US firms get more for their IT bucks

Businesses that invest in IT reap significant productivity gains, according to researchers at the London School of Economics, but how the technology is used, and how the business is organised is just as important.

The Register reports (14 Octopber) that the researchers evaluated data from more than 7,500 companies in the UK. They found that US-owned firms in the UK not only use more ICT than both domestic firms and other multinationals, but they also use it more effectively.

When a US-owned firm doubles its IT spend, it tends to see productivity gains of around five per cent, the researchers say. For domestic firms, the same increase in outlay only leads to a productivity increase of four per cent.

According to The Register, the LSE contends that this is because US firms are better managed than local UK firms, and that the structure of the companies is "conducive to getting the most out of ICT", according to the university's press material.

The LSE researchers say that there are signs that more US-style business practices are being adopted in the UK and across Europe, and argue that the cultural barriers should not be overstated because of the potential benefits.

The Register says that the study, led by Professor John Van Reenen from the LSE's Centre for Economic Performance, was carried out in tandem with the Office of National Statistics (ONS), and was sponsored by the DTI.

European Justice Ministers have agreed not to immediately force through plans for an EU-wide data retention scheme, but opted to negotiate with the European Parliament instead. MEPs had objected to the proposal, claiming that it breaches civil rights laws.

The Register reports (14 October) that MEPs had even threatened to take the Council of Ministers to court if they were not allowed to participate in the legislative process, according to reports.

According to the report in The Register, the Council of Ministers would prefer to have the cooperation of the European Parliament in creating the legislation but does not actually need it. UK Home Secretary Charles Clarke, on behalf of the EU Presidency - held by the UK until January - warned yesterday that he would push the measure through if MEPs have made no progress by the end of the year.

The Register reports that, meeting in Brussels, Ministers agreed to a compromise deal that would oblige ISPs and telcos to retain fixed and mobile telephony data for a minimum period of 12 months, and IP-based communications data for a minimum period of six months.

The proposals allow for a maximum retention period of two years, although Member States, such as Ireland and Italy, who already have national retention periods going beyond that, will be allowed to stick to their existing timescales, reports The Register.

Broadband subscriber growth started to slow in 2005, according to a new study from Kagan Research.

The Associated Press reports in The New York Times (14 October) that the Californian research firm forecasts 9.3 million net new broadband subscribers in 2005 -- down from the 9.5 million in 2004. That figure is seen dropping off to 8.1 million net new users in 2006 with continued decreases thereafter. For 2009, Kagan forecasts 5.6 million net new broadband subscribers for a total of 72.4 million.

The AP report says that the study showed that the slowing growth coincides with broadband's ascending popularity. This year marks when ''high-speed data services have finally overtaken dial-up connections as the dominant pathway to the Internet for US consumers.''

The firm estimates a total of 45.2 million broadband subscribers by the end of 2005, and 29.6 million dial-up users. A year ago, the ratio was almost even with 35.8 million broadband households and 35.1 million dial-up users, says AP.

According to the AP/NYT report, cable currently dominates the broadband market with roughly a 60 percent market share, though Kagan projects that will shrink to 53 percent by 2009.

Phone carriers, which are busy upgrading their networks, should see growing market share -- from 35 percent in 2001 to 40 percent in 2009.

Hewlett-Packard has recalled 135,000 battery packs for its laptop computers, citing a fire hazard, the world's second-largest personal computer maker said on Friday.

Reuters reports in The New York Times (14 October) that HP said that an internal short in the HP and Compaq notebook lithium ion rechargeable battery packs can cause the battery cells to overheat and melt or char the plastic case, posing a burn and fire hazard.

HP so far has received 16 reports of batteries overheating, including four in the United States. Four cases of minor property damage but no injuries were reported.

The Reuters/NYT report says that the recalled battery packs have a bar code label starting with GC, IA, L0 or L1, the company said, and were sold from March 2004 through May 2005. They were also sold separately from the notebook computers.

The battery packs were used to power Pavilion, HP Compaq, Presario and Evo notebooks and were made in China and Taiwan, HP said.

Reuters reports that HP said it would replace the battery packs at no charge and customers could find details of the battery replacement program www.hp.com/support/BatteryReplacement.

HP said that of the 135,000, about 85,000 were originally sold in the United States.

Nigeria signed an agreement with Microsoft on Friday to work together to fight internet crime, officials said Friday.

The Associated Press reports in The New York Times (14 Octyober) that, in a statement on its web site, Microsoft hailed the agreement as a first with an African country and said it will work with the Nigerian government ''to combat issues such as spam, financial scams ... spyware, viruses, worms, malicious code launches and counterfeiting.''

Nuhu Ribadu, head of Nigeria's Economic and Financial Crimes Commission, signed the agreement on behalf of the government.

THe AP/NYT report says that President Olusegun Obasanjo's government is stepping up efforts to deal with people who send millions of unsolicited e-mails with false proposals to swindle victims.

Among the most common are e-mails proposing to share portions of dead African dictators' ill-gotten estates in exchange for an advance payment to help move the money overseas. The scammers keep the ''fees'' while victims receive nothing.

AP says that the proposed law specifically identifies use of computers for spamming, fraud, identity theft, child pornography and terrorism as criminal offenses punishable by stiff jail terms and fines.

Is your job at risk? If it's the type of work that can be done over a wire, then probably yes, says Nandan M. Nilekani, the chief executive of Infosys Technologies, reports The New York Times (15 October.

The newspaper says that Infosys is India's second-largest outsourcer and, after achieving success in software engineering and back-office service, it has now begun to compete with companies like IBM for more lucrative consulting work.

The NYT reports that this week, Infosys reported that its second-quarter earnings rose 36 percent. It raised its earnings forecast for the full year on stronger demand and a weaker rupee.

In a recent interview, Mr. Nilekani, a chief executive who makes US$60,000 a year at a company worth nearly US$20 billion, spoke about Infosys's success and the danger that it and other companies like it pose to American competitors.

Steven Spielberg, the Oscar-winning filmmaker, and Electronic Arts, the video game maker, said on Friday that they would jointly create three new original video game franchises.

The New York Times reports (15 October) that the collaboration, described as a long-term deal, will allow Mr. Spielberg to work with EA's developers to create designs, characters and plots for new games, which will not be adaptations of existing movies, the video game company said.

Electronic Arts will own the game franchises, including sequels, which it will publish and distribute worldwide. The company declined to disclose financial terms of the deal.

The NYT reports that the partnership between Mr. Spielberg and Electronic Arts shows the growing interaction between Hollywood and the video game industry and also the increasing popularity of interactive media.

Neil Young, the head of the Los Angeles studio of Electronic Arts, where the joint effort will be based, said he hoped that Mr. Spielberg would help bring video games to their full potential.

Video game industry analysts said the deal could be a boon for Electronic Arts, which, while the dominant independent video game maker, has fallen into a slump, reports the NYT.

Those skeptics who have long predicted curtains for AOL are turning out to be right - only not quite the way they envisioned, says the New York Times in a 14 October report.

The newspaper reports that curtains, a large blue pair to be exact, are the images being used in an estimated US$50 million campaign to promote AOL.com as a free web portal. The campaign, in online and offline versions, depicts computer users parting the curtains to reveal a bright white light on the other side.

According to the NYT., the campaign has been in development for months, ever since AOL's parent, Time Warner, decided to shift strategies (again) and offer at no cost much of the content and features that had been available only to subscribers of America Online. The reason is that despite all the elaborate previous changes to the subscription service, paying users continue to flee.

The newspaper adds that, still, web sites that are part of AOL, which include Moviefone, Mapquest and Netscape, remain popular destinations with computer users. Their continued appeal is the reason behind the recent talks between Time Warner and other major media companies regarding potential investments in America Online.

Yahoo is considering buying a stake in America Online, joining other internet powerhouses interested in the company's web portal, a person close to the talks said Friday.

The Associated Press reports in The New York Times (15 October) that the discussions were described as preliminary and not as advanced as separate talks AOL parent Time Warner has had with Microsoft and Google, which is considering a joint bid with Comcast.

The AP report says that News Corporation has also expressed interest, but those discussions have largely ended, said the person, who spoke on condition of anonymity because the release of information was not authorised.

The Yahoo-AOL discussions were first reported by TheStreet.com.

Ap says that AOL's talks with Microsoft have been ongoing since late spring, while the other suitors emerged after word of them leaked in mid-September, the person said. Time Warner is insisting on a controlling stake in any deal, the person said.

Bending slightly to the ways of Wall Street, Google, the online search engine company, said on Thursday that it would expand its quarterly financial reports to include an earnings figure that differs from mandated accounting practices.

The Associated Press repoprts in The New York Times (14 October) that the move, disclosed on Google's web log, is intended to clear up recent confusion about whether the rapidly growing company's profits are meeting analysts' expectations.

The newspaper says that, in a move to provide clarity, Google will report pro forma earnings - essentially what its profit would have been if not for a recurring charge for stock-based employee compensation unrelated to its continuing operations. Google will also continue to report its earnings under GAAP, the generally accepted accounting principles that include the charges.

Google plans to provide both calculations with its third-quarter report.

Lexar Media said on Friday that a California court entered a final judgment in the memory card maker's case against Toshiba in which Toshiba must pay the more than US$465 million.

Reuters reports in The New York Times (14 October) that a jury found Toshiba guilty of breach of fiduciary duty and theft of trade secrets from Lexar in March. The was case tried in the Superior Court of California, County of Santa Clara.

The Reuters/NYT report says that on 30September, Judge Jack Komar ruled that he would let stand the jury's verdict that found in Lexar's favor. After the verdict, Toshiba had argued that the jury did not have the right to award Lexar damages and that its verdict was only advisory.

The judge found otherwise. Lexar said in March that the award was the largest-ever intellectual property victory in California courts.

A US judge ordered a tentative stay in web search company Google's lawsuit against Microsoft, dealing a blow to Google's fight over the hiring of a former Microsoft official.

Reuters reports in The New York Times (14 October) that Judge Ronald Whyte of the US District Court for Northern California declined to say what his final ruling would be in the suit by Google, which is seeking to override the jurisdiction of a Washington state court in a related case.

The Washington state case, brought by Microsoft, accuses Google and manager Kai-Fu Lee of violating a non-compete agreement that Lee had signed with Microsoft.

Reuters says that during a hearing on the Google suit on Friday, Judge Whyte called the matter a ``tough case.'' ``It is one of those where I read one brief, and I say, 'Yep, they're right.' And I read the other and I say, 'Yep, they're right.''

The stay order by the federal court, if maintained by Judge Whyte, would set the stage for the Washington state case to go to trial on 9 January, 2006, according to attorneys working for Microsoft, reports Reuters.

Podcasting is on the verge of setting off a video revolution and users of Apple Computer's new video iPod can expect a deluge of outspoken commentary, religious sermons and pornography, according to a Reuters report in The Nerw York Times (14 October).

The newspaper says that podcasting, a term based on the name for Apple's portable media player, allows customers to download audio, and now video, segments for free to their computers and portable devices. Radio shows are among the most popular podcasts, but amateurs have helped turn podcasting into an eclectic global phenomenon.

Apple's video-enabled iPod models, announced on Wednesday, promise to stoke the fervor of home-grown broadcasters.