Published in September 9th, 2007
This article was written by Mark Clayton.
Environmentalists may have gained a powerful new legal weapon to fight global warming: the Endangered Species Act.
That’s the fallout some expect from a settlement last week between environmentalists and the National Marine Fisheries Service. The government agency agreed to protect the “critical habitat” of elkhorn and staghorn coral, the first species to be recognized as threatened by global warming.
By protecting habitat, not just species, the federal government could be in a position to fight any threats to that habitat, including possibly, global warming, some environmentalists say. While no one expects the U.S. to stop, say, a coal-fired power plant in the Midwest to save Florida coral, the settlement does expand the leverage of the 1973 law that protects species from extinction.
“We think this victory on coral critical habitat actually moves the entire Endangered Species Act [ESA] onto a firm legal foundation for challenging global-warming pollution,” says Kieran Suckling, policy director of the Center for Biological Diversity, an environmental group based in Tucson, Ariz., that filed both coral suits.
Indeed, the coral-protection victory may be just the beginning of a push to use the ESA to fight global warming, he and other environmentalists suggest.
The pair of coral species are struggling to survive because Florida’s and the Caribbean’s waters have become warmer and more acidic. Many scientists attribute the change to global warming.
Protected Coral Gets Habitat Safeguards The elkhorn and staghorn coral won protected status under the ESA in May 2006. But it took a second legal battle to win a preservation of the corals’ “critical habitat,” part of last week’s settlement between environmentalists and the U.S. fisheries service.
The act’s leverage will grow, environmentalists say, as climate change becomes recognized as a factor in species’ decline. The number of species-recovery plans that cite global warming as a damaging factor has gone from zero as recently as 1990 to 141 today - with most of the growth since 2000.
While that’s still just 9 percent of the 1,494 species listed at one time or another, the increase suggests that a large group of species still awaiting listing will have global warming cited as a major cause in their decline. The polar bear, 12 species of penguins, and the Kittlitz’s Murrelet, an Alaskan bird that nests on the edges of glaciers, are all candidates, Suckling says.
Specific Effects Of Warming Speculative Right now, any bid to fight the construction of a power plant by arguing that emissions might harm a species would probably be thrown out of court, because such climate-change effects remain speculative, Suckling concedes.
But in the next few years, if evidence of the threat of global warming on endangered species grows, so could the legal argument that the ESA be considered when a power plant or other carbon-intensive project is proposed, he adds.
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Published in September 9th, 2007
SAN FRANCISCO - Narin Leininger knows about the risks of talking on a cell phone or sending text messages while driving. The 16-year-old high school junior says he’d only use his phone behind the wheel in an emergency — a flat tire, traffic jam or crash.
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But if he ever decided to whip out his phone to chat or text with a friend while steering, he wondered, could anyone stop him?
“There’s no way a cop could see if you’re texting under the steering wheel,” said Leininger, a student at San Francisco’s Lowell High School.
Still, California and at least 11 other states are considering bills banning teens from using electronic equipment while driving, according to the American Automobile Association. At least 15 states and the District of Columbia have passed bans.
Supporters say teen-specific regulations — which generally amend existing laws that apply to everyone, or add provisions to graduated licensing laws for young motorists — reduce driver distraction and save lives. Opponents say they’re another example of government meddling into citizens’ private behavior — and teaching students proper driving skills is a parent’s duty, not the state’s.
California’s bill could land on Gov. Arnold Schwarzenegger’s desk this week. Schwarzenegger, whose daughter turned 16 and began driving last year, hasn’t indicated whether he’d sign it.
The legislation, introduced by California Sen. Joe Simitian, would take effect next July. It would ban 16- and 17-year-olds from using any electronic device while driving — cell phones, text messaging devices, laptop computers, pagers, walkie-talkies and handheld computers, even those with “hands-free” features. (Last year, Schwarzenegger signed a bill that prohibits all drivers from holding a cell phone while driving. The measure, which takes effect in July 2008, allows hands-free devices.)
Violators of the proposed teen bill would get a $20 fine for the first offense and a $50 fine for subsequent offenses, but they wouldn’t get points on their records.
“I introduced this bill for one simple reason — it will save lives,” said Simitian, a Palo Alto Democrat.
There’s been little scientific research directly linking texting and car accidents, but anecdotal evidence — and common sense — suggest it’s too distracting.
Last month, police in suburban Phoenix blamed a teen’s text-messaging habit for a head-on crash that killed two people. Ashley D. Miller, 18, wasn’t wearing a seat belt and was texting on her cell phone while driving in Peoria, Ariz., when her Ford pickup crossed a lane and smashed into a Chrysler PT Cruiser, killing 40-year-old driver Stacey A. Stubbs.
In June, a head-on wreck in New York’s Finger Lakes region killed five teenagers who graduated from high school five days earlier. Although police didn’t conclusively link texting with the deaths, the crash happened only moments after the 17-year-old driver had sent and received text messages.
The accident — in which the teen’s SUV swerved into oncoming traffic, hit a tractor-trailer and burst into flames — prompted New York State Sen. Carl Marcellino to introduce a bill banning writing, sending or reading text messages while driving.
“You need two thumbs to use these devices. How do you hold the wheel? You have to take your eyes off the road to see the screen or see the letters. It’s terribly dangerous,” the Republican from Syosset told legislators in Albany.
According to a 2001 report by the National Highway Traffic Safety Administration, 16-year-old drivers have a crash rate three times higher than that of 17-year-olds, five times greater than 18-year-olds and almost 10 times greater than drivers ages 30-59.
“Bottom line, this law will most likely save lives — not just teenagers but anyone on the road,” said Dave Melton, director of transportation technical consulting services for the Hopkinton, Mass.-based Liberty Mutual Research Institute for Safety. “Frankly it would behoove all of us to do away with distractions that interfere with decisions we make while driving.”
But last month in Sacramento, Sen. Tom McClintock portrayed the legislation as an attempt to regulate behavior. His 17-year-old daughter recently missed curfew after a play rehearsal, and McClintock and his wife were happy they could call her.
“It’s midnight, she’s not home,” said McClintock, a Republican from Thousand Oaks. “We were able to reach her on the cell phone. She was on her way home. She was fine.”
Stephen Wallace, chairman and chief executive of Boston-based Students Against Destructive Decisions, agreed parents should set the rules. He urged adults to talk to kids about safe driving — and parents should be good examples and put down the phone when they’re at the wheel.
But family discipline doesn’t mitigate the need for laws, he said.
“Any regulation in place has merits as a way to reinforce a message that they should receive at home,” Wallace said. “The more places they get this message the more they’re likely to respond.”
Many teens agree.
Minna Shmidt, 16, got her license in July and never talks or sends messages on her cell phone when she’s at the wheel — a lesson impressed upon her by her dad, a retired driver’s education teacher.
“I’m a beginning driver — the slightest noise makes me nervous and distracted,” said Shmidt, a Lowell High junior with braids and braces. “If you’re thinking about your friends and what they’re saying, you’re not paying attention to the road conditions.”
Published in September 9th, 2007
AOL LLC's venerable site, given an extreme Web 2.0 makeover 15 months ago and transformed into a spiffy social news site, will revert to being a traditional portal again.
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In an official blog posting Thursday, a Netscape official explained that feedback from Netscape.com visitors prompted AOL's decision to scrap the site's redesign.
In short, people want the site to offer a more traditional Web portal experience, with news items chosen by Netscape.com editors instead of visitors, a prominent search engine box and links to AOL and Netscape services and content channels.
At press time, Netscape.com still retained the format it moved to in June of last year to compete with the likes of Web 2.0 social news upstarts like .
However, those interested in checking out how Netscape.com will look like soon can see its forthcoming format at an alternate address.
Proving that everything old is new again, the new format looks a lot like Netscape.com before its social news metamorphosis.
After Netscape.com adopts its new/old portal format, AOL will move the social news site to another, as of yet undetermined, Web address, according to the blog posting.
The decision is not surprising. Jason Calacanis, the blogging entrepreneur who masterminded Netscape.com's transformation into a social news site, left AOL in November, shortly after Jonathan Miller was replaced as AOL's CEO. Miller had overseen AOL's acquisition of Calacanis' Weblogs Inc. in October 2005 and become a Calacanis mentor at AOL.
Then in June of this year, AOL relaunched its AOL News site with a raft of social news capabilities, such as the ability for people to vote on, rank and share links to articles, photos and video clips, as well as comment on them, duplicating many of Netscape.com's features.
Interestingly, AOL News apparently relies on the Netscape.com social news site for its section on stories submitted by readers. It's unclear if or how the transformation of Netscape.com will affect AOL News' user-submitted stories section.
AOL didn't immediately reply to a request for comment.
Published in September 9th, 2007
María Amelia López, 95, blogs about the world she sees during the summer from Muxía, Spain, where she was born, and from Galicia the rest of the year. (Lalo R. Villar for the IHT)
MUXÍA, Spain: Her readers call her “the little granny,” and for eight months she has engrossed them with her ruminations on the present and her recollections of the past. Since her debut in cyberspace in December, María Amelia López, 95, has drawn thousands of readers from across the globe with an incisive blog.
This Internet journal (amis95.blogspot.com) is a meandering chronicle of old age sprinkled with vivid reminiscence and her take on contemporary life, from fashion and workers' rights to Basque terrorism and Iran's nuclear pretensions. Since her grandson, Daniel, 35, set it up as a birthday present in December, López's blog has received 350,000 hits and drawn responses and, increasingly, media attention from as far afield as Chile, Venezuela, Russia and Japan.
“It's a whole new universe,” said López, an elegant woman with high, arched brows and a keen stare. She dictates her entries to Daniel. “It's like having a conversation, and those who read what I say become my friends.”
López, who now calls herself the “world's oldest blogger,” discovered the Internet late last year, when she heard a voice coming from a computer - her grandson speaking over the Web to a friend in Mexico.
“I thought, 'What is this thing of the devil?' ” she recalled, speaking in the computer room at the town hall of this quiet town on Spain's northwestern coast.
When her grandson explained, López seized on the Internet as a way of keeping up with the world.
“I told him, 'Between the life that I have led and the life into which you were born, there is an enormous difference. I want to understand your culture. I want to be on top of things,' ” she said.
Daniel set up the blog and showed his grandmother how to use the Internet to read El País, the Spanish newspaper. He prints out biographies and news articles from the Web for her to read, as well as responses to her blog, she said. Nearsighted, she says she tires quickly of reading text on a computer screen.
By turns insightful, amusing and mundane, López's blog reports on the world she sees during the summer from her seaside balcony in Muxía, where she was born, and from the Galician farmhouse where she lives with her grandson the rest of the year.
She blogs sporadically, sometimes once a week, sometimes every day, chronicling her swollen joints, her bouts of dizziness and her trips to the doctor. She charts the progress of the construction work on the apartment building next door in Muxía, lamenting the apparent lack of safety measures and the rudimentary apparatus; she complains about poor broadband penetration in Galicia.
López turns her eye from modern fashion to Prime Minister José Luis Rodríguez Zapatero. In January, she wondered how the girls in church could stay warm with “their little knickers showing and their hips all bare.”
Not that she is against all new fashions, she added. “A miniskirt with a pretty pair of legs - that, I love,” she wrote. “But you really need to have good legs.”
In May, she sent regular updates from her trip to Brazil - her first outside Europe - and posted pictures of herself dancing and wading in the sea.
When ETA, the violent Basque separatist group, formally ended its cease-fire in June, López turned her sympathetic cybergaze toward Zapatero, who had tried to broker peace. “You did what you could,” she wrote in her blog. “And you'll still make it if you can, but it's a very hard thing to do.”
The prime minister is among hundreds who have written to López to commend her vivacity, wish her blog a long life or seek counsel, she said.
“I have kids asking me what career they should follow, but I don't feel qualified to advise them,” she said.
If the Internet has provided López with a new way of connecting to the outside world, it has also provided a path to her country's sometimes painful past. López was 25 when Spain's civil war began in 1936.
In a March blog, López described how she and her family, who supported the republicans fighting General Francisco Franco, were protected early in the civil war by a soldier who happened to be in their village. “I don't know if he saved our lives, but he definitely saved us from a good beating,” she wrote.
A reader from Madrid, Joaquín Polo, read her account and wrote to tell her that he believes the soldier was his uncle, Luis. López then realized that she knew Polo's parents and marveled at the coincidence. “The Internet opens paths and opens up the past,” she wrote.
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Published in September 9th, 2007
BRUSSELS: Nine years after it began, Microsoft's legal battle with Europe's competition regulator will reach a climax next week with a ruling as eagerly awaited as almost any in European legal history.
But anyone planning to witness this moment of drama next Monday had better be punctual. Scheduled for 9:30 a.m. in the Grand Salle of the European Court of First Instance, which is based in Luxembourg and can hold about 200 people, the event will be over in a matter of minutes.
Dressed in his formal blue robes, one of the court's two senior judges will read major passages of the judgment, boiling down more than a year of legal deliberations by the court into one or two pages.
But the brevity of these proceedings should not disguise their importance: That the commercial strategy of the world's largest software company, which is based in Redmond, Washington, can be decided by 13 judges sitting in Luxembourg underlines the growing power of the European Commission as a regulator and the executive arm of the European Union.
The battle with Microsoft is the European Union's highest-profile antitrust case, one that, more than any other, defines its stance on competition issues and its willingness to challenge the world's biggest companies. Both sides agree that the regulator's credibility is on the line.
Erich Andersen, vice president and associate general counsel for Microsoft in Europe, called it a “significant judgment” because it will shed light on two questions.
“Firstly, under what circumstances can market-leading companies improve their products for consumers?” he said. “And secondly, what rights do market-leading companies have to benefit from their own breakthroughs and inventions?”
The answers, Andersen said, will effect companies far beyond the technology sector and will set precedents that “will rule the behavior of market leaders across Europe for many years to come.”
Thomas Vinje, a partner at the law firm Clifford Chance and part of the legal team representing the European Committee for Interoperable Systems, a coalition that includes Microsoft opponents like IBM, called the case the “granddaddy of them all.” He said the case would be “a truth test of the viability of antitrust policy in the technology sector,” where standards, knowledge and relationships between competitors and collaborators are constantly in flux.
Dennis Oswell, managing partner at the law firm of Oswell & Vahida in Brussels, said, “What is on trial is the wisdom of trying to regulate an industry which, by and large, moves so quickly.”
The importance of the case is underlined by the preparations being made for an unprecedented battle of spin when the judgment is finally made public.
The stakes are high because perceptions count and, were the commission to be perceived as the loser, Microsoft's critics fear that the regulator's willingness to gamble on such high-profile cases in the future might be shaken.
According to several accounts of the plans, Brad Smith, Microsoft's senior vice president, general counsel and corporate secretary, will be in Luxembourg for the court's brief statement, as will representatives of Microsoft's opponents and about 100 journalists.
But most of the media circus afterward will be in Brussels, where Smith will travel by helicopter after his initial statement. The commission itself will hold a news conference around midday in Brussels, fronted probably by the competition commissioner, Neelie Kroes. Soon after, Smith is expected to address the news media.
The parties will have to think on their feet, because none will get advance information. Leaking is almost unknown at the court in Luxembourg, where officials are bound by an oath of secrecy, which they take on starting their job.
By the time it is read out in court, perhaps as few as 30 people will know what the ruling says, including the 13 judges who heard the case, according to various private estimates. Broad agreement on the ruling has almost certainly been set since July 17, when the court said it would make the announcement Sept. 17.
Those in the know include two translators who are producing an English version of the ruling, which will have been drafted in French, and the court's press team, which will have compiled a media release to be issued at the same time as the judgment.
All of the information is expected to be released on the Internet within minutes.
Though Microsoft has been at the heart of European Commission antitrust litigation since 1998, this specific case - the company's appeal of a €497.2 million, or $684.4 million, fine and three other legal issues in the case - first came to this court in the summer of 2004. A five-day hearing before the panel of judges took place in April 2006.
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Published in September 9th, 2007
MOSCOW: Targets of a handful of raids in recent months say the Russian authorities are using an innovative way to crack down on critics: Accuse them of using pirated software.
Activists say the allegations are examples of selective justice, given that software piracy is everywhere in Russia. The International Intellectual Property Alliance, a coalition of seven industry groups, estimated last month that piracy rates in Russia ranged from 65 percent to 80 percent of all software in use.
The nongovernmental organizations wonder if the ongoing raids, including two last month in Nizhny Novgorod, are not mere coincidence. “There have been at least 10 such cases,” said Vladimir Pribylovsky, head of Panorama, a research center that tracks political groups.
The Nizhny Novgorod police denied that the crackdown had any political motive.
The police have searched more than 100 businesses and other organizations this year for unlicensed software, including a bread factory that was raided the same week as the local edition of Novaya Gazeta, an outspoken opposition newspaper, said Alexei Gorbatov, a police spokesman.
“There are three or four such raids per week,” he said. “It's standard practice.”
In fact, the United States and other governments have accused Russia of being too lax in protecting intellectual property rights, a basic principle of membership in the World Trade Organization, a status that Russia has long sought.
Still, in late August, the high-technology crimes unit of the Nizhny Novgorod police raided the offices of two nongovernmental organizations, the Tolerance Support Foundation and the Nizhny Novgorod Human Rights Society, as well as Novaya Gazeta. Saying they were searching for unlicensed computer programs, the police confiscated four computers from the Tolerance Support Foundation, crippling the organization's work, and six computers from Novaya Gazeta, preventing the newspaper from publishing its next issue.
“Our work has stopped because of the confiscation of the computers,” said Oksana Chelisheva, head of the city's branch of the Tolerance Support Foundation, which seeks to improve relations among ethnic groups.
Similar raids took place in Samara in May, when the police seized computers from the offices of the local edition of Novaya Gazeta and an organization that was helping orchestrate an anti-Kremlin street protest.
That same month, the police in Tula confiscated a computer from the Popular Democratic Union, the political movement that supports the presidential candidacy of a former prime minister, Mikhail Kasyanov.
Police said the Tula and Samara raids were justified because the computers had unlicensed software installed on them.
“This may not be a very nice aspect of Russian life,” said Zakhar Prilepin, editor of the Nizhny Novgorod edition of Novaya Gazeta. “But in Russia it's perfectly clear that up to 90 percent of companies, and practically 99 percent of regional newspapers and medium-sized businesses, and 100 percent of private computers, have some sort of pirated programs on them.”
By law, the authorities can keep the confiscated computers for one month, and then they can extend the period of confiscation for another month.
Prilepin characterized the raid on his newspaper as retaliation for its muckraking journalism and linked its timing to the start of the campaign for seats in the State Duma, the national legislature. The Duma elections are scheduled for Dec 2.
Even for organizations and businesses that do use licensed programs, it can be complex to keep the paperwork that would prove to the police that the software is legal.
In a raid two weeks ago at the Moscow office of the BBDO advertising agency, the police disrupted work for several hours to verify that all the software in the office was licensed. The agency had to obtain documents from its U.S.-based parent company, Omnicom Group, to prove it was not violating the law.
A high-profile piracy case this year involved the headmaster of a village school in the Perm region, Alexander Ponosov, who was put on trial after prosecutors found unlicensed copies of Microsoft Windows on school computers. Ponosov said he did not know the software was pirated, and a judge threw out the case against him in February.
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Published in September 9th, 2007
Marketing executives used to complain, “Half the money I spend on advertising is wasted; I just don't know which half.” The Internet made that joke an anachronism, at least in text-based media, offering advertisers a measurable return on their investments.
But the exposure and effectiveness of ads on broadcast media like television and radio, which still claim more than 50 percent of all ad spending, remain as immeasurable as ever. Marketing executives still don't know which half of their broadcast spending is squandered.
Integrated Media Measurement, a start-up in San Mateo, California, wants to make advertising on broadcast media more efficient. Tom Zito, its chief executive, boasts, “The simple way to think about us is that we're doing for broadcast media what Google did for the Internet.”
That is a grand claim. But Zito, who has worked as a rock critic for The Washington Post and as a staff writer for The New Yorker, has chutzpah to spare and a passion for technology. He started four technology and entertainment companies before he helped found Integrated Media in 2003. This time, he may be onto something bigger.
Integrated Media, also known as IMMI, uses existing technologies to do something new. It recruits teenagers as well as adults up to age 54 to carry a special cellphone at all times for two years. (In exchange, it pays all their cellphone costs.) The phone captures 10 seconds of audio from its surroundings every 30 seconds. Those samples are compressed into small digital files, called fingerprints, and uploaded to the company's servers in California. There, the files are compared with samples of the media being measured, using a technology called acoustic matching.
Thus, IMMI can measure the number of participants who have heard an advertisement not only on television and radio, but also on digital video recorders, game players, cellphones, DVDs and CDs. The technology also works at films, concerts or sporting events.
That goes far beyond the measurements provided by Nielsen Media Research, which has long dominated the broadcast industries. Nielsen tracks viewing habits of households rather than individuals, and has struggled to accurately measure the exposure of people to ads across different media. And it cannot really tell whether an ad encouraged someone to see a movie, TV show or event, or make a purchase.
But IMMI can, its founders say. It tracks not only whether participants responded to a promotion to view or listen to other media, but also whether they made retail purchases after viewing or hearing an ad.
“We use something called a Bluetooth beacon, which our clients can install in stores,” said Al Alcorn, a co-founder of IMMI and its chief technical officer. “We can know when an IMMI panelist goes into a store, and we can see what, if any, advertisements they were exposed to” before that.
Steve Jurvetson, a venture capitalist at the firm Draper Fisher Jurvetson, was the primary investor in IMMI. “It's one of those rare ideas that just smacks you in the forehead,” he said. “It's pretty bold: they want to passively monitor everything that someone consumes in terms of media.”
Draper Fisher Jurvetson and another firm, Advanced Technology Ventures, have invested $14 million in IMMI.
IMMI has signed up 10 clients, including NBC and ESPN.
“I don't think that IMMI is the last stop, but frankly, we have nothing better right now,” said Alan Wurtzel, the president for research and media development at NBC.
Jason Pontin is the editor in chief and publisher of Technology Review.
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Published in September 9th, 2007
Round Rock, Texas: On a recent afternoon at his company's headquarters here, Michael S. Dell is seated in a spacious conference room named Dobie Hall — in honor of the University of Texas dormitory where, in 1984, he started the computer giant that bears his name.
He boasts that Dell Inc. has just reported quarterly profits that exceeded Wall Street projections. It's an encouraging sign, he says, that the company — buffeted by high-profile production problems and accounting shenanigans — is finally regaining momentum.
Over the last few years, Dell, once the gold standard among PC makers, has simply overlooked major growth trends in personal computing. It missed significant shifts in notebook computer sales and the consumer market as a whole, lagged competitors in international sales, and lost the profit edge that it enjoyed from its superior procurement-and-supply network. Hewlett-Packard, having overcome its own woes, passed Dell last year as the largest seller of PCs worldwide.
Dell's ills also extend beyond the nuts-and-bolts of making and marketing PCs. After a yearlong internal investigation, Dell conceded last month that some managers had falsified quarterly results to meet sales targets from 2003 to 2006. The company expects to reduce earnings over those years by $50 million to $150 million, tiny sums compared with the billions of dollars in profits it earned during that same period. (Dell posted annual sales of about $57 billion last year.) Yet the accounting disclosures suggest a corporate culture in which at least some senior managers felt under such pressure that they doctored the numbers; the disclosures have prompted a Securities and Exchange Commission investigation.
“The company was too focused on the short term, and the balance of priorities was way too leaning toward things that deliver short-term results — that was the major root cause,” explains Dell, dressed for the Texas summer in a short-sleeved polo shirt and jeans.
The recent setbacks would be humbling for any company, but especially so for Dell, a smooth-running machine for years and a model of the efficiencies that the shrewd use of technology and customer information can produce. Dell was widely admired beyond the technology industry, and it was cited in business-school studies alongside companies like Wal-Mart Stores.
Successful entrepreneurs, of course, are hardwired by inclination and necessity to look beyond immediate hurdles for opportunities, and Dell is no exception. He says he is not leading a simple turnaround, but rather a long-term campaign to transform a company known for a cultlike adherence to a certain way of doing business.
As the company surged to the lead in the PC industry, the “Dell model” relied on direct sales over the Internet and by telephone rather than through retail stores, cutting prices to gain market share, focusing on computer hardware rather than services, leaning heavily on the American market and avoiding acquisitions. But since Dell reclaimed the role of chief executive in late January, he has changed all that.
At internal meetings, he repeatedly emphasizes that the Dell model “is not a religion,” according to staff members. Moreover, Dell — who once ran a company famous for its laserlike devotion to next week rather than next year — no longer champions short-term goals and fixes. “We're moving the needle in terms of getting focused on the right long-term issues,” he says.
But re-engineering the Dell model will be a daunting challenge. “Dell continued to do the same old thing, when it was no longer working,” observes David B. Yoffie, a professor at the Harvard Business School. “This is going to be about changing the way they do business at many levels.”
“Dell can do it,” Yoffie adds, “but it's going to take a lot more innovation on more fronts than the company has shown in the past.”
LAST year was, to borrow a term, the annus horribilis for Dell. Its problems kept building throughout 2006: sluggish growth, disappointing financial results, complaints about customer service, even a high-profile safety recall of notebook computer batteries. Not all of these were the company's fault. For example, Sony made the batteries that could overheat and catch fire, causing other companies like Apple to also issue recalls.
But there was no disputing that Dell had stalled. Wall Street, as well as Dell's own board, had become impatient with the company's management. So a change came quickly early this year, at the end of January. Dell's outside directors voted unanimously that the company needed a single leader instead of having a chairman (Dell) and a separate chief executive (Kevin B. Rollins, who had been C.E.O. since 2004).
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Published in September 9th, 2007
Just before U.S. financial markets were roiled by a global credit squeeze this summer, an equally dramatic financial crisis threatened “Second Life,” the much-hyped online world.
On July 25, the company controlling “Second Life” announced that it would no longer allow gambling. Economic activity was cut by nearly half as gambling halls shut down.
That’s a recipe for disaster in any economy, with job losses and a possible currency collapse, but the online world stayed on an even keel. That’s in part due to the fact that few people make a living there, but also to the firm grip on its currency market by “Second Life’s” equivalent of Ben Bernanke, chairman of the Federal Reserve.
It’s just one example of how economists and virtual worlds are teaming up, to mutual benefit. Outside “Second Life,” a game company just hired its first full-time economist. Another economist, coming from the academic side, believes that just as virtual economies need economists, so economists need virtual economies - to experiment with.
The “Second Life” equivalent of Bernanke is John Zdanowski. He’s the chief financial officer at Linden Lab, the privately held company that runs the world. Using “Second Life” software, he spoke to The Associated Press as an “avatar,” or 3-D representation, in Linden Lab’s virtual headquarters.
Before the gambling crackdown, visitors (or as the company calls them, “residents”) exchanged about 2 million U.S. dollars a day in “Second Life.” That dropped to $1 million shortly after.
Gambling wasn’t quite as important to the world’s economy as those figures indicate, Zdanowski said. “Second Life” is considerably more than an online Las Vegas - it’s a place for socializing, sex games, advertising and other activities enabled by a world where residents can, with sufficient skill, create almost anything they want out of thin air.
Gambling inflated the economic activity because it meant small amounts of money changed hands relatively quickly, often several times a day, like at a poker table.
But the gambling shutdown was still a potential problem for economy, because “Second Life” has its own currency. The Linden dollar is convertible to U.S. dollars at an ostensibly floating exchange rate.
Losing even 10 or 20 percent of its real economy set it up for a currency crisis, as gamblers and gambling hall operators tried to cash in their gains for U.S. dollars and put their money to use elsewhere.
If the exchange rate started to plummet, remaining, non-gambling residents would also feel compelled to trade their virtual dollars for real ones, making the currency nearly worthless. Zimbabwe is currently struggling with that kind of hyperinflation. But in “Second Life,” that’s not what happened.
“The reason it hasn’t hit the exchange rate is that we were exercising one of the controls we have,” Zdanowski said.
Noticing that residents’ behavior is strongly affected by the direction of the exchange rate, Linden Lab has for more than a year put a ceiling to the value of its currency. It’s done that by selling Linden dollars on the currency exchange for around 270 to the U.S. dollar, and that’s where the exchange rate has stayed since then. In a year, the company has made about $5 million on this trade.
Like China, “we basically manage the supply of our currency so that the exchange rate stays fixed against the U.S. dollar,” Zdanowski said.
With visitors taking money out of the world because of the gambling shutdown, Linden Lab simply stopped selling its currency to compensate for the greater supply of Linden dollars for sale on the exchange.
If the supply needs to be reduced further, for instance if the popularity of “Second Life” starts declining, Linden Lab could introduce other measures, Zdanowski said. It could start accepting Linden dollars rather than U.S. dollars for some of the monthly fees it charges “landowners” in the world. That gives the company a very effective, but costly, way to soak up money.
However, Linden Lab doesn’t guarantee the value of the Linden dollar - it could simply decline to spend money to prop up the virtual currency.
Eve Online, an online science-fiction game run by CCP hf of Iceland, has avoided some of the complications of having an online currency by banning its conversion to real money. Yet the company this summer hired its first full-time economist to keep tabs on what goes on inside the game.
“My job will be to disseminate good-quality, consistent information for the player base so they can make their decisions on production and mining and market rates,” said Eyjolfur Gudmundsson, who has a Ph.D. from the University of Rhode Island.
The game has about 200,000 players, who form corporations, organize banks and even defraud one another. Gudmundsson will be looking at whether CCP should facilitate the formation of more complex financial institutions, like banks.
He also hopes to cultivate relationships with real-world academic institutions that want to use Eve Online for their research and teaching.
“One example can be that business students always have to develop a business or strategic plan in their studies. But they very rarely get the opportunity of actually following it through. Within a virtual economy, that would be no problem,” said Gudmundsson.
Ted Castronova, an economist at Indiana University in Bloomington, is working on a related project: a virtual world based on the works of William Shakespeare, to be used as a “sandbox” to try different ideas in economy, sociology and political science.
In contrast to sciences like physics and medicine, where research is based on experiments, “in the social sciences, we have endless argument, with nobody every coming to firm conclusions” about large-scale things like the best way to run a country, said Castronova.
“There’s nothing but fighting about stuff like `how high should the overall income tax rate be for an entire economy?’ No one has done controlled experiments on that question.”
Castronova envisions running two or more copies of “Arden: The World of William Shakespeare” and varying conditions slightly between them to study the differences. For instance, he believes the worlds could be used to study the effect of money supply on interest rates.
“I think virtual worlds make it possible that in the next three or four hundred years we could see advances in social science like we’ve seen in the natural sciences in the past 300 years,” Castronova said.
Funded by a MacArthur Foundation “genius” grant, “Arden” is in its early testing stages. Among its economically focused characters is, of course, Shylock, the Merchant of Venice.
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Published in September 9th, 2007
SAN FRANCISCO - At the center of a black hole there lies a point called a singularity where the laws of physics no longer make sense.
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In a similar way, according to futurists gathered Saturday for a weekend conference, information technology is hurtling toward a point where machines will become smarter than their makers. If that happens, it will alter what it means to be human in ways almost impossible to conceive, they say.
“The Singularity Summit: AI and the Future of Humanity” brought together hundreds of Silicon Valley techies and scientists to imagine a future of self-programming computers and brain implants that would allow humans to think at speeds nearing today’s microprocessors.
Artificial intelligence researchers at the summit warned that now is the time to develop ethical guidelines for ensuring these advances help rather than harm.
“We and our world won’t be us anymore,” Rodney Brooks, a robotics professor at the Massachusetts Institute of Technology, told the audience. When it comes to computers, he said, “who is us and who is them is going to become a different sort of question.”
Eliezer Yudkowsky, co-founder of the Palo Alto-based Singularity Institute for Artificial Intelligence, which organized the summit, researches on the development of so-called “friendly artificial intelligence.” His greatest fear, he said, is that a brilliant inventor creates a self-improving but amoral artificial intelligence that turns hostile.
The first use of the term “singularity” to describe this kind of fundamental technological transformation is credited to Vernor Vinge, a California mathematician and science-fiction author.
High-tech entrepreneur Ray Kurzweil raised the profile of the singularity concept in his 2005 book “The Singularity is Near,” in which he argues that the exponential pace of technological progress makes the emergence of smarter-than-human intelligence the future’s only logical outcome.
Kurzweil, director of the Singularity Institute, is so confident in his predictions of the singularity that he has even set a date: 2029.
Most “singularists” feel they have strong evidence to support their claims, citing the dramatic advances in computing technology that have already occurred over the last 50 years.
In 1965, Intel co-founder Gordon Moore accurately predicted that the number of transistors on a chip should double about every two years. By comparison, according Singularity Institute researchers, the entire evolution of modern humans from primates has resulted in only a threefold increase in brain capacity.
With advances in biotechnology and information technology, they say, there’s no scientific reason that human thinking couldn’t be pushed to speeds up to a million times faster.
Some critics have mocked singularists for their obsession with “techno-salvation” and “techno-holocaust” — or what some wags have called the coming “nerdocalypse.” Their predictions are grounded as much in science fiction as science, the detractors claim, and may never come to pass.
But advocates argue it would be irresponsible to ignore the possibility of dire outcomes.
“Technology is heading here. It will predictably get to the point of making artificial intelligence,” Yudkowsky said. “The mere fact that you cannot predict exactly when it will happen down to the day is no excuse for closing your eyes and refusing to think about it.”
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On the Web:
The Singularity Institute for Artificial Intelligence,