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Monday, 17 January 2005 19:00

News Roundup 17 January 2005


Oracle sackings of PeopleSoft staff

After completing its contentious takeover of PeopleSoft, Oracle has now began sending layoff notices to some of the 11,700 employees working at its former rival, and announcing that 5,000 employees, or nearly 10 percent of the combined Oracle-PeopleSoft work force, will be sacked.

The New York Times reports (15 Jan) that Oracle did not give a breakdown of how many of the 5,000 employees to lose their jobs worked for the former PeopleSoft and how many for Oracle.

Oracle formally completed its $US10.3 billion acquisition of PeopleSoft on 7 January. The paper says that for years, Oracle, the undisputed leader in the corporate database market, had been struggling to gain a larger presence in the multibillion-dollar industry of back-office software that companies use to manage their finances, inventory and procurement needs, whereas in that market, PeopleSoft was the uncontested No. 2, behind SAP of Germany, the business software giant.

Oracle had also promised that the company would release at least one more major upgrade of PeopleSoft's flagship software product, and provide customers technical support for at least 10 more years.

However, the NYT says that some market watchers are not so sure, concer ned about how, with such a large a reduction in the work force, the company is going to be able to continue to deliver the same level of service to PeopleSoft's customers.

In another story commenting on the Oracle sackings, The Mercury News reporets (15 Jan) that the Oracle staff cuts will bring total employment to about 50,000 worldwide, although Oracle will keep the vast majority of the technical workforce of its smaller rival.The Mercury says the mass firings of 5,000 could save the company about $US1 billion a year.

The paper reports that Oracle has said company that this week it will unveil its strategic game plan for the combined business during a meeting with customers that will be accessible via Webcast.

Oracle, whose core business is database software, hopes the acquisition will beef up sales of its applications software, which manages business functions such as finances and personnel. Analysts have been divided on the deal, with some saying Oracle paid too much and others seeing it as a stroke of strategic genius that will depend on quick and smooth integration.

Apple patches 'highly critical' iTunes bug

Apple has just updated its iTunes software following the discovery of a security bug that leaves open a way to compromise vulnerable systems.

The Register in the UK reports (14 Jan) that a bug in code used by iTunes to parse .m3u and .pls playlists means a maliciously-crafted playlist (with long URL file entries) can crash vulnerable versions of the application. In the process, hostile code can be injected into vulnerable systems. This is a classic buffer overflow attack.

iTunes users are advised to update to version 4.7.1 ( to guard against the risk of attack.

The Registers says the security reporting firm Secunia rates ( the iTunes bug as "highly critical". Exploitations of both Mac OS and Windows machines running iTunes is possible - providing an attacker tricks a user opening a malicious playlist file with a vulnerable version of iTunes.

Apple's profit quadruples on IPod & computer sales

Apple Computer announced that profit in its first quarter more than quadrupled - the biggest increase ever - on strong holiday sales of its iPod music player.

The New York Times report (13 Jan) said the results came a day after the company embarked on a strategy to capitalise on the success of the iPod by selling a line of low-cost computers, with the company reporting net profit of $US295 million, or 70 cents a share, for the quarter, which ended 25 December. That compares with $63 million, or 17 cents, for the quarter a year earlier.

Apple's chief executive, Steve Jobs, said this was Apple's biggest revenue increase in its history, along with the record rise in profit. He attributed the strong results to rising sales of personal computers and iPods, and said about 40 percent of the quarter's sales came from music-related products.

The NYT reported that Apple's revenue for the quarter was $3.49 billion, up 74 percent from $2 billion a year earlier. Analysts had forecast revenue of about $3.18 billion. The company also projected that revenue for the current quarter would be $2.9 billion, and estimated that earnings per share would be 40 cents, also surpassing analysts' expectations.

Apple shipped more than a million Macintosh computers in the quarter, a 26 percent increase over last year, and of those, the greatest demand was for the iMac, with its sales nearly tripling, reported the paper.

But the iPod remained the big story, with Apple selling 4.6 million of them in the quarter, five times the number sold in the period a year earlier. That brought the total number of iPods sold in three years to about 10 million.

In addition, Apple's iTunes music store made a small profit during the quarter and has sold 230 million songs to date.

Sun posts small profit but revenue drops

Sun Microsystems, reports The New York Times (14 Jan) eked out a profit for the second quarter, but it disappointed investors by reporting a slight decline in revenue.

Sun, a maker of servers and software that run corporate computer networks, reported a net profit of $US19 million, or 1 cent a share, in contrast to a net loss of $US125 million, or 4 cents a share, in the quarter a year ago. Excluding charges, Sun earned $US28 million, or 1 cent a share.

The paper says, however, that Sun's revenues declined 1.6 percent to $2.84 billion, from $2.89 billion a year ago, for the quarter that ended 26 December, although analysts had forecast a slight rise in revenue, to $2.92 billion.

Sun executives said the company's focus on cutting costs and managing expenses had paid off and it was getting costs out and efficiencies in.

Sun, founded in 1982, is one of Silicon Valley's oldest technology companies, and recently it has been forced to move from making proprietary systems to selling industry-standard computers, servers and software. Over the last year, the company has revamped its product line, introduced a new version of its Solaris operating system, streamlined its pricing strategy and signed a truce with Microsoft resulting in a technology exchange.

Digital TVs gain following with consumers

The explosion of new television formats is creating a sales boom for the electronics industry -- even if consumers don't always know what they are buying. Digital television sales will jump to 10.77 million units in 2005 from 6.97 million in 2004, accordng to a forercast by the Consumer Electronics Association in the US.

The New York Times/Reuters report (15 Jan) that scores of the shiny new products were on display at the recent Consumer Electronics Show in the US, as companies showed off the latest and greatest in TV technology, including the ultimate in concept models, a 102-inch set from Samsung.

The paper says that for the average consumer, Samsung's jumbotron-for-the-living room might be a big reach financially, since it is expected to sell for about the price of a new car. For most consumers, big-screen dreams are probably more in the 40- to 50-inch category, where prices are falling to $US2,000 or less for entry-level models.

But, the paper says, it's not just the big-screen televisions that are fighting for consumers' attention. A plethora of new digital services are vying to be the ones to deliver programing for the new TV sets, including extra packages for digital cable or satellite services, and even digital channels broadcast over the air by local stations.

Brand choice is an issue too reports the NYTY -- Sony is pushing LCD displays, while Matsushita's Panasonic brand is firmly in the plasma camp and companies like Samsung and Thomson have stood back to push a wide range of styles.

Hewlett-Packard combines printer, PC units

Hewlett-Packard has combined its printing unit with its personal computer division, helping end speculation that HP would follow competitors in spinning off divisions.

The Mercury News reports (14 Jan) that the move aims to strengthen the company's market position and get new products out faster.

In December, HP chairman Carly Fiorina said the company's board had three times considered breaking up the technology giant, but decided its diversified portfolio of printers, computers, digital cameras, servers and information-technology services helped it weather fluctuations in the cyclical technology sector.

By contrast, IBM sold its PC segment in December because it's margins had become razor thin.

In the fiscal fourth quarter, ended 31 October, HP's printing unit posted operating profit of $US1.1 billion, up 7 percent from a year earlier. Revenue rose 5 percent to $6.5 billion, as HP shipped a record 14 million printers.

The PC group reported quarterly operating profit of $78 million, a gain of more than three times the year-earlier quarter's $22 million. Revenue for the division rose 9 percent to $6.5 billion.

Motorola, Oakley making wearable wireless devices

Motorola has just announced a joint venture with eyewear maker Oakley to develop new Bluetooth-enabled wearable wireless communications devices.

The New York Times/Reuters report (14 Jan) that Motorola said it is working with Oakley to combine its Bluetooth technology, which allows devices to communicate with each other without a physical wire connection, with Oakley's eyewear concepts.

It said details and designs will be unveiled by the middle of the year.

Texas Government sues student over spamming

In the US State of Texas, the state attorney general has filed a lawsuit against a 22-year-old college student and his business partner, accusing them of illegally sending hundreds of thousands of unsolicited, misleading e-mails.

A report by the New York Times/AP says that Ryan Pitylak, a student at the University of Texas, heads the fourth-largest spamming operation in the world, and it has been alleged he and Mark Trotter, his 40-year-old business partner in California, have been sending the e-mails since at least 1 September, 2003.

The lawsuit seeks millions of dollars for violations of the US's federal Controlling Assault of Non-Solicited Pornography and Marketing Act of 2003, known as the CAN-SPAM Act, which made illegal sending uninvited e-mails that could mislead recipients.

Student seeks legal aid in Apple case

A 19-year-old US publisher of a Web site facing a lawsuit over an article about a top-secret US$499 Apple computer says he can't afford to defend himself.

Apple is suing Harvard University student Nicholas Ciarelli's Web site,, alleging it illegally published company trade secrets, reports The Newe York Times/AP (14 Jan).

Ciarelli, whose identity as the site's publisher and editor was only published this week, is not named as a defendant. But he still needs a lawyer, and said he is hoping to find free or low-cost legal help to argue that he deserves First Amendment protection and used proper newsgathering techniques to break news about the Mac mini computer and other inside information about Apple.

The paper says that Ciarelli, who described himself as "an enthusiastic fan of Apple's products since an early age", started in 1998 when he was 13. The site, which accepts advertising, is read by Apple enthusiasts and industry analysts because of its exclusive stories about company developments.

On 28 December the web site published an article that, citing "highly reliable sources", revealed details of an inexpensive, bare-bones Mac mini computer that would be priced at $499 -- two weeks before the Mac mini was launched at Apple's MacWorld conference.

Another Think Secret story on 6 January correctly predicted Apple's rollout at this week's show of a $149, 1-gigabite flash-memory version of the company's popular iPod music player. The web site goofed, though, on some of the details, citing sources suggesting Apple would also offer a 2-gigabyte version for $199.

The paper says the Think Secret case is the third intellectual-property lawsuit that Apple has filed recently. Apple also sued two men who allegedly distributed pre-released versions of its upcoming version of its Mac OS X software, as well as unnamed individuals for allegedly leaking details about a future and as yet-unannounced music product, code-named Asteroid.

Google settles case linked to its initial offering

Google has announced that it has settled regulators' charges that it failed to register more than US$80 million in employee stock options before its initial public offering, and that the US Securities and Exchange Commission would not pursue further action related to a Playboy interview with company founders. The article was published just before the company's US$1.7 billion IPO in mid-August, and the SEC was investigating whether the article violated the regulatory quiet period before a new share offering.

The New York Times/Reuters report (14 Jan) said the SEC had accused Google of issuing more than US$80 million in stock options to its employees and consultants from 2002 to 2004 without registering the offering and providing financial information required under federal securities laws.

Man accused of hacking T-Mobile network

A hacker broke into the computer network of the wireless carrier T-Mobile USA over at least seven months and read the e-mail messages and personal files of hundreds of customers, including a Secret Service agent who was investigating the hacker, according to the US government.

The New York Times/AP report (13 Jan) said the hacker obtained an internal Secret Service memorandum and part of a legal treaty from Russia. The documents included "highly sensitive information" about criminal cases, according to court records.

The break-in was discovered during a broad Secret Service investigation, called Operation Firewall, aimed at hacker organisations.

The paper reports that Nicolas Lee Jacobsen, 21, a Californian a computer engineer, has been charged in United States District Court in Los Angeles with the break-in. He was arrested in October and released on a $US25,000 bond.

Isle of Man sill take online bets from U.S.

The Isle of Man, a British crown dependency in the Irish Sea, is reversing a four-year-old policy that has deterred internet casinos based there from accepting bets from United States residents.

The New York Times reports (13 Jan) that the policy change, while affecting only a handful of internet casinos, adds a wrinkle to an emerging trade battle between the US and many other countries over internet gambling.

American prosecutors maintain that federal laws prohibit online gambling, and they have tried to curb the growing popularity of such gambling in the United States by threatening legal action against American companies that do business with overseas Internet casinos, whose operations fall outside their jurisdiction. A number of American banks do not allow the use of their credit cards for internet gambling.

However, the NYT reports that despite the restrictions, Americans still place more wagers online annually than residents of any other country. Internet casinos around the world and the jurisdictions that license them are eager for this business.

The decision by the Isle of Man - which makes its own domestic laws and relies on Britain for defense and foreign policy - to allow its licensed internet casinos to take bets from Americans went into effect on 1 January

The paper says that the policy seemed to pay off at first as some of the world's largest gambling operations, including MGM Mirage, purchased expensive licenses to operate there. But business did not become as brisk as expected, and six major casinos, including MGM, have relocated or closed their internet operations altogether.

Last year, some $US7.6 billion was lost worldwide in wagers over the internet, an analyst said, about half of that by United States residents.

EBay to increase fees, angering US sellers

Some small business owners in the US who reach most of their customers via eBay have expressed anger at the online auction giant's plan to boost the monthly fee it charges sellers by 60 percent

The New York Times /AP report that EBay outlined the increase in a terse e-mail last week all buyers and sellers, including small business owners who hawk clothing, electronics and other low-margin commodities.

Starting on 18 February, eBay has said the monthly subscription fee for people who operate ``Basic eBay Stores'' will increase from $US9.95 to $US15.95, with the fee for a standard listing of 10 days doubling from 20 cents to 40 cents.

The paper says angry reactions underscore the popularity eBay has achieved with small business owners who can't create their own web sites or operate a traditional bricks-and-mortar establishments. Peddling vintage china, handmade sweaters, classic cars and other collectibles on eBay generates supplemental income for senior citizens, rural Americans and others who live far from commercial hubs.

Media Lab Europe closing after failing to attract sponsors

Media Lab Europe, a high-tech research center founded by the Irish government and the Massachusetts Institute of Technology, has announced that it is closing because it's run out of money, reports The Mercury News/AP (14 Jan).

The paper says the project, launched in 2000 as a 10-year collaboration and modeled on a similar lab at the US university, had high hopes of promoting innovation and incubating successful products in Europe.

It was supposed to become self-financing -- like MIT's 20-year-old, industrially funded Media Lab in Cambridge, Massachusetts -- with intellectual property developed through the partnership shared with financial contributors.

The lab's business model required around $US13 million a year from corporate sponsors -- but only a fraction of the hoped-for money came.

The paper reports that this was the second unsuccessful attempt by MIT to set up a Media Lab offshoot abroad, following on the success of MIT's industrially funded center in Cambridge. In 2003, the university pulled out of a collaboration in India after less than two years, blaming a clash in research styles.

Irish Prime Minister Bertie Ahern had attracted the MIT-inspired project by offering a $45 million start-up grant.

Ahern envisioned that the lab -- based in a former warehouse of the Guinness brewery in a traditionally rough quarter of Dublin -- could become the focal point for a ``digital hub'' of high-tech companies.

About three dozen mostly small firms have been attracted to the area, aided by their own government grants.

FBI To scrap overhaul of outdated computer system

In the US, the The Federal Bureau of Investigation is reportedly is on the verge of scrapping a $US170 million computer overhaul that is considered critical to the campaign against terrorism but has been riddled with technical and planning problems.

The New York Times reports (15 Jan).) that, in a last-ditch effort to save the program, the FBI has hired a research firm at a cost of US$2 million to evaluate the mounting problems in creating a "paperless" work system and to determine whether any parts of the project can be salvaged. One idea under strong consideration is for the bureau to use off-the-shelf software instead of the expensive customised features it has unsuccessfully sought to develop.

The paper says the development is a major setback for the FBI in a decade-long struggle to escape a paper-driven culture and replace antiquated computer systems that have hobbled counterterrorism and criminal investigations.

The report says that while other intelligence agencies like the CIA and the National Security Agency developed sophisticated and secure computer systems long ago, the bureau has been much maligned for years for its failure to develop a modern system.

The bureau said that it had made some significant inroads in the last few years in overhauling its computer capabilities, with the installation of 30,000 new desktop computers and the development of a secure, high-speed network.

But the FBI's "virtual case file" system, the last in a three-part computer upgrade totaling more than half a billion dollars, has proved the most difficult.

But the project is over budget and behind schedule, and F.B.I. officials acknowledged on Thursday that they were uncertain whether it would ever be completed. Only about 10 percent of the project, delivered by the Science Applications International Corporation of San Diego, is now in use, officials said.

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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.





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