Volume 10, Issue 10        Atari Online News, Etc.       March 7, 2008   
                                                                           
                                                                              
                  Published and Copyright (c) 1999 - 2008
                            All Rights Reserved

                          Atari Online News, Etc.
                           A-ONE Online Magazine
                Dana P. Jacobson, Publisher/Managing Editor
                      Joseph Mirando, Managing Editor
                       Rob Mahlert, Associate Editor


                       Atari Online News, Etc. Staff

                        Dana P. Jacobson  --  Editor
                   Joe Mirando  --  "People Are Talking"
                Michael Burkley  --  "Unabashed Atariophile"
                   Albert Dayes  --  "CC: Classic Chips"
                         Rob Mahlert  --  Web site
                Thomas J. Andrews  --  "Keeper of the Flame"


                           With Contributions by:

                                 Fred Horvat



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                                  =~=~=~=



A-ONE #1010                                                 03/07/07

   ~ Pentagon Bans Google!  ~ People Are Talking!    ~ Wikileaks Returns!
   ~ Samsung's 500GB Drive! ~ eBay's Growing Risks!  ~ Vista Prices Cut!  
   ~ CeBIT Greening Fails!  ~ More FBI Violations!   ~ Porn Spam Charges!
   ~ 'Father of D&D' Dies!  ~ 'Army of Two' Partners ~ IE8 Test Version!    

                  -* ICANN - US 'Pact' Ends in '09 *-
               -* Yahoo Buys Some Time With Microsoft *-
           -* Spammers Get Past Security of Google Gmail *-



                                  =~=~=~=



->From the Editor's Keyboard              "Saying it like it is!"
  """"""""""""""""""""""""""



Yep, another week, another dollar, er issue.  Not much happening this
past week to really generate much writing interest.  Last weekend's snow
has melted, replaced by rain and plenty of mud.  I prefer it this way.
Here's hoping that warmer temperatures are coming, and here to stay for
awhile.  A good sign of that lies in this weekend's Daylight Savings Time.
It's worth losing an hour of sleep to see the sun setting later and later
in the day!

I could rail on about the current state of the political dog and cat
fights going on in the presidential campaign, but what would be the,
point; it's all going to continue anyway.  Gotta love it.  The world will
go on, in its own insane fashion.  If you can't beat 'em with
intelligence, beat 'em into submission with negativity!  It's the American
way!  Probably the worldwide way by now!

So, as we cautiously await the coming of a renewing spring season, enjoy
the simple things in life.  Somehow, that process is invigorating.

Until next time...



                                  =~=~=~=



                             PEOPLE ARE TALKING
                          compiled by Joe Mirando
                             joe@atarinews.org



Hidi ho friends and neighbors. Well, another week has come and gone, and
it's time to check out the UseNet for messages again. We're still
seeing a decrease in the number of messages, but we'll give it a whirl,
okay?

I've been doing some reading this past week on a bunch of subjects...
all of the things that interest me, but that I never used to have the
time to enjoy... politics, physics, MORE politics, etc. [grin]

Well, John McCain cinched the republican nomination this past week (even
though Ron Paul is technically still in the race, and Romney
technically only SUSPENDED his campaign) McCain has enough delegates to
take the nomination), and the democrats Clinton and Obama are still
locked in near-mortal combat for their party's nomination.

Will their campaigns turn nasty... or nastier than they have been? There
are signs of that happening already. It's almost inevitable when you're
talking about a race like this one. Even if these two were having a
secret affair, they would keep on taking shots at each other. Why?
Because it works, that's why. And McCain feels that he can go on about
his business of campaigning while they "duke it out".

Well, that dog ain't gonna hunt either. Clinton and Obama will continue
to grab the headlines while it becomes easier and easier for people to
say, "John who??".

But you watch, boys and girls, once both parties have their nominees
picked and polished up, things will go back to the way they've almost
always been... 

There are going to be plenty of things for both sides to whine about...
the higher-ups have made sure of that from the get-go... C'mon... one
of the most polarizing First Ladies in history, or a one-term senator
who was a teenage cocaine addict, and a war hero POW who's still
willing to countenance torture and the erosion of Civil Rights? How
could you have picked a better bunch of lightning rods as candidates?

Okay, on to one of my other favorite subjects: Astronomy and physics.
NASA said today that it had nailed down the age of the Universe with an
uncertainty of +/-  120 million years. Mark it down on your calenders,
kiddies... the Universe is officially 13.73 billion years old.

Of course, that's assuming that we know everything we need to know about
the Universe in the first place. And THAT'S looking more and more
uncertain as we gather more data on what's known as the PIONEER
Anomaly. To date nine spacecraft have shown discrepancies in their
speeds and trajectories that hint that maybe Newton and Einstein
weren't completely right.... not that they were wrong, mind you, but
that they just didn't have the whole story. To paraphrase a
movie, "just imagine what you'll KNOW tomorrow".

The whole thing reminds me of an article in one of the major news
magazines years ago. They were a general news magazine (I truly do not
remember which one anymore), and they were trying to "smarten up" their
issues to counteract the coverage they were giving to the "Intelligent
Design vs. Evolution" debate, I guess.

Anyway, their cover story was on the Big Bang and the formation of the
forces and dimensions we observe today. That's fine and dandy with me.
But then an editor got involved. Now, anyone who's done any
professional writing knows about editors. By and large, they simply go
around looking for ways to justify their own existence. The major way
they do this is by deciding on headlines.

Well, this particular editor decided to prove his worth by adding this
headline (which appeared on the cover of the magazine): "THE BIG BANG:
What Was It Like The Moment Before Time Began?"

Yep, that's right. Think about it a bit.

Well, now that I've ticked just about everyone off... Republicans,
Democrats, Newtonians, Einsteinians, Progressives, Fundamentalists,
etc... let's bump some electrons together and see if we can make the
UseNet sing, huh?


From the comp.sys.atari.st NewsGroup
====================================


Last week we mentioned Phantomm asking about a graphics display program.
We got several answers, but there are a couple more this week, so we're
going to take another look at the question:

"Years ago I remember a program for the ST/E and or Falcon that allowed
you to view many different pictures/graphic files from different
computer platforms including the Atari 8-bit machines. I think it also
allowed you to convert them to some of the Atari 16 bit
picture/graphics formats as well. I can't recall the name of the
program, and there may have been more than one program that does this.

Anyhow I am looking for a ST/e-Falcon program(s) that allows viewing and
converting of Atari 8-bit picture and graphics files. Also, a program
or two that will allow the playing and converting of Atari 8-bit
sound/music files on a ST/e-Falcon."


Rob Mahlert of Atari-Users.Net tells Phantomm:

"I was thinking of Speed of Light.. but I don't think that does 8 bit."


Our buddy Lonny Pursell tells Rob:

"More than likely it was one of the module based pic viewers like
Gemview or Smurf.  Gemview has quite a lot of import/export modules as
does Smurf. The only other one that comes to mind is DEGAS, since Tom
Hudson had his roots in the 8-bit world before jumping into the ST."


Phantomm replies:

"Someone mentioned LookNSee, which sounds like it.

I'm still searching through my software. Thing is, I have most of it
boxed up so it's taking awhile to find it. I think it came on a Cover
Disk of a magazine or I downloaded it from a BBS.

The program didn't have any fancy graphic displays, it was for the most
part just in Text, and I think you just pressed a key for which ever
option you wanted.

It may have been on a STart or AIM disk, I've not gotten into
those yet."


Jos Vlietstra asks for help finding old copies of Cubase:

"I'm looking for the original software of old Cubase versions 1.0 to 2.5
I have a dongle of Steinberg, which I wanna test for what program it has 
been made. I'm also looking for the original software of PRO24 vers. 2.1
I have the dongle and the manual but I lost the disk."


'Charlie Copp' tells Jos:

"I really liked these programs, they still remain the best there are.

I have the original disks but here is an internet link to where they can
be found: http://atari.music.free.fr/

Nobody seems to express much interest in this area, not as much as the
people used to. Too bad, they don't know what they're missing!!!!!"


Paul Nurminen posts this about his Falcon PowerUp:

"Well, I received the new Falcon PSU from Best Electronics yesterday.
The voltage is stable and up to specs.  However, the Falcon still has
the same issue - sometimes it boots, sometimes it doesn't (mostly, as
of late, it doesn't).

So, I'm guessing the Nemesis is probably to blame, or some other tiny
little problem, short, or bad component on the motherboard?

I certainly can't see any trouble with a visual inspection.  Nothing
looks burned out, everything is seated/connected (including all the
wires and solder joints for the Nemesis. I even went through the
Nemesis documentation step by step, to make sure everything was where
it's supposed to be (it is).

Realistically, I don't have the time, or patience, to remove the
Nemesis, and put everything back the way it was before the upgrade.
I'm not really sure I'd even want to attempt it if I did. I've never
won any soldering awards (hahaha).

Nor am I in a position to send it off to Wizztronics or ATY (if they'd
even take it).  The idea here was to sell something I don't really use
much any more, but to get it into the hands of one of the Atari
faithful.  I'm not sure that's likely now, given the Falcon's current
problem.

So, I'm at a loss.  I now have one very temperamental Falcon, and two
good Falcon power supplies...

Bottom line... if anyone feels like they still want to take this bird
off my hands, and feels they have the technical know-how to fix the
problem, by all means, I'm still open to offers."


Jo Even Skarstein tells Paul:

"I'm afraid that I haven't followed this thread closely so I might ask
some questions that has already been answered.

1. Does the power LED on the keyboard light up when the Falcon doesn't 
boot?

2. Is there any floppy activity?

3. Is the screen always black when this happens?

If (1) and (3) I would guess that there's a problem with the DMA clock 
patch, or the DSP clock. I would start by undoing the Nemesis DMA clock 
patch (IIRC a resistor or capacitor patch near the DMA chip. I can't 
recall the details, I removed the Nemesis from my Falcon in 2001.). If 
that doesn't help, undo the DSP acceleration.

If the power LED doesn't light up or there's floppy activity when this 
happens then there's something else that's wrong."


Paul replies:

"1. Yes, the power LED lights up.

2. No disk reading is attempted, but the floppy activity light
flickers.

3. Yes, the screen is always black.

Other "signs of life" are the fan spins up to speed, and the speaker
lets out a little pop when the Falcon is first powered on, and then
about every 6 seconds or so.

I removed the wire from the Nemesis to the circuit trace that's
near the DMA chip (this is the trace that you scrape away slightly
during the installation so you can solder this wire to it, as well one
leg of the tiny capacitor - who's other leg attaches to one of the
pins of the DMA chip itself.

Both removed.  The only change was that I no longer heard the speaker
pop (not during power up / not every 6 seconds)."


Jo Even continues:

"If you only removed the wire the DMA chip has no clock. During 
installation the clock feed to the DMA chip is cut somewhere, this has
to be restored. Try reinstalling the wire to the DMA, and undo the DSP
acceleration."


Well folks, that's it for this time around. Tune in again next week,
same time, same station, and be ready to listen to what they are saying
when...

PEOPLE ARE TALKING



                                  =~=~=~=



->In This Week's Gaming Section  - "Frontlines" Aims To Break Out!
  """""""""""""""""""""""""""""    'Army of Two', Getting Partners!
                                   'Father of D&D" Dies!
                                   And more!


        
                                  =~=~=~=



->A-ONE's Game Console Industry News   -  The Latest Gaming News!
  """"""""""""""""""""""""""""""""""



              "Frontlines" Aims To Break Out of Shooter Pack


At first blush, THQ's "Frontlines: Fuel of War" seems like just another
entrant in a recent string of military-themed shooter video games. But a
few tricks could set it apart enough to turn it into a sorely needed
success for THQ, which struggled last year with lackluster reviews and
poor sales.

The game is set in 2024, and a "peak oil" energy crisis has sparked a
global war over resources with Russia and China in one corner and the
United States and Europe in the other.

"We started researching it and we were blown away by how real these
theories could be and how dependent our modern society is on that
affordable, cheap oil," David Votypka, the game's design director, said
in an interview.

The single-player portion of the game drops the player in a combat zone
with a constantly updated list of missions. Where many games, like last
year's hit "Call of Duty 4," have players follow a set path, "Frontlines"
chose an "open-world" model.

"Now the question isn't 'What did the designers want me to do here?' but
'What approach makes the most sense here?'," read one review on gaming
news site 1Up.com.

For instance, a player tasked with taking an enemy compound could try to
barge in with a tank, fly remote drones to blow up key fortifications, or
simply mount an infantry assault.

"The combination of organic level design and a broad weapon set allows
for unusually realistic and creative approaches to your mission
objectives," 1Up said.

1Up and other reviewers also complained of ho-hum graphics and visual
glitches, and some felt the open-world model didn't make up for a dull
single-player experience. The game has a middling score of 74 on
Metacritic, which rates video games.

Much of the negativity was due to early glitches in the online play,
which is where "Frontlines" is trying to break new ground with battles
that can include 50 players, far more than other popular Xbox 360
shooters like "Halo 3."

Initially, jerky on-screen movement made the game all but unplayable, but
Votypka said the problems have been fixed.

When running properly, reviewers have marveled at the epic scale and
ability of players to drive off-road vehicles and tanks, and pilot jets
and helicopters. Gamers can also choose specialized roles that give them
have the ability to operate drones, repair vehicles or call in air
strikes.

If that sounds like the PC game "Battlefield 2," that's because THQ hired
a team of developers who worked on that title, which was published by
Electronic Arts in 2005.

"Frontlines" is the first game built from the ground up by what is now
known as Kaos Studios. In a game industry version of rags-to-riches,
Kaos's leaders got their start as amateurs creating a free add-on to
transform EA's World War II shooter "Battlefield 1942" into a modern game
set in the Middle East.

THQ is banking that "Frontlines" is hitting the market at a time when
most gamers are starting to tire of the games they got last holiday
season.

There are signs that THQ could have a modest hit on its hands. Gamefly,
which rents games via mail, said "Frontlines" was its second-most
requested game last week. The game has also hit number four on the UK
sales chart.

THQ Chief Executive Brian Farrell said last month that the company was
counting on "Frontlines" to drive sales this quarter, but that it was
still taking a "conservative approach financially" to the game.

"That being said, we're very, very proud of the quality and how it shines
as a multiplayer game," Farrell said. "We think it has a tremendous hook
- unlike its competition, it's not linear in script, it's very
open-world, so it's a very different game."



                      Get A Partner for 'Army of Two'


It's not flawless, but the buddy system works.

In Electronic Arts' Army of Two, you get an impressive co-op hampered by
erratic intelligence and an underwhelming campaign.

You control Salem and Rios. They're mercenaries reaping the benefits of
a military environment heavily dependent on private contractors. The
pair deploys to locales such as Iraq, Afghanistan and China to complete
covert missions.

Army of Two implements an intuitive system requiring a true team effort
to advance. This may involve hoisting your partner above a platform while
he picks off enemies. When parachuting into hostile territory, one may
steer the chute while the other serves as a sniper.

The directional pad hosts three commands for your partner: advance,
regroup and hold position. Press once for a defensive posture, or twice
for a more aggressive approach. When someone is injured, either character
will drag the other to safety to heal and return to the fight.

A key component to co-op play is the use of Aggro, an aggression meter
measuring which character enemies are most focused on. If you draw all
the attention, your character turns red as you dodge a hail of gunfire.
If it happens to your partner, you turn nearly invisible, allowing you to
secretly flank enemies for easy kills. If the Aggro meter holds long
enough, you'll then enter a brief overkill mode which greatly enhances
your battlefield skills.

Army of Two's arsenal is fantastic. The duo huddles with arms dealers to
accumulate a bevy of primary and secondary firearms. Each can be
modified for maximum damage and accuracy. As you complete objectives, you
earn cash toward upgrading your weapons.

Enemy artificial intelligence is pretty sharp. They flank, utilize cover
effectively and are clever enough to try to flush you out into the open.
Aggro is rather tough to abuse. In sections where I traveled in an
"invisible" state, I made the mistake of entering an opponent's line of
sight and was immediately mowed down.

Too bad your partner's AI isn't as smart. He doesn't necessarily weigh
you down, but he's inconsistent. He was most useful in holding position
and drawing enemy fire while I snuck around systematically picking off
foes. During advance or regroup, he avoided cover and would take heavy
damage. Having a human-controlled partner makes a major difference in the
experience.

Environments are unique and vibrant. Hulking mercenaries looked
incredibly intimidating. The campaign, however, was rather forgettable.
Firefights were intense at times, but every level fizzled out,
especially the final mission. Mid-mission shopping feels cheap and
unrealistic. The arms dealer must have great connections with UPS if he
can get you weapons aboard an aircraft carrier in the middle of a
firefight.

Salvaging the campaign is a solid multiplayer component. The options are
few, but far more satisfying, especially with a human partner. Instead of
focusing solely on kills, your objectives revolve around obtaining the
most money possible. Goals include assassinating enemy targets and
rescuing injured combatants. You must do so, however, against another
twosome as well as hordes of regional foes.

Hidden within Army of Two is a decent shooter co-op fans can embrace. But
no matter how clever the team skills, the game squanders some of its
potential on an average campaign and an AI partner who has you yearning
for a solo adventure.



                 Germans Move to Games Consoles from PCs


German video gamers, long wedded to their personal computers, are
switching to games consoles and mobile devices, pushing German games
software sales up 21 percent to 1.36 billion euros ($2.1 billion) last
year.

The German games software association (BIU) said on Friday sales of games
for consoles such as the Nintendo Wii, Sony PlayStation or Microsoft Xbox
rose 38 percent to 904 million euros in 2007.

By contrast, sales of PC games slipped 3 percent to 458 million euros.

Games for mobile devices were the fastest-growing segment of the market,
with sales rising 65 percent to 360 million euros as more casual gamers
entered the market, the BIU said.



                                  =~=~=~=



->A-ONE Gaming Online       -       Online Users Growl & Purr!
  """""""""""""""""""
 


                  Gary Gygax, 'Father of D&D,' Dies at 69


Gary Gygax, one of the co-creators of the Dungeons & Dragons role-playing
game, died Tuesday morning at his home in Lake Geneva, Wisconsin,
according to Stephen Chenault, CEO of Troll Lord Games.

Gygax designed the original D&D game with Dave Arneson in 1974, and went
on to create the Dangerous Journeys and Lejendary Adventure RPGs, as well
as a number of board games. He also wrote several fantasy novels.

"I don't think I've really grokked it yet," said Mike Mearls, the lead
developer of the upcoming 4th edition of Dungeons and Dragons. "He was
like the cool uncle that every gamer had. He shaped an entire generation
of gamers."

Gygax was not directly involved with Dungeons & Dragons after 1985, and
his relationship with his former company, TSR Inc., was not friendly at
first. The company sued him over his competing game Dangerous Journeys,
and in a 2004 interview with GameSpy he stated that he was "pleased to
say" that he thought the cost of the suit and settlement drove TSR to
sell the rights to the game.

While reportedly unimpressed with the current edition of the Dungeons and
Dragons game, he created adventures and settings that could be used with
it, which were published by Troll Lord Games.

Gygax went well beyond the role of game developer and became an icon to
gamers, appearing as himself in episodes of Futurama and Code Monkeys and
participating in discussions on roleplaying-related message boards.

Gygax had been in poor health for some time, according to his wife Gail.
Chenault says he will publish more information, including funeral
arrangements, on the Troll Lord message board as it becomes available.



                                  =~=~=~=



                           A-ONE's Headline News
                   The Latest in Computer Technology News
                       Compiled by: Dana P. Jacobson



                Wikileaks Returns as Judge Reverses Himself


Wikileaks is back in business. In the face of widespread media attention
and action from rights groups, a federal judge on Friday reversed his
decision to shut down the whistle-blower Web site.

"It is clear that in all but the most exceptional circumstances, an
injunction restricting speech pending final resolution of the
constitutional concerns is impermissible," wrote U.S. District Court Judge
Jeffrey White in San Francisco.

Swiss bank Julius Baer filed a legal complaint and, after an initial
review, White ordered Dynadot, a California Web-hosting company, to
"immediately clear and remove" records from Wikileaks and "prevent the
domain name from resolving to the Wikileaks.org Web site or any other Web
site or server other than a blank page" until he could undertake a closer
review.

Wikileaks.org allowed anonymous posting of documents, including those
disclosing U.S. Army operations at Guant�namo Bay, Cuba; human-rights
abuses in China; and political corruption in Kenya. But when documents
from the Swiss bank showed up, that marked the beginning of a new look at
First Amendment law.

Free-speech and privacy advocates, including the American Civil Liberties
Union, objected to the takedown. The judge's order was largely
ineffective because versions of the site hosted throughout the world
remained online and even the Wikileaks site itself was still available at
its numerical address.

According to Mark G. McCreary, an attorney with Fox Rothschild LLP in
Philadelphia, it appears the judge acknowledged that the injunction went
too far by including the entire Web site, rather than just the
complained-about documents. However, for all the headlines about
Wikileaks' reprieve, he doesn't sees a deeper story.

From McCreary's perspective, the most interesting aspect of the case so
far is how the Internet community responded to the takedown by mirroring
the Web site elsewhere and posting the controversial Swiss bank documents
across the Web. Most people dismissingly comment that the "virtual world"
has no real effect on the real world, he said, but this was a real-world
example of the consequences of actions in the virtual world.

"Whether the effect would be as foreseeable as creating extremely
negative press as a result of overreaching corrective measures - taking
down the entire site versus removing specific documents - or as
unforeseeable as having the financial health of your bank affected as a
result of the negative press," McCreary said, "it is clear that the
Internet community that is concerned with freedom of speech, even if not
specifically Wikileaks.org, was not going to let this aggressive and
scattershot approach stand."

McCreary's point is that businesses too often fail to consider whether the
steps they take to thwart information on the Web will end up putting them
in a worse position than the information itself.

While noting he only has limited information on the Wikileaks case,
McCreary said he saw nothing that put the bank under any duty to have the
leaked information taken down. Instead, he said, the bank is getting
international attention it doesn't want.

"What attention would there have been to these documents if the posting
just remained, untouched, on Wikileaks.org?" McCreary asked. "It makes
you wonder if anyone in the decision-making process in this case asked
that question. What would the story have been if the injunction covered
only the complained-about documents? This occurrence may be yet another
example of pigs getting fat and hogs getting slaughtered."



               Yahoo Buys Time With Microsoft by Board Move


Yahoo Inc extended a deadline to nominate board directors, buying the
company time to pursue alternatives to Microsoft Corp's $41.7 billion
offer, while also giving Yahoo room to negotiate a friendly deal with
Microsoft.

The original March 14 deadline could have catapulted Microsoft and Yahoo
into a formal proxy contest next week. Instead, Yahoo said on Wednesday
the deadline would fall 10 days after it announces the date for its annual
shareholder meeting, which has yet to be scheduled.

Yahoo has explored tie-ups with several other Internet and media
companies that would allow it to retain more independence. Delaying
board nominations reduces the pressure on Microsoft to turn hostile in
its takeover strategy in which it could nominate an alternative slate of
Yahoo directors.

Talks about a deal with Time Warner Inc's AOL unit have accelerated, a
person briefed on the discussions said on Wednesday. News Corp and Yahoo
are still discussing possible options, a source familiar with the talks
said.

A Yahoo spokeswoman declined to comment the board actions beyond its
previous statement that the company and its directors are continuing to
consider all strategic options.

Canaccord Adams analyst Colin Gillis said the move was a delaying tactic
by Yahoo as Chief Executive Jerry Yang looks for an alternative to
Microsoft.

"It's a sign he doesn't really have any viable alternatives. He's trying
to buy more time to dig up other solutions," said Gillis.

Gillis said it would be best for both companies if they could work out a
deal.

"Microsoft has time working against it," he said. "They don't want to
spend six months doing the dance with the (Yahoo) board and 12 months
waiting for a deal to close."

After more than a year of intermittent talks, Yahoo rebuffed an offer that
Microsoft made public on February 1 valuing the company at $31 per share
in cash and stock. Based on current share prices, the deal would value
Yahoo at $27 per share.

Yahoo shares rose 2 percent to $28.62 in early trading on the Nasdaq,
indicating investors still expect Microsoft to sweeten its offer.
Microsoft gained 2.6 percent to $28.31.

Such tactics are common in takeover battles. BEA Systems Inc delayed
nominating directors in December for its annual meeting, setting the stage
for negotiations that led BEA to accept a sweetened $8.5 billion bid by
Oracle in January.

"It's an indication that probably Yahoo is less receptive to Microsoft
than was initially believed," said analyst Jeffrey Lindsay of Sanford C.
Bernstein, referring to the extension.

"It looks as if they've bought themselves several weeks by proposing this
delay," he said. "It's probably the maximum they can do without incurring
a lot more shareholder ill-will."

Yahoo Chief Executive Jerry Yang told employees in a letter that the
extension would still allow Microsoft to nominate directors to its board,
but the main aim was to create some breathing room.

"In light of the current circumstances, this change removes an imminent
deadline," Yang said in the letter, which was filed with the U.S.
Securities and Exchange Commission.

"Microsoft, of course, could still choose to name directors, but our
objective here is to enable our board to continue to explore all of its
strategic alternatives for maximizing value for stockholders without the
distraction of a proxy contest," Yang said.

Yahoo has said the Microsoft offer significantly undervalues its worth,
including a user base of nearly 500 million people, as well as lucrative
overseas holdings. Wall Street had viewed that as an effort to wrest a
higher price from Microsoft.

Microsoft, for its part, has not publicly budged from its original offer.

"We are fully aware of our options," a person close to Microsoft said.

Yahoo has yet to set a date for its annual shareholder meeting, which
took place on June 12 last year and under Delaware laws - where Yahoo is
incorporated - has up to 13 months to hold its next annual meeting.
Companies must notify shareholders of a meeting date 10 to 60 days ahead
of time.



                   Pentagon Bans Google Teams from Bases


The Pentagon has banned Google Earth teams from making detailed
street-level video maps of U.S. military bases.

A message sent to all Defense Department bases and installations around
the country late last week told officials to not allow the popular
mapping Web site from taking panoramic views inside the facilities.

Michael Kucharek, spokesman for U.S. Northern Command, told The
Associated Press on Thursday that the decision was made after crews were
allowed access to at least one base. He said military officials were
concerned that allowing the 360-degree, street-level video could provide
sensitive information to potential adversaries and endanger base
personnel.

His comments came just a few days after published reports suggested that
protesters used Google Earth to help plot their access to the roof of the
Parliament building in London.



              Spammers Get Past Security Into Google's Gmail


When you sign up for an e-mail account at Google's Gmail, you have to
navigate past a CAPTCHA - squiggly words and letters that need to be
typed into a box to prove you're human and not an automated system
looking to send spam. But in the war against spammers, CAPTCHAs are not
holding up well and the latest attacks let spambots into Gmail.

CAPTCHA stands for "Completely Automated Public Turing test to tell
Computers and Humans Apart." Typically image files, the
challenge-and-response system has been fairly successful in preventing
spammers from opening e-mail accounts on popular Web domains like Gmail,
Yahoo and Hotmail. Those accounts are prized by spammers because Web
administrators can't simply blacklist the popular domains.

Spammers have found ways to break CAPTCHAs, according to Stephan
Chenette, manager of Websense Security Labs. "What we're seeing is the
technology on the hacker side has surpassed the simple CAPTCHAs,"
Chenette told us. "In the public domain there are several tools available
right now for everyone to use to break simple CAPTCHAs."

Chenette said organized attackers are using automated tools to sign up
for Gmail and other Web-mail accounts. When the CAPTCHA image appears,
it's automatically sent off to a large and low-paid workforce, typically
in another country, where a worker enters the code and sends it back so
the account can be created.

This type of attack has been used against other Web-mail sites, Chenette
said, but in the attacks on Gmail there's a new wrinkle. "One of the more
interesting things about the Gmail CAPTCHA breaking is that we believe
that this might be happening through an automated process, which is the
next step to breaking CAPTCHAs as opposed to hiring a large workforce to
break them," he said.

In fact, Chenette believes these are two-pronged attacks. The first uses
the offshore workforce, while the second may rely on bot networks, large
sets of compromised computers that work together for attackers. Websense
experts can see how often CAPTCHAs are being broken, and for the Gmail
traffic there's only a 20 percent success rate for one prong of the
attack.

"It would be very odd if a human would fail one out of five times in
understanding what that CAPTCHA was," Chenette said. "From that we
conclude it's possibly a bot network with automated tools involved."

Most of the IP addresses and networks involved in these attacks are from
the United States, Chenette said. But when he visited some of the Web
pages, the text was in Russian, leading Websense to conclude that the
authors - who specify a pay rate of $3 per broken CAPTCHA - are likely
Russian as well. That wouldn't be a surprise. "In malicious activity in
general, the U.S., Russia, China and Brazil are the top offending
countries," he said.

Douglas Merrill, vice president of engineering at Google, told us that the
CAPTCHA attacks are being dealt with quickly and he has no concern that
this is the tip of a larger security issue. "We've disabled the accounts
that were set up as result of CAPTCHA violation. But this does not in any
way weaken the security of our users or our users' Gmail. We have many,
many layers of security, technical and physical, in place at Google to
secure information, and those layers remain strong," he said.

Despite the attacks on Web-mail providers, CAPTCHAs are not dead yet.
Websense's Chenette suggested that making them more difficult will make
it more difficult for humans as well, so he recommended using CAPTCHAs as
one of several steps in authenticating. Newer versions of CAPTCHAs play an
audio file that the user listens to and types, so that may help stave off
malicious attacks for a while.

But only for a while. "We can't underestimate the malicious community,
because they are a hired workforce of very capable programmers, with a
mission of gaining profit," Chenette said. And spam remains a very
profitable business.



                 More FBI Privacy Violations Confirmed


The FBI acknowledged Wednesday it improperly accessed Americans'
telephone records, credit reports and Internet traffic in 2006, the
fourth straight year of privacy abuses resulting from investigations
aimed at tracking terrorists and spies.

The breach occurred before the FBI enacted broad new reforms in March
2007 to prevent future lapses, FBI Director Robert Mueller said. And it
was caused, in part, by banks, telecommunication companies and other
private businesses giving the FBI more personal client data than was
requested.

Testifying at a Senate Judiciary Committee hearing, Mueller raised the
issue of the FBI's controversial use of so-called national security
letters in reference to an upcoming report on the topic by the Justice
Department's inspector general.

An audit by the inspector general last year found the FBI demanded
personal records without official authorization or otherwise collected
more data than allowed in dozens of cases between 2003 and 2005.
Additionally, last year's audit found that the FBI had underreported to
Congress how many national security letters were requested by more than
4,600.

The new audit, which examines use of national security letters issued in
2006, "will identify issues similar to those in the report issued last
March," Mueller told senators. The privacy abuse "predates the reforms we
now have in place," he said.

"We are committed to ensuring that we not only get this right, but
maintain the vital trust of the American people," Mueller said. He
offered no additional details about the upcoming audit.

National security letters, as outlined in the USA Patriot Act, are
administrative subpoenas used in suspected terrorism and espionage cases.
They allow the FBI to require telephone companies, Internet service
providers, banks, credit bureaus and other businesses to produce highly
personal records about their customers or subscribers without a judge's
approval.

Last year's audit by Justice Department Inspector General Glenn A. Fine,
issued March 9, 2007, blamed agent error and shoddy record-keeping for
the bulk of the problems and did not find any indication of criminal
misconduct. Fine's latest report is expected to be released as early as
next week.

Several Justice Department and FBI officials familiar with the upcoming
2006 findings have said privately the new audit will show national
security letters were used incorrectly at a similar rate as during the
previous three years.

The number of national security letters issued by the FBI skyrocketed in
the years after the Patriot Act became law in 2001, according to last
year's report. Fine's annual review is required by Congress, over the
objections of the Bush administration.

In 2005, for example, Fine's office found more than 1,000 violations
within 19,000 FBI requests to obtain 47,000 records. Each letter issued
may contain several requests.

In contrast to the strong concerns expressed by Congress and civil
liberties groups after last year's inspector general's report was issued,
Mueller's disclosure drew no criticism from senators during just over two
hours of testimony Wednesday.

Speaking before the FBI chief, Senate Judiciary Chairman Patrick Leahy,
D-Vt., urged Mueller to be more vigilant in correcting what he called
"widespread illegal and improper use of national security letters."

"Everybody wants to stop terrorists. But we also, though, as Americans,
we believe in our privacy rights and we want those protected," Leahy
said. "There has to be a better chain of command for this. You cannot
just have an FBI agent who decides he'd like to obtain Americans'
records, bank records or anything else and do it just because they want
to."

Following last year's audit, the Justice Department enacted guidelines
that sternly reminded FBI agents to carefully follow the rules governing
national security letters. The new rules caution agents to review all
data before it is transferred into FBI databases to make sure that only
the information specifically requested is used.

Fine's upcoming report also credits the FBI with putting the additional
checks in place to make sure privacy rights aren't violated, according
to a Justice official familiar with its findings.

Critics seized on Mueller's testimony as proof that a judge should sign
off on the national security letters before they are issued.

"The credibility factor shows there needs to be outside oversight," said
former FBI agent Michael German, now a national security adviser for the
American Civil Liberties Union. He also cast doubt on the FBI's reforms.

"There were guidelines before, and there were laws before, and the FBI
violated those laws," German said. "And the idea that new guidelines
would make a difference, I think cuts against rationality."



            Greening of CeBIT Fails To Revive Shrinking IT Fair


Europe's biggest information technology fair went green this year. The
problem was that there weren't many people around to notice.

CeBIT 2008 was a slimmed-down, serious affair, cut back to six days from
seven. Formerly sprawling exhibits were corralled into order by theme and
publicity stunts banished to the weekend that now comes at the end of the
show, not the middle.

The idea was to turn dwindling exhibitor and visitor interest into a
virtue by using the lack of gadgety distractions to create a
business-like arena where managers could get on with meeting, greeting
and checking out the competition.

The result was an atmosphere free of the chaos of previous years but also
devoid of excitement, casting a feeling of desertion over the vast
trade-fair grounds in the northern German city of Hanover.

"We decided to do product launches globally at CES," said Michael
Langbehn, in charge of PR and marketing in Germany for electronics maker
Panasonic (6752.T), referring to the huge annual consumer electronics
show held in January in Las Vegas.

"Then there's IFA, which is a must," he added, meaning the
August/September consumer gadgets fair in Berlin that has drawn
electronics makers and the German public away from CeBIT.

"And then consider the BRIC countries, which also have their own fairs
that are growing."

Like most exhibitors who still elect to come to CeBIT - this year there
are 5,845 of them, 5 percent down from last year - Panasonic is using
CeBIT to explain its less glamorous business-system products to potential
clients.

Talk of "solutions" of all kinds - vertical, digital and security -
abounded at the fair.

Cisco was one of the few to talk about the problems demanding these
solutions as it launched a new Internet router to help cope with a surge
in monthly data sent over the Internet to 29 exabytes by 2011 -
equivalent to 144 times all the world's printed matter.

CeBIT organizers declared the theme of this year's show to be the
environment and built a "green village" to house companies peddling
products to boost corporate energy efficiency and reduce toxic waste.

"CeBIT Goes Green - Big Time" was the main headline of the official CeBIT
News on Wednesday, recognizing that "green IT" is a trend impossible to
ignore as both energy costs and climate-altering carbon emissions soar.

Microsoft Chief Executive Steve Ballmer, by far the highest-profile
speaker at CeBIT, conformed with the trend by announcing a deal with
German energy provider Yello Strom for technology to display electricity
consumption on a home PC.

But most journalists were only interested in quizzing him on Microsoft's
campaign to buy Yahoo in a bid currently valued at $42 billion.

The information and communications industry has overtaken aviation in
terms of carbon emissions believed to cause global warming, accounting
for just over 2 percent of emissions, according to research firm IDC.

The picture is complicated, however, by the hidden environmental cost of
transporting electronic parts around the world to assemble them where
labor is cheap as well as the fact that IT can cut the need for travel
to face-to-face meetings.

Environmental group Greenpeace promised a hard look at the green claims
of electronics manufacturers, driven more by a need to cut costs than a
desire to save the planet.

At a sparsely attended news conference, it singled out products from
Apple, Sony Ericsson and Nokia for praise while cautioning, "It's not
enough just to offer a green computer for the tree-huggers."

Greenpeace's "could do better" verdict on the industry - following a
gadget survey severely limited by manufacturers' willingness to cooperate
- could apply to the new-concept CeBIT as a whole.

CeBIT continues in Hanover until Sunday.



                  ICANN Looks Toward End of U.S. Agreement


The Internet Corporation for Assigned Names and Numbers (ICANN) is
starting to look at how the organization might function after its current
memorandum of understanding with the U.S. Department of Commerce expires
in September 2009.

ICANN, the nonprofit group that manages the Internet domain name system,
has suggested it should become independent of Commerce Department
oversight when the current Joint Project Agreement (JPA) with the agency
expires. The agency's memorandum of understanding with ICANN has been in
place since 1998, but in recent years, representatives of some other
countries have questioned why the U.S. government should have primary
oversight of the organization.

ICANN has made significant improvements in accountability, transparency
and other issues since the Commerce Department renewed the agreement in
September 2006, said Paul Levins, ICANN's executive officer and vice
president of corporate affairs. ICANN's goal after the Commerce
Department agreement ends, he said, is to expand a global governance
model that allows input from a broad range of Internet communities.

"What we're trying to do is ensure that the accountablities that the
organization has now, the responsibilities to all the stakeholders, are
locked in place forever," Levins said Friday. "We want to try to lock in
the existing model over the long term."

Some people have suggested the JPA should remain in place to provide 
accountability. "The fact that ICANN is making progress toward meeting
its responsibilities does not imply that the JPA is no longer needed,"
Thomas Lenard, president and senior fellow at conservative think tank
iGrowthGlobal, wrote in comments about the agreement. "Indeed, it may
demonstrate the value of the JPA. The JPA and the continuing tie to the
Department of Commerce may account for ICANN's good performance."

Questions about ICANN's future have come up during a midterm review of
the Commerce Department agreement. The public was invited to comment on
the agreement and the Department of Commerce's National
Telecommunications and Information Administration hosted a public
hearing on the agreement in late February.

As a nonprofit, ICANN operates with "almost no oversight," Lenard added
in his comments. "ICANN is a unique organization," he wrote. "It is a
nonprofit corporation under California law, but unlike literally any
other nonprofit, ICANN makes decisions of major economic and social
consequence throughout the world."

The Center for Democracy and Technology and TechNet, a trade group
representing tech senior executives, both advocated for a continued
agreement with the Commerce Department.

But the expiration of the U.S. agreement would still leave ICANN with 
accountability, Levins said. ICANN still has a contract with the U.S. to
operate the Internet Assigned Numbers Authority (IANA), and its board
members are elected by several groups. The organization must follow
California law governing nonprofits, Levins said, and in a "next steps"
document, it has proposed a procedure for removing the board if enough
of the nominating groups agree on removal.

Some other people commenting on ICANN's performance have suggested the
organization hasn't made enough progress on its goals under the Commerce
Department agreement. The organization hasn't done enough work on
internationalized domain names "to empower local non-English speaking
communities," wrote Khaled Fattal, chairman and CEO of Live Multilingual
Translator, a company providing online English-to-Arabic translations.
ICANN's inactivity on internationalized domain names has "seriously
damaged potential good faith, trust, and belief in ICANN's competence in
the eyes of the very people ICANN is seeking to appeal to today," Fattal
wrote.

But many of the comments on ICANN during the midterm review were
positive. "It is our opinion that ICANN is living up to its mandate and
that the endeavor of transitioning ICANN into a private sector entity is
taking shape," wrote Anthony Mugambi, chairman of the Kenya Network
Information Centre. "Conclusion of the JPA would, however, provide the
next logical step toward full transition some time in the future."

ICANN's Levins said the organization is paying attention to criticisms.
ICANN "could and should always do more," he said. "Is there even a point
where you can say... security and stability are done?"

But the organization also wants to more toward being more autonomous, as
has been the stated goal of the agreement with the Commerce Department,
he said. ICANN will begin engaging stakeholders about how a transition
should work in the coming months, he said.

"The [Internet] addressing system is so fundamental," he said. "We need
to make sure that can't change and there isn't a point at which any one
entity is able to change that, or can reconfigure that somewhere down
the track."



                     Company Settles Porn Spam Charges


An adult Web site whose affiliates sent pornography-related spam to
unsuspecting recipients will pay US$413,000 to settle a complaint from the
U.S. Federal Trade Commission.

Under the settlement, Cyberheat is prohibited from spam e-mail marketing
and is required to monitor its affiliates to ensure they are complying
with the law, the FTC said.

Cyberheat, in Tucson, Arizona, is the sixth company that has settled FTC
complaints about porn spam since 2005. A complaint against a seventh
company is pending. The six companies that have settled the 2005
complaints have agreed to pay more than $1.6 million in civil penalties.
The FTC had accused  the companies of exposing children and others to
sexual images. The spam e-mail was the equivalent of "electronic
flashing," the FTC said.

The FTC alleged that Cyberheat violated the agency's FTC's Adult Labeling
Rule and the Can-Spam Act, which require commercial e-mailers of sexually
explicit material to use the phrase "sexually explicit" in subject lines.
The rule and law also require that e-mail senders ensure that the
initially viewable area of the e-mail does not contain graphic sexual
images. Cyberheat's affiliate markets also did not provide adequate
opt-out mechanisms in their e-mail and did not provide a postal address
for the company, the FTC said. Can-Spam requires both.

FTC filed the complaint against Cyberheat and the settlement in U.S.
District Court for the District of Arizona.

Cyberheat did not send e-mail directly to consumers, but the company
operated an affiliate marketing program, in which it paid others who sent
spam on the company's behalf, the FTC said. Under Can-Spam, the company is
liable for the illegal spam sent by its affiliates because the defendant
induced them to send it by offering to pay those who successfully
attracted subscriber to its Web sites, the FTC alleged.



               Microsoft Cuts Vista Prices To Urge Upgrades


Microsoft Corp said on Thursday it plans to cut prices of its Windows
Vista operating system sold at retail outlets in a move aimed at pushing
customers to switch to the newest version of Windows.

The world's largest software maker said it plans to lower retail prices
for Vista in 70 countries later this year in tandem with the shipment of
the first major update to Vista, known as Service Pack 1 (SP1).

Packaged versions of Windows Vista sold at stores and on the Web account
for less than 10 percent of all licenses of the dominant Windows
operating system that sits on more than 90 percent of the world's personal
computers.

Most consumers opt to buy a new PC, which comes preloaded with the latest
version of Windows.

"We anticipate these changed will provide greater opportunities ... to
sell more stand-alone copies of Windows," said Brad Brooks, a Microsoft
corporate vice president.

In the United States, Microsoft will reduce prices for Windows Vista
Ultimate, the company's top-end operating system, to $319 from $399 for
the full version and cut the price for an "upgrade" version to $219 from
$259 for consumers who already run Windows XP or another edition of
Vista.

It also cut prices for upgrade versions of Vista Home Premium, its
mainstream product, to $129 from $159. The price cuts vary by country.

In emerging markets, Microsoft will stop selling "upgrade" versions of
Vista, because, for many customers, it will be the first purchase of a
genuine copy of Windows. The company will instead sell Vista Home Premium
and Home Basic, a stripped-down version, at the upgrade prices.

Microsoft has sold more than 100 million licenses of Vista since its
January 2007 release and its adoption has underpinned strong earnings
results at the company in recent quarters.

Nonetheless, some consumers have raised issues with Vista's performance,
stringent hardware requirement and lack of support for other software and
devices like printers. Microsoft said it would continue to sell Windows
XP until June 2008, delaying a scheduled transition to Vista.

Brooks, who oversees consumer marketing of Vista, said he is confident
the company can bring in enough new customers to offset the revenue
declines from lowering prices after seeing the results of a recent
three-month promotional trial of lower Vista prices.

The announcement comes on the heels of sales data that showed a 30 percent
drop in money spent for software at U.S. retailers in January, according
to market research firm NPD.

Microsoft said the announcement is unrelated to the sales data, which the
company said could be a result of inventory build-up after the holiday
shopping season.



                Samsung First To Ship 500GB Laptop Hard Drive


Samsung Electronics is the first hard drive manufacturer to ship a 500GB
2.5-inch drive. Samsung announced its drive was shipping in volume to
OEMs and PC makers today.

The 500GB drive marks a significant milestone in portable storage: On
notebooks that support dual-hard drive configurations, a 500GB drive
means you can have a whopping 1TB of storage in a laptop computer.

Hitachi was the first company to announce a 500GB 2.5-inch hard drive,
before the start of the 2008 International Consumer Electronics Show.
Samsung was the second to announce, also at the show; Fujitsu also
recently announced its intention to offer a 500GB drive.

However, both Hitachi and Fujitsu are taking a different approach to
500GB than Samsung. All three drive makers use three disk platters, but
Hitachi and Fujitsu reach 500GB by expanding the height of the drive from
9.5mm - the common standard for most notebooks - to 12.5mm, a height
that's increasingly accommodated on larger, desktop-replacement laptop
designs, but not necessarily on more general-use laptops.

Samsung's Spinpoint M6 drive spins at 5,400 rpm (revolutions per
minute). Hitachi's drive carries the same rating, but Fujitsu slowed its
drive to 4200 rpm.

Hitachi's drive was supposed to ship in February, but is now expected to
ship later this month. Fujitsu says its drive will ship in May.

Since the Spinpoint M6 fits into the chassis of commercial and multimedia
notebooks, said Andy Higginbotham, director of hard drive sales at
Samsung Semiconductor. Two drives can be combined for 1TB of storage, he
said. Priced at $299, the hard drive is shipping now to OEMs and PC
makers and will be in retail stores later this month. A company
spokeswoman declined to comment on which PC makers will be using the
drive; nor would a spokeswoman say when we might see a notebook using the
drive.

At the Consumer Electronics Show earlier this year, Asus announced the
M70S laptop, which combined two 500GB drives from Hitachi. Samsung also
announced the Spinpoint MP2 hard drive, a 2.5-inch drive with 250GB of
storage. Aimed at desktop replacement notebooks, workstations and blade
servers, it provides quicker read and write speeds than the M6. The hard
drive spins at 7,200 rpm. With the MP2, the company also provides an
optional chip that protects a hard drive from vibrations caused by other
hardware components. The Spinpoint MP2 is priced at $299 and will be
available through retailers. An 80GB version
of the hard drive is also available, according to the company. Both
drives come with a free-fall sensor that OEMs can opt for; the sensor
can park the head and turns the hard drive off in the event of a fall,
protecting the data on it.



           Microsoft Rolls Out Test of New Internet Explorer 8


Microsoft Corp on Wednesday made available a test version of Internet
Explorer 8, the next edition of its Web browser.

At Microsoft's MIX08 online technology conference, Dean Hachamovitch,
general manager of Microsoft's Internet Explorer team, provided a first
glimpse at the successor to IE 7, which was released in October 2006.

Microsoft's Internet Explorer Web browser is the world's most widely-used
Web browser with a greater market share than Apple Inc's Safari or
Mozilla's Firefox. The browser is also part of the ongoing battle between
Microsoft and arch-rival Google Inc.

Firefox is closely affiliated with Google, which provided around 85
percent of the revenue of Firefox's parent organization, the Mozilla
Foundation, which was $66.8 million in 2006, according to filings
published last October.

Google distributes Firefox as its preferred browser software in a number
of its own products. Mozilla continues to receive revenue from Google
under a contract set to expire in November 20, 2008.

Microsoft's presentation was catered heavily toward Web developers, but
Hachamovitch showed some user features of IE 8. One feature allows users
to save work being done on a Web site to the local computer when an
Internet connection goes down.

Another feature lets users highlight an address on a Web site and then
see a map within the Web site with a single click. Users can also
highlight a product name and be able to see if the item is available for
sale on eBay (EBAY.O).

The new browser is available to developers at
http://www.microsoft.com/ie/ie8.

Earlier this week, Microsoft announced the new browser would use the
most-standards-compliant mode by default in rendering Web sites.

That means Web sites will essentially look the same regardless of browser
and developers will not need to do multiple versions of Web sites for
different browsers.

It's a departure from what Microsoft did in IE 7 and seen as a move to
assuage developer, regulatory and legal concerns.

The European Union launched a new antitrust investigation into Microsoft
to probe complaints from Norwegian browser maker Opera Software about
how Microsoft ensures rival Web browsers are not fully compatible with
Internet Explorer.

Critics argue that Internet Explorer is inferior to rival browsers and
Microsoft maintains its lead because Explorer comes standard with the
company's Windows operating system.

Microsoft also said it was making available a test or "beta" version of
its Silverlight 2 multimedia technology. Silverlight 2 is the next
version of Microsoft's competitor to Adobe Systems Inc.'s.



             eBay Sees Growing Risks to Business in Coming Year


Online auction leader eBay Inc warned in an annual report on Friday that
it faces difficulty getting former customers to return, adding to the
normal challenge of attracting new users to its sites.

In its annual shareholder filing with the U.S. Securities and Exchange
Commission, eBay cited a variety of new threats to its business that
reflect "changing customers demands."

EBay acknowledged that its main auction business faces slowing growth in
each of its top three markets.

"We face challenges in the U.S., U.K. and Germany, which are our three
largest markets, as growth of listings, active users and GMV on the
eBay.com platform in those countries has slowed," the company said in the
regulatory filing.

GMV is gross merchandise volume, the total value of goods and services
sold on eBay sites - on which eBay takes a cut in the form of transaction
fees.

Adding to the risks in the coming year is expected weaker consumer
spending in each of these three major markets, it said. At the same time,
overall growth in the e-commerce market is expected to continue to
decelerate, the company cautioned.

Wall Street analysts, on average, expect eBay this year to earn revenue
of $8.7 billion, a rise of 14 percent on 2007.

EBay revenue has suffered a dramatic slowing of growth in recent years -
down from rates of 30 percent to 40 percent.

In a discussion of potential risks to growth and profitability, eBay
added the need to "reactivate former users," adding to the typical Web
business concerns about attracting new users and keeping existing users
active.

The San Jose, California-based company also acknowledged that
significant changes made in January in fees and policies on its
marketplaces have been controversial with many sellers.

"If these changes cause sellers to move their business away from our
sites or otherwise fail to improve gross merchandise volume or the
number of successful listings, our operating results and profitability
will be harmed," eBay said.

The language of eBay's annual report underscores previous warnings the
company has made about slowing growth. In January it reported solid
fourth-quarter results but said it expected 2008 revenue to grow only
12 percent - well below the 18 percent that analysts, on average, had
predicted at the time.

Jeffries & Co analyst Youssef Squali said the pessimistic language eBay
uses to describe its business prospects reflect a growing awareness
that eBay is no longer the only game in town for merchants. Rivals such
as Amazon.com are enjoying surging growth in its merchant business as
eBay slows.

EBay has also been suffering one of its periodic seller revolts in
response to the recent round of price changes.

But Squali said the impact of the latest "sellers' strike" has yet to
be reflected in any dramatic fall-off in auction listings. "The buyers
don't go on strike," he said, but added: "Now sellers are looking for
new options off of eBay."



                                =~=~=~=




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