Oracle profit drops 15% after acquisition

Oracle, the world's second-largest software company, has just reported that its revenue rose 18 percent in the third quarter but that its profit declined as it followed through on its US$10.3 billion takeover of PeopleSoft.

The New York Times reports (23 Mar.) that Safra Catz, a co-president of Oracle who is also serving as the company's chief financial officer, said the company was pleased with the quarter, which she described as a transitional one. "We are beyond satisfied," Ms. Catz said of the PeopleSoft merger, in a conference call with reporters. "We are thrilled with how it is going."

The paper says Oracle, which makes database software and applications for large companies, reported net income of US$540 million, or 10 cents a share, for the third quarter ended 28 February. That compares with profit of US$635 million, or 12 cents a share, in the third quarter last year, a decline of 15 percent.

The NYT says that Oracle's revenue for the third quarter was US$2.95 billion, an 18 percent increase from US$2.51 billion in the same quarter last year, aided by its purchase of PeopleSoft during the quarter.

Excluding certain expenses, including US$249 million in charges related to the PeopleSoft takeover, Oracle reported a profit of US$814 million, or 16 cents a share. On that basis, the company beat analysts' average forecast of 15 cents a share, the NYT adds.

The paper says that Oracle's revenue from new software license fees was US$947 million in the quarter, up from US$847 million a year ago, with most of the growth coming from the company's database business. The company said it was taking market share away from IBM in the database market.

But, the NYT says the improvement in the company's applications business was less clear. The company reported US$152 million in application license revenue during the quarter, with US$31 million coming from PeopleSoft and US$121 million from Oracle. On the basis of Oracle alone, that represents a 12 percent decline from last year, says the paper.

According to the paper's report, Ms. Catz insisted that the integration of the two companies was going smoothly, and that PeopleSoft's existing customers were happy with the merger. She added that the outlook for the fourth quarter had improved, leading Oracle to raise its full-year forecast to 64 cents to 65 cents a share, from a previous forecast of 62 cents a share.

The NYT says that Oracle's results came less than a day after it won a bidding war with SAP of Germany, its larger rival, to acquire Retek for US$341 million. Retek, which had sales last year of US$174.2 million, makes software that helps retail chains manage their operations. Roughly 80 percent of its customers also use Oracle database software, adds the paper.

Retek's board of directors accepted Oracle's most recent offer of US$11.25 a share, or US$631 million, late Monday, three weeks after SAP set off the bidding with an initial offer of US$8.50 a share, reports the NYT., adding that before Oracle made its counteroffer, Retek's board of directors accepted SAP's US$11-a-share bid and agreed to a US$25 million termination fee, which Oracle must now pay. For Oracle, the acquisition of Retek gives it a foothold in the retail market, which is going through major technological change.

Microsoft unready to carry out European order say rivals

Microsoft is failing to comply with a European Commission order to sell an unbundled version of its Windows operating system, competitors that were asked to examine the program said on Tuesday.

The New York Times reports (23 Mar.) that a  year ago, Mario Monti, then the European commissioner for competition, ordered Microsoft to sell a second version of Windows in Europe that has its music and video-playing program, Media Player, stripped out.

The paper says the order was intended to restore competition. The second version, installed with a rival alternative to Media Player, is supposed to be introduced in the next few weeks.

However, according to the NYT.,David R. Stewart, deputy general counsel for RealNetworks, said Tuesday that Microsoft was still not ready to comply with the European ruling. RealNetworks, of Seattle, which makes rival software, has the most to gain from enforcement of the order.

The paper says the commission has yet to decide whether Microsoft's proposal for introducing the unbundled version of Windows meets its requirements. Mr. Stewart contended that "the version of Windows Microsoft is proposing to sell has technical problems that render it less functional than the existing version of Windows," reports the NYT.

RealNetworks said that Microsoft had deleted registry entries associated with media-playing functions in Windows. Without the registry entries, Mr. Stewart said, rival media players installed in the second version of Windows could not work with other applications like Word documents and some Web sites, the paper reports.

A spokesman for Microsoft said the company was aware of the commission's concern about its plan to delete the registry entries. He acknowledged the problem, but said it was a direct result of having to comply with the commission's order, says the NYT.

The NYT says that last week, in a sign of growing impatience, the commission, the administrative arm of the European Union, said it had "strong doubts" that Microsoft was complying with a separate order in last year's ruling to disclose information about Windows that would allow rival producers of server software to make programs that work with the Windows operating system.

Appeal in Apple trade secrets suit

Online journalists who published secrets about Apple Computer filed an appeal Tuesday in a case that could have broad implications for the media.

The New York Times/AP report that a California judge ruled on 11 March that three independent online reporters may have to provide the identities of their confidential sources and that they weren't protected by "shield laws" that usually protect journalists.

The paper and AP say that in December, Apple sued 25 unnamed individuals, called ``Does'' and believed to be Apple employees, who leaked specifications about a product code-named "Asteroid" to Monish Bhatia, Jason O'Grady and another person who writes under the pseudonym Kasper Jade. Their articles appeared in the online publications Apple Insider and PowerPage.

The company said the leaks and the published documents violated nondisclosure agreements and California's Uniform Trade Secrets Act. Company attorneys demanded that the reporters identify their sources, says the NYT and AP.

The report says that the reporters sought a protective order against the subpoenas, saying that identifying sources would create a "chilling effect" that could erode the media's ability to report in the public's interest.

But a Santa Clara County Superior Court Judge ruled in Apple's favour earlier this month, saying that reporters who published "stolen property" weren't entitled to protections, says the report.

On Tuesday, attorneys representing the journalists filed an appeal, as expected.

EDS signs UK defence contract

EDS has signed the contract to overhaul technology for the UK's Ministry of Defence, after being named as preferred bidder earlier this month.

The Register reports (23 Mar.) that the contract is for Increment 1 of the DII(F) project which will run for ten years at a cost of £2.3bn (US$4bn). More work is possible once the first increment is completed.

The Register says EDS will lead the ATLAS consortium, which also includes Fujitsu Services, General Dynamics, EADS Defence and Security Systems and LogicaCMG.

The DII(F) project aims to bring various different networks onto one infrastructure, says The Register, and adds that the network "will provide seamless interaction between headquarters, battlefield support and the front line", according to a company press release. It will link about 340,000 users in 2,000 locations using 150,000 desktop machines, the company claimed, reported The Register.

The Register says the project will also help the MoD achieve efficiencies demanded by the Defence Change Programme.

EDS has had little luck with military contracts recently, according to The Register, adding that a deal to sort out an intranet for the US Navy was valued at US$8bn but has already cost EDS US$500m in written off assets.

Mobile phone plan for London tube

Commuters on London's Tube network could be able to use mobile phones and wireless internet connections deep underground from 2008 if trials for the technology get the green light.

The Register reports that London's Mayor Ken Livingstone is looking for suppliers to install their kit to enable commuters to use mobiles and wireless laptops on stations. The scheme could even be extended to include trains as well as underground stations.

If all goes to plan, says The Register, London Underground would trial the technology next year before a full commercial roll-out in 2008.

The railways say they also want to see how the technology could be taken even further, for instance wireless internet so passengers could receive up-to-the-minute travel information via their laptop or mobile phone.

According to The Register, tube bosses say there is strong support among passengers for mobile access across its network and that there are plenty of technology companies interested in providing services.

Newspaper giants buy web news monitor

Three of America's biggest newspaper publishers, the Gannett Company, Knight-Ridder and the Tribune Company, are joining forces to buy three-fourths of Topix.net, a web site that monitors more than 10,000 online news sources.

The New York Times reports (23 Mar.) that each publisher will own 25 percent of the company. Topix.net, based in California, will retain the rest and continue to run the site. The cost of the acquisition, which is scheduled to be announced immediately, was not disclosed.

The paper says that Topix.net is a news aggregator, continuously monitoring updates on thousands of news media web sites as well as government sites and organising links to articles in more than 300,000 subject areas. Topix.net already keeps track of news from sites operated by Gannett, Knight-Ridder and Tribune, but the acquisition will allow it to approach the newspapers' online advertisers about using its technology for customising ads. It will also let Topix.net add material like television listings.

Rich Skrenta, chief executive and a co-founder of Topix.net, said that in exchange, the newspapers' web sites would get more fine-tuned technology and a better way to show their readers "the ads that they actually want to see," says the paper.

"They get powerful contextual advertising technology, and we make their ads more profitable," Mr. Skrenta said, referring to what he said was Topix.net's ability to place relevant ads next to articles. He also said the newspaper companies, which collectively operate more than 140 newspaper web sites with nearly 30 million unique visitors a month, would direct more readers to Topix.net, the paper further reports.

The NYT says the three news publishers have joined together for two other online projects, ShopLocal.com and CareerBuilder.com, and they have joint ventures with other companies in web sites like Cars.com and Apartments.com.

According to the paper, the Topix.net deal is the latest in a series of recent acquisitions of web ventures by newspaper companies that are, in one way or another, attempting to broaden their reach and profit from strong growth in online advertising. They include the purchase of MarketWatch by Dow Jones & Company, the purchase of About.com by The New York Times Company and the acquisition of the online magazine Slate by The Washington Post Company, says the paper.

Tim Landon, president of the Tribune Company's interactive and classifieds unit, said in a statement that the investment in Topix.net would allow the three newspaper companies to "further extend both our news and classified businesses" and "make both our local and national web sites more valuable to customers," the NYT reports.

The NYT also reports that Chris Tolles, vice president of marketing for Topix.net, said the web site was able to offer highly localised news to readers across the country by providing information not only from local newspapers but also from government web sites, local television, police blotters, trade magazines and other sources.

Brit. video game maker to acquire for $US144.5m

The SCi Entertainment Group, a British video game maker, has just made a surprise £76.1 million (US$144.5 million) bid on Tuesday for a rival company, Eidos, a move that could ignite a takeover battle for Eidos.

The New York Times reports (23 Mar.) that SCi's offer came about 13 hours after Elevation Partners, a private equity firm that counts the singer Bono among its managers, said it would pay £74 million (US$139 million) for Eidos.

The paper says Eidos is best known for developing Tomb Raider, featuring the heroine Lara Croft, who has become a pop culture icon. Its other games include Hitman: Contracts and ShellShock: Nam '67. Despite Tomb Raider's renown, overall sales have been weak, and Eidos said in June that it would look for strategic alternatives including a buyer for the company.

SCi, which makes driving games like Carmageddon and a Persian Gulf war game called Conflict, is offering one share of its stock for every six shares of Eidos, or 53.6 pence a share as of March 21. Elevation Partners' offer is worth 50 pence a share in cash., the paper reports.

The NYT says that SCi submitted a detailed takeover proposal to Eidos shareholders outlining changes it could make if it won the bid, including cutting £14 million in annual costs. Eidos's brands, studios and work force have "significant potential," SCi's chief executive, Jane Cavanagh, said in a statement, but financial problems have led to rushed development and poor products.

According to the paper, SCi said it had indications that the offer would be accepted by investors holding 28 million shares, or about 20 percent of Eidos's outstanding shares. SCi is selling £60 million in stock to pay for the bid.

Macintosh hacker attacks increasing - Symantec

Hacker attacks on Apple Computer's Macintosh OS X operating system, thought by many who use the Mac to be virtually immune to attack, are on the rise, according to a report from anti-virus software vendor Symantec.

Reuters and the New York Times report (23 Mar.) that Symantec's report said that "Contrary to popular belief, the Macintosh operating system has not always been a safe haven from malicious code,".

The paper reports that Symantec said "it is now clear that the Mac OS is increasingly becoming a target for the malicious activity that is more commonly associated with Microsoft and various Unix-based operating systems."

The NYT says that many in the Macintosh computer community have long claimed that the Mac platform has been virtually immune to attack -- unlike Microsoft's Windows operating system, which runs on more than 90 percent of the world's personal computers.

The paper adds that the Macintosh operating system, the current version of which is based on the Unix operating system, has less than 5 percent of the global market for computer operating systems.

Apple's recent introduction of the Mac mini, a US$500 computer sold without a display, keyboard or mouse, could actually increase the likelihood of more malicious software computer code targeting the Mac platform, Symantec said, reports the NYT.

"The market penetration of Macintosh platforms will be accelerated by the much lower priced Mac mini, which may be purchased by less security-savvy users," the report said. "As a result, the number of vulnerabilities can be expected to increase, as will malicious activity that targets the," reportsa the NYT.

Symantec said that over the past year, it had documented 37 high-vulnerabilities -- weaknesses that leave the system open to malicious software attacks -- in Mac OS X. They "have been confirmed by the vendor, which, in the Apple case, almost always means that the company has released a patch."

At the same time, asccording to the NYT.,the report said that while those vulnerabilities in the Mac operating system will increase, "they will likely be outnumbered in other operating systems for some time to come."

World chip glut 'over early Q2'

In the UK, The Register reports that market watcher iSuppli has signalled the end of the inventory correction phenomenon that plagued the semiconductor industry through the latter half of 2004 and beyond.

According to The Register report (23 Mar.) the company has said that the electronics supply chain is on its way to ridding itself of surplus chips by the end of Q2. By the end of this month, it expects industry-wide chip inventories to have fallen to US$780m, from around US$1bn at the end of Q4 2004, iSuppli said. The publication also reports that the US$780m figure is an estimate derived from the company's mid-quarter figures, according to iSuppli.

The publication says the Q1 2005's total is less than half the US$1.62bn worth of unused chips held in the supply chain in Q3 2004, which was not only above industry observers' estimates and more than double Q2 2004's US$800m total, but was the highest the figure has risen since Q2 2002's US$2.5bn inventory.

iSuppli said it expects semiconductor suppliers to have four days' worth of chip inventory at the end of Q1, down from more than a week's worth at the start of Q4 2004, and five days at the beginning of the first quarter, The Register reports.

iSuppli put the latest reduction down to chip makers' moves to reduce the number of new chips going into production lines during Q4. The biggest stockpiles are held by chip manufacturers who upped production on the back of the high demand experienced in the first half of 2004. But with end-user demand down, vendors reduced their own orders in H2 2004 in a bid to use up the components they had already ordered, says The Register.

However, iSuppli said Far Eastern mobile phone stocks remain high, with the traditional post-Chinese New Year sales hike occurring much more slowly this year, the Register reports.

Yahoo expands e-mail storage, again

Yahoo is quadrupling the amount of storage provided with its free e-mail accounts and upgrading its desktop search software in its ongoing duel with rivals Google and Microsoft.

The New York Times and Associated Press report (234 Mar.) that Yahoo has said that it will provide 1 gigabyte of storage for each free e-mail account. The current limit is 250 megabytes. The expanded storage will be available in mid-April, according to Yahoo.

The company also is expanding the reach of its desktop software, a test product designed to find material stored on computer hard drives. Yahoo's software, licensed from X1 Technologies, will now index content from e-mail address books and discussions in Yahoo's instant messaging service, report AP and the NYT.

According to the NYT and AP.,the expanded e-mail storage enables Yahoo to catch up with online search engine leader Google, which offers an invitation-only service that has been offering 1 gigabyte of storage for nearly a year.

The paper and AP say that when Google introduced "Gmail," Yahoo provided just 4 megabytes of free e-mail storage. Yahoo, which runs the world's most popular web site, has gradually increased its e-mail capacity in response to Google's competitive threat. Microsoft's Hotmail service offers 250 megabytes of free e-mail storage.

As part of its e-mail changes, Yahoo also is providing software from Symantec to clean viruses detected in attachments, says the report.

The NYT and AP say that Yahoo's desktop software is also competing an array of similar products, including offerings from Google and Microsoft.

Sydney court hears Kazaa trial closing arguments

The owners of global file-sharing company Kazaa have told a Sydney court they should not be held liable for copyright infringements by network users because the company cannot control how the software is used after it is downloaded.

The New York Times and AP repoprt that a group of Australian record labels is suing the makers of Kazaa, Sharman Networks, and the company's directors in the Federal Court in Sydney for copyright infringements by the network's estimated 100 million members worldwide.

The paper and AP say the record companies claim Kazaa users freely download up to 3 billion songs and music files each month, costing the industry millions of dollars in unpaid royalties.

In closing arguments, lawyers for Sharman Networks acknowledged that some Kazaa users engage in illegal copying, but said the software's creators could not be held responsible, the report says.

The court was told that once Kazaa was downloaded onto users' computers, the company had "no power to control" its use -- just as the makers of photocopiers and video recorders could not control or be held responsible for illegal copying on their machines, report te NYT and AP.

As a result, the lawyer said, the main issue in the case was whether Kazaa, in effect, authorised its users to download copyright protected material.

Lawyers for the record industry argue that Kazaa not only enables but encourages users to infringe copyright, report the NYT and AP., adding that
the lawyers also said the company collects information about its users that would enable them to control their use of the software.

The trial, which is being heard before a judge with no jury, wasexpected to wrap up late yesterday, with averdict expected within six weeks, report the paper and AP.

IBM pays off Compuware

After five weeks in court IBM has agreed to settle all ongoing legal disputes with Compuware. Big Blue is paying the mainframe management software vendor US$140m for software licenses and US$260m for services over the next four years, reports The Register (23 Mar.).

The register says the two companies agreed to end all outstanding litigation and to share interoperability information. They also signed a reciprocal patent license agreement covering both companies' technology.

Compuware had accused IBM of using information from ex-Compuware employees in breach of their confidentiality agreements, reports The Register, adding that IBM was also accused of using trade secrets to improve its own mainframe management software.

IBM was also accused of unfairly linking hardware and software sales to try and "kill" Compuware, says The Register.

Level 3 pulls US internet phone fees request

In the US, a company that provides Internet phone service has withdrawn a request to federal regulators asking that it be exempt from paying higher fees to local phone companies for transmitting certain calls over the traditional phone network.

The New York Times and AP rerport (22 Mar.) that Level 3 Communications told the Federal Communications Commission that the cost of making internet calls could rise if the FCC ruled that the company had to pay higher access charges to local phone companies.

Level 3 doesn't deal directly with consumers, but provides Voice over Internet Protocol, or VoIP, services to internet providers, says the papdsr and AP., adding that cable companies and other firms that then sell to consumers. Higher costs would eventually be absorbed by subscribers, industry officials say.

Tuesday was the deadline for an FCC decision, but Broomfield, Colo.-based Level 3 withdrew the request Monday night. Industry officials said the FCC had been preparing to rule against Level 3, says the paper and AP.

Many companies like Level 3 do pay to use the phone network, but local phone companies say it's not enough. They contend internet phone providers should pay the more costly access charges that long distance companies pay, says the report.

VoIP technology shifts calls away from wires and switches, instead using computers and broadband connections to convert sounds into data and transmit them via the internet. In many cases, subscribers use conventional phones connected to a special box and a high-speed connection to make Internet calls, says ghe report.

The NYT and AP say Level 3's request dealt specifically with calls that started from an internet phone but ended on a traditional line, or vice versa.

AOL LatAm out of cash, may stop operating

America Online Latin America, the beleaguered provider of internet services in South America, has just said that it is running out of cash and may shut down or file for bankruptcy protection.

Reuters and the New York Times report (22 Mar.) that unless AOL Latin America finds a buyer for its assets, it will have to close down operations, the Fort Lauderdale, Florida-based company said in a regulatory filing with the US Securities and Exchange Commission.

AOL Latin America, founded as a joint venture between America Online and the Cisneros Group at the start of the internet bubble in 1998, has since struggled to become profitable, say Rewuters and the NHT.

The NYT and Reuters report that the loss-making company, which provides internet dial-up service mainly in Brazil, Mexico and Argentina, stopped counting non-paying subscribers in 2003 as the SEC investigated the company's methods in counting subscribers.

The paper and Reuters add that although AOL Latin America has enough cash to stay in business through the third quarter of this year, it said it may have fallen into default with Time Warner, which holds US$160 million of senior convertible notes in the company.

AOL Latin America said it is no longer pursuing any financing, the report says.

The report adds that other internet service providers have also struggled to stay in business in Latin America. StarMedia Network, Terra Lycos and Yahoo's efforts to build an access provider have fallen flat.

The NYT and Reuters report that AOL Latin America went public on the Nasdaq in 2000 at the low end of the expected range, with investors expressing concern over its growth prospects.

Woman cleared in mass obscene e-mailings
 
A death penalty opponent who sent e-mails laced with obscenities and references to Adolf Hitler and Osama bin Laden to a pro-death-penalty web site was not guilty of a crime, a judge in the United States has ruled.

The New York Times and AP report that police charged Rachel L. Riffee with misdemeanor electronic harassment after they traced to her two e-mails and three web site postings sent to a pro-death penalty site run by Frederick A. Romano, the brother of a murder victim.

The paper and AP say that on Monday, a Circuit Judge acquitted Riffee, 34, ruling that state law protects political speech. The judge said the Web site invited discussion, and a few e-mails do not constitute a pattern of harassment.