Weekly Digest
Weekly Digest Issue No. 449
22-01-2009
by Deirdre McArdle
Obama reboots the White House | Tech giants under antitrust microscope | IBM and Apple improve Wall Street's mood | Second Life: a viable alternative to real life? | Year of the netbook: Deloitte
Obama reboots the White House
In keeping with Barack Obama's web-savvy presidential campaign and his clever use of technology, www.whitehouse.gov was re-launched on Tuesday as Obama was being sworn into office. The new-look White House website is slick and includes several interactive features, including the ability to get e-mail updates, and a White House blog. The site's "briefing room" also includes slots for a weekly video address, slide shows, proclamations, and executive orders as well as news about nominations and appointments. In addition, all non-emergency legislation will be published to the website for five days, and the public will be able to review and comment before the President signs it. "Millions of Americans have powered President Obama's journey to the White House, many taking advantage of the internet to play a role in shaping our country's future. WhiteHouse.gov is just the beginning of the new administration's efforts to expand and deepen this online engagement," wrote Macon Phillips, director of new media for the White House, in the site's first blog. And it's not just President Obama's use of the internet to communicate openly with citizens that's exciting Americans. It's also the promise he issued in his inauguration speech to "restore science to its rightful place and wield technology's wonders". While the Bush administration had a tension-filled relationship with scientists, President Obama appears to recognise and understand the vital role science and technology play in future developments. "We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together," vowed President Obama. "We will harness the Sun and the winds and the soil to fuel our cars and run our factories." Sounds like there are some exciting times ahead.
Tech giants under antitrust microscope
Once again Microsoft finds itself in the European Union's black books. The software giant has been accused of stymieing competition in the web browser market by "tying" its Internet Explorer browser to its Windows operating system. This, the executive arm of the EU says, "undermines product innovation and ultimately reduces consumer choice". Microsoft now has eight weeks to reply to a "statement of objections", in which the EU has threatened to impose a fine on the software giant if its preliminary findings were confirmed. Despite the element of surprise with this latest EU objection to Microsoft's practices, this is not unfamiliar territory for the Redmond firm. Microsoft and the EU have been engaged in several antitrust spats over the past several years, the most recent of which saw the US firm being slapped with a record EUR899 million (USD1.35 billion) fine. For its part Microsoft has said it is studying the EU's current ruling and is "committed to conducting our business in full compliance with European law". Another tech giant that's feeling the antitrust heat is IBM, which could find itself battling the EU on antitrust charges brought against it by T3, a Florida-based mainframe manufacturer. The US firm alleges that IBM boxed it out of the mainframe market by making it difficult for customers to install IBM software on T3 mainframe hardware. The complaint, which asks EU regulators to launch an investigation into IBM's practices, would extend a legal battle ongoing in the US between IBM and T3.
IBM and Apple improve Wall Street's mood
Still, IBM's financial results for the fourth quarter of 2008 are likely to give the firm a boost. Though Big Blue's revenues slipped 6 percent to USD27 billion, net income rose 12 percent to USD4.4 billion, or USD3.28 a share, ahead of the USD3.03 a share that had been expected by analysts. To the joy of investors IBM also offered a relatively optimistic forecast for full year 2009, predicting earnings per share of "at least" USD9.20, up from the USD8.93 it predicted in 2008 and above the USD8.80 Wall Street had projected. Following on from that relatively cheery financial announcement, Apple reported a recession-beating set of results. The iPod maker posted net income for the quarter ended 31 December of USD1.61 billion, or USD1.78 per share, up 1.9 percent on the 2007 quarter's USD1.58 billion, or USD1.76 per share. Revenue was also impressive, coming in at a record USD10.17 billion, up 5.8 percent on the same period in 2007. During the quarter Apple sold 22.7 million iPods, up 3 percent year-on-year and far surpassing Wall Street's expectations of a 5 percent to 10 percent decline in shipments. Apple's guidance for its second fiscal quarter also pleasantly surprised analysts and investors: the firm said it expected earnings of USD0.90 to USD1 per share, and revenue of between USD7.6 billion and USD8 billion. Shares in the iPod maker rose 9.1 percent in after-hours trading on Wednesday with the firm's positive guidance serving to assuage investor fears somewhat. Things may get a bit hairy in the coming weeks however, with the news that the US Securities and Exchange Commission (SEC) is reportedly investigating the circumstances around Steve Jobs' announcement that he is taking a medical leave of absence from the firm. According to Bloomberg, the SEC is reviewing the sequence of events around the announcement to make sure investors weren't misled. For its part, Apple hasn't commented on the Bloomberg report.
Second Life: a viable alternative to real life?
In what could be seen as a reflection of the depressing state of the real-world economy, Second Life has revealed that user hours in its virtual world during 2008 grew by 61 percent over 2007. What's more, peak concurrent users -- the number of people visiting their 'second life' at the same time -- was up 31 percent over 2007. Linden Lab, the brains behind Second Life, claims to have just shy of 17 million 'residents', and that over 500,000 of those logged in during the past week. So just what are these people doing in Second Life? Spending money, it seems. Linden Lab said that user-to-user transactions increased 54 percent in 2008 and were valued at USD361 million. Though transactions in Second Life occur in virtual Linden Dollars, the currency itself is bought and sold for US dollars (the exchange rate is currently 262 Linden Dollars per US dollar). Land is one of the key buys for Second Life residents, with land 'owned' by users increasing by 82 percent during 2008 and totalling around 1.76 billion virtual square metres. In response to the huge growth volumes in virtual goods transactions in its virtual world, Linden Lab announced this week that it had acquired two sites -- Xstreet XL and OnRez -- which operate Amanzon.com-type shopping sites for Second Life goods. These goods range from a bouquet of virtual flowers or clothes for your avatar to a beachfront villa. Certainly, it looks like Linden Lab wants to get in on all that money-changing-hands action. Considering that the mighty Google shut down its virtual world, Lively, after a mere five months in operation, it has to be said that Second Life, whose GDP jumped 54 percent in 2008, is proving to be more than just a fad.
Year of the netbook: Deloitte
The majority of analysts and research firms seem to agree on one thing for 2009: this will be the year of the netbook. According to Deloitte's annual Technology, Media and Telecommunications (TMT) predictions, the netbook will be the fastest growing segment in the PC market this year, and may represent as much as 15 percent of all portable PCs sold during the year. It's been a quick rise to fame for the netbook. In 2007 less than 1 million units were sold worldwide, according to research firm DisplaySearch, while Deloitte reports that at the time of writing 8 of the top 10, and 14 of the top 20 mobile PCs for sale on Amazon's US site were netbooks. The growing popularity of the device has seen mobile operators viewing them as a type of large smartphone, and some have begun selling them in conjunction with mobile broadband offers. During 2008, half of all netbook sales in Europe were made by a telecoms operator, according to Deloitte. Mobile broadband is another key area for growth highlighted in Deloitte's report, although the firm warned that operators will need to invest in propping up their networks if the rate of growth remains strong. During 2008 global sales of mobile broadband dongles exceeded 4 million per month, and are expected to double this year. The rising demand will likely put major stress on operators' networks, which could see them having to purchase more spectrum to cope with demand, according to Deloitte. For more on Deloitte's TMT predictions for 2009, visit www.deloitte.co.uk.
Caped Koala Studios has built a virtual world for kids, combining education and social networking 