Former minnow swallows former whale
The long-running rumors ,  have fructified. The $9.6B cash/ stock deal  is the largest ever in the computer industry, and will result in the third-largest computer company (after IBM and HP), with annual revenues of $37B. Digital shareholders will get $30 plus 0.945 Compaq shares for each DEC share owned. Digital will operate as a wholly owned subsidiary of Compaq. The deal must pass regulatory scrutiny and is expected to be finalized in the second quarter of this year. This PC Week analysis of the deal  quotes Enrico Pesatori, CEO of Tandem (recently acquired by Compaq), without noting that Pesatori ran Digital's PC business unit from 1993 to 1997. Digital stock rose more than 20% today on the news.
On Thursday Microsoft ducked a contempt-of-court ruling by agreeing to remove Internet Explorer from the Windows 95 product offered to resellers, after having argued strenuously that it could not do so , . The next battle will be in appellate court in April, when the company's appeal of Judge Jackson's December 11 ruling will be heard. The court-appointed Special Master is to report at the end of May. Of course the whole question of whether IE can or should be unbundled from Windows 95 will be moot by midyear, when Windows 98 launches. Judge Jackson's order, if eventually upheld and enforced, certainly is worded as if it means to include Windows 98. The Justice Department is widely rumored to be pursuing a new antitrust case against Microsoft focused around Windows 98 and the company's deals with ISPs. Here is Yahoo's summary coverage of the Microsoft story .
A. Licensing and preinstalling OSR 2.0 as modified to reflect
the set of changes that would be made by running the Add/
Remove Programs utility with respect to Internet Explorer 3.x
B. Licensing and preinstalling OSR 2.0 as modified by removing
the Internet Explorer icon from the desktop and from the
Programs list in the Start menu and by marking the file called
Stops charging for Communicator 4, offers Net developers source to Communicator 5
On the same day, Thursday 1/22, Netscape announced a new policy of giving away its browsers . You can now download  Communicator 4.04 free of charge and free of guilt. By this unilateral levelling of the browser playing field Netscape renounces 13% of its revenue, amounting to $17M in the last quarter. The company is now calling itself "both an enterprise software company and an online service company," having morphed its much-visited top page into the free membership-based Netcenter. This move will begin to put pressure on the revenues Netscape collects from partner search engines and content sites.
The bigger news by far is that Netscape will play out a hugely audacious gamble by freely publishing the source to its next-generation browser . History will tell whether this strategy is a foundation for 21st-century Net software development or a train wreck. Successful examples exist of "bazaar not cathedral" freeware software development , but none is commercial. The majority reaction in the developer community to Netscape's move is positive verging on the ecstatic , ,  but some notes of caution are appearing . Coordinating the work of thousands of far-flung developers will not be a doddle in the park. Analysis from the business community is considerably less upbeat , .
Netscape will release source code for Communicator 5 with its first beta in late March. The exact license terms were not announced but the company made reference to the GPL , or copyleft, introduced by the Free Software Foundation in the 1980s. The GPL requires anyone redistributing modified versions of copyleft code, whether for free or for fee, to perpetuate its copyleft status. The catalyst for Netscape's decision was apparently this suggestion  posted by Rob Malda, a college student in Michigan, the proprietor of slashdot.org ("news for nerds that matters") . On the day of Netscape's announcement Chris Thompson registered the domain name openscape.org  and put out the shingle as a collecting-point for folks interested in working on Netscape code. (Netscape said they will set up their own site to distribute source code and collect enhancements, so it's not clear what part Openscape might play. "If in 30 days it seems... frivolous and unnecessary, I'll glady delete the domain name and walk away," Thompson said.)
The Feds want to get out of running the Net, but how -- and how slowly -- will matter a lot
The long-awaited report of the Ira Magaziner task force on domain naming is expected out sometime this week. Its content has been the subject of rumors and leaks since the first of the year. I have no hard news to share on this subject -- the report will be the subject of a Tasty Bit of the Day once it's published -- so will content myself with pointing you to this recent Wired coverage  and this TechWeb story  on the companies that have signed up with CORE, the Council of Registrars now carrying the standard for 2-year-old IAHC plan to expand top-level domains . If you want to hear Mr. Magaziner you can tune in to this 1/19 RealAudio news conference , but be warned that he spends 16 minutes saying general things about the proper role of government in the Net and not much about domain naming.
Basic crypto weakness undermines all claims to security, expert says
Longtime readers know that TBTF has been reporting on security weaknesses in Microsoft's products, particularly Internet Explorer, for more than a year . Now a security expert from New Zealand, Peter Gutmann, has posted a paper  claiming that the flaws are so serious that Windows 95 users should entirely refrain from using the Web. Among the problems Gutmann points out is a critical weakness in the way Microsoft software protects (or does not protect) users' master encryption key; this weakness undermines all other encryption components in Web servers and browsers. Gutmann outlines how a cracker could quietly retrieve the private key from a victim's machine and break the encryption that "protects" it in a matter of seconds. The attacker has, Gutmann says, then "effectively stolen [the user's] digital identity, and can use it to digitally sign contracts and agreements, to recover every encryption session key it has ever protected in the past and will ever protect in the future, to access private and confidential email, and so on." TechWeb coverage is here .
The king of spam pokes an eye above the trenches and the antispammers shoot it blind
TBTF for 1997-11-24  reported on spam king Sanford Wallace's plans to form a backbone network, called Global Technology Marketing Inc., to revive the operation of his much-despised Cyber Promotions after he was booted off AGIS Internet. The threatened network has not appeared, but Wallace and partner-in-spam Walt Rines did quietly set up a GTMI Web site to serve as an advertising billboard. This act of merely raising a periscope above the trenches promptly attracted withering fire from anti-spam forces. They deluged GTMI's hosting ISP, Galaxy Net, with complaints and veiled threats; they applied pressure through Galaxy's upstream provider, GeoNet. Within hours, Galaxy reluctanty pulled the plug on GTMI, despite the fact that the spammer site had broken no rules. The scorched-earth victory won the anti-spammers no friends or admirers at Galaxy Net. Read more about it here .
Three thoughtful essays on the state of software, and Microsoft's position, in these markets
Three readers sent thoughtful responses to EM Ganin's article on Microsoft's Hebrew versions of its software, published in TBTF for 1998-01-19 . One, from Alexander Gagin <gagin at cityline dot ru>, editor-in-chief of the Russian magazine Internet, ran as Tuesday's Tasty Bit of the Day. These are collected  on the TBTF archive along with two other missives, from Gil Rimon <gil at rimon dot org> in Israel and from Dr. Anton Nossik <anton at cityline dot ru>, editor of the Russian-language Evening Internet Daily. A thread running through the commentaries is the role of rampant software piracy in establishing Microsoft as the dominant player in these countries.
His charter may be more limited than that of his predecessor
The new advisor is Steven Honigman, brought in from his position as general councel to the Navy . It's not clear how far his portfolio extends beyond policy and implementation for government procurement of cryptography products. Honigman's predecessor David Aaron lasted less than a year before moving to a position in the Commerce Department. Aaron demonstrably failed to obtain cooperation, or even acquiescence, from US allies  on a policy of export limitations and key recovery. (After a year-long legal battle the Electronic Privacy Information Center has obtained from the State Department 500 pages of Ambassador Aaron's travel logs; they have not yet been posted on the Web.)
A timeline of first mentions
Keith Lynch <kfl at clark dot net> has been on the Net for longer than anyone I know. He's been squirreling away email messages and Usenet posts since 1975 and from them has constructed a succinct timeline  of first mentions of products, jargon, terms, concepts, and items of Net culture. Some excerpts:
1981 aug "Usenet" (mentioned on the ARPAnet) 82 feb "Internet" (then called ARPAnet) 86 mar "netiquette" 88 jan Year 2000 problem (i.e. lots of software will break) 88 feb perl 89 nov world.std.com (ISP, the first directly on the Internet) 91 mar cyberspace (referring to the net, not to sci-fi) 92 mar "Web" (as in World-Wide) 92 jun "WWW" 92 nov Linux (an operating system) 93 feb Wired magazine 94 jan "intranet" http://www.clark.net/pub/kfl/timeline.html
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