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With more than $11 billion in acquisitions this year aimed at reshaping Internet advertising, Microsoft, Google, and Yahoo are ready for the competition to pick up steam.
But a funny thing happened on the way to the brave new world of online ads: Web users rediscovered a sense of privacy.

Members of the social network Facebook howled this month after it launched Beacon, an advertising feature that tells your network of friends about your shopping habits at dozens of Web sites. Facebook was forced to let users turn off the service.

“Beacon fell victim to a poorly thought out plan of execution,” says Kevin Lee, founder of search consulting firm Didit.

Advertisers are hungry to reach consumers congregating at sites such as Facebook, MySpace and YouTube to socialize and access free content. Microsoft, Google and Yahoo all want to help advertisers track consumer behavior, then distribute product pitches dovetailing with an individual’s interests. If they are successful, consumers will see more Web sites posting compelling free content.

But pitfalls await tech giants as they attempt to engineer the great leap forward into “targeted advertising” — marketing pitches that key off what individuals say and do online.

Privacy Fears

Google cleared an important regulatory hurdle when the Federal Trade Commission last week approved its $3.1 billion merger with ad placement giant DoubleClick.

But congressional hearings on privacy are set for this spring, and consumer advocates are clamoring for limits on Google’s use of behavioral data. As part of its merger ruling, the FTC proposed a set of principles for self-regulation in behavioral marketing.

Meanwhile, European antitrust regulators have begun what could be a protracted look at whether the merger could stifle competition. “Google is so big and is moving so fast that they’ve became a natural target,” says tech consultant Rob Enderle of the Enderle Group.

Lack of Sizzle

Microsoft paid…

The sad fall of Taiwan’s Via Technologies picked up speed Dec. 19 when Bear Stearns dropped analyst coverage of the company. Once the top chip-design company in Taiwan and one of the world’s premier makers of chipsets for PCs, Via had ambitions of entering the major leagues by creating microprocessors that would compete directly with those of Intel and Advanced Micro Devices. Back in the late 1990s and early 2000s, Via was a headache for Intel, which charged the Taiwanese company with getting ahead by violating its intellectual property.

No doubt Intel execs are now smiling as things haven’t worked out so well for Via and its plans to enter the microprocessor business. It turns out there’s a very good reason Intel and AMD dominate the high end of the chip business: Making microprocessors (also known as central processing units, or CPUs) is no walk in the park, and convincing computers to switch to an unfamiliar alternative is even harder. Via’s stock price, which traded at 50 Taiwan dollars in mid-2003, is now at 17. This year alone, it has dropped 56%. Sales for the first 11 months of 2007 were down 31%, to $430 million.

Bear Stearns decided that Via no longer warranted coverage even though just a day earlier Via struck a deal with China Unicom to provide the Chinese state-owned cellular operator with CDMA chips. “Given the company’s uncertain growth prospects, investor interest in the stock has diminished substantially,” the Bear analysts wrote.

The big problem: “It is increasingly difficult for Via to compete with Intel in the chipset market, given Intel’s dominance in CPUs.” Via spokesman Richard Brown declined to respond directly to a question concerning Bear Stearns’ decision, but in an e-mail reply acknowledged that “we have undergone a challenging transition over the past few years from…

When AT&T went shopping for high-tech gear to soup up its communications network with advanced video, broadband, and voice services, it turned to long-time supplier Cisco Systems. On Dec. 10 the nation’s largest telco announced a deal that could be worth up to $500 million to Cisco over the lifetime of the upgraded AT&T network, according to Jim Kelleher, an analyst at Argus Research.

What’s noteworthy isn’t simply the size of the deal but the vast amount of bandwidth it represents. When Cisco brought out its top-of-the-line router in 2004, many analysts felt it was so powerful that only a handful of companies would ever buy one. Now, AT&T plans to link 25 cities with these mighty machines to help it handle the rising tide of Net traffic — particularly video. This bodes well for a Cisco unit that has traditionally brought in a steady 25% of networking giant’s $34 billion sales.

Now other telcos and cable companies, located everywhere from Korea to Bulgaria, are flooding Cisco with orders — and helping realize its dream of conquering the telecom market, long a domain of Alcatel-Lucent, Ericsson, and Nortel. Cisco’s service provider business finally had a major growth spurt this year, shooting up to nearly 30% of overall sales. To put this in perspective: Cisco’s carrier revenues are nearly as large as all of Nortel’s. And service provider sales “could grow another percentage point or two [as part of total sales] next year,” says Eve Griliches, an analyst with consultancy IDC.

Why is Cisco on such a tear? It enjoys a far broader product line than most rivals, both for the basic routers that carriers need to run their networks and for related products, such as Scientific Atlanta cable TV set-top boxes and pricey videoconferencing systems, that can be resold by carriers to consumers…

When AT&T went shopping for high-tech gear to soup up its communications network with advanced video, broadband, and voice services, it turned to long-time supplier Cisco Systems. On Dec. 10 the nation’s largest telco announced a deal that could be worth up to $500 million to Cisco over the lifetime of the upgraded AT&T network, according to Jim Kelleher, an analyst at Argus Research.

What’s noteworthy isn’t simply the size of the deal but the vast amount of bandwidth it represents. When Cisco brought out its top-of-the-line router in 2004, many analysts felt it was so powerful that only a handful of companies would ever buy one. Now, AT&T plans to link 25 cities with these mighty machines to help it handle the rising tide of Net traffic — particularly video. This bodes well for a Cisco unit that has traditionally brought in a steady 25% of networking giant’s $34 billion sales.

Now other telcos and cable companies, located everywhere from Korea to Bulgaria, are flooding Cisco with orders — and helping realize its dream of conquering the telecom market, long a domain of Alcatel-Lucent, Ericsson, and Nortel. Cisco’s service provider business finally had a major growth spurt this year, shooting up to nearly 30% of overall sales. To put this in perspective: Cisco’s carrier revenues are nearly as large as all of Nortel’s. And service provider sales “could grow another percentage point or two [as part of total sales] next year,” says Eve Griliches, an analyst with consultancy IDC.

Why is Cisco on such a tear? It enjoys a far broader product line than most rivals, both for the basic routers that carriers need to run their networks and for related products, such as Scientific Atlanta cable TV set-top boxes and pricey videoconferencing systems, that can be resold by carriers to consumers…

Anyone responsible for managing a data center understands the increasing importance of power efficiency. This is especially the case in data centers where consolidation and higher-density equipment have packed more and more devices into less floor space.

Although many companies have already consolidated their storage and server environments, they could benefit further by consolidating their storage-area-network (SAN) environments. In fact, some data centers have reached or are nearing the maximum power allotment for their facilities, meaning they have no choice but to consolidate and deploy more power-efficient devices.

I.T. managers already know that servers are putting a strain on the world’s power grids, but what is often overlooked is the energy consumption of storage environments. The environments are expanding rapidly to accommodate the explosive growth of digital data. IDC calculates that 161 billion gigabytes of digital data were generated in 2006 alone.

According to Gartner, servers account for 40% of a data center’s power consumption, but storage comes in a close second, with 37%. What’s more, storage-related devices — including SAN devices — can consume 1,000 watts or more. The lesson? If you’re attempting to contain your data center power use (and costs), you can’t afford to neglect your storage or SAN environments.

What can you do to lower your data center’s power consumption? To understand some of the issues better, it helps to consider the analogy of transportation and fuel efficiency. Vehicles such as electric, hybrid or compact cars obviously are more fuel-efficient than larger, petroleum-fueled vehicles.

But a larger vehicle, such as a bus, can provide a highly efficient mode of transportation because it can accommodate many passengers, making for a low fuel-per-passenger ratio.

This concept reflects what is occurring in today’s data centers: consolidation of multiple devices into a larger, shared resource. If the shared resource happens to…

NTT DoCoMo, Japan’s largest mobile carrier, is partnering with Google to offer search and e-mail on its handsets, according to news reports.

DoCoMo subscribers could have access to Google’s search tool, Gmail e-mail service, Picasa photo-sharing software, and Google Calendar application early next year via DoCoMo’s i-Mode network, according to Reuters.

The report cited unnamed sources, and Google and DoCoMo could not immediately be reached for comment. However, according to Japan’s main business daily, The Nikkei, DoCoMo is hoping to establish a closer relationship with Google than its growing competitors.

Last month, DoCoMo joined the Open Handset Alliance, a consortium of 34 companies that have pledged to work with Google and its Android platform.

Google vs. Yahoo

Yahoo has inked several mobile services deals in Asia, but if Google and DoCoMo partner, it could be a major coup for both companies.

Michael Gartenberg, an analyst at Jupiter Research described the rumored deal as one more win for Google and another opportunity for the search titan to get its services and content into an important mobile market.

Google would gain access to DoCoMo’s 49 million users of its i-Mode mobile phone Internet service in a market where Yahoo leads the pack.

“What we are seeing is that it’s not an issue of dominance on the mobile platform,” Gartenberg said, noting that Microsoft, Yahoo, and Google all are making significant inroads onto mobile handsets. “It’s an issue about many strong players each trying to grow stronger.”

He said the mobile world has not turned into a winner-take-all scenario like PC desktops. “In 2008,” he concluded, “we’ll see different players try to break away from the crowd.”

Mobile Services

The mobile services market is growing by leaps and bounds. According to a recent study from ABI Research, the market value for mobile video telephony services, including video mail, video calling,…

EMC announced its intentions to acquire publicly held Document Sciences for approximately $85 million in cash. Document Sciences provides enterprises with software for creating and delivering personalized, multichannel communications to customers, partners, and suppliers.

The proposed stock buyout, which has been approved by Document Sciences’ board of directors, is expected to extend EMC’s position in enterprise content management, company officials said.

The core software technology that EMC is acquiring under the deal “provides a tremendous advantage in addressing transaction-intensive applications, such as loan origination, new account enrollment, wealth management, brokerage, and claims processing,” noted Mark Lewis, the president of EMC’s Content Management and Archiving Division.

It will give “our customers a significant competitive edge to increase customer loyalty and maximize business performance,” he said.

Automated Document Management

Over 100 major organizations around the globe currently use Document Sciences’ third-generation software for their document-generation requirements, company executives said.

Applications in the xPression 3 software suite, which is designed to help automate the creation and delivery of interactive communications, range from contracts, policies, and high-volume relationship statements to customized marketing collateral and correspondence.

The product’s xPressContracts extension, for example, is designed to give financial organizations a method for initiating, negotiating, and managing their contracts.

Document Sciences’ software suite integrates with traditional CRM, ECM, and ERP systems, and provides components for document design, assembly, composition, output, and delivery — including the plug-ins for working with documents in Adobe InDesign, Dreamweaver, and Microsoft Word file formats.

At the time of publication, xPression-produced communications can be customized, assembled in batch or real-time using multiple templates and data sources, and delivered over the Web, in an e-mail, or as a printed document.

EMC’s Bid To Be All-in-One

Under EMC’s acquisition proposal, Document Sciences stockholders would receive $14.75 in cash for each share of common stock. “We are pleased to enter…

According to a report in the Financial Times, Apple has inked a deal with News Corp.’s 20th Century Fox that will bring a new video-on-demand service to iTunes. The companies are expected to announce the deal on January 14 at MacWorld.

The agreement reportedly will allow consumers to rent, for a limited time, just-released Fox movies via digital download from iTunes. Although Apple already peddles newly released movies through a deal with Disney, this is the first time iTunes will be renting rather than selling movies digitally.

MGM, Lionsgate, Viacom, and Paramount restrict their digital libraries to older titles. However, the Fox deal could open the floodgates for new release rentals. Apple is reportedly in talks with Paramount, Warner Bros., and Sony to make their new releases available on iTunes for rent or purchase.

Leveraging Apple Ecosystem

The reports of a movie rental deal with 20th Century Fox, if they are accurate, represent an important shift in Apple’s business process, according to Michael Gartenberg, an analyst at Jupiter Research.

The deal, Gartenberg said, is Apple’s recognition that renting movies is an understood business model that could add profits to Apple’s already swelling bottom line.

“The idea of people being able to rent movie content, put it on their iPod, watch it on the go, and then move on to the next thing is definitely a concept that will resonate with consumers,” Gartenberg said.

Of course, iTunes won’t be the first digital-download store to rent movies. Netflix and other companies offer digital rentals. But Apple’s deal with Fox — and the possible deals with the other studios — could shake up the decades-old rental business.

“The Fox deal could become a tipping point for digital movie rentals because Apple has already built out this tremendous ecosystem between the computer, the iPhone, and the iPod,” Gartenberg said….

My cell phone rang just as I pulled my car into a park along the Puget Sound. I needed to add something to a news story I had written a few hours earlier, but I really didn’t want to give up my evening stroll.

Instead of driving back to the office or hunting for a Wi-Fi hotspot, I booted up my laptop, plugged in a PC card, connected to the Internet and updated my story — all from a bench near the water, with a dreamy view of snowcapped mountains.

Such a feat is no surprise to anyone with a wireless card from a cellular carrier, but I wasn’t connected to the networks of Verizon Wireless, Sprint or AT&T. Instead, I used an early version of the relatively new technology WiMax, which is being offered in Seattle by Clearwire Corp.

What’s exciting here is the availability of yet another pipe for accessing the Internet at home, in the office and on the go. It raises the possibility that it not only will be faster but also — in theory — cheaper than the competition.

The Clearwire card saved me in a pinch when I needed to file a story from across town. But in the end, it didn’t quite live up to my hopes for an “everywhere” broadband wireless connection. Coverage is far from complete, and it’s still too expensive.

The company says its “pre-WiMax” network I tested is four to five times faster than cell phone providers’ 3G, or third-generation, networks, and cheaper to deploy. It’s also testing true WiMax, which can deliver connections that promise to be even faster over wider areas, and plans to launch its first network in the middle of 2008.

Kirkland, Wash.-based Clearwire sells high-speed Internet access and Internet-based calling for homes and businesses in 46 U.S. markets, including Seattle,…

Sony is dropping its money-losing rear-projection TV business worldwide to focus on two flat panel technologies — liquid crystal display and organic light-emitting diode, the company said Thursday.

Sales of rear-projection TVs had been declining recently as LCD TVs gain in popularity and get bigger, Sony Corp. spokesman Shinji Obana said.

In October, Sony lowered its global sales forecast for rear-projection TVs — which uses a projector to create images on large screens — to 400,000 from 700,000, which is down from 1.1 million the previous fiscal year.

By contrast, Sony expects to sell 10 million LCD TVs this fiscal year through March, up from 6.3 million the previous year.

Sony sells 85 percent of its rear-projection TVs in the U.S., and about 10 percent in Europe, according to Obana. Production at the three plants that make the rear-projection TVs in Japan, Mexico and Malaysia, will be halted, Obana said.

The decision to abandon rear-projection TVs underlines Sony’s strategy of focusing on LCDs and OLEDs at a time when competition is heating up in flat TVs.

In the fiscal half-year through September, Sony lost 60 billion yen ($526.3 million) in its TV operations, partly because of losses tied to rear-projection TVs. Diving prices of LCD TVs also contributed to the red ink, Obana said.

The world’s electronics makers are all working on LCD technology for TVs, as well as another technology called plasma display panels, or PDP.

Earlier this month, Sony began selling a small 11 inch TV that uses a relatively new but expensive flat-panel technology called OLED. Sony’s XEL-1 measures just 3 millimeters, or 0.12 inches, thick and delivers clear, vivid images.

Earlier this week, Matsushita Electric Industrial Co., which makes Panasonic brand products, Hitachi and Canon forged a tie-up in their liquid crystal display businesses — another sign of how Japanese electronics makers are being forced…

Samsung Electronics Co. said Thursday it filed a complaint with American authorities over alleged unfair trade practices by Japanese rival Sharp Corp., fueling an intensifying legal battle over flat panel technology.

Samsung said in a statement that it filed the complaint with the United States International Trade Commission on Dec. 21, claiming that Sharp and two U.S. subsidiaries imported and sold liquid crystal display products that infringe on four of Samsung’s U.S. patents.

The complaint came after Sharp earlier this month sued Samsung in a South Korean court, also alleging patent violations for LCDs. It demanded damages and a halt to manufacturing and sales of affected TVs and display panels.

In August, Sharp filed a similar lawsuit against Samsung in federal court in the U.S. state of Texas. Samsung said Thursday it was pursuing federal lawsuits in Texas and Delaware against Sharp.

The string of lawsuits between the two companies — two of the world’s biggest makers of LCD panels — highlight the bruising competition to develop better technology for products like hot-selling flat screen TVs.

Samsung said its complaint calls on the Washington-based trade commission to launch an investigation and order that Sharp products that allegedly infringe on Samsung’s patents — including LCD TVs, monitors, notebook computers and mobile phones — be kept out of the U.S. market.

“Samsung has and will continue to vigorously protect itself against the infringement and unauthorized use of its intellectual property,” Samsung said.

Separately, Samsung also said it asked the Tokyo District Court on Wednesday to prohibit the manufacture and sale in Japan of Sharp LCD TVs it claims incorporate technology that allegedly violates two Japanese patents owned by Samsung.

“Sharp is prepared to take appropriate legal countermeasures once it studies the complaints,” company official Akinori Shibuya said from Osaka, where Sharp is headquartered, referring to both the trade commission filing…

Tightening credit markets have forced Intel and STMicroelectronics, Europe’s largest semiconductor maker, to delay a planned merger of the companies’ memory divisions.

The new company, to be called Numonyx, will be formed by March 28 instead of the end of 2007, as originally planned when the deal was announced in May, the companies said.

Numonyx, which would be the largest manufacturer of flash memory in the world, is an attempt to wrest profits from a sector that has seen slumping prices amid increased competition.

The companies estimate Numonyx would represent $3.6 billion in sales, making the new company bigger than Spansion, currently the market leader.

New Deal After Credit ‘Turmoil’

A third party in the deal is Silicon Valley-based Francisco Partners, which will invest $150 million for a 6.4 percent stake in the new company.

As the credit situation continues to be tight, banks are looking to scale back their exposure to the deal. In May, Intel and STMicro announced they had commitments for a $1.3 billion loan and $250 million in revolving credit, but Wednesday the companies said financing would be reduced to a $650 million loan and $100 million in revolving credit.

Under the new deal, STMicroelectronics will get 48.6 percent of the new company plus cash and notes worth $364 million. In May, the transaction called for Intel to get a 45.1 percent share of the company plus $432 million. Now, Intel isn’t saying how big a payment it will take.

“We’ll wait and see when we get the terms all finalized,” said Chuck Mulloy, an Intel spokesperson.

Expanding Use in Notebooks

“Numonyx will be the industry’s largest supplier of NOR flash memory and a leader in nonvolatile memory solutions with a substantial patent portfolio,” the companies said in a statement. “Intel, Francisco Partners, and ST intend for Numonyx to hit the ground running,…

Canon, Hitachi, and Matsushita have formed a new alliance under which the three companies intend to cooperate in the development and production of LCD panels and related technologies. The announcement follows hard on the heels of a rival LCD deal announced by Sharp and Toshiba.

Canon, Hitachi, and Matsushita said intensifying competition has made it imperative for them to join together to ensure a stable supply of high-quality LCD panels at low prices.

Under their new alliance, Canon and Matsushita initially will acquire 24.9 percent of the shares of Hitachi’s wholly owned subsidiary Hitachi Displays, reducing Hitachi’s stake to 50.2 percent. In the long run, however, the three companies are planning ownership changes under which Canon will take a majority holding in Hitachi Displays.

Hitachi said the alliance would help it accelerate the development of cutting-edge technologies as well as strengthen its efforts to develop ultrathin flat-panel TV sets. The agreement also gives Canon and Matsushita access to Hitachi’s highly regarded in-plane switching (IPS) technology for TFT liquid crystal displays.

Cooperative Efforts

Canon said the deal will help it secure a steady supply of LCD panels for its medical and office equipment products as well as consumer electronics offerings such as Canon’s digital single-lens reflex camera. And by teaming up with Hitachi, Canon expects to accelerate its ongoing development of organic light-emitting diode (OLED) displays.

Plasma display market leader Matsushita expects the cooperative effort with Canon and Hitachi will help it develop LCD offerings that can compensate for an anticipated slowdown in Plasma TV sales. Matsushita said it expects to take a majority stake in its separate LCD joint venture with Canon and Toshiba. That venture is known as IPS Alpha.

Matsushita is pushing ahead with construction of a next-generation plant for IPS Alpha that could serve as a possible future…

IBM said it will acquire privately held Solid Information Technology for the purpose of adding real-time, data-access capabilities to its existing database and information-management offerings.

Currently available in more than three million deployments worldwide, Solid’s software employs in-memory database technology to access and store data in RAM at speeds up to 10 times faster than what can be achieved through the use of traditional disk-based database systems, IBM said.

The company’s major clients include Alcatel, Cisco, EMC2, Nokia, and Siemens.

“Together, IBM and Solid Information Technology will provide a comprehensive set of capabilities that enable companies to deliver trusted information in real time to every person and every business transaction,” said Ambuj Goyal, general manager of IBM Information Management.

Uninterrupted Memory Access

Solid’s solidDB software is designed to support numerous consumer applications as well as services in telecom, retail, finance, and healthcare.

In particular, the product’s real-time, data-access capabilities provide nearly instantaneous access to data for mobile phones, Internet-based calling, online shopping, investment transactions, and other applications, IBM said. What’s more, Solid maintains that its technology offers the ability to recover from a system failure within milliseconds..

IBM, which already partners with Solid on information management for telecommunication service providers, said it sees the acquisition as complementary to its own disk-based DB2 and Informix Dynamic Server offerings.

For example, a proof-of-concept conducted last June at IBM’s Innovation Center in San Mateo, California showed how Solid’s technology can be used to accelerate access to data stored in DB2 by a factor of 40 over a configuration lacking Solid’s enhancements.

Entering the Software Group

In a separate undertaking, the two companies have demonstrated how Solid’s technology can work with IBM Bladecenter. According to the companies, the combination delivered an industry-leading throughput in a benchmark that simulated a wireless scenario involving one million subscribers.

The throughput…

Although data encryption adds cost and complexity, business and government sectors are becoming wedded to it — even though at times it’s like an arranged marriage driven by regulatory compliance and fear of data-breach fiascos.

“We now require encryption for ‘data at rest’ on laptops in the Air Force,” says Greg Garcia, member of the senior executive service of the US. Air Force and director of the 754th Electronic Systems Group at Gunter Air Force Base in Montgomery Ala. The group sets security policy for the 500,000 laptops used by the Air Force.

“The contract we awarded for this grew out of what happened at Veterans Affairs,” Garcia points out, alluding to the data breach fiascos of this year and last that led to millions of veterans’ personal information being exposed on lost and stolen laptops.

The VA data-breach incidents spurred the White House Office of Management and Budget, the U.S. Department of Defense and the civilian-side General Services Administration to look at government-wide approaches for data-at-rest encryption.

The outcome was the U.S. government’s first-ever blanket purchasing agreements (BPA) for data-at-rest encryption products to protect sensitive but unclassified data on government laptops and removable storage devices.

BPAs were awarded in June to eleven resellers, including Intelligent Decisions, MTM Technologies and GovBuys.

The encryption products on the list include Credant Technologies’ CredantMobile Guardian, Encryption Solutions’ Skylock AtRest, GuardianEdge Technologies’ GuardianEdge, Information security’s secret Agent, Mobile Armor’s Data Armor, Pointsec Mobile Technologies’ Pointsec, SafeBoot’s (acquired by McAfee for $350 million in October) SafeBoot Device Encryption, SafeNet’s SafeNet protectDrive, Spyrus’ Talisman/DS Data security Suite, and WinMagic’s secureDoc.

State and Local Government Viewpoint

What’s known as the data-at-rest encryption BPAs are also available for use by state and local governments.

The Tennessee Department of Revenue is going its own way in adding encryption to its mobile laptops by deploying Entrust encryption software this…