"Obviously, nothing like this can continue forever..." --Gordon Moore, conceding that his 1965 prediction -- computer-chip performance would double every year or two -- will soon have run its course
Last month, Research In Motion (RIMM) (RIM), maker of the ubiquitous BlackBerry, welcomed the chance to pay $450 million to settle a furious legal battle over patents held by NTP, a small patent-holding company. But RIM may soon regret making a deal. On Apr. 6, the U.S. Patent & Trademark Office overturned one of the five patents NTP had accused RIM of infringing and gave a strong indication that it might reject the other four, too.
The agency has been taking a second look at eight NTP patents ever since NTP sued the Waterloo (Ontario) company in December, 2002. So far, patent examiners have rejected three of the patents -- including the one in the RIM case -- held by NTP, based in Arlington, Va.
RIM declined to comment on the patent office decision. It has said the settlement with NTP is "full and final." The matter might be behind RIM, but it certainly isn't over. NTP will surely appeal the patent office rejection, a process that could take years and end up right where it started -- back in court. Regardless of the outcome, NTP will be ahead by at least $450 million.
Is New York Attorney General Eliot Spitzer taking on spyware? In an April 12 Securities & Exchange Commission filing, Intermix Media (MIX), a Los Angeles purveyor of online greeting cards and games, says it received notice Spitzer is considering legal action. The AG's office alleges Intermix "distributed downloads that were installed by users without sufficient notice or consent and in a manner that made it difficult to locate and remove." Intermix says it's cooperating with Spitzer and has been scaling down the part of its business that enables spyware.
The move likely won't halt Spitzer. "There is a real [chance] of an enforcement action," says a person familiar with the investigation. A Spitzer anti-spyware campaign should be applauded by beleaguered PC users increasingly incensed at the number of unwanted pop-up windows unleashed by the stealth software. A study by America Online (TWX) and the National CyberSecurity Alliance estimates that 80% of computers have spyware. What's more, spyware is widely blamed for identity theft since some programs steal data such as passwords.
A source close to Spitzer expects details about legal moves against Intermix to be disclosed by the end of April. Given Spitzer's track record of widening investigations, other alleged spyware companies should probably watch out.
Meetup, the web site best known for launching Howard Dean's brief Presidential candidacy, wants its 2 million members to pay up. Come May 1, organizers of Meetup groups, which form online but meet in the real world, will be charged up to $19 a month to maintain an online presence.
CEO Scott Heiferman hopes the proceeds will help the three-year-old meeting site turn a profit by yearend. But he's also hoping to boost marketing and develop new organizing tools so groups can team up to take political action. Meetup groups of tech writers in India are already banding together and pushing for higher wages.
Heiferman admits he could lose "a lot" of the 54,000 managed groups. Mike Sedita, leader of a bulldog owners' group in New Jersey, says he won't pay. But hey -- it's not 1999 anymore. Even Web sites with a noble mission to restore a sense of community now have to earn their keep.
Mortgage Broker Hires Hit Man; Fugitive Pair on Mortgage Fraud Spree. Tabloid headlines? No, just a couple from MortgageDaily.com. The online newsletter covers mortgage products and the like. But it's the sordid tales that draw readers -- 80,000 a month, twice the Net traffic of rival National Mortgage News. The housing boom clearly has brought more fraud: The IRS says real estate fraud investigations doubled between 2001 and 2003. Not to mention a boom in readership for MortgageDaily.com.
As securities trading has become a more diverse and global pursuit, the portion of U.S. traders who work in New York has plummeted -- to 23.4% in 2004, down from 42.5% in 1973. But a new report from the Securities Industry Assn. suggests that number has finally leveled off, remaining nearly flat for the past three years.
Good news for the city's economy: The securities industry makes up just 4.5% of the local workforce, but it accounts for 19.2% of city income. That's a lot of tax revenue keeping the Big Apple sweet.
Saving IBM (IBM) may look easy compared with Lou Gerstner's latest task: saving America's schools. After retiring in 2002 as chairman and CEO of Big Blue, he founded the Teaching Commission to improve teacher quality. Now, Gerstner, 63, is pushing to give educators a raise -- and link salaries to performance.
Makes sense. However, a poll the commission unveiled on Apr. 6 suggests the difficulties Gerstner faces. True, a surprising 70% of adults support pay hikes -- even if it means higher taxes. But they're unsure about Gerstner's notion of tying pay to test scores. Two-thirds say teachers should get "extra pay" linked to "tests and other indicators." But just 41% thought tests alone should influence pay.
Still, says Gerstner, "every day we subject our kids to unqualified teachers, because we're underpaying them and not attracting the right people into the profession." On that, there seems to be a consensus.
For a tough-minded dealmaker who doesn't take rejection lightly, Barry Diller recalls one of his first big disappointments came as a freshman on the Beverly Hills High School newspaper. He was fired for never showing up by the editor-in-chief, Nora Ephron, now a noted author and film director. Chalk it up to teenage whimsy, because for the past 40 years, the CEO of IAC/InterActiveCorp has shown up plenty -- first making his mark as a top programmer in television, then as a studio chief, and more recently in the fast-paced world of e-commerce. BusinessWeek Managing Editor Mark Morrison spoke with Diller on Apr. 7 as part of the Captains of Industry series at Manhattan's 92nd Street Y. Here are some edited excerpts:
On his former ABC and Paramount colleague Michael Eisner:
I think of Michael as part of my family. This book by Jim Stewart [DisneyWar] is very one-note when it comes to Michael. It doesn't talk about the fact that if you look at what [Walt Disney (DIS)] was and what it became, his is a truly great career. The downslopes -- the ends of careers -- are usually never pretty for anybody.
On Rupert Murdoch:
You referred to me as a risk taker. I'm a Tweety Bird compared with Rupert. He's the only true internationalist in media. Politically we are hardly on the same planet, but I have great respect for him as a businessperson and as a person who engenders great loyalty.
On IAC's buying Ask Jeeves:
We were concerned that our business could be disintermediated by powerful search engines, so we thought defensively about what to do. Look, I would have liked it if we had found [Google (GOOG) founders] Sergey [Brin] and Larry [Page] in kindergarten. But Ask Jeeves today is a better search engine, founded on contextual search, not algorithmic search.
On getting back into the entertainment industry:
All things interactive and digital are going to deeply affect the narrative forms of entertainment. So I would say [Hollywood] is not in my buried history. But if you're asking me: Would I like to run a major motion picture studio? I would rather be a waiter.
For more on Diller go to businessweek.com/mediacenter
Since September 11 the U.S. has frozen the assets of 40 Islamic charities suspected of financing terrorists -- chilling Muslim-American giving and causing many charities to shut down. On Mar. 26, more than 20 Muslim charities created a new group to set guidelines to make their governance and funding more transparent.
U.S. Islamic groups meeting rules set by the National Council of American Muslim Nonprofits can become members. That assures donors their funds go to legit groups. The Council won't "provide safe harbors from legal action," says Juan Carlos Zarate, an Assistant U.S. Treasury Secretary. But it helps address a crisis of trust.