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Archive: May 1998 News Headlines
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Telstra Pledges Better Rural Access

Telstra and the Federal Government jointly announced yesterday that they intend to provide better rural access to the Net through a new satellite network. The network would allow remote properties to access the Net if they were willing to spend $1,000 for set-up equipment and $50 a month for connection to the system in addition to normal dial-up ISP fees. The announcement comes ahead of the Federal Government's plans for a complete sell-off of the partially privatised carrier and was immediately denounced by the Opposition as a "sop" to try to allay widespread public concerns surrounding the sale. However, National Farmers' Federation president Wendy Craik said the upgrade - scheduled for next year - was a "positive step" for rural Australia. "The real issue is quality and price and these sorts of initiatives help," Dr Craik said.

 

1 In 6 Australians Now On Net

According to the Australian Bureau of Statistics (ABS), the number of Australians using the Net at home has doubled each year for the past two years and more than 3 million Australians used the Internet last year - about one-sixth of the population. The ABS study found that about 1 million Australians accessed the Net from home, 1.3 million accessed it at work and 1.5 million accessed the Net at other places (such as schools, universities or Internet cafes). The study found that the ACT has the highest level of Internet usage with roughly 50% of the adult population accessing the Net during the last year, while South Australia is the country's least "netted" state, with an overall penetration of 16.8% Australian businesses, however, have proven to be much more conservative than the general population. Although Australia now has an estimated 1 million small businesses, less than 40,000 .COM.AU domains have been registered - a take-up rate of around 4%

 

Netscape Restructures, Reports Flat Results

Netscape surprised many observers in the financial industry today by announcing a net income of zero cents per share for the April 30th quarter - much better than the expected figures that had been widely tipped before the accounts were made public. Nonetheless, the company reported an overall loss of $10.1 million for the period which it attributed to a one-off restructuring charge of $12 million, heavy investment in its enterprise software and NetCenter "portal" site, and the lay-off of 300 employees - down from the $7 million profit it had made in the same period in 1997. Netscape reported that total revenues grew to $127.2 million for the 3 month period (compared to $120.5 million a year before) and that total site visitation remained high, with an average of more than 25 million unique visitors every month. Chief executive Jim Barksdale said that the early-year quarter was traditionally flat and the company expected better figures as NetCenter ramped up and new server software made its appearance on the market. While some financial analysts were critical of the company others took a positive view, saying that Netscape had done considerably better than had been expected, given the assault Microsoft has been mounting against it with its Internet Explorer browser - a matter now the subject of the Dpt. of Justice's anti-trust lawsuit. In addition, according to Browserwatch, Netscape appears to be maintaining its market share against Internet Explorer, with more than 52% of all surfers still electing to use its products as their browser of choice.

 

Australian Ecommerce Still In "Early Days"

According to a report commissioned by the Australian federal department of Industry, Science and Tourism, the value of online sales rose by more than 340% in 1997. The report estimates that at least $55 million worth of Australian goods were purchased online last year, a dramatic rise on the estimated $16 million worth of goods sold in 1996, and that the median purchase is now between $70 and $100 (including shipping) spread across more than 500,000 transactions. Furthermore, the anticipated total value of online sales in 1998 is expected to rise by a similar margin. Nonetheless, the report noted that most Australian businesses are still adopting a "wait and see" attitude, with les than 11% having an online presence. The report also found that roughly 80% of businesses currently wired to the Net use it for email and/or online research only. The report also noted that 35% of businesses with an online presence had found it assisted profits, whilst 36% said they felt it was too soon to tell. However, fewer than 20% of respondents had managed to achieve a 10% return on their investment.

 

Optus Buys Microplex

In a surprise move, Optus Communications announced today that it had acquired Microplex Pty Ltd, one of Australia's largest privately-held ISPs. The acquisition will give the company 26,000 dial-up subscribers, access to the retail Internet market, and the potential to provide dial-up access services to large parts of rural Australia through a deal recently inked between Telstra and Microplex for the company to use Telstra's dial-connect frame relay network, giving Microplex access to many areas that Telstra was unwilling to cover with its rival Big Pond network. Last year Microplex acquired several smaller ISPs and pioneered the use of pre-paid internet access cards through retail outlets, claiming to have sold more than 80,000 of them since their introduction. Optus CEO Chris Anderson said that the purchase represented another step in Optus' long-term plan to become a fully integrated communications company able to offer a comprehensive suite of voice, data and IP products to its customers. Microplex will continue to trade under its own brand name for the present time, and several of the company's key executives will join Optus following the buy-out.

 

Newsletter Marketing Works - Study

While unsolicited spam is widely regarded as probably the least effective (and most offensive) form of marketing on the Internet, a recent study by Manhasset seems to indicate that newsletters carry considerably more punch - and that advertisements in newsletters are even more effective. In a recent survey conducted across Information Week Daily's subscriber base, Manhasset found that 44% of text-only newsletter readers take some kind of action after seeing an ad in an email newsletter, and that around 40 percent actually visit the vendor's website. Meanwhile, another study by Cyber Dialogue has disclosed that 82 percent of online shoppers surfing for product information conduct a general product search on a search engine before going to specific product brand name sites (indicating the need for high positioning in engines) and that online shoppers display almost identical needs to conventional shoppers and are highly influenced by offline marketing campaigns. Further - although quality is an important attribute - price is still the number one motivating factor that leads to a purchase. Opinion email forms, site opinion postings and other interaction which allow customers to influence the development of the product site are effective ways to build credibility and customer trust, the study found.

 

ACCC To Join World-Wide Net Scam Blitz

The Australian Competition and Consumer Commission (ACCC) will join forces with counterparts from OECD countries in a series of global "scam raids" designed to weed out fraudulent and deceptive conduct in the rapidly expanding e-commerce sector following the success of a similar raid three months ago. The agencies announced today that will periodically trawl the Net in a "serious, concerted international effort" to try to stamp out con artists and spammers - partly to protect consumers and partly to foster close co-operation agreements between the agencies so that a fraud detected in one jurisdiction can be prosecuted by an agency which has legal coverage of that particular geographic area. Although the multi-national group say they recognise that global regulation of Internet commerce is untenable, the ACCC says that the group hope to introduce an international code of conduct which respectable firms could abide by, and to put pressure on multi-national companies to treat any problems on a global basis The ACCC already has the power to close down Australian web sites if they were found to be engaged in misleading or deceptive conduct.

 

Dpt Of Justice, 20 States Sue Microsoft

The US Department of Justice and 20 US State attorneys-general filed parallel anti-trust lawsuits against Microsoft today in response to the company's decision on Monday to begin shipping Windows98 to computer manufacturers and to break off negotiations with the regulators. The lawsuits allege, amongst many other things, that Microsoft has engaged in a series of anti-competitive practices and used its monopoly power to develop a chokehold on browser software. According to the plaintiffs, their six-month investigation into Microsoft uncovered evidence in the company's own files that Microsoft had embarked on a deliberate campaign to "choke off Netscape's air supply" by welding the Internet Explorer browser into Windows95 and the soon-to-be-released Windows98; by compelling ISPs to sign contracts which prohibited them from distributing or promoting Netscape; and by compelling computer manufacturers to install Explorer as the "browser of choice" on new PCs. Interestingly, several of the documents allegedly unearthed during the investigation show that senior Microsoft executives regarded Internet Explorer as vastly inferior to Netscape's Navigator and Communicator browsers, and that some executives were afraid that the product was so good it would actually pose a real threat to the company's Windows operating system. Microsoft has denied the allegations.

 

Galaxy Pay-TV Collapses

Australis Media - owners of the Galaxy pay-TV channel - will go into liquidation after the NSW Supreme Court ruled yesterday that the company is insolvent and should be wound up. Australis, which had been attempting to raise capital and/or secure a buyer for more than a year, now seems unlikely to survive the next 48 hours, leaving 70,000 subscribers in the cold and creditors out of pocket by more than $600,000. The closure of Australis also reduces the number of Australian pay-TV operators from 3 to 2 (Optus and Foxtel). The court action was bought by Telstra, a partner with News Limited in rival channel Foxtel, to recover an $A30 million investment in senior secured bonds that it alleged were in default, which the court upheld. The liquidation of Australis will also allow Foxtel to bypass a previous contract it had struck with Australis to supply film programming it had secured in deals with Hollywood studios, allowing Foxtel to buy content direct.

 

Microsoft To Ship Win98 On Schedule

Microsoft plans to ship Windows98 to computer manufacturers on Tuesday, Australian time after talks between the company and US government officials over Microsoft's alleged anti-competitive activities broke down over the weekend. Microsoft said that it plans to release Windows98 on June 25th, its scheduled launch date, and that "dire economic consequences" could ensue if its plans were thwarted. Windows98 has been the focal point of an ongoing legal battle Microsoft and US federal and state prosecutors for the last 6 months. US officials cite Microsoft's stated intention to make its Internet Explorer browser an intrinsic part of Windows98 as a key example of anti-competitive behaviours the company has adopted both on and off the Internet designed to severely restrict the window of opportunity for competitors. Industry commentators now believe that the US Department of Justice and a number of US state attorneys-general have few options: either take Microsoft to court in a major anti-trust action, or drop the case and suffer a major loss of face.

 

Victoria "Dangerously" Behind On Y2K

According to a study undertaken by Victoria's Auditor-General, Victorian Government agencies are "dangerously" behind on their Year 2000 compliance programs - and ordinary consumers may become the victims. The report, tabled in State Parliament, was based on a review of seven non-Budget sector Victorian Government agencies (Alfred Hospital, the Victorian Superannuation Board, the Gippsland and Southern Rural Water Authority, Manningham City Council, the State Trustees, the Knox City Council and Kangan Batman TAFE) undertaken to determine their Year 2000 preparedness. The report concludes that none of the agencies is Year 2000 compliant and, as a result, their businesses are at risk. "With the exception of VicSuper and Manningham City Council, entities are either in the early stages of taking the required action or have not yet reached the stage of determining the what work is required to make their key systems and critical non-IT equipment Year 2000 compliant," the report stated, expressing concern that the tight timeframe for addressing millennium bug problems put the completion of Year 2000 programs in most agencies in doubt.

 

Ozemail Acquires 50% Of Powerup

OzEmail announced today that it intends to acquire 50% of PowerUp, the Queensland ISP behind the well-known WebCentral hosting service. According to the company's financial results, which were released at the same time as the announcement, OzEmail's revenues increased by 105 per cent from $10.8m in the first quarter of 1997 to $22m in the first quarter of 1998. However, over the same period OzEmail's net loss rose from $316,000 to $4.3m. OzEmail attributes most of the growth to the acquisition of Access One for $25 million last November, in a deal which was expected to add 40% to revenues all by itself; and most of the losses to its investments in OzEmail Phone and OzEmail Fax. OzEmail will pay approximately $2m for a majority interest in PowerUp in a deal that is still being finalised. PowerUp currently has about 15,000 internet access subscribers, 2,500 web hosting clients and will turn over between $5m and $6m this financial year, according to PowerUp director Lloyd Ernst. Mr Ernst said that OzEmail was seeking to purchase just over 50 per cent of PowerUp, but stressed that the company's operations were to remain separate from OzEmail's with a different pricing structure.

 

Microsoft Faces Legal Storm

Microsoft looks likely to face a storm of legal action over Windows98 as a dozen US State attorneys-general and the Federal Department of Justice - who've been deliberating on action against the software giant for the last 6 months - seem set to file charges before Friday, the product's official OEM shipping date. The case to be brought by the attorneys-general alleges that Microsoft is using anticompetitive practices to maintain its monopoly in operating systems and office-related applications, and attempting to establish new monopolies in Internet software. The allegations are broader than many legal experts have expected and embrace a Microsoft pricing scheme that "wrongfully hampers competition" among office productivity software by making it "economically impractical" for computer makers to offer rival programs. The suit also alleges that Microsoft still uses contractual requirements that prevent online service providers - including America Online - from promoting rival browsers, such as Netscape Communications' Navigator/Communicator lines. Microsoft have denied the allegations, saying they think that a lawsuit "would be bad for consumers and bad for the future of the software industry".

 

Y2K To Be Tax Deductible

The Australian Federal Government has decided to make Year 2000 outlays tax deductible. The decision, announced by Treasurer Peter Costello in tonight's Budget statement, represents a victory for the Australian IT industry against the Taxation Department, which had been trying to have Y2K expenses treated as capital outlays for several months. The Tax Department took the view that Millennium Bug outlays represented repair costs for an asset "known to be defective at the time of purchase". Under current tax laws, this would mean that companies would be forced to capitalise all Y2K costs. However, the Federal Government ultimately sided with the viewpoint espoused by the IT industry and business that the potential costs of not addressing the Y2K issue were far greater than any revenue that might be lost over the next 18 months.

 

Australian Net Growth Slowing

According to Australia's two largest ISPs OzEmail and Telstra BigPond, who both announced today that they now have approximately 180,000 subscribers each, Australian Internet growth has started to show signs of slowing down. Both Telstra and OzEmail said that they believed growth in the core group of 25-to-39 year old males had definitely slowed, but other segments (such as access for younger or retired people) still showed promise. Telstra said that they had identified four reasons why they believe growth has slowed: lack of compelling Internet content, technophobia, high costs and slow connection speeds. Both companies agreed, however, that monthly growth rates this year have returned to double-digit figures after suffering a taper-off during the summer holiday period.

 

Men Access More Pages - Study

A report by Internet Profiles Corp and Media Metrix reveals that in 1997 the average website grew by 130 percent. The report, "The Web in Perspective: A Comprehensive Review of Web Usage", shows that 40 percent of growth in traffic is attributable to the increase in people logging on from home and a further 15 percent is attributable to increased use by veteran users. The remainder is attributed to increased use of the Internet at work and a growing population of Internet users outside the US. Not surprisingly, websites dedicated to marketing and ecommerce were the fastest growing contingent, some showing 500 percent growth in 1997. The study showed that in the US, the number of females online is nearly equal to the amount of males online. However, the study found males access more pages than women (which it noted may perhaps an indication of a shorter attention span). A very interesting revelation is that usage patterns remain almost identical to those of 1996. People are not varying the day of week or time of day they access the net.

 

CD Universe Site Upgraded

CD Universe have upgraded their site. The new version 2.0 CD Universe store has followed the growing trend to eliminate frames. The new-look site features a vastly expanded catalogue of CD albums, CD singles and cassettes - most of which can be delivered from the US to Australia around $8 to $10 cheaper per item than prices currently charged by most retail outlets. CD Universe now stock around 180,000 titles. They also have an extensive list of weekly Top 10 Charts and a free music newsletter, along with thousands of RealAudio sound samples for tracks on most popular albums. They also have an extensive classical music selection and an online video store as well (most videos are in US format). CD Universe recently celebrated their second birthday on the Internet. The company is now the third largest online music store in the world.

 

FTC To Legislate On Net Advertising

The US Federal Trade Commission is examining ways to update to update its advertising rules in order to ensure that US Internet sites selling fake gold, unproven medical "miracles" or other dubious products post disclaimers on their sites that are loud and clear. The FTC today unveiled a proposal to more clearly apply its existing consumer protection guidelines to CD-ROMs, email and the Net, and is allowing public comment on the draft document until July 7th. The FTC proposals are concerned with the online claims that companies make about their products. The changes propose that if product claims made on web sites are proven to be untrue, the FTC could file a civil lawsuit against the owners, just as it currently can against advertisers in traditional media. The US Food and Drug Administration (FDA) is also known to be looking at issuing guidelines to cover drug and medical claims on US web sites. The FDA guidelines are expected to appear by year's end.

 

Tamils Launch E-Terrorism

US intelligence officials have reported what is believed to be the world's first attack by a "terrorist group" on the country's computer systems. According to the report, ethnic Tamil guerillas attempted to swamp Sri Lankan embassies with email during a concerted spamming attack last August, rendering the embassies "electronically impotent" and unable to communicate with the outside world via the Net. Although the incident - in the end - proved no more than an annoyance to Sri Lankan staff, intelligence officials said that the unexpected attack had made them "sit up and take notice" because "new avenues of e-terrorism may be an indication of things to come"

 

ACCC Hits Domain Name Fraud

The Australian Competition and Consumer Commission (ACCC) has filed fraud charges against Internic Software, an Australian company that is the registered operator of "www.internic.com", a site which sold US domains to consumers for up to 3 times the market rate. The ACCC alleges the company collected up to $3 million from consumers worldwide who mistook the site for the official domain registry in the USA at www.internic.net The ACCC was alerted to the site by the US Federal Trade Commission in August last year, but it took the ACCC several months to gather a case against owner Peter Zmijewski, who allegedly duped 12,000 customers into paying between $200 and $250 each for $100 domains, most of which were never registered. The ACCC is now seeking a court order to shut down the site and to collect refunds for consumers.

 

Australian Net Grows 3.8%

The Australian Internet took an upward swing of 3.8% last month after a 10% slide in March, according to our monthly Australian Internet Growth Index (which has been measuring the approximate number of Australian sites on the Internet since January 1996). Gains were posted in all state capitals except Sydney or Melbourne. This may be an aberration caused by the refresh cycle of the search engines we monitor to calculate the AIGI. The May 1st figures (with April 1st figures in brackets) are as follows:

  Australian Internet Growth Index April 1998
  (Figures Show Estimated Live Sites)
  • Brisbane - 2,191 (2,046)
  • Sydney - 8,107 (8,108)
  • Melbourne - 6,155 (6,156)
  • Adelaide - 2,694 (2,515)
  • Perth - 2,191 (2,046)
  • Hobart - 1,100 (1,027)
  • Canberra - 2,694 (2,348)
  • Darwin - 2,191 (2,046)

During April Australian Cybermalls hosted 47,953 visitors, down slightly on 49,274 visitors in March 1998. We displayed more than 300,000 pages of content to our visitors and consumed 7.3 GBytes of bandwidth during the month.

 

 
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