update Sun Microsystems announced Wednesday plans to cut up to 13 percent of its work force, in its first major restructuring effort under new CEO Jonathan Schwartz.

The struggling workstation and server maker said it will cut between 4,000 to 5,000 employees over the next six months, which represents an 11 to 13 percent cut in its global work force of 37,500. Sun said the bulk of the layoffs are expected to occur in the current quarter.

The Santa Clara, Calif., company anticipates that the cuts will save it $480 million to $590 million annually by the fourth fiscal quarter in 2007.

"We've worked hard to reinvent the entirety of Sun's product line, from software to systems, storage and services," Schwartz said in a statement. "It's on that rebuilt foundation that we are reinventing our business model on a far simpler base, and focusing our energies on the automation, energy efficiency and network innovation at the heart of our technology leadership."

Schwartz, who was named Sun's chief executive last month, has wasted no time in paring down the company's headcount since taking the reins. As a result, he may avoid the criticism encountered by company founder and CEO predecessor Scott McNealy, who was faulted by many industry observers and some former Sun executives as having moved too slowly in bringing Sun's costs in line with its falling revenue.

Sun cut more than 13,000 jobs between 2001 and 2005, but it wasn't enough to keep costs in line with slumping sales. Revenue dropped 39.3 percent from fiscal 2001 to 2005, while operating expenses dropped only 26.5 percent, according to analysts.

The layoffs, in part, may not come as a surprise, given that Sun's former chief financial officer, Michael Lehman, was pulled out of retirement three months ago to rejoin the company.

Sun said Lehman would take a "fresh look at everything" upon his return and assemble a "leaner and more efficient business model."

Lehman and Schwartz began extensive reviews of the company's global operations about a month ago, Sun said.

As part of its efforts to save costs via consolidating its real estate holdings, Sun will sell its Newark, Calif., campus and also give up leased facilities in Sunnyvale, Calif. The company noted, however, that it will continue operations at its two major Bay Area campuses in Menlo Park and Santa Clara, Calif.

Yahoo is set to launch a new video Web site in a bid to cash in on the popularity of viral video, which has pushed YouTube front and center.

"Our goal is to be the starting place for finding video on the Web," said Jason Zajac, general manager of social media at Yahoo. The new site is scheduled to go live at 9 p.m. PT Wednesday at video.yahoo.com.

The redesigned Yahoo Video page will include a search box at the top and editorially chosen feature videos that are topical, interesting or popular among viewers. Users can also browse for video by categories or user-generated tags.

The search results page offers more detail on the video content, including source and length, as well as a breakdown of video that either fits in predetermined channels created by Yahoo or by people who have uploaded content, based on a single source or by topic. Viewers will be able to read ratings and reviews and forward content and links to friends via Yahoo Mail or Yahoo Messenger.

If the video is hosted on an outside site, such as YouTube, clicking the "play" button takes the viewer to the other site. Yahoo-hosted video allows people to watch the video directly on the site through an embedded video player.

Users can also paste the video into their own blogs and other Web sites, as well as create pages of their favorite videos and make those available as public play lists, Zajac said.

The new Yahoo Studio allows people to upload their own video, create a profile, and keep track of how many people watched the video and what the ratings are. People who upload video own the content but give Yahoo the rights to play and display it on Yahoo and partner sites, he said.

The site competes with YouTube, AOL, Microsoft, Blinkx and Google Video, which provides access only to video that Google hosts and not from across the Web.

Microsoft and eBay declined to comment. "The information out in the public is speculation and the company does not comment on rumors," said an eBay spokesperson. A spokesperson for Microsoft said much the same thing.

But bloggers, industry analysts, and others have been speculating about what a move on Microsoft's part might mean.

Improving MSN

"[Microsoft] can either improve MSN to make it more of a real competitor to Google, or it can take a different approach, for example by buying eBay," said Martin Reynolds, an analyst at Gartner. "Google is quietly creeping up on Microsoft, and eBay would take Microsoft in a whole new direction."

Reynolds also said that eBay's acquisition of Internet telephony firm Skype last year would be an added bonus for Microsoft. "But buying eBay would be an expensive acquisition for Microsoft," he warned.

Stacey Quandt, an analyst at Aberdeen Group, agreed with Reynolds that acquiring eBay would transform Microsoft.

"If Microsoft purchases eBay, it would certainly invigorate MSN and create a stronger community due to the growing use of Skype and PayPal," she said. "A dramatic gesture of this sort is needed to achieve the promise of MSN to be a leading content- and services-delivery model."

'No Natural Synergy'

Avivah Litan, an analyst at Gartner, warned of the possible downside. "I can understand MSN's motivation in potentially acquiring eBay, but it would be a major negative for eBay shareholder value," she said.

"Microsoft has no expertise in actual commerce and transactions, and there is no natural synergy between the two companies other than that they both have a major Internet presence," she said. "Surely, there are less painful ways to improve the stakes for MSN."

The eBay-Microsoft merger rumors follow last week's announcement that eBay has agreed to a wide-ranging partnership with Yahoo. Under the terms of that deal, Yahoo will become the exclusive provider of all graphical advertisements on eBay, and will deliver sponsored search listings for products on some eBay pages.

At the same time, Yahoo is putting eBay's PayPal platform in its online-wallet system so customers can pay for the Web portal's services through their PayPal accounts.

Microsoft released a desktop especially created for Mac users: Microsoft Wireless Laser Desktop for Mac.

Microsoft's new Mac mouse enjoys Microsoft® High Definition Laser and Microsoft Intelligent Tracking System technology, making it much more accurate, responsive, and smooth. The built-in Tilt Wheel is meant for smarter document and web browsing.

Both the keyboard and mouse are wireless, preventing unnecessary cable scrambling and guaranteeing an entertaining and stress-free utilization from up to 6 feet.

Microsoft® Wireless Laser Desktop for Mac operates on the Macintosh, including the new Intel-based Mac machines, and uses a standard keyboard and mouse Universal Serial Bus (USB) connection.

The Comfort Curve Keyboard assures natural hand and wrist layout (enhanced finger grooves and thumb scoop ) as well as a cushioned palm rest, increasing comfort and productivity.

It features a glossy silver finish, Mac Modifier Keys, Zoom Slider, five Favorite Keys, Eject key, and user-set Hot Keys.

The Microsoft Wireless Laser Desktop for Mac will be available this summer for an estimated retail price of $99.95.

As another debut, it is the first Microsoft keyboard without the Windows Start button, since its introduction.

Microsoft's High Definition Laser technology guarantees 1,000 dots per inch (DPI) for more responsiveness and 6,000 frames per second (FPS) for better precision.

Microsoft's Macintosh Business Unit Director Scott Erickson:

"We are excited to see our colleagues on the Microsoft Hardware team provide this Mac-only keyboard and mouse to strengthen Microsoft's lineup of products for Mac users, which includes our productivity suite, Office 2004 for Mac. This launch further demonstrates Microsoft's commitment to enhancing the computing experience for Mac users. We were able to preview the product at Macworld this January and saw firsthand the very favorable response from Mac customers."

The Mac desktop from Microsoft requires Mac OS X version 10.4x (excluding 10.0), while those running Mac OS X v10.2.x must install enclosed IntelliType Pro and IntelliPoint software before connecting the hardware. Users of Mac OS X v10.3.x must upgrade to Mac OS X v10.3.9 before connecting hardware OR install the enclosed IntelliType Pro and IntelliPoint software before connecting the hardware.

A 30MB hard disk space, and an USB port are also necessary, while the 4 AA batteries will be included.

Internet Hot Keys are supported for use with: Browser support (only with software installed): Apple Safari 1.2, Microsoft® Internet Explorer 5.2.3, Netscape Navigator 7, Mozilla Firefox 1.0, and Opera 7.

Microsoft's Multimedia Hot Keys are supported for use with iTunes.

A smart receiver mounted on Microsoft Wireless Laser Desktop for Mac improves 27MHz wireless technology and cuts down on interference. The included smart receiver and intuitive software notify users when interference occurs from other wireless devices, such as a cordless phone, and offer ways to reduce it.

With the cost of mobile phone calls already dropping sharply, Virgin Mobile USA plans to announce a way that people can talk for no money at all. They will, however, have to pay with a chunk of their attention.

The program, called SugarMama, lets people earn one minute of talking time by watching 30-second commercials on a computer or receiving text messages on their phones, then answering questions to prove they were, in fact, paying attention.

Virgin Mobile, a relatively small cellphone carrier with four million mostly young customers, is aiming the program at teenagers, who can earn up to 75 minutes of free talk time a month.

Howard Handler, chief marketing officer for Virgin Mobile USA, described SugarMama as "someone who shows up and gives you some extra gratification and gets you over the hump" when you are running low on talk time.

The company says that the program, scheduled to be available on June 14, is the first ad-supported cellphone service in the United States. Several companies are taking a similar approach to wireless Internet access, with proposals or plans for free services backed by advertising.

Virgin has signed up three advertisers: Pepsi, Microsoft's Xbox game console and a youth antismoking campaign called Truth.

Telecommunications industry analysts said SugarMama might not hit a sweet spot with consumers or advertisers. Roger Entner, an analyst with Ovum Research, a market research firm, said the kinds of consumers willing to swap their time for airtime were not likely to be big spenders.

"If you're too cheap to buy a minute of air time, how are you going to afford an Xbox?" Mr. Entner said. The people likely to earn minutes for free "are people who want to avoid costs at any cost."

Adding to Virgin Mobile's challenge is the fact that airtime is cheap and getting cheaper, said Ed Snyder, an analyst with Charter Equity Research. He said a minute of airtime typically cost from 3.5 cents to 10 cents, down from more than 25 cents a decade ago.

Mr. Handler said customers would get something besides free minutes: they would also get access to "funny and provocative" advertising. He declined to elaborate on the ads' content.

Young people "have been deluged with all forms of advertising from almost day one" of their lives, he said, adding that "they want it on their terms." This service "puts them in control," he said.

Virgin Mobile is what is known as a prepaid cellular provider, meaning subscribers pay an up-front fee for minutes, rather than signing a contract and paying a monthly subscription.

Customers who want to try SugarMama can visit the Virgin Web site to sign up. They must then agree to take part in one of three ways: by watching short video clips online, filling out questionnaires or receiving text messages on their phones.

In the case of the clips and the text messages, the subscribers would only receive a free minute if they sent in a response indicating that they had paid attention. For example, they might be asked to identify the main point of a commercial, Mr. Handler said.

news analysis Google appears to be in fast-forward mode with its new video ads.

The search giant may have bumbled with the January beta launch of the Google Video hosting service. But experts said the company will have better luck with a new computerized auction service that lets marketers place video ads on publisher Web sites.

"It will be successful. Brand advertisers have plenty of money to spend on the Google network," predicted Emily Riley, an analyst at market researcher JupiterResearch. "It's the next generation" of online advertising.

Google, of course, popularized search-related advertising and has used it to become a company with a $115 billion market cap. Google makes nearly all its revenue--more than $6 billion in 2005--by selling ads that appear on search results pages and on partner Web sites.

Up until last week, Google sold text-, flash- and image-based online ads. Google now offers click-to-play video ads that appear on the Web sites of its publisher network, but not on its own sites.

Under the new service, marketers provide Google with ready-to-show video and Google hosts it but is not charging so-called "serving fees" to marketers, said Gokul Rajaram, a director of product management for AdSense, Google's ad-selling network. Advertisers are eager, he said, to put ads on Google's network because of the dearth of Web sites willing or technologically able to show video ads, he said.

"If you buy video ads today, there is very little publisher space to buy," Rajaram said. "Most sell out months in advance."

Still, Google faces a learning curve when it comes to video, experts said.

"I don't think they're going to be as sophisticated out of the gate as, say Yahoo, who has been in the video ads business for some time," said Paul Palumbo, an analyst and consultant at AccuStream iMedia Research. "But Google has a history of innovation in ad models and can build on what's been done."

Safa Rashtchy of Piper Jaffray said the proof would be in the targeting. "The key will be to what degree Google can increase the efficiency of those ads by targeting them," he said. "Video ads are interesting and inviting and they add an attractiveness to the Web site itself. The key is that they be relevant to both the page and the users' interest."

There's no question video is becoming more popular on the Internet as the success of YouTube and viral videos illustrate.

Now video is increasingly gaining a share of the total online ad market. According to JupiterResearch figures from mid-2005, spending on streaming media in the U.S. rose from $140 million in 2004 to $251 million in 2005 and could hit $344 million in 2006. That compares with spending on conventional online ads, which is estimated to be $8.8 billion this year, JupiterResearch said.

eMarketer, which does research related to the online ad industry, predicts that by the end of the decade advertisers will spend at least $1.5 billion on video ads online.

However, not everyone is ready to jump into the video waters. While large marketers will have budgets to create video ads, that's not the case with smaller companies, who represent much of Google's bread and butter, said Allen Weiner, an analyst at market researcher Gartner.

"I don't believe you can take a 30-second ad from TV and put it on the Web," he added.

Then there's the oft-debated question of whether people really want to click on ads.

In a posting titled "Google PPC Video Ads--I'm betting against it," blogger Michael Arrington listed a number of reasons why he thinks the service will be unsuccessful, including lack of consumer interest.

"First, Google needs to eat its own dog food. It won't be placing these ads on (its) own sites for now," he wrote. "Why? Perhaps their early testing showed that consumers don't want to click on these nearly as often as significantly less intrusive text ads."

So what's Google doing that's different?

Unlike many video ads that automatically play when a user goes to a Web page, Google's ads will not start until the user clicks on them, said Rajaram. Viewers can advance the video, pause it, adjust the volume or click through to the advertiser's site.

Google also hopes it will be a cheap alternative to what's already out there. Via Google's automated auction system, advertisers can bid on a cost-per-click basis, where they pay when a user clicks an embedded link, or on a cost per thousand impressions (CPM) basis. Fees on a CPM basis are expected to range between $5 to the low double-digits, compared with the current online video prices, which can run as high as $100, Rajaram said.

Advertisers can choose which sites they want the ads to appear on, and they can target their ads based on keyword, content relevance, demographics and geography. Web site publishers can choose not to accept any video ads on their sites, although none have opted out so far, Rajaram said.

Google also will tell marketers how many people play a given video as well as what the average viewing duration is, he said.

The company had 12 beta testers for the service, including Paramount Pictures, Fox Home Entertainment and General Motors.

Rajaram said internal testing has shown that video ads outperformed text ads in most cases. Google may eventually show video ads on its Google Video site, he added.

Several studies seem to back up Rajaram's claim. A study released in March by the Online Publishers Association found that 66 percent of a sample of more than 1,200 U.S. Internet users who watch online videos have watched online video ads, and 44 percent of those have taken action on what they've seen, like visiting a Web site or making a purchase.

A May 2005 survey from Dynamic Logic and Viewpoint/Unicast found that more people were annoyed by pop-up ads and television ads than by online video ads.

"It's amazing how many people do click on video ads," said Gary Stein, strategy director at Ammo Marketing. "Video ads have been shown to be pretty powerful. They also have this good branding effect."

The ads viewers want to see are ones that are highly targeted and offer interactivity, experts also said.

"Do people want to click on video ads? It depends. If you make it fun, if it's a game, a contest..." said Weiner of Gartner. "Just taking a Zantac ad and moving it to the Web is boring."

Debate aside, Google faces formidable competition in the video arena. In addition to video ad veteran Yahoo, there's Microsoft and AOL "who have very sophisticated media players," AccuStream's Palumbo said.

AOL, in particular, has been charging full speed ahead with video. In January, the Time Warner division bought video search engine Truveo and just this month acquired Lightningcast, an online-advertising company that specializes in the placement of streaming video and audio content.

Google hopes that AOL--with whom it inked a multiyear search and marketing partnership late last year in exchange for an investment--will send some of its advertisers over to Google's video ad service, Google's Rajaram said.

Microsoft, meanwhile, said in April that it would buy Massive, a company that inserts ads in video games.

Google is moving beyond online ads, whether static or video. The company began experimenting last summer with print ads and with newspaper ads earlier this year. Google also announced plans in January to buy DMarc Broadcasting, which sells radio ads.

And it probably won't stop there.

"Google has made early forays into print and radio (with limited success)," a Merrill Lynch research note said. "However, we expect further innovation (targeting on traditional advertising mediums can improve) and we envision long-term opportunities for Google to develop partnerships to deliver targeted video advertising for on-demand TV viewing."

On the same day that Yahoo & eBay announced their PayPal and Yahoo Search Marketing oriented partnership, Google registered the domain GoogleCheckout.com, according to ZDNet’s Garett Rogers. Like any other Google domain registrations which make it to the top of the search engine blogs on a slow Memorial Day weekend, this domain registration is surrounded by mystery.

Garrett French (with an extra ‘r’) or Market Smart Interactive lends his detective work:

Is this more of a PayPal thing or a shopping cart add-on that will sync with Google Analytics?

date Yahoo + eBay went live: 2005-06-25
date DNStinations registered domain for Google: 2005-06-26

And back with Garett Rogers:

I think it will be a shopping cart system to help websites accept payment for their items online. The money site owners make will be deposited into a holding account at Google — just like AdSense works.

Isn’t this starting to sound a lot like PayPal? Who knows, they could even offer a Google branded Mastercard “debit card” like PayPal’s ATM/Debit Card — after all, the domain googlemastercard.com is registered to Google too.

If this is indeed what they are planning, it would make sense for Google Checkout to tie into Google Analytics so website owners can easily track with certainty how their AdWords campaign is directly affecting sales — right through the checkout process.

Rumors have been flying for years that Google would build a payment system which would be an alternative to PayPal, something they are testing with their Google Video Store and Google Base. Expansion into the webmaster cooridor would make perfect sense as a wrapped package with Analytics, AdWords, AdSense, Pages or Blogger (imagine the ability to launch a business blog with direct sales powered by Blogger/Google Checkout).

One aspect of the Yahoo eBay partnership which I feel is being overlooked is what the integration of PayPal means to the Yahoo Publisher Network. Under one umbrella, Yahoo may soon offer YPN Ads, Development Tools, Publisher Yahoo Maps & Y!Q, and Yahoo Stores powered by PayPal all under one roof. PayPal is the preferred online payment system among many online shoppers and site owners already, expanding to Yahoo’s Small Business and Yahoo Publisher Network is only going to build strength to both YPN & Paypal.

My opinion is that if Google does not introduce a checkout or payment system now, it might be too late. Not only would a Google Checkout ecommerce cart & payment system give publishers more reason to use Google Analytics, but Yahoo just might sweep the publisher rug directly from under Google’s feet with its own hosting. analytics, integrated PayPal payment systems, and a more relevant and publisher friendly contextual advertising system - which is something that Google cannot afford.

Microsoft reached development milestones for its three flagship products last week, releasing test versions of Windows Vista, Windows Longhorn server, and Office 2007. But a few big questions are unanswered, including whether the company can deliver those products when promised and just how it will use more than $2 billion in new spending.

The answers are important as Microsoft enters a new fiscal year, starting July 1. Last month, the company disclosed it would spend $2.4 billion more than previously revealed in fiscal 2007 and lowered its earnings forecast for the upcoming year, which pushed the price of its shares lower. In a memo to employees, CEO Steve Ballmer said Microsoft is spending more on marketing, manufacturing, hiring, and "investing heavily in our services strategy." CTO Ray Ozzie has said Microsoft could spend billions of dollars building data centers to support Internet-delivered software. Otherwise, however, company officials have been mum on details.

Microsoft's To--Do List 1. Tell the world how it will spend an additional $2.4 billion 2. Provide details on its software-as-a-service strategy 3. Lay out plans for big data centers to support software services 4. Deliver Vista in January 2007 (or delay it again) 5. Keep selling software and talking it up

That could change soon. Ballmer is scheduled to speak this week at an investors conference in New York sponsored by Sanford C. Bernstein & Co., then again at Microsoft's annual meeting with financial analysts in late July. "Steve may have something up his sleeve," says Jim Allchin, co-president of Microsoft's platforms and services division. "There's more that needs to be explained."

Whether Vista will make it to market in January--Microsoft's target date after numerous delays--remains to be seen. Market research company Gartner recently warned the next version of the desktop operating system may not arrive until March. Ballmer, speaking in Tokyo last week, gave an inch: He said Vista could arrive preloaded on new PCs in January--or February. The next version of Windows Server, code-named Longhorn, is scheduled for release in the second half of next year.

Barry Crume, director of Advanced Micro Devices' partnership with Microsoft, doesn't see the launch of Vista as an inflection point for increased PC sales. "The hardware pickup on the consumer side happened last November," he says. Business demand for new machines will depend more on how compelling PC makers' new products are.

No Standing Still
Microsoft hopes to make desktop computing more compelling. During a speech at the company's Windows Hardware Engineering Conference last week, Bill Gates said Microsoft is changing Windows' boot-up routine, Internet software stack, and wireless technologies to improve performance. Vista also includes a new method of retrieving more data from RAM instead of disk, speeding up applications and reducing power consumption. "The PC is in no way standing still," Microsoft's chairman said.

Hardware and software companies need to "give performance back to the user" by making communications among PC components more efficient and designing software that takes advantage of new chips, Gates said.

The Windows interface also is changing. The beta 2 version of Vista includes new features such as Windows Meeting Space, which lets laptop and tablet users quickly share files over peer-to-peer networks, and Search Folders that can kick off saved search queries when they're opened (see story, "Windows Vista Beta 2 Features Great Search, Improved Security, Hardware Snags").

Gates has a new reason to get it right. Rival Google last week struck a three-year deal with Dell to include Google's desktop search software on millions of new PCs and make Google's home page the starting point for Web browsing on those machines.

The New York Post created some buzz among those who didn't cut out of town early this (U.S.) holiday weekend by reporting Friday that Microsoft, for several weeks, has been discussing the possible acquisition of online auction site eBay.

The Post cites multiple unnamed sources in its story claiming that Microsoft has considered buying eBay and merging it with its MSN portal in an effort to better take on Google.

"Sources indicate that the talks, while still active, have cooled somewhat in the last two weeks as executives considered antitrust issues," the story says, adding that it's unclear what impact news that Yahoo and eBay have joined forces will have on the talks.

Blog community response:

"It's a bold idea, certainly, one that illustrates Microsoft's seriousness about making MSN more than an also-ran. But eBay doesn't need a portal draped on top of it, especially the third-ranked portal, and owning eBay won't save MSN. The entity would have a fighting chance as a stand-alone company, but Microsoft seems determined to keep strangling its Internet division by keeping all its businesses all under the same roof...The most complementary assets Microsoft would gain in such a merger would be PayPal and Skype. Alas, unless the company intends to spin-off eBay's marketplace business, this seems an awfully expensive way to get them."
--Internet Outsider

"Great! Now everything will be properly integrated in an auction-enabled VoIP Desktop Operating System with built in advertising. Maybe Linux can buy Gizmo now."
--Webtown--Jan in Malaysia

European jet maker Airbus is taking an unprecedented step to expand cockpit automation: onboard computers that will automatically maneuver jetliners to avoid midair collisions, without any pilot input.

Known for its pioneering use of computers and software to push the automation envelope, this time Airbus has decided to cross a new threshold in replacing pilot decisions with computer commands. For the first time, flight crews of Airbus planes will be instructed and trained to rely on autopilots in most cases to escape an impending crash with another airborne aircraft. Currently, all commercial pilots are required to instantly disconnect the autopilot when they get an alert of such an emergency, and manually put their plane into a climb or descent to avoid the other aircraft.

The change, which hasn't been announced yet, comes after lengthy internal Airbus debates and despite skepticism from pilot groups and even some aircraft-equipment suppliers.

In spite of significant pilot opposition, the proposed shift sets the stage for broader use of computerized safety systems down the road to protect commercial planes, business jets and other aircraft from other hazards, including flying into natural or man-made obstacles.

Airbus, a unit of European Aeronautic Defence & Space Co. and BAE Systems PLC, plans to start installing the computerized systems on its A380 superjumbo jets perhaps as soon as next year, pending regulatory approvals. It intends to gradually install them on all other Airbus aircraft, including retrofits for older models.

The proposed systems will ensure that all aircraft "respond correctly and quickly" to alerts with "less stress on the pilot [and] less potential for injury" to passengers, said Bill Bozin, a top Airbus safety official. He said some pilots now overreact to such cockpit alerts, making extreme maneuvers that can throw passengers around, and in congested airspace even end up putting the aircraft on a collision course with still other nearby planes. In rare circumstances, pilots would retain the option of turning off the autopilot and responding on their own.

The average passenger probably won't notice any difference in an emergency, but the concept already is prompting a fair bit of controversy in aviation circles. Larry Newman, a top safety official with the Air Line Pilots Association, said his group is wary because "this tends to lead to getting the pilot further and further away from the process" of responding to emergencies.

The design approach used by Airbus -- essentially trusting computers to react faster and more predictably than humans to midair alerts and then revert to normal flight -- is in stark contrast to Boeing Co.'s approach of relying on pilot judgment in all emergencies. Before Airbus publicly talked about its decision, Scott Pelton, Boeing's chief engineer for electronic systems on jetliners, said Boeing would remain "aligned with our fundamental philosophy," which "believes the captain is in charge."

A lawsuit filed Wednesday accuses the Motion Picture Association of America of hiring a hacker to steal information from a company that the MPAA has accused of helping copyright violators.

The lawsuit (click for PDF), filed in U.S. District Court for the Central District of California by Torrentspy.com parent Valence Media, doesn't identify the man the company says was approached by an MPAA executive. But the suit calls the man a former associate of one of the plaintiffs and alleges that he was asked to retrieve private information on Torrentspy.com, a search engine that directs people to download links.

Torrentspy's complaint includes claims that the man whom the MPAA allegedly paid $15,000 to steal e-mail correspondence and trade secrets has admitted his role in the plot and is cooperating with the company.

"It is a Hollywood drama, what happened here," Ira Rothken, Torrentspy's attorney, said in a telephone interview Wednesday evening.

The allegations come three months after the MPAA filed suit against Torrentspy and other directories for allegedly making it easier for pirates to distribute movies over the Internet.

"These claims (by Torrentspy) are false," Kori Bernards, the MPAA's vice president of corporate communications, said in an e-mail to CNET News.com. "Torrentspy is trying to obscure the facts to hide the fact that they are facilitating thievery. We are confident that our lawsuit against them will be successful because the law is on our side."

The suit filed by the MPAA was a departure from the organization's previous strategy of going after Web sites that were directly involved in aiding file sharing. By suing Torrentspy, as well as such companies as IsoHunt, BTHub.com, and TorrentBox.com, MPAA was declaring that it saw little difference between the file-swapping networks that the studios have aggressively taken to court and those companies that direct people to works that may be protected by copyright.

One MPAA executive is quoted in Torrentspy's lawsuit as saying: "We don't care how you get it," referring to the alleged assignment to dig up information on Torrentspy.

Some of the information that the man allegedly pilfered included a spreadsheet containing Torrentspy income and expenses from January to June 2005, copies of private e-mails between Torrentspy employees, detailed information on the company's servers, and billing information, according to the lawsuit.

Torrentspy alleges in the suit that the man, whom the company refers to as the "informant," has provided documents that prove the nature of his relationship with the MPAA, including a written agreement signed by the hacker and an MPAA executive, Rothken said.

"We have very significant proof of wrongdoing and the MPAA's involvement," Rothken said. "We think it's ironic for the MPAA to claim that they are protecting the rights of the movie studios and then go out and pirate other people's property."

Rothken said that the MPAA also paid the hacker to "gather nonpublic information" about other Torrentspy-related sites. Rothken declined to specify which sites.

Following all this, the "informant" had a change of heart and contacted Torrentspy.

"By doing that, he's mitigating the harm that he did," Rothken said. "He is also allowing us to get a remedy against the MPAA and to help us stop them from using the stolen data."

Torrentspy has asked the court for unspecified damages and a jury trial.

European Union lawmakers are investigating a proposed tax on e-mails and mobile phone text messages as a way to fund the 25-member bloc in the future.

A European Parliament working group is reviewing the idea, tabled by Alain Lamassoure, a prominent French MEP and member of the center-right European People's Party, the assembly's largest group.

Lamassoure, a member of Jacques Chirac's UMP party, is proposing to add a tax of about 1.5 cents on text or SMS messages and a 0.00001 cent levy on every e-mail sent.

"This is peanuts, but given the billions of transactions every day, this could still raise an immense income," he said.

Currently the EU budget is funded through a combination of import duties, value added tax revenues and direct contributions from member states--the so-called "Gross National Income resource," which is calculated according to wealth.

However, following a yearlong battle over the current seven-year budget, agreed on last December, it was decided that the way in which the EU is funded should be changed, with new proposals expected by 2008/2009.

A single "EU tax" has found support among many of the 25 EU governments, MEP's and the European Commission, the EU's executive arm. Other ideas include a tax on airline tickets and an extra levy on oil companies.

In Italy, the concept of a tax on texting was floated in the past, as a way to help offset the country's huge deficit, though it was flatly rejected by the outgoing government.

But Lamassoure argues that with billions of e-mails and texts sent around the world, it's a novel and simple way to raise funds from new technology.

"Exchanges between countries have ballooned, so everyone would understand that the money to finance the EU should come from the benefits engendered by the EU," he said.

Applying traditional First Amendment protections to the exploding universe of online journalism, a state appeals court on Friday rejected Apple Computer's bid to unearth the identities of individuals who leaked inside information on a new company product to bloggers.

In a 69-page ruling, the San Jose-based 6th District Court of Appeal broke new ground by concluding that bloggers and Web masters enjoy the same protections against divulging confidential sources as established media organizations. Civil liberties groups and journalism organizations have argued that online journalists need to protect the confidentiality of sources just as much as traditional media, such as the New York Times and CNN.

Journalists covet the ability to protect the identity of sources as a key to gathering news. The appeals court's firm endorsement of journalistic shields for online media sets up what could be a crucial First Amendment showdown in the California Supreme Court if Apple continues to press its case.

Apple triggered the closely watched case two years ago when the company went to court to pry loose the identities of individuals who leaked internal company documents on a new product called ``Asteroid'' to three Web pages devoted to Apple-related news. Among other things, the plans for Asteroid, including an exact drawing of the yet-to-be released digital music device, were posted on a Web site called PowerPage, operated by Pennsylvania blogger Jason O'Grady.

Apple has argued that it is entitled to the identities of the bloggers' sources in order to protect its trade secrets and punish anybody who stole and distributed them. A Santa Clara County judge sided with Apple last year, but the appeals court overturned that decision Friday.

The 6th District, in a unanimous three-justice ruling, rejected Apple's argument that bloggers are not covered by California and federal laws protecting the confidentiality of journalists' sources and should not be afforded the same protections as traditional news organizations.

``We decline the implicit invitation to embroil ourselves in questions of what constitutes `legitimate journalism,' '' Justice Conrad Rushing wrote for the court. ``The shield law is intended to protect the gathering and dissemination of news, and that is what petitioners did here. We can think of no workable test or principle that would distinguish `legitimate' from `illegitimate' news.''

``Any attempt by the courts to draw such a distinction would imperil a fundamental purpose of the First Amendment,'' the justices added.

Apple lawyers referred questions to company spokesman Steve Dowling, who did not return phone calls seeking comment. Apple has repeatedly described the case as an important test of a company's ability to protect its trade secrets.

Civil liberties groups and other online media advocates lauded the court decision, saying it marked a legal breakthrough for the eclectic blend of new media operators devoted solely to the Web. The Electronic Frontier Foundation, which represented O'Grady in the case, called the ruling a ``huge win'' for online journalists.

Various legal blogs also supported the decision. Eugene Volokh, a University of California-Los Angeles law professor who runs a popular law blog, said the court ``got this absolutely right.''

``This means that if a journalist receives information from a source, it doesn't matter if they publish that on a Web site or in a newspaper or they are talking about it on the radio,'' added Lauren Gelman, assistant director of Stanford Law School's Center for Internet and Society.

Apple was backed in the case by a coalition of high-tech companies that warned there is no journalistic privilege when it comes to concealing corporate theft. And Apple, which investigated several dozen employees for the leak, has contended that the case is about theft, not the First Amendment.

Superior Court Judge James Kleinberg, who ruled in Apple's favor last year, agreed with that position, concluding that Apple had a right to find out who stole and leaked the information on Asteroid, a device designed to work with Apple's GarageBand music software.

The appeals court, however, found that Apple failed to thoroughly pursue other options before going after the bloggers' sources. The 6th District also ruled that a 20-year-old federal law designed to protect the privacy of electronic communications prohibits Apple from going through Internet service providers to obtain the bloggers' sources.

The appeals court also refused to accept Apple's argument that information related to the Asteroid product was not newsworthy and should not fall under the scope of laws protecting a journalist's confidential sources.

In a lawsuit filed in the U.S. District Court for the Central District of California, Valence and its owners have filed their own suit claiming that the MPAA, which represents the interests of the U.S. film industry, paid a known hacker to infiltrate the company's IT systems looking for potential evidence.

If brought to court, the suit will represent one of the most high-profile accusations of industrial espionage carried out via the use of paid hackers ever heard in the U.S. legal system.

According to the suit, filed specifically in the names of Valence executives Justin Bunnell, Forrest Parker and Wes Parker, contends that the MPAA "willfully and intentionally" purchased, procured, used and disclosed private information that it unlawfully obtained via a break into the company's computing systems.

The filing further claims that the MPAA paid its hacker $15,000 to steal e-mails and screen prints from Valence's servers, including client bills and the documents related to the firm's technology infrastructure.

MPAA representatives didn't immediately return calls seeking comment on the suit, for which Valence is seeking unspecified damages.

In February 2006, TorrentSpy was included in a lawsuit filed by the MPAA against companies providing links to the controversial BitTorrent file-sharing site. The MPAA claimed that TorrentSpy and other similar sites were guilty of facilitating copyright infringement by providing direct links into BitTorrent's hosted content.

In 2005, the U.S. Supreme Court ordered BitTorrent to block protected content from reaching its service as a result of an MPAA suit, and the company has since remade itself as a law-abiding venture.

In May 2006 the firm made the ultimate leap, signing a major distribution deal with Warner Brothers, one of the MPAA's largest members.

Named in the suit is Dean Garfield, the MPAA's director of legal affairs, who is accused of organizing the deal with the unnamed hacker and specifically telling the individual that when it came to getting Valence's information, "We don't care how you get it."

The lawsuit maintains that the involved person had gained previous knowledge of Valence's systems via a prior business arrangement.

It is widely held that the employment of hackers for the purpose of stealing industry trade secrets has long been a problem in the United States, but few cases have made it all the way to prosecution.

In one case decided earlier in May, the Los Angeles federal District Court sentenced a hacker to nearly five years in prison for loading a malicious program onto an estimated 400,000 computers, including some systems controlled by the U.S. Department of Defense, for the purpose of selling access to those machines to others.

Recently there seem to be a new category of cellphones emerging - Sport phones. First there was Nokia 5500 Sport, then a week later Sony Ericsson 710 Walkman sport phone. These mobile handsets have built in pedometer and specially programmed functions to monitor your activities, built-in GPS to measure your jogging distance, integrated text to voice capabilities so you don’t need to look at your phone to read SMS you just received and other cool functions.

It looks like Apple is thinking along the same lines with the development of the iPod music player. We have already described Apple’s Audio Navigation Patent for iPod, (filed Nov 24, 2004) that lets you access your music library following voice commands in the menu. As one of the possible applications, the patent specifically mentioned exercising. Now another patent form Apple (filed on Nov. 24, 2004) became public that describes “Music synchronization arrangement” for portable music player:

the invention pertains to a computing device that is capable of controlling the speed of the music so as to affect the mood and behavior of the user during an activity such as exercise. By way of example, the speed of the music can be controlled to match the pace of the activity (synching the speed of the music to the activity of the user) or alternatively it can be controlled to drive the pace of the activity (increasing or decreasing the speed of the music to encourage a greater or lower pace). One aspect of the invention relates to adjusting the tempo (or some other attribute) of the music being outputted from the computing device. By way of example, a songs tempo may be increased or decreased before or during playing. Another aspect of the invention relates to selecting music for outputting based on tempo (or some other attribute). For example, the computing device may only play songs having a particular tempo. Yet another aspect of the invention relates to both selecting music based on tempo and adjusting the tempo of the music.

Basically what it describes is a pre-programmed possibility for your iPod, with built-in accelerometer, to select and play music depending on the kind of exercise your are doing, or even play a faster music to make your run quicker.

Apple surely knows that very often people use iPods during their exercising. And now we have two patents, filed on Nov.24 2004 (18 months ago) showing Apple’s keen interest to enhance usefulness of iPods during exercising sessions. Then there is Apple-Nike partnership, that Business Week says was initiated by Apple 18 months ago.

IRobot Chief Executive Colin Angle said one group of soldiers even named its robot “Scooby Doo” and grieved when it was blown up after completing 35 successful missions defusing improvised explosive devices.

“Please fix Scooby Doo because he saved my life,” a soldier told repair technicians, according to Angle’s account at last week’s Future in Review technology conference.

The company, which is best known for Roomba, the robotic vacuum cleaner, and Scooba, the floor-mopping robot, envisions a machine that would instill similar feelings in civilians.

Someday, Angle believes, these robots — which he calls ”physical avatars” — will help care for children and the elderly, giving parents and caregivers greater peace of mind as well as relief from mundane tasks.

But iRobot got its start as a military contractor, and its future also looks firmly wedded to the armed services.

Military contracts continue
The company was formed in 1990 and completed its initial public offering last November.

“There were no venture capitalists interested in funding robotics 15 years ago,” said Neena Buck, a Strategic Analytics vice president who specializes in emerging technologies. ”IRobot was funded by a lot military contracts and research grants that allowed them to do parallel research on consumer projects.”

Scooby Doo was one of about 300 PackBot Tactical Mobile Robots deployed in Iraq and Afghanistan to open doors in urban combat, lay fiber-optic cable, defuse bombs and perform other hazardous duties previously done by humans alone.

In March, iRobot won a $26 million U.S. Navy contract to provide an additional 213 PackBots for bomb-defusing duty, bringing the total value of Navy orders of its robots to more than $43 million.

The company has won another contract to supply its next-generation robots to the U.S. Army’s Future Combat Systems. IRobot is working with Boston University on a sniper detection robot that could sense where a bullet came from.

The Boeing Co., with employee-owned Science Applications International Inc., is the primary contractor for the $125 billion future combat program that will use advanced communications to link troops with a family of 18 manned and unmanned air and ground vehicles.

Civilian robots
IRobot has sold about 2 million Roombas, the company announced on Monday. It doubled its first-quarter revenue to $38.2 million from a year earlier.

But investors have punished the stock, driving its price to about $21 from the mid-$30s in recent months as the company failed to turn a profit due to a near tripling of marketing costs.

“I think they are in the early innings of this market opportunity,” said Jonathan Dorsheimer, director of research at capital management firm Canaccord Adams.

IRobot will use the defense market to develop technology that it can then use as the basis for lower-cost consumer applications, he said. For example, he suggested the company might develop a robotic lawn mower in this fashion.

And then there’s the avatar. Angle said a human being would remotely control this futuristic robot, which would be capable of carrying out complex tasks such as cooking meals and ensuring people take the prescribed dosages of medicines.

“The physical avatar has a screen, sound, and the ability to manipulate objects,” he said. “It provides a physical presence in a remote location.”

An iRobot partner has already produced an avatar that Angle says allows doctors to complete hospital rounds remotely. Angle’s goal is to make the commercial-grade avatar, which he says costs in the tens of thousands of dollars, cheap enough for consumers.

Leaner, meaner robots
While he does not know when these types of machines will be available in typical households, Angle is more immediately focused on the robots in Iraq, which are going out on 600 to 700 missions a day. IRobot employees who have been in Iraq have returned with ideas to improve weight, battery operation and other product requirements.

Angle did not hesitate when asked if he thinks the bond soldiers have formed with his robots is normal.

“I think it’s very rational,” he said. “(Scooby Doo) was someone, something, that was doing a great service for them and thus when they brought it back, it was viewed not just as a loss of a machine gun or a piece of body armor or a helmet. It was a loss of a contributing member of the team.”

Tips For Creating Strong Passwords You Can Remember

For the curious hacker who has somehow gained access to your computer system this is the equivalent of locking your door and leaving the key under the doormat. Without even resorting to any specialized tools a hacker can discover your basic personal information- name, children’s names, birthdates, pets names, etc. and try all of those out as potential passwords.

To create a secure password that is easy for you to remember, follow these simple steps:

1. Do not use personal information. You should never use personal information as a part of your password. It is very easy for someone to guess things like your last name, pet's name, child's birth date and other similar details.
2. Do not use real words. There are tools available to help attackers guess your password. With today's computing power, it doesn't take long to try every word in the dictionary and find your password, so it is best if you do not use real words for your password.
3. Mix different character types. You can make a password much more secure by mixing different types of characters. Use some uppercase letters along with lowercase letters, numbers and even special characters such as '&' or '%'.
4. Use a passphrase. Rather than trying to remember a password created using various character types which is also not a word from the dictionary, you can use a passphrase. Think up a sentence or a line from a song or poem that you like and create a password using the first letter from each word.

   For example, rather than just having a password like 'yr$1Hes', you could take a sentence such as "I like to read the About.com Internet / Network Security web site" and convert it to a password like 'il2rtA!nsws". By substituting the number '2' for the word 'to' and using an exclamation point in place of the 'i' for 'Internet', you can use a variety of character types and create a secure password that is hard to crack, but much easier for you to remember.

5. Use a password management tool. Another way to store and remember passwords securely is to use some sort of password management tool. These tools maintain a list of usernames and passwords in encrypted form. Some will even automatically fill in the username and password information on sites and applications.

Using the tips above will help you create passwords that are more secure, but you should still also follow the following tips:

• Use different passwords. You should usea different username and password for each login or application you are trying to protect. That way if one gets compromised the others are still safe. Another approach which is less secure, but provides a fair tradeoff between security and convenience, is to use one username and password for sites and applications that don't need the extra security, but use unique usernames and more secure passwords on sites such as your bank or credit card companies.
• Change your passwords. You should change your password at least every 30 to 60 days. You should also not re-use a password for at least a year.
• Enforce stronger passwords: Rather than relying on every user of the computer to understand and follow the instructions above, you can configure Microsot Windows password policies so that Windows will not accept passwords that don't meet the minimum requirements.

This document shows the approximate amount of time required for a computer or a cluster of computers to guess various passwords. The figures shown are approximate and are the maximum time required to guess each password using a simple brute force "key-search" attack, it may (and probably will) be possible to guess correctly without trying all the combinations shown using other methods of attack or by having a "lucky guess".
See the bottom of the page for details about the classes of attack.

10 Characters

Just numbers. As you can see choosing a password from such a small range of characters is a bad idea.

26 Characters

The full alphabet, either upper or lower case (not both in this case).

36 Characters

The full alphabet, either upper or lower case (not both in this case) plus numbers.

52 Characters

This time we're trying the full alphabet but using a mixture of upper and lower case letters, that effectively doubles the number of combinations when compared with just using a single case.

62 Characters

Mixed upper and lower case alphabetic characters plus numbers.

96 Characters

Mixed upper and lower case alphabet plus numbers and common symbols.

Examples

These are just a couple of examples to show the resilience of certain types of password, using the information in the tables above you will be able to make your own examples.

Classes of Attack

These are just some example speeds, I'd be interested to hear from people with more information about the speed taken to crack various types of passwords with various hardware.

A. 10,000 Passwords/sec
Typical for recovery of Microsoft Office passwords on a Pentium 100

B. 100,000 Passwords/sec
Typical for recovery of Windows Password Cache (.PWL Files) passwords on a Pentium 100

C. 1,000,000 Passwords/sec
Typical for recovery of ZIP or ARJ passwords on a Pentium 100

D. 10,000,000 Passwords/sec

Fast PC, Dual Processor PC.

E. 100,000,000 Passwords/sec

Workstation, or multiple PC's working together.

F. 1,000,000,000 Passwords/sec
Typical for medium to large scale distributed computing, Supercomputers.

Distributed.net's Project Bovine RC5-64 possibly the fastest computer on earth has recently reached a speed of 76.1 Billion passwords per second!