrongdoers. Target says in a court filing it is provided to employees on a "need-to-know" basis.

To find out who "John Doe" is, Target is seeking the help of AOL, Yahoo! Inc. and Microsoft Corp. It's unclear whether these companies will comply, though.

The lawsuit, filed Sept. 5 in federal court in Atlanta, follows a two and a half month campaign that included efforts to get the multiple postings deleted from various message boards.

It also follows the publishing of Wal-Mart Stores Inc.'s recent theft-prevention policy change, leaked to The New York Times in July, which said shoplifters would no longer be charged for stealing less than $25 in goods.

Shoplifting is a $10 billion to $13 billion a year nightmare for U.S. retailers, according to California-based retail security expert Chris McGoey, also known as the "Crime Doctor." Even though stores such as Target and Wal-Mart rack in tens of billions of dollars of sales annually, shoplifting can account for up to 3 percent of those sales every year, he says.

"That's profit they should have gained," said McGoey, who advises almost every national retail chain in the country.

Target operates more than 1,400 stores, including 45 in Georgia.

Target's lawsuit illustrates the lengths to which companies will go to protect secret information from reaching the masses, said Jason Bernstein, an Atlanta-based intellectual property attorney at Powell Goldstein LLP. He says Target is trying to send a clear message to rogue posters that the publishing of trade secrets is something the company will not stand for.

"It's demonstrating to me an incredible awareness these companies have of the importance of their trade secrets and confidential info because they rely on them to increase sales and prevent theft," Bernstein said. "Companies like Target, they're also trying to send a statement to the industry. They're probably very upset over this."

A blueprint for crime

In the lawsuit, Target claims the postings have already led to losses and that they provide "potential wrongdoers with a blueprint for circumventing Target's security procedures." The policy, which Atlanta Business Chronicle obtained at targetunion.org, outlines in detail various rules, such as mandating that all thefts above $20 must be referred for prosecution and barring anyone from photographing employees who have been caught shoplifting.

If Target does ID the blogger, and he or she still refuses to cease the postings, the company faces some sticky issues, a First Amendment and intellectual property expert says.

For one, it is not known whether the poster ever signed a confidentiality decree. If the John Doe didn't, then Target would have to prove the poster knew the policy was confidential, said David Bodney, a First Amendment and media rights lawyer with Phoenix-based Steptoe & Johnson LLP. Bodney, also a lecturer at Arizona State University, adds that Target would have to prove the postings had no legitimate purpose other than to malign.

"It's an uphill battle," he said.

However, he also points out that free speech is not absolute, especially if a judge decides -- as Target claims -- that the policy is a court-protected company secret.

"It's a disappointing reality that our constitutional liberties are conditional," Bodney said.

According to the suit, the poster obtained the 30-plus-page policy from a terminated Target theft prevention employee in Wisconsin. That employee allegedly e-mailed the policy to the John Doe and only knew the poster through his association with anti-Target Web sites.

In July, just days after the employee posted the policy on targetunion.org, the suit says, Target contacted the employee and demanded he delete it from the site and his computer. He allegedly obliged, but the John Doe never did -- despite the fact that Target contacted the poster's various e-mail accounts and posted messages on popular anti-Target Web sites demanding the practice to stop.

In response to one of Target's postings, the blogger -- who used screen names such as "Target Sucks" -- allegedly wrote online "I didn't sign any confidentiality agreement with them and really don't give a rat's ass if they like it or not." The poster also warned others on targetunion.org that Target law firm Faegre & Benson was monitoring the site, and published attorney Kerry Bundy's e-mail address and phone number. In response, another poster wished "a million scurges" on the law firm. A scurge is a parasitic alien on Nintendo video games.

An e-expert was hard pressed to predict which side has the upper hand. Eugene Volokh, a University of California law professor who specializes in free speech issues, compares the case to four others: three involving Apple Computer Inc. and one involving Ford Motor Co. Apple has had mixed luck with its ongoing war against leakers in recent years. And Ford, in 1999, lost a lawsuit regarding a blogger who posted corporate documents showing some negative information about the company's vehicles. The site, blueovalnews.com, still exists today.

Source: Complaint No. 1:06-CV-2116 filed in U.S. District Court in Atlanta.

Census Bureau Loses Hundreds of Laptops
Douglass K. Daniel

The Census Bureau collects the most personal information about Americans, from how much money they earn and where they spend it to how they live and die. It's all confidential - as long as no one steals it.

Lost or stolen from the Census Bureau since 2003 are 217 laptop computers, 46 portable data storage devices and 15 handheld devices used by survey takers.

Although the number of people affected isn't known, the Commerce Department reports that passwords, encryptions and other safeguards were in place. Nothing so far indicates a misuse of any information.

"The department takes very seriously these high instances of missing laptops, as well as potential breaches of personal identity data," Commerce Secretary Carlos M. Gutierrez said Thursday in response to an internal review of Commerce Department computers.

"All of the equipment that was lost or stolen contained protections to prevent a breach of personal information," he said in a statement. "The amount of missing computers is high, but fortunately, the vulnerability for data misuse is low."

Several other government departments in recent months also have acknowledged the loss of laptop computers containing personal information, in some instances for millions of people.

A request by Rep. Tom Davis, R-Va., the chairman of the House Government Reform Committee, prompted the Commerce Department review. In addition, a media inquiry - the department would not identify the source - came via a Freedom of Information Act filing, Commerce spokesman Richard Mills said in an interview.

Commerce found that since 2001 the department's 15 operating units had lost track of 1,137 laptop computers. Most, 672, belonged to the Census Bureau. Of those, 246 contained personal information.

Thousands of Census field representatives - many of them temporary, hourly employees - use laptop computers to compile survey data. The department said half of the laptops containing personal information were stolen, often from employees' vehicles, and 113 were not returned.

Census data collected during survey periods were downloaded each day and removed from the laptops at the end of the survey periods, making it impossible to estimate how much personal information may have been on the computers, Mills said.

The department was in the process of contacting the 558 households with data recorded on the missing handheld devices, although the risk of data misuse was considered low, it said.

Among government departments recently reporting data thefts and security breaches, the Veterans Affairs Department suffered the biggest loss with the theft in May of a laptop and external drive containing information for 26.5 million veterans and active-duty troops. Burglars stole the equipment from the home of a Veterans Affairs employee, but the computer was recovered and showed no signs of having been accessed for the personal data.

Other departments reporting the loss of computers with personal information include the departments of Agriculture, Defense, Education, Energy, Health and Human Services, and Transportation. The Federal Trade Commission also has lost laptops with sensitive data.

Second only to the Census Bureau in missing laptops at the Commerce Department was the National Oceanic and Atmospheric Administration. It reported 325 missing computers, three of them containing personal data.

Among those stolen was one used by a NOAA law enforcement agent and containing some case file information. In July, a laptop containing Social Security numbers and other information on 146 employees and contractors was reported stolen after a fire in a NOAA facility in Seattle, the department said.

Gutierrez said the department was taking steps to protect against further missing laptops or potential breaches of personal identity data. Among them were inventory reforms, including creating a database for all departmental property, and "raising employee accountability standards."

"This review process has clearly pointed out the flaws in the department's inventory and accountability efforts going back many years," Gutierrez said. "We are viewing this process with the spirit of actively rooting out the problems and addressing them immediately."

Will Public Lose Confidence In Census?
Stephen Ohlemacher

When Elizabeth Mazur found a census taker's business card stuck inside her door last fall, she dutifully called the number and agreed to take part in a monthly survey on income and poverty.

Some questions were personal: Who did she live with? How much money did she make? Where were her parents born?

Mazur, a 29-year-old lawyer in Chicago, said she was happy to answer. But after hearing that Census Bureau workers have lost 672 laptop computers since 2001, including 246 that contained personal data, she's not sure she'd do it again.

"You hear stories about people, schemers pretending to be a bank employee," Mazur said. "Knowing there have been problems (at the Census Bureau), I would be less willing to do it if somebody I didn't know called me."

The Commerce Department, which oversees the Census Bureau, this week became the latest federal agency to acknowledge losing laptop computers containing sensitive information. Overall, the department has lost or had stolen 1,137 laptops since 2001 - the largest number of computers that any agency has publicly acknowledged losing.

All the computers containing personal information were protected by passwords or encryption technology. Still, the disclosure raises questions about the government's ability to protect sensitive information, said Rep. Tom Davis, R-Va.

At least eight other federal agencies have reported computers with sensitive information lost, stolen or illegally accessed in recent months. The biggest case was at the Department of Veterans Affairs, which had a computer containing the personal information of 26.5 million veterans and military personnel stolen. The computer was eventually recovered with no data accessed.

"The reality is, we are incapable of storing, moving and accessing information," said Davis, who vowed to pursue legislation to improve security. "The American people deserve better from their government." Davis chairs the House Government Reform Committee, which has requested information about lost or stolen computers from all Cabinet agencies. He hopes to compile a report by next week.

Rep. Michael R. Turner, R-Ohio, chairman of the House subcommittee on the census, said he plans to hold hearings on how the computers were lost and how to
prevent losses in the future.

There is no evidence that any personal information from the Census Bureau's computers has been accessed or misused, said Ruth Cymber, the agency's director of communications. Publicly disclosing personal information from census surveys is a crime punishable by up to five years in prison and a $250,000 fine.

Census officials do not know how many people had their personal information on the lost or stolen computers, Cymber said. On average, a computer would contain information from 20 to 30 households at any given time.

Most personal information from census surveys would be insufficient to steal a person's identity, according to security experts. However, 81 of the lost computers may have contained Social Security numbers.

Among the Census Bureau computers containing personal information, 104 were stolen and 113 were not returned by former employees. The rest were lost or misplaced. Cymber said the bureau is working with state and local police to try to retrieve computers from former workers.

When possible, the Census Bureau has withheld pay from workers who did not return computers, Cymber said. Most of them were temporary hourly workers paid to gather data door to door.

Security analysts said it would take a computer expert to access a laptop protected by a password. One protected by encryption technology would be even more difficult to access.

"The casual thief likely won't know how to break them," said Peter Swire, a law professor at Ohio State University and the chief privacy counselor for the Clinton administration.

In the meantime, census officials are concerned about losing the public's confidence. The Census Bureau conducts about 120 surveys a year, questioning more than 3 million households about everything from their race and ethnicity to their employment status and how many bathrooms they have in their homes. Most of the questions are mandated by law. The information is used by economists, government planners, marketing companies and academic researchers.

"We cannot do our work without public confidence," Cymber said.

Americans are required by law to answer questions from census takers. But census officials had to go back to 1962 to find a case of someone being prosecuted.

Gary Gordon, a Utica College professor and an expert on identity fraud, said the Census Bureau will have to repair its reputation if it wants Americans to continue answering questions voluntarily.

"People are learning that they need to protect their personal identifiers and trust is big issue," Gordon said.

For her part, Mazur was philosophical about the possibility that some computer thief might learn how much money she made last year.

"I feel like there's so many ways that we're vulnerable, what's one more laptop being lost by the government?" she said.


On The Net:

Census Bureau: http://www.census.gov

ID Theft Task Force Urges Limiting Use of Social Security Numbers

Federal agencies should restrict their use of Social Security numbers to guard against identity theft, a presidential commission said Tuesday.

The Identity Theft Task Force, which was created in May, also urges greater penalties against identity thieves and creation of a ``universal police report'' to help police and victims track complaints.

``When we look at the problem of identity theft, we are reminded that the same technological advances that have improved our lives have also given new and broad opportunities to criminals,'' Attorney General Alberto Gonzales said at a briefing announcing the proposals.

The recommendations, Gonzales said, are a first step to creating practical solutions.

Under the plan, the task force urges the government to review the uses of Social Security numbers as employee identification and determine ways in which it can conceal or eliminate their use in agency systems and paper and electronic forms.

It calls on Congress to amend criminal laws so that identity-theft victims can recover for their hours lost disputing fraudulent accounts with creditors or correcting credit reports.

The initial recommendations come as the government has struggled with high-profile data breaches. At least 10 agencies in recent months have reported incidents, which included the loss of a laptop and external drive containing information for 26.5 million veterans and active-duty troops. That equipment was later recovered.

Goldman Sachs Signs DRM Deal
Munir Kotadia

Global investment bank Goldman Sachs has signed a deal for digital rights management software to protect its confidential documents from unauthorized access. The software, from U.S. vendor Liquid Machines, allows the bank to encrypt documents so it can control access regardless of where the data travels. Document authors can define what users can and cannot do with the information, providing protection against loss, theft or modification.

A Goldman Sachs employee could control who might open, read, forward or print a file irrespective of the user or file's location. For example, an employee could see if someone was attempting to open the document from home. Authorized users are still able to cut, copy or paste data to other applications, with the data remaining protected. The value of the deal was not disclosed. Goldman Sachs is an investor in the privately held company.

Munir Kotadia and Steven Deare of ZDNet Australia reported from Sydney.

Security Products Sold Despite Freeware
Anick Jesdanun

Microsoft gives away a security firewall with its latest operating system. Many high-speed Internet service providers offer free anti-virus protection for subscribers. And several Web sites distribute free toolbars to warn of Web scams.

AOL even recently made a package of basic security tools - anti-virus, anti-spyware and firewall programs - available for free to anyone, not just paying subscribers.

Despite all the free protection, primarily for Windows computers, leading security vendors are moving forward with plans to start selling their annual slate of security products this fall.

Why bother, when so much is available elsewhere at no cost?

"I absolutely don't argue that the highly tech-savvy consumer will and can search the Web for freeware and knock out 90, maybe 95 percent of the risk," said Lane Bess, Trend Micro Inc.'s general manager for consumer products. "That's not the largest (base of) consumers out there."

Most people, he said, would rather install a package - for $50 in Trend Micro's case - that does everything.

Free often means cobbling a package together:

- Taking the basic firewall that comes with the Service Pack 2 version of Microsoft Corp.'s Windows XP, or getting a stronger one like Check Point Software Technologies Ltd.'s Zone Alarm to monitor and block outbound traffic as well;

- Adding anti-virus protection from a high-speed Internet provider like Comcast Corp. or Time Warner Inc.'s Road Runner;

- Obtaining one or more free spyware removal tools like Spybot Search & Destroy;

- Installing a toolbar from EarthLink Inc. or elsewhere to block Web sites known to engage in e-mail "phishing" scams.

Even AOL's free all-in-one package, which uses technology from McAfee Inc. and others, is incomplete, said Joel Davidson, an AOL executive vice president for products and technologies.

Last week, the Time Warner unit announced that subscribers who pay $26 a month will get additional protections, such as a stronger firewall and alerts when malicious software tries to send out a bank account or credit card number. They'll even get more online storage for backup and free insurance for identity theft and computer damage.

The free standalone products have even more limits.

Major e-mail providers scan messages for viruses automatically, but they won't address threats that come from instant messaging or a rogue Web site, or a virus already on the computer.

Trend Micro's free HouseCall virus scanner covers those situations, but users must remember to periodically perform a check, and they won't be automatically protected in the interim. Same goes for the free scan from Microsoft; automated scanning comes with Windows Live OneCare, which costs $50 a year for up to three computers and includes computer backup and tuneup services.

And while Microsoft plans a more robust firewall in its upcoming Windows Vista operating system, it's holding back enough to justify selling OneCare separately.

The free Zone Alarm, meanwhile, will generate a pop-up warning when newly installed software attempts to connect to the outside world. The $40 Zone Alarm Pro will have a continually updated database of programs that researchers know as good or bad, so pop-up prompts only come up in rare cases.

"I don't think (the free version) reduces protection, but it is definitely less convenient," said Laura Yecies, general manager of Check Point's Zone Labs consumer division. "The user is essentially then putting themselves in the role of making determinations."

The free and subscription versions of Grisoft Inc.'s anti-virus and anti-spyware products are nearly identical, but paying customers can get technical help from humans, instead of only the software's help files and Web site documents.

And free software won't come with the ability for companies to easily update all their computers remotely, an issue for larger organizations, said Johannes B. Ullrich, chief research officer with the SANS Institute security group.

Google Inc., Yahoo Inc. and computer manufacturers distribute free security products as well, but they are trial versions often with features disabled, said Kraig Lane, Symantec Corp.'s manager for consumer security products.

The six-month Symantec software bundled with Google, for instance, will block known viruses but won't detect unknown ones, based on behavioral patterns, in the hours before a software update can be developed and distributed for new threats.

"We want to have a little extra value" for paying customers, Lane said.

Other restrictions are in the free software's license terms.

A standalone version of AOL's anti-virus software, from Kaspersky Lab, comes with terms that permit AOL to send e-mail marketing messages, while Sophos Inc. gives free software only if a person's employer or school is already a paying customer.

Some security is better than no security, said Bruce Schneier, a computer security expert with Counterpane Internet Security Inc. "I can complain about them (the free products), but going out free to millions and millions of users, you have to like that."
Yet it's not entirely clear how many users even know of the free offerings.

Bari Abdul, McAfee's vice president for consumer marketing, said Internet users often configure their browsers to bypass home pages that high-speed service providers use to promote free software.

AOL subscriber Gail Taylor, a teaching assistant at the University of Illinois at Urbana-Champaign, said she never knew AOL gave away security software.

But even after checking a number of free products at the request of The Associated Press, she said she still couldn't decide which of the free or fee offerings work best for her. She said she'd need to find time for more research, leaving her computer largely unguarded for now.

Consumers who do install free products may be left with a false sense of security, added David Luft, a senior vice president for security vendor CA Inc.

"Some of those limitations aren't always obvious to the end users until they run into a problem they thought might be addressed," he said. "They think they have something that's fully protecting them, when in reality they don't protect in a way they might need."

AOL to Disband Access Subscriptions Unit
Anick Jesdanun

AOL will disband its business unit that handled access subscriptions and give product managers more autonomy over designing services for consumers as the company increases its emphasis on generating advertising revenue.

AOL also will name its first chief privacy officer in the wake of a much-criticized disclosure of the search terms used by more than 650,000 subscribers.

The changes, outlined in a memo Chief Executive Jonathan Miller sent to AOL employees, take effect in January and represent the first major restructuring since November 2004, when the Time Warner Inc. unit started making news articles, music videos and other materials available for free, breaking its historic "walled garden" of content exclusive to paying subscribers.

At the time, AOL reorganized into four business units, including separate ones for access and audience, its official term for drawing eyeballs to ad-supported Web sites.

"It is my belief that this structure served us well but no longer reflects what we are doing," Miller wrote Wednesday. "Starting last month, our whole company became an `audience' business."

AOL decided last month to give away AOL.com e-mail addresses and software once reserved for paying customers, accelerating an erosion in access subscriptions. The move was designed to prevent AOL subscribers from defecting to free ad-supported services elsewhere.

Although the company will still provide dial-up Internet access to those who want it, it is no longer actively marketing the service. Joe Redling, 47, head of the access unit, will instead oversee AOL's international presence, its mobile services and its relationship with free and paying customers.

Ted Leonsis, 50, head of the audience unit, already has announced plans to relinquish day-to-day management responsibilities beginning in January and remain AOL's vice chairman. At least three senior executives who have reported to Leonsis will report directly to Miller, reflecting the increased import of attracting new customers.

To ensure that lower-level managers can more quickly and effectively develop new services to draw more visitors, they will be given more control over a product's technology, testing, business plans and rollout "and then be held responsible for the results," Miller wrote.

Selling ads for those services, however, will remain centralized, as will such matters as legal compliance and human resources.

"The recent search data debacle is a prime example of why, even with the best of intentions, without proper oversight, costly mistakes can be made," Miller said. "There are, and always will be, corporate functions."

Miller did not say when a chief privacy officer would be named, other than to say "soon."

Two AOL employees already have been fired and its chief technology officer resigned following the intentional release over the summer of three months' worth of search data. One of the fired employees had released the data as a gesture to outside researchers, but had failed to properly seek approval, which the company has said would have been denied.

Miller added that the company still plans to expand its international presence, even as Time Warner announced this week that AOL was selling its access businesses in France and Germany.

Under those deals, which require regulatory clearances, AOL would program Web sites for existing subscribers as well as those of the buyers, an arrangement Miller said would let AOL show more ads to English-speaking and local-language audiences.

Shares in Time Warner fell 12 cents to close Thursday at $17.49 on the New York Stock Exchange.

Time Warner to Sell AOL Germany Business
Matt Moore

Time Warner Inc. is giving up its foothold in one of the fastest-growing markets for broadband Internet access with a deal to sell AOL Germany's Internet access business to Telecom Italia SpA for about $870 million.

The all-cash deal, announced late Sunday, is expected to close early in 2007, subject to regulatory approval.

The decision was expected after AOL said in August that it planned to cut 5,000 jobs, or a quarter of its global work force, as it restructured its business to draw more advertising revenue.

AOL Germany has 1.1 million broadband users and 1.3 million subscribers who use dial-up or ISDN to access the Internet.

Germany's broadband market is one of the largest in Europe, with more than 12 million subscribers by the end of June. The number of users is expected to grow by 10 million through 2009 as faster access is introduced in the country of more than 82 million residents.

Over the past two years, AOL has been offering more of its services without charge to boost advertising revenue and offset declines in its subscription-based Internet access business. The transition accelerated last month with AOL's decision to give away AOL.com e-mail accounts and various software once reserved for paying subscribers.

In Germany, AOL will offer its services on a joint Web portal for Telecom Italia users and will design, host and operate audience services for Telecom Italia customers in Germany.

The deal will make Milan-based Telecom Italia the second-biggest provider of broadband Internet in Germany with 3.2 million customers, behind T-Online International, part of Deutsche Telekom AG.

The deal will bring to more than 9 million the number of Telecom Italia subscribers in Italy, France and Germany.

"This acquisition marks a further step in Telecom Italia's strategy of focusing on broadband services and content delivery at an international level," Telecom Italia Chief Executive Riccardo Ruggiero said in a statement.

AOL also is looking to shed its access business in France and the United Kingdom.

It has entered into exclusive negotiations with Neuf Cegetel for AOL France. Like the arrangement with AOL Germany, the envisioned deal with Neuf Cegetel calls for AOL to retain its French portal and handle content for Neuf Cegetel's existing customers.

Dan Bieler, of London-based consulting and research firm Ovum, questions whether a U.S.-based company can successfully run a German portal. He said AOL Germany "has a different history and culture" than Telecom Italia, which offers broadband in Germany under the "Alice" brand.

"Whilst AOL Germany no doubt brings expertise in online advertising, we are less certain that it is in a position to operate a portal that caters to the tastes of existing Alice customers," he said.

Shares in New York-based Time Warner, the majority owner of AOL LLC of Dulles, Va., rose 12 cents to close at $17.14 Monday on the New York Stock Exchange.

A Chip That Can Transfer Data Using Laser Light
John Markoff

Researchers plan to announce on Monday that they have created a silicon-based chip that can produce laser beams. The advance will make it possible to use laser light rather than wires to send data between chips, removing the most significant bottleneck in computer design.

As a result, chip makers may be able to put the high-speed data communications industry on the same curve of increased processing speed and diminishing costs — the phenomenon known as Moore’s law — that has driven the computer industry for the last four decades.

The development is a result of research at Intel, the world’s largest chip maker, and the University of California, Santa Barbara. Commercializing the new technology may not happen before the end of the decade, but the prospect of being able to place hundreds or thousands of data-carrying light beams on standard industry chips is certain to shake up both the communications and computer industries.

Lasers are already used to transmit high volumes of computer data over longer distances — for example, between offices, cities and across oceans — using fiber optic cables. But in computer chips, data moves at great speed over the wires inside, then slows to a snail’s pace when it is sent chip-to-chip inside a computer.

With the barrier removed, computer designers will be able to rethink computers, packing chips more densely both in home systems and in giant data centers. Moreover, the laser-silicon chips — composed of a spider’s web of laser light in addition to metal wires — portend a vastly more powerful and less expensive national computing infrastructure. For a few dollars apiece, such chips could transmit data at 100 times the speed of laser-based communications equipment, called optical transceivers, that typically cost several thousand dollars.

Currently fiber optic networks are used to transmit data to individual neighborhoods in cities where the data is then distributed by slower conventional wire-based communications gear. The laser chips will make it possible to send avalanches of data to and from individual homes at far less cost.

They could also give rise to a new class of supercomputers that could share data internally at speeds not possible today.

The breakthrough was achieved by bonding a layer of light-emitting indium phosphide onto the surface of a standard silicon chip etched with special channels that act as light-wave guides. The resulting sandwich has the potential to create on a computer chip hundreds and possibly thousands of tiny, bright lasers that can be switched on and off billions of times a second.

“This is a field that has just begun exploding in the past 18 months,” said Eli Yablonovitch, a physicist at the University of California, Los Angeles, a leading researcher in the field. “There is going to be a lot more optical communications in computing than people have thought.”

Indeed, the results of the development work, which will be reported in a coming issue of Optics Express, an international journal, indicate that a high-stakes race is under way worldwide. While the researchers at Intel and Santa Barbara are betting on indium phosphide, Japanese scientists in a related effort are pursuing a different material, the chemical element erbium.

Although commercial chips with built-in lasers are years away, Luxtera, a company in Carlsbad, Calif., is already selling test chips that incorporate most optical components directly into silicon and then inject laser light from a separate source.

The Intel-Santa Barbara work proves that it is possible to make complete photonic devices using standard chip-making machinery, although not entirely out of silicon. “There has always been this final hurdle,” said Mario Paniccia, director of the Photonics Technology Lab at Intel. “We have now come up with a solution that optimizes both sides.”

In the past it has proved impossible to couple standard silicon with the exotic materials that emit light when electrically charged. But the university team supplied a low-temperature bonding technique that does not melt the silicon circuitry. The approach uses an electrically charged oxygen gas to create a layer of oxide just 25 atoms thick on each material. When heated and pressed together, the oxide layer fuses the two materials into a single chip that conducts information both through wires and on beams of reflected light.

“Photonics has been a low-volume cottage industry,” said John E. Bowers, director of the Multidisciplinary Optical Switching Technology Center at the University of California, Santa Barbara. “Everything will change and laser communications will be everywhere, including fiber to the home.”

Photonics industry experts briefed on the technique said that it would almost certainly pave the way for commercialization of the long-sought convergence of silicon chips and optical lasers. “Before, there was more hype than substance,” said Alan Huang, a former Bell Laboratories researcher who is a pioneer in the field and is now chief technology officer of the Terabit Corporation, a photonics start-up company in Menlo Park, Calif. “Now I believe this will lead to future applications in optoelectronics.”
http://www.nytimes.com/2006/09/18/te... tner=homepage

Group Says Worldwide DSL Use Jumps

ATHENS, Greece (AP) -- Worldwide use of DSL technology for broadband access rose 38 percent to around 164 million users in the year to June 30, 2006 boosted by strong growth in the European Union, industry trade group said Tuesday.

In EU countries, roughly 18 million new DSL users were added in those 12 months, an increase of 45 percent, bringing the total to 56 million, and making up slightly more than one-third of the global total.

The figures were announced by the industry group DSL Forum, which is holding a quarterly meeting of the in Athens.

Use of DSL, or digital subscriber line, has accelerated in the last few years as advances in technology have driven down prices and allowed greater services to be offered over existing telephone lines.

"Sustained global growth in DSL is founded on leveraging the existing telecommunications infrastructure," Michael Brusca, head of the DSL Forum, said.

"The performance and quality of broadband services with DSL keeps on getting better and better."

In North America, where cable television penetration is widespread, slightly more than half of broadband subscribers use cable television lines.

However, in the year to June, DSL use rose faster than cable modem subscriptions and overall, the market rose 31 percent to 26.7 million users.

In the Asia-Pacific region, DSL use rose 9.5 percent to 29.8 million users, while in South and Southeast Asia, the number of users rose 57 percent to 36.2 million, due largely to 11.6 million new subscribers in China.

Latin America added 3 million subscribers for a total of 8.06 million and the Middle East and Africa added 1.75 million for a total of around 3.8 million.

'I'm in the playground'

Most 10 Year-Olds Have a Mobile Phone
Matt Chapman

More than half of the UK's 10 year-olds have a mobile phone, according to a study for the The Carphone Warehouse and The London School of Economics.

The Mobile Life Youth Report found that 51 per cent of 10 year-olds own a mobile phone, rising to 91 per cent for 12 year-olds.

While only a third of adults in general feel that children should have a mobile phone by the age of 11, that figure rises to 54 per cent of those parents who were questioned.

The social aspect of mobile phones is felt keenly by teenagers; 78 per cent claim that it gives them a better social life, and 42 per cent of 15 to 17 year-old girls would feel 'unwanted' if a whole day went by when their mobile phone did not ring.

Two thirds of 15 to 17 year-olds would not let their parents look through their text messages, and a quarter of 11 to 17 year-olds had received a text inviting them on a date.

"The mobile phone has become the most important electronic device for young people in the UK today, and 91 per cent of children have a mobile phone by the time they go to secondary school at 12 years old," said Charles Dunstone, chief executive at The Carphone Warehouse.

"It provides them with a social network, a sense of security and access to entertainment. But most importantly it provides them with a sense of belonging to their peer group."

The study was carried out by polling organisation YouGov and questioned 1,250 11 to 17 year-olds who own a mobile phone.

Comics and Micropayments: An Interview with Todd Allen

Yesterday, I ran an outtake from Convergence Culture which centered around the efforts of Scott McCloud to build public interet in micropayments as a means of supporting digitally distributed comics. Like McCloud, I believed that micropayments offered perhaps the best way to provide a commercial infrastructure which would preserve the diversification of content that currently characterizes the web while at the same time allowing artists to make a living off of their work. When McCloud spoke at MIT last week, he told me that Reinventing Comicswas designed to be a book about the future when it was published more than five years ago and it was still a book about the future now. We are just moving towards the future at a slower rate than any of us might have imagined. The success of iTunes suggests that people are willing to pay small amounts of money online to consume content they want (and thus suggests that some micropayments model might still make sense). At the same time, they are doing so through a central distribution channel which could easily become a gatekeeper locking lots of content producer out.

I have not been paying as much attention as I should lately to developments in the debates around micropayments and other ways of paying for online content. A few years ago, I served as a member of a thesis committee for Todd Allen, a student at New York University's Gallatin School, who was doing a project focused on business models for digital comics producers. He has since self-published the thesis as a printed book and made it available online Allen is now a Chicago-based consultant and author on matters related to digital media and its business applications. He teaches E-Business for the Arts, Entertainment & Media Management Department at Columbia College Chicago. Allen's writing on technology has been seen in the Chicago Tribune and Iconocast. Allen has worked with a diverse group of companies including the American Medical Association, National Parent Teacher Association, Modem Media and the Marketing Store. Outside of technology, Allen spent two seasons covering the New York Knicks for New York Resident, a Manhattan weekly paper, where he also penned a humor column. He once appeared on MTV in a futile attempt to explain computer science to Pauly Shore.

Todd is someone who follows digital comics very closely and so I decided to check in with him this week to see if he could bring us up to date about developments in that area.

You investigated alternative ways of funding digital comics through your thesis research. What models offered the greatest promise and why?

If I had to point to one, I'd point to merchandising. T-shirts, posters, printed collected editions (graphic novels, if you prefer)... selling things seemed to be the highest revenue generator when viewing the area from a high level.

That said, the more popular web comics - your PVPs and Penny Arcades - do quite well with advertising. In these cases you have high page view counts and higher than average CPM rates for the advertising, owing to a desirable demographic, particularly to gaming companies.

Ultimately, different revenue streams will work for different web comics. There will be differences in audience demographics and merchandising options from property to property that cause variations in the productivity of a revenue model. There's no reason not to mix the models until one clearly overtakes the other. Initially, merchandising will be a better option for more web comics. Advertising becomes a more viable option as your strip's traffic grows.

I would also caution against the use of contextual advertising for web comics. Contextual advertising is based on the _text_ elements of a web page, not the graphic elements. While theoretically, you could structure the text of the page to sync with the individual strip, I haven't heard a lot of success stories about cartoonists striking it rich with AdWords. Feel free to correct me on that one if a few instances have popped up.

What did you learn about the effectiveness of micropayments? What has happened in this space since Scott McCloud launched his experiment with BitPass?

You really don't hear much about Bit Pass these days. There seem to have been two nails in the coffin:

1) The Goats.com boys tried a download experiment last year with BitPass. They weren't happy with the response they got, which didn't translate into a lot of money (owing to the nature of micropayments requires a lot of transactions to start adding up to significant money). They also found their normal merchandising sales took a significant hit. It wasn't immediately apparent whether this was due to a focusing of attention on download distracting attention away from the t-shirts or whether people bought the low-margin download, instead of the higher margin merchandise, but the experiment did not go well and Goats.com is a site that's serious about its income, so people paid attention.

2) PayPal now lets you do micropayments with a credit card. This speaks to what, in my mind, is the biggest problem with BitPass - namely you're dumping $3.00 into a glorified bus pass to spend on their system. What if, like me, the only thing you want to get off their merchant system is Scott McCloud's "The Right Number" web comic? Then you've spent fifty cents on the first two parts and you have $2.50 in an account just sitting there, gathering dust. Having to open a separate account is a deterrent to sales. Having to open that account and drop in 12x the amount you intend on actually spending is silly. The power of their network wasn't strong enough to overcome the barriers... and I'm still waiting for the final part of "The Right Number" to come out, for that matter.

But we should back up and talk about micropayments in a more braod sense. People define micropayments a few different ways. Could be a payment under $3. Under $2. Under $1. Under $0.50.

By and large, iTunes and their $0.99 downloads are considered proof that micropayments work. Downloading the pilot for Aquaman at a $1.99 price point may or may not be considered a micropayment, depending on who you talk to.

There has not been a great deal of micropayment experimentation done in comics, past BitPass and I would argue that having that bus pass/minimum deposit system does not make BitPass a valid test.

In a very recent development (as in, within the last two weeks) Slave Labor Graphics has started offering some of their titles as digital download for $0.69 cents a pop. That price not only qualifies as a micropayment, you can also use it as a punchline.

What have been some of the more interesting recent efforts to provide support for the production and distribution of comics?

A few things. Web comics, traditionally, have followed the comic strip model, more than the comic book model.

On the strip side, the syndicates are expending a bit more energy to talk you into buying a subscription to their content. You can get the strips in an e-mail. You can access a deep archive. You have access to a few strips that are web only, including reprints of classic, discontinued strips.

It was a long time coming, but the syndicates are experimenting with what they can do online... after all, if the newspapers are having problems, then the syndicates are having problems.

The most interesting thing on the comic book side of web comics would be the migration of independent comics away from print and onto the web.

I should probably preface this with a thumbnail recap of the foibles of the direct market for comic books.

Most comic books are bought in specialty stores these days, and somewhere in the neighborhood of 90% of direct market sales is controlled by a single distributor - Diamond Comics. Diamond has a catalog which features a handful of the larger publisher (who they have special contractual relationships with) in individual sections in the from of said catalog. Everyone else is mixed in the back of the catalog, alphabetical by publisher name. It makes it very hard to stand out in the catalog, and since there's a lot of crap (and I'm being nice when I say crap... trust me, I've seen the catalog) in that amalgamated section, many retailers don't even bother to read through it, making it even harder for a book to stand out. Sound like a mess for a small publisher? It is.

So when you add the retailer apathy towards independent/small product lines that exists in any industry to the problems with catalog placement in such a centralized distribution market, you can see where your independent artists who publish there own material might get squeezed out.

Well, Diamond recently put some minimum sales requirements on their catalog. This scared some people and we're seeing a migration to web of a few critically acclaimed books that didn't sell well in single issues, but did just fine in trade paperback editions (collected editions, graphic novels, pick your term of preference).

Phil Foglio was the pioneer for this trend _prior_ to Diamond throwing down the sales minimum with http://www.girlgeniusonline.com/ , a continuation of his Girl Genius comic.

This has been followed by Carla Speed McNeil's "Aboriginal SF" feature Finder at http://www.lightspeedpress.com/ and Batton Lash's self-explanatory Supernatural Law at http://www.webcomicsnation.com/supernaturallaw/. There will, doubtless, be more to come.

Foglio is more aggressive with embracing non-collected edition merchandising (t-shirts, pins, etc), but over-all, what we're seeing is a shift away from small-print-run monthly comics to web publications aiming for a graphic novel as the end product. Placing material online, one page at a time, and offering an archive offers an infinitely wider distribution network than depending on the owners of an already-small network of comic book shops to stock your product.

Anecdotal evidence is that it helps the sales of the collected editions and the artists haven't felt an additional pinch for not having the traditional comic book's income. (In fairness, the income off the "monthly" editions for a series selling under 3000 copies would likely be minimal and there's a great deal of production and solicitation work that goes away in the straight-to-web scenario).

Do you believe Chris Anderson's Long Tail theory applies to comics? Why or why not?


At the most basic level, you have the very existence of the collected edition. That's someone buying a book that's really 4 - 12 issues of OLD MATERIAL.

Kick it up a level, and look at Sin City or V for Vendetta. They've been around for years, selling a decent amount of books each year. Then they have films come out, based on the originals, and suddenly you're selling a LOT of Sin City and V for Vendetta. In bookstores, too.

Old properties sitting around and suddenly find an audience? That's the Long Tail in full force.

Back issue sales in print comics could be construed to be the Long Tail, although the collectors market makes it a bit different.

As fiction, and usually serial fiction at that, comics fit into the Long Tail model much better than news periodicals. New readers will seek out the backstory. And with web comics, since the back issues are, essentially, an on-demand feature for most strips, the Long Tail is built in.

Have DC and Marvel backed off of web-based distribution of their content altogether? Does the web have more to offer smaller publishers or independent artists than major companies?

DC offers little more than a few pages of previews. One occasionally hears rumblings, but DC seems to be a little on the web-phobic side, to look at their actions.

Marvel continues to waffle. They stepped back from their web comics, then returned to them with a strategy geared more towards promotion of upcoming collected editions. Their initiative of late have been establishing a wiki and instituting some editorial blogs. On the other hand, Marvel also issued a survey about attitudes towards digital downloads, including questions on how much the consumer would be willing to pay for one. So with Marvel, they're definitely thinking about it, if not jumping to action.

As to what the web offers to whom, that would depend on the context. If you were just looking at the world of people who go to comic shops, the web has a lot more to offer the independents. After all, most of them have trouble getting good physical distribution. This is a no-brainer.

If you look at the whole world, the web opens up possibilities to all, but more to DC and Marvel. Why? Because DC and Marvel are recognizable brands. You will have a magnitude more people seeking out Batman and Spider-Man online, than you will something like Fear Agent or Queen & Country. Your smaller publishers will need to do more marketing to catch up, when using brands that are, effectively, unknown to the mass market. That's not to say that something like Fear Agent couldn't become popular with the mass market, similar to how the Sin City film turned people onto the comics, but its a longer and harder road.

On the flip side, independent comics have more non-super hero fare, and could potentially play to a wider audience. Or at least so goes one line of thinking.

The web does not appear to be a zero sum market for comics at this point.

You've been doing some experiments lately with comics as download. What were the results?

Promising. Again, this is a story that needs some framing, particularly since your blog will have some people far removed from the comics scene. Rich Johnston is a London (UK)-based ad man who writes copy for radio advertisements by day and also does a gossip column about the comic book industry ( http://comicbookresources.com/columns/?column=13 ). Every year or two, Rich will produce a comic, usually as the writer. While the do alright for small press titles, these aren't books that set the sales charts on fire. After all, Rich is known as a journalist, not a comics scripter, in these circles. This year, Rich wrote a comic called The Flying Friar. A mild satire of the Superman legend co-mingled with the history of an actual Catholic saint, the book received an unusual amount of publicity in Europe, prior to publication. And when I say unusual, I'm referring to the BBC and the London Times. It was obvious this book would sell out quickly in a fair number of venues and the publicity would definitely reach areas it wasn't stocked, so it was decided we would offer a PDF download of the book for sale. As there was a copy on the store shelves, we decided to offer the download for cover price, as not to be undercutting the shelf copies (which would be unethical to do without first announcing the cheaper online version during the solicitation period). We also gave the book a few days on the shelves before announcing the online offering (on Super Bowl Sunday, actually). Net effect was we've sold a bit over 2% of the initial print orders. The raw number isn't all that amazing, but when taken in context of a small press book, 2% is definitely significant. This was also a month AFTER the media mentions in Europe. More interestingly, links coming in from comic book websites converted to purchase at a 2% rate. Ask anyone in web retailing, 2% is a healthy conversion percentage. People who came to the site, came with their wallet open. For an eBook, essentially. 20-25% of the audience was from Europe. As a proof-of-concept piece, this suggests that there is an audience for online comics, and one willing to pay full cover price for an item they can't find locally (or just prefer to have in a digital edition). It goes without saying that there are no print costs or distributor fees with digital downloads, so the margin is superior to the print version. This was all accomplished with a slightly known, if not unknown creative team. One wonders what the percentages would be like with a known brand or "name" creative team. The only marketing done was shotgunning some press releases. Again, one wonders what would be possible with a marketing budget. The concept played out soundly. (Interested parties can view the book at www.richjohnston.com.)

If you were to predict the future of digital comics distribution five years from now, what changes do you expect to see and which present models will have disappeared?

The ball is definitely moving and more people are talking. No two ways about that.

The micropayment "networks" like BitPass will be gone.

PayPal will have forced other credit card processors to adopt micropayment-friendly policies.

At least 50% of monthly comics will have a digital download available. The question here being whether the publishers handle it themselves or farm it out to stores, ala iTunes.

Comic book stores will become more firmly entrenched as a collector-specific market, not a medium-specific market. (That is to say, right now, if you want to read comics, you have to go to a comic shop. In the future, if you want to _collect_ the print editions, the monthlies, you'll need to go to a shop, as will casual readers who have a strong preference to print. Casual readers without the strong preference for print will start migrating to online, where its easier to find the material.)

You will see more creator-owned properties starting out as web properties and migrating to print, much like PVP has, but starting out this way with the expressed intent of following that path.

You will see the web and print industries actually admit that they're both in a market aimed at collected editions/graphic novels as the enduring product.

The wild card here is what happens with the newspaper market and the traditional syndicates.

Ad Assignment Goes Awry on MySpace.com

A university student appears to be responsible for an advertising class assignment that went awry when the teacher's pug was threatened to be killed online, the school said.

Virginia Commonwealth University had previously said it did not suspect a student was behind the posting on networking site MySpace.com in which someone identifying himself as Jason threatened to kill the pug, Oscar, online this week.

The school later traced the postings to a school computer. It refused to identify the suspect because of federal privacy laws regarding students.

Mike Lear, an adjunct professor at VCU's Adcenter, last week gave his class an assignment to make his 6-year-old pug famous. While most students posted fliers around campus with the pooch's picture on them, the MySpace user opted for a more shocking approach.

It worked, as animal activists and others around the globe called the Adcenter and local police to report the threat. After investigating, Richmond police issued an alert saying, "this threat is the result of a VCU student's assignment that went awry. We want to stress that at no time was any animal in danger."

The assignment had made it clear that students could not harm or kill the dog or threaten to do so.

"The VCU Adcenter is very upset about this incident and will use 'Oscar' as an example of what not to do for classes in the future," Rick Boyko, Adcenter's managing director, said Thursday in a statement from the school.

Although charges won't be filed against the student, the university said the postings violate VCU's honor code and rules regarding the use of university computers and that the student could receive sanctions, including expulsion.

Official Sues Students Over MySpace Page

A high school assistant principal is suing two students and their parents, alleging the teens set up a Web page on MySpace.com in her name and posted obscene comments and pictures.

Anna Draker, an assistant principal at Clark High School, is claiming defamation, libel, negligence and negligent supervision over the page on the popular free-access Web site.

Draker claims two 16-year-olds, a junior and a sophomore, created the page using her name and picture and wrote it as through Draker herself had posted the information, according to Draker's attorney, Murphy Klasing.

Draker found out in April that someone had created a page on MySpace. It had been up about a month before she discovered it.

The site falsely identified Draker as a lesbian. Klasing said Draker, who is married and has small children, was "devastated."

MySpace.com removed the page when Draker told them it wasn't hers.

One of the students also is facing criminal felony charges.

Bexar County Assistant District Attorney Jill Mata would not release information about the case, but confirmed that juvenile charges are pending against a local high school student involving retaliation and fraudulent use of identifying information. Both are third-degree felonies.

Draker is suing for an unspecified amount for damages for emotional distress, mental anguish, lost wages and court costs.

Hungry Workers, Tied to Desks, Clicking to Get Culinary Delights
Jennifer 8. Lee

EVERY weekday, when they are hungry, thousands of the most highly paid workers in New York City will log on to the same Web site. Finding food while they work requires just a few clicks of the mouse, and fits neatly into their multitasking, desk-bound work lives. Few of those employees will ever see the bill or pay a tip when their food is delivered. Instead, their orders are processed, and billed to their employers, through a single company: SeamlessWeb.

SeamlessWeb may be little known outside the high-powered business world. But it has instant name recognition with almost any elite corporate lawyer, investment banker or management consultant in the city. At hundreds of firms, a SeamlessWeb log-on has joined the company ID and the e-mail address as de rigueur accouterments for the new hire.

New York City — with its density, time pressures and rich culinary offerings — has long been a hub for delivery innovation. Ever since the owner of Empire Szechuan began an aggressive menu campaign in the mid-1970’s on the Upper West Side, New Yorkers have embraced the ritual of having food brought to their door. SeamlessWeb yanks that tradition into the era of cutthroat corporate efficiency.

And like the BlackBerry that keeps employees in touch with the office, or the black Town Car that takes them home after hours, SeamlessWeb is a symbol of the heavy time commitment demanded by many of New York’s professional service firms. For employers, it is another reward meant to influence employee behavior: give us almost all of your time and we will pamper you.

Once employees log in, they can order meals for delivery through clicks of a mouse. Even the deliveryman’s tip can be selected from a drop-down menu in increments of 50 cents. The orders are then transmitted to restaurants through a fax or a Web interface. SeamlessWeb pays the restaurants, then bills the employers for the meals and adds a small surcharge. Restaurants also pay SeamlessWeb marketing fees based on their volume of business.

SeamlessWeb seems just a half-step down fromand a half-hour slower than, the food replicators in “Star Trek.” You can have a sumptuous $25 sushi dinner from Hatsuhana in 30 minutes. It is a shame that the delicately prepared meal must be savored while slogging through a spreadsheet or proofreading a contract.

SeamlessWeb and its clients say it benefits everyone involved, which is why it has been so successful: It processed $81 million in food and other deliveries last year, is projecting 50 percent growth this year, and has 1,000 corporate clients in 14 cities.

Employees gush about the rich variety and the quality of the cuisine that unfurls across their Web browsers — a vast improvement over the days when wrinkled takeout menus accumulated in manila folders stuffed in file cabinets. A number of lawyers have even written up a Zagat-type rating for 140 Midtown Manhattan restaurants, including Wondee Siam II, Papillon and Printon 56. According to data from SeamlessWeb, investment bankers tend to order more meat and steak, while lawyers more frequently eat sushi.

“I remember both post- and pre-SeamlessWeb days, and life after SeamlessWeb was much easier,” said David Lat, 31, the blogger behind Abovethelaw.com. Mr. Lat once worked at Wachtell, Lipton, Rosen & Katz, a law firm known for its workaholic tendencies even among New York City’s workaholic law firms. “There were weeks when I could get between half and three-quarters of my calories from SeamlessWeb. If I worked five or six days a week and I got both lunch and dinner from SeamlessWeb, and I’m not a big breakfast person, then yes — three-quarters of my calories.”

Brian Wong, a 27-year-old financial analyst who said he works 14-hour days, estimates that SeamlessWeb saves him at least five minutes a day, because he doesn’t have to dial a phone number or fumble for money to pay the deliveryman.

“If you multiply that by the number of days in a year you work, about 300, that’s 1,500 minutes, which is 25 hours a year,” Mr. Wong said. “You could be more aggressive, and say it saves you 10 minutes a day. That’s 50 hours a year — that’s a workweek.”

Office administrators are even more enraptured by the efficiencies offered by the service. SeamlessWeb integrates smoothly with their financial accounting software, allowing them to download reports that let them quickly analyze by cost center, client and ordering patterns. That means they no longer need to have accountants chasing down scribbled receipts stained with masala sauce. Indeed, the company’s very name, SeamlessWeb, is a reference to its compatibility with back-end office systems. In interviews with industry publications, administrators have also said they like being able to put restrictions on how much food employees may order and when they may order.

It is understood that SeamlessWeb increases productivity because it keeps employees at their desks. More than a few of its client firms are housed in buildings with gyms, salons, dry cleaners, dentists, salons and florist shops, so there is little excuse for employees to leave the building (and by extension, their desks) for a significant period. At some top law firms, including Wachtell, messengers go down to the lobby to retrieve the delivered meals.

Indeed, there are employees who order their cans of Diet Coke through SeamlessWeb instead of getting up to walk down the hall and drop change into a vending machine.

Mr. Wong estimates that he spends 90 percent of his day at his desk, which is why he tries to order healthy meals. “You feel guilty that you are treating your body so badly, so it’s the least that you can do.”

The potential of SeamlessWeb germinated in the mind of Jason Finger in the late 1990’s when he was a 27-year-old first-year lawyer at O’Sullivan, Graev & Karabell, a Midtown law firm. He was hungry while working one Thanksgiving weekend and was frustrated by the lack of food options. He discussed his idea for a sophisticated delivery service with a former law school classmate, Paul Appelbaum, who shared his entrepreneurial sensibilities. They raised money from people who would understand the need for the service they wanted to provide.

“We targeted lawyers and investment bankers for the initial financing,” Mr. Finger said. They raised $340,000 in seed money and began operating in early 2000. The chief financial officer at Mr. Finger’s law firm said that it would be his first customer. Last June, SeamlessWeb was acquired by Aramark, a giant food services corporation, for an undisclosed sum. The initial investors did very well, said Mr. Finger. When asked about the workaholic tendencies of his clients, Mr. Finger replied: “What we try to do is focus on the positive aspects. We get notes like, ‘I work really long hours and this allowed me to leave 10 minutes earlier.’ These are the kinds of things that keep us going.”

SeamlessWeb has expanded into the home delivery market, but that has been a more difficult path, says Mr. Finger. Company surveys show that consumers strongly associate the SeamlessWeb brand with work, and it turns out that work is not something they necessarily want to bring home with them.

But in the office, SeamlessWeb is invaluable, Mr. Lat said. “It really does fit with the 24/7 workaholic New York culture,” he said. “Everything can be done for you. They would bring you food. They would bring you drinks. They would make you coffee. The only thing that they couldn’t do for you was go to the bathroom.”

Crave Talk: All Hail The Analogue Revolution
Chris Stevens

It sounds like an unlikely revival, but vinyl is scratching and crackling its way back to the top. Seven-inch vinyl records are once again a popular format for some indie singles' sales in the UK. Sales of 7-inch singles have risen to well over one million this year. The last time things looked this good for vinyl was 1998.

It doesn't stop there -- the NME's Alex Needham is championing the format to supersede CD. "I think it's very possible that the CD might become obsolete in an age of download music but the vinyl record will survive," he said.

The latest White Stripes' single, The Denial Twist, was helped into the Top 10 by 7-inch vinyl sales -- the band sold 5,500 singles in the format. Stuart Green, head of sales for the Stripe's label told Crave, "We're seeing more interest in 7-inch. We're now more likely to put out two 7-inch records and one CD whereas in the past the opposite was true." Not bad going in an age where iPods are as integral to the proper functioning of a teenage human body as lungs.

Lily Allen saw fit to initally release her new single, LDN, exclusively on 7-inch. It's arguable that the dying singles chart has been defibrillated by vinyl sales.

So why are thousands of people turning back to vinyl when tapes, and then CDs and MP3s, wiped out the vinyl singles market two decades ago? It's likely that the tactile joy of owning a physical object that represents your attachment to a band is infinitely more enjoyable than entering a credit card number into iTunes. Not to mention the fun of manipulating turntable technology to play vinyl, that sense of physical control of the medium. Sales of record decks appear to bear this out -- turntables had disappeared from high street stores but now we're beginning to see major retailers stocking these antique wonders.

What pleasure is there to be had in clicking a virtual button with a mouse? Very little, really. Whereas the slightly precarious operation of placing a record on a platter and dropping the needle seems like a surgical procedure of a kind that most modern automation has tried to completely erase.

There's a wonderful sense of anticipation when you hear that nervous crackle of needle on fresh groove during that brief moment before the music kicks in. How delightful that a new generation is discovering the joy of 7-inch.

Add Easy Listening To Guilty Pleasures Of Digital Downloads
Jason Fry

I am a bit of a rock snob, but the latest digital-music revolution has allowed me to lead a secret double life as a pop-music devotee.

To explain how, here's an example of how things used to be. I once lost a bet and wound up in a karaoke bar singing "Oops!...I Did It Again" by Britney Spears. It didn't go well. When a burly onlooker told me I stank, all I could do was nod.

And that was just the latest in a series of humiliations. In a vain attempt to not stink, I had practiced -- requiring the purchase of a used Britney Spears CD at a cool record store. Hoping to avoid the cashier's contempt, I bought a bunch of CDs with unimpeachable indie cred, then slid Britney into the middle of the stack. Not a bad plan, except the cashier who had to fill the empty cases had given me the wrong Britney CD.

"Um, I need her second album -- this is the first one," I mumbled beneath his withering stare.

Today, there would be no walk of shame in the cool record store -- I'd just stream "Oops!" from one of many digital-music services, or spend a buck to download it.

Therein lies a rarely discussed part of digital music's appeal. Sure, the Internet has revolutionized the spread of information and all that high-minded stuff, but its combination of reach and anonymity also makes it the greatest enabler of guilty pleasures ever invented. Indulgence is just a click away, and nobody needs to know, except you and some server somewhere. (At least you hope; iTunes and other legal digital-music services promise to guard your privacy.)

Given such freedom, hipsters can let their inner dork out for a romp, extolling the virtues of the Arcade Fire by night and retreating to their headphones by day for a Hanson or Boston fix.

The anonymity of buying music online has played a small but significant role in its popularity, says Tim Quirk, vice president of music content and programming for the Rhapsody subscription service, judging by the company's usage data.

Living a secret musical life is a blast -- until somebody borrows your iPod for the gym, or you're playing music for a party and someone peeks at the list of most-played songs.

And there's the threat of so-called Web 2.0 applications that let users exchange information more easily. The popular Last.fm lets friends and like-minded users share their favorite artists. It's easy to forget that list may include any nostalgic 3 a.m. flights of fancy. ("Dude, that's a lot of plays for Rush.")

So what's a poor rock snob to do?

Some opt for denial, aided by technical trickery. If your secret love of "Save a Horse (Ride a Cowboy)" has caused it to creep into your iTunes list of 25 most-played songs, a simple right-click will let you reset the play count. If you want to hear Fall Out Boy, but would rather do so in secret, you can command Last.fm to ignore that the song was played -- or delete it from your charts if you forget.

Viewed from the standpoint of cool logic, this behavior is at least mildly insane. But who needs things that remind us of who we really are, as opposed to how we want others to see us -- or how we'd like to see ourselves?

Rhapsody will periodically offer celebrity playlists, and Mr. Quirk admits, "We do chuckle sometimes when they come in. You very often get the sense that they're not necessarily picking their favorite songs, but songs that they want you to think are their favorite songs."

Another rock-snob defense mechanism is compartmentalizing -- herding beloved tracks whose names dare not be spoken into folders called "80s Schlock" or "Guilty Pleasures." This way, loving Hall and Oates can be passed off as yet another exercise in irony.
If that works for you, great -- but you're living a lie. And you know it, don't you?

There's another way: Let down your hair metal, o rock snobs! Digital music delivered you from the record-store clerk looking down his pierced nose at you, so why in the name of Jon Bon Jovi would you want to replace him with some bogeyman conjured from your own insecurities?

"Another way of looking at a guilty pleasure is something that you're interested in that doesn't define you," says Mr. Quirk, who adds that "like any intervention, the first step is saying it out loud, is admitting what you like. Even if you can't do that, if you act under the assumption that it's going to be OK, you'll quickly learn that it is going to be OK."

Besides, it's a rare rock snob indeed who doesn't have some skeletons in the digital closet. "I don't worry about it," my friend Michael (a veritable colossus of indie cool) says of his Last.fm profile. "Everybody has something they're ashamed of on there."

And so, a pledge: I'm renouncing my secret life. Sure, I love Sleater-Kinney and the Replacements, but every single band and song I've mentioned is in my iTunes, too -- and from now on, I won't pretend they aren't, or claim I'm not at least a bit fond of them. Look and you'll even still find "Oops!...I Did It Again." Just don't ask me to sing it for you.

Until next week,

- js.

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