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Is Google Investing In Obsolete Technology?

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In This Issue:
1. Editor's Note: Is Google Investing In Obsolete Technology?
2. Today's Top Story
    - Google Adds Trends Feature To Personalized Search
    - Google Desktop Apps To Ship With Lexar Flash Drive
3. Breaking News
    - Apple's Web Traffic Riding High On iTunes Surge
    - Philips Spin-Off Creates An 'IPod' For The Written Word
    - Will Mobile Broadband Kill Wi-Fi?
    - Automakers Embrace The IPod
    - OpenOffice.org Suite Updates
    - Yahoo Offers Personal Search Shortcuts
    - Sun's Niagara Server: Try Before You Buy
    - Salesforce.com Outage Inconveniences Customers
    - Bug Bites McAfee Antivirus
    - Flurry Of New Deals Could Make CSC A More Attractive Takeover Target
    - IBM's $865 Million Micromuse Acquisition Aims To Take On Network Complexity
    - H-1B Backers Lose Budget Round
    - Palm Profits Surge, Four New Treos Coming
    - Seagate Set To Acquire Maxtor For $1.9 Billion
    - Oracle Ships ID-, Access-Management System
    - Ford's Fix Could Send Help Desk Offshore
4. Grab Bag
    - Pricey Games: Moms Don't Play (Washington Post)
    - Inside The Google-AOL-Microsoft Negotiations (Wall Street Journal, paid subscription required)
    - Texas Files New Spyware Claim Against Sony BMG (Reuters)
5. In Depth
    - Microsoft Odd Man Out In AOL-Google Deal
    - Microsoft Says Pay Up To Try Live Messenger Beta
    - Microsoft Fixes SUS Glitch
    - Xbox Photos Fetch Huge Prices On eBay
6. Voice Of Authority
    - Blog Confession Leads To Jail Time For Teen
7. White Papers
    - Will Your Company Benefit From Enterprise Fax And E-Document Delivery?
8. Get More Out Of InformationWeek
9. Manage Your Newsletter Subscription

Quote of the day:
"Part of the secret of success in life is to eat what you like and let the food fight it out inside." -- Mark Twain


1. Editor's Note: Is Google Investing In Obsolete Technology?

I startled myself the other day when I realized I didn't know whether my laptop computer has a modem. I had to think about it a couple of minutes. It's been that long since I've used a dial-up connection.

Not long ago, having a laptop computer without a modem was like having one without a display or keyboard--completely useless. But these days, everywhere I go, I can count on a high-speed Internet connection, and in many places I can get a Wi-Fi connection. That's been true for quite some time.

That's half of America Online's problems right there. AOL built its business on dial-up access, and dial-up is rapidly becoming obsolete.

But dial-up is only part of the value that AOL offers its subscribers. It also offers training wheels for the Internet. If you're a civilian who's heard about this "Internet thing" from a nerdy friend or relative, you can get online fast, cheap, and easy through AOL.

Neither of those things is as valuable as they once were. Consumers are stampeding away from dial-up access, looking for high-speed and wireless connections instead. And, by now, pretty much everybody in the developed world who's going to get on the Internet has done so. Moreover, consumers realized that AOL offers a commodity service at boutique prices. You can find services just as good as AOL, or even better, elsewhere.

AOL's subscriber base is fleeing fast: It has only about 20 million subscribers, down from 36 million in December 2002. Pretty soon, it'll be down to the level it was in fiscal 1999, before it bought Time Warner, of 17.6 milling members. (Source of those numbers: AOL's own financial reports, for the third quarter of 2005, annual 2002, and 1999. They're PDF files.)

In the face of that, AOL is scrambling to convert itself from the world's largest Internet service provider to providing a portal, competing with Microsoft and Yahoo. But there's lots of competition in that market and no assurances that AOL will succeed.

So why on Earth would Google invest $1 billion to take a 5% share in a 20th century company?

Google had lots of reasons to want to do the deal. It gets a potential advertising audience of 20 million, an opportunity to stick it to Microsoft, preservation of a substantial existing ad revenue stream, and an investment in a sizeable, family-friendly island in an ocean of Internet porn.

What do you think? Will the AOL-Google deal be good for those customers? What will it mean to users? Let me know on the InformationWeek Weblog, where you can read the rest of this note and leave a comment.

Mitch Wagner
mwagner@cmp.com
www.informationweek.com


2. Today's Top Story

Google Adds Trends Feature To Personalized Search
It provides registered users with a list of their top searches and other history-related information.

Related Story:

Google Desktop Apps To Ship With Lexar Flash Drive
Preinstalled applications on the minidrive, which can hold up to 2 Gbytes of data, will include Google's Picasa, Toolbar, and Desktop Search.


3. Breaking News

Apple's Web Traffic Riding High On iTunes Surge
Apple Computer's Web traffic grew 57% year-over-year for November, Nielsen/NetRatings reported. However, the biggest traffic surges went to sites catering to 12- to 24-year-olds.

Philips Spin-Off Creates An 'IPod' For The Written Word
A spin-off company from Royal Philips Electronics has developed a wirelessly connected "electronic reader" tablet based on a high-contrast "electronic paper" display from E Ink Corp. The E-reader will be available in April.

Will Mobile Broadband Kill Wi-Fi?
With technologies like mobile WiMax starting to emerge, some people are starting to ask whether there's a long-term future for public Wi-Fi.

Automakers Embrace The IPod
Automakers are expected to ride the popularity of the iPod and add support for Apple Computer's portable music player in millions of cars over the next six years.

OpenOffice.org Suite Updates
OpenOffice.org updated its open-source suite Tuesday to 2.01, two months after the long-awaited 2.0 version was released.

Yahoo Offers Personal Search Shortcuts
People can access a Yahoo page that lets them attach a name to a URL that would take them to a frequently visited page or Web service.

Sun's Niagara Server: Try Before You Buy
Sun Microsystems president Jonathan Schwartz reveals a 60-day free trial of the company's new Sun Fire T2000 server on his company blog.

Salesforce.com Outage Inconveniences Customers
Database glitch a reminder that users of on-demand systems should make backup plans.

Bug Bites McAfee Antivirus
A security research firm says McAfee's antivirus line is vulnerable to attack, the second such warning issued about antivirus software in two days.

Flurry Of New Deals Could Make CSC A More Attractive Takeover Target
Contractor strikes IT services deals with the IRS and DuPont and closes in on contract with aerospace giant BAE Systems.

IBM's $865 Million Micromuse Acquisition Aims To Take On Network Complexity
Micromuse's technology will be integrated into IBM's Tivoli platform.

H-1B Backers Lose Budget Round
The Senate had earlier approved a measure that would have increased the number of H-1B visas available next year but yesterday dropped the provision from a bill.

Palm Profits Surge, Four New Treos Coming
The company reported quarterly revenue that's 18% higher than the same period a year ago, marking its eighth consecutive quarter of double-digit growth.

Seagate Set To Acquire Maxtor For $1.9 Billion
The deal is expected to close in the second half of 2006; the combined company will continue under the Seagate name.

Oracle Ships ID-, Access-Management System
The new suite spans a number of Oracle's homegrown and acquired technologies, including Web access control, identity administration, user provisioning, federated identity management, and directory services.

Ford's Fix Could Send Help Desk Offshore
General Motors isn't the only troubled automaker looking to run a more-efficient IT shop. Under a new outsourcing deal, Ford is driving toward a more-simplified IT operation by centralizing key technology operations and aggressively adopting standards. And "anything you can centralize becomes a candidate for offshore savings," says Irene White, Ford's manager for support services.

All our latest news

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In the current episode:

John Soat With 'Why?'
Learn why Apple's Web-site traffic is up, PC sales will rise, spam law is ineffective, and more.

Tony Kontzer With 'Pandora's Musical Box'
Musical site Pandora creates customized radio stations based on your musical tastes.

'What's A Podcast?'
The News Show team hits the streets to find out if people can define the word of the year, "podcast."

Alex Wolfe With 'Rock Stars And Royalty'
A look back at Carly Fiorina's reign at HP.


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4. Grab Bag: News You Need From Around The Web

Pricey Games: Moms Don't Play (Washington Post)
With just days before Game Day, also known as Christmas, there's many a mom such as CaShawn Thompson trapped inside a video game store. A mom speaking in a pointed, resolute, it-ain't-gonna-happen tone. A mom drawing the line.

Inside The Google-AOL-Microsoft Negotiations (Wall Street Journal, paid subscription required)
Two weeks ago, when Time Warner was on the cusp of signing a sweeping online deal with Microsoft, a team of executives from the media company's AOL unit traveled to Microsoft's headquarters in Redmond, Wash., to make sure everything was in order. When the executives returned, they reported back to Time Warner's top deal negotiator, Olaf Olafsson, with some less-than-satisfactory findings. They had found some of Microsoft's technology to be clunky, while the contemplated joint venture with the software king contained what they thought were financial pitfalls.

Texas Files New Spyware Claim Against Sony BMG (Reuters)
The Texas attorney general said Wednesday he added a new claim to a lawsuit against Sony BMG Music Entertainment accusing it of violating the state's laws on deceptive trade practices by hiding "spyware" on its compact discs.


5. In Depth

Microsoft Odd Man Out In AOL-Google Deal
The situation highlights the uphill battle Microsoft faces as it tries to gain traction in the lucrative business of selling online ads.

Microsoft Says Pay Up To Try Live Messenger Beta
People who want a look at the beta of Microsoft's Windows Live Messenger should pony up, one of the instant messenger's developers said Wednesday.

Microsoft Fixes SUS Glitch
The initial problem with Software Update Services turned updates that had been set as "unapproved" by the administrator into "approved" updates that could be mistakenly sent out to workstations and servers.

Xbox Photos Fetch Huge Prices On eBay
An eBay shopper from New York paid more than $600 for a photograph of an Xbox, thinking it was the real thing.


6. Voice Of Authority

Blog Confession Leads To Jail Time For Teen
Eric Chabrow asks: How dumb can some bloggers be? That's a question 18-year-old Blake Ranking is pondering as he faces five years in prison and 10 years on probation for causing an accident that killed one friend and severely injured another. "It was me who caused it," Ranking confessed in a blog three days after the October 2004 accident.


7. White Papers

Will Your Company Benefit From Enterprise Fax And E-Document Delivery?
A Special Guide on Network Fax Servers for Cutting Costs And Improving Your Organization's Productivity Enterprise faxing and network electronic document delivery enable companies to dramatically improve productivity and reduce costs. This guide demystifies fax server software, exposes critical product features, and helps you calculate ROI and choose a solution that best meets your unique requirements.


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