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Archive: June 1998 News Headlines
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Pressure Ramps Up Over Y2K

With 18 months to go before the fateful day, the Australian Federal Government will launch a mainstream radio and TV campaign next month to warn small and medium enterprises (SME) to prepare for the millennium bug. The Government will also establish a special hotline for SME owners to call for Y2K information. The Government has already pledged $9 million to fund the public awareness campaign and organisers hope to solicit a further $18 million from State governments to bolster the awareness effort. According to the program's chief executive Graeme Inchley, it's estimated that if as few as 10% of SME's fall victim to the Y2K problem up to 360,000 Australians would be forced out of work shortly after January 1, 2001. This would instantly push up the national unemployment rate by 5%. In a sign of how entrenched the problem is, a recent survey carried out by the Australian Retailers Association found that fewer than 25% of SME's had taken any Y2K action to date and a further 50% believe that the millennium problem doesn't affect them at all. Meanwhile, the Australian Stock Exchange will tonight put up to 25% of the nation's largest public companies on a "Y2K black list" for failing to respond to its recent demand for information on their Y2K readiness. The black list is meant to serve as a warning to investors.


Academic Cracks SSL Security Standard

Scientists at Bell Labs announced today that they had managed to crack the Public Key Cryptography Standard (PKCS) which underlies most SSL web servers, undermining the security of many Internet merchants who use SSL servers to retail products online. Bell scientist Daniel Bleichenbacher discovered the security flaw by hitting a web server with over 1 million carefully chosen messages, then piecing together the information in the resultant error messages to crack the encryption key. He was quick to stress, however, that in the real world any web site would almost certainly notice such an attack and could take remedial action. Meanwhile, security software company RSA Data Security (which controls the PKCS standard) responded immediately to news of the discovery by saying that the "chosen plaintext attack" used by Bleichenbacher had never been reported on a real-world site, and the company was working with other vendors to quickly produce a simple patch which would prevent hackers from obtaining information about a system's security keys.


NEC To Introduce ADSL In 1999

NEC Australia have announced that they intend to unveil an ADSL broadband access system in Australia next year which provides speeds of up to 8 Mb/sec over ordinary telephone lines and which the company believes could kill off Telstra's ISDN market, the fastest data service currently available over standard telephone lines. NEC's new system will be manufactured in Melbourne and marketed worldwide by NEC Australia and its parent corporation in the first half of 1999. NEC said that the company expects to generate up to $500 million in sales from the new technology over the next 5 years. The ADSL system promises to deliver a download channel of 8 Mb/sec and an upload channel of 1 Mb/sec, making it suitable for video on demand, video-conferencing, music and Internet telephony and pitching the new service head-to-head with cable modems. ADSL modems made by NEC Australia will be available at retail outlets in the first half of next year for an expected price of between $A300 and $A400. The modems would enable users to gain simultaneous access to broadband services and the telephone through a single existing twisted pair connection, and NEC are confident the price and speed differential between the two technologies will kill Telstra's ISDN market almost immediately. Ironically, Telstra have already begun testing the new NEC system after rejecting ADSL technology last year.


Netscape Still The Most Popular Browser

Netscape lost 3.5% of its leading share of the browser market to Microsoft last year, according to a study of web browsers released by International Data Corporation (IDC). The study covered the period up to the end of 1997, and IDC analysts noted that Netscape had taken significant steps to improve its market share this year, including giving away its browser as freeware. The study estimated that Netscape browsers are used by 50.5% of surfers (down from 54% in 1996). Internet Explorer improved its market share from 16.4% to 22.8% and AOL's browser also rose 3.0% to 16.1% on the back of the company's continued expansion. Other browsers were used by the remaining 10.7% (down from 15.9% in 1996). IDC noted the significance of the report was that in the tussle between Netscape and Microsoft for market dominance, Netscape was still the preferred browser for two out of every three participants.IDC analysts also noted that the market for browsers outside the Netscape/Explorer/AOL trilogy had declined by 33% during 1997, signalling a very hard time for any new entrant.


AAA Tries Out Subscription Model

Australia's popular AAA Australia Announce Archive has launched the country's first online site subscription service. Called Matilda.Net, a modest $36 annual joining fee allows subscribers full access to the vast AAA site, which now draws an estimated 250,000 visitors per week. However large portions of AAA (including its popular Matilda Search Engine) will remain free. More than 1,000 regular visitors have already joined up with the new service according AAA webmaster James Lilburne. "Matilda is already the most linked-to search engine outside the USA," he said. "Now we'd like to extend what we can offer visitors - and naturally the cost of content development needs to be recouped". AAA announced that it's also in the process of contacting many of Australia's top sites seeking their support for the new online service as Matilda.Net partners. "We want to ensure that the content is easy to find on a topic-specific basis. We have over 100 writers at present who are constantly compiling subject matter, and that certainly helps," he said. Matilda.Net has also recently introduced the Boomerang Web directory. "We called it Boomerang because we hope people would keep coming back." said Lilburne. "We decided to make listing sites easy as possible for anyone who wants to. It only takes one second for Australian sites to be listed on Boomerang after submission. Listings are also dated so that surfers have a guide to how fresh the URL really is."


Online Shopping Boom Coming - Study

According to a study by International Data Corporation (IDC) released today, the volume of online purchases is likely to increase almost 14-fold over the next 4 years. The IDC study estimated that more than $US4.3 billion worth of goods and services were traded over the Net during 1997. However, this is expected to rise to at least $US54 billion by 2002, and the number of people who've made a purchase online should expand from 36% to 50% over the same period. The IDC study also found that at commerce, classified or auction sites, males 50 and older compose the largest group of viewers, making up 63 percent of total traffic. Furthermore, the study found that 23% of the Net viewing audience maintain household incomes of $75,000 and above, and that teenage girls' net surfing habits bear a closer resemblance to adult females than to teenage males. The study also found that the Internet's population continues to be slightly skewed towards males, who comprise 56 percent of the online audience even though they are only 48% of the US population.


Windows98 Debuts This Week

Microsoft's Windows98 will debut in the US on Thursday to much less fanfare than its predecessor, Windows95. So far beta reviews of the product have been generally favourable, but the software upgrade is being generally seen more as a consolidation of the hundreds of patches and upgrades Microsoft have released over the last 3 years to repair of extend Windows95 than the evolutionary step that Windows95 represented over Windows and DOS systems. As a result, Microsoft expects to have a tough time persuading business and domestic consumers to purchase the upgrade - and both the company and financial markets expect that the uptake of Windows98 will be slow. Nonetheless, Microsoft Chairman Bill Gates was named the richest man in the world by Forbes magazine in their July 6th issue for accumulating $51 billion - up from $18.2 billion just 24 months ago, According to Forbes, Gates is followed by the Walton family (of Wal-Mart fame) on $48 billion, with Warren Buffet holding third place on $33 billion. Paul Allen, an early comrade of Gates, comes in fourth at $21 billion.


Net Registry May Disendorse Reseller

.AU.COM domain registry Net Registry may disendorse the Australian & New Zealand Domain Name Registry as a reseller following news today that the latter are currently under investigation by the Department of Fair Trading (DFT). The DFT is trying to determine the reseller has a case to answer over alleged breaches of the Trade Practices act for mounting a deceptive advertising campaign. In recent months Australian & New Zealand Domain Name Registry faxed out thousands of messages to businesses stating that unless they purchase their domain name now 'you will not be able to use your own company or product name in the future unless you buy it back'. The company were reselling .AU.COM sub-domains on behalf of Net Registry, who are marketing the address as an alternative to the original namespace. In a statement released by Net Registry's CEO, Larry Bloch, the company made it clear that the alleged behaviour was not condoned and that Net Registry will sever relationships with Australian & New Zealand Domain Name Registry if it is found to be breaking the law.


NineMSN Folds New Division

In a move that took many people by surprise, NineMSN sacked 11 staff today - 7 from the news and current affairs departments and the remaining 4 from various other areas of the company. NineMSN is a $50 million online publishing venture partnership between Kerry Packer's Publishing and Broadcasting Ltd and Microsoft. NineMSN will now feature a news feed from Australian Associated Press instead of original in-house content. A company spokesman said that the cutbacks were "regrettable" but the news division hadn't made enough money to support itself. The company didn't believe that it could make money within the foreseeable future either. However, the spokesman said that a vestigial news department will be retained to contribute occasional items, though most of the remaining staff would primarily be allocated to running the site's chat areas and online polls. Despite a 500% rise in hits and a growing advertising stream since its launch in March, the company does not expect to be profitable for 5 years.


Barnes & Noble Expand

Australian Cybermalls franchisee Barnes and Noble opened two extensions to their business with us today: Barnes and Noble Software and Barnes and Noble Magazines. The new software site retails products not available through our Digital River online software store, while the new magazine site offers bargain subscriptions to a wide range of US publications, many of which are not normally available in Australia. The company (which recently celebrated its first year of operations on the Internet) is now one of the largest online book-selling chains in the world, closely rivalling the better-known Amazon.Com. The company believe that software and magazine subscriptions are natural adjuncts to their bookselling business. Meanwhile, CD Universe announced today that they will be holding a storewide sale from now until at least the end of the month. Even with the currently poor Australian-US exchange rate of $A0.58 to the $US1, most CD's at CD Universe can still be landed in Australia at prices lower than commonly available at retail outlets.


Netscape To Release Communicator 4.6

Although the company will neither confirm or deny the rumour, Netscape are widely tipped to be releasing a new, expanded version of their Communicator browser on Wednesday (US time). The new Communicator 4.6 will include features that Netscape has already announced, such as its Smart Browsing technology that links the Web browser more closely with its Netcenter portal site. Other browser enhancements include features that will make it easier for users to "roam," or share computers between home, work, and elsewhere through automatic personal configurations, and full support for a set of tools to filter out online sites based on a user's settings. The two Net site screening features that will be integrated into the new browser are tipped to be the RSACi and SafeSurf web site ratings systems.Microsoft Internet Explorer already supports both systems, which block access to sites containing adult language, violence, nudity and other content based on ratings applied to Web pages by content providers. Netscape's support would be a big boost for Net ratings systems, which have been slow to catch on with Web sites and users because of criticism from free-speech advocates.


Australian Domain Registry Re-Launched

Australian domain registry MelbourneIT have launched a new division - Internet Names Australia - to handle domain registration and delegation requests. The organisation has also announced plans to expand their services to cover a broader e-commerce focus, and have launched a number of new registry services with the name change. These include automatic checks for trademark infringements at the point of registration and service guarantees promising registration turnaround times of between 2 hours and 2 days. MelbourneIT Chief Executive Professor Peter Gerrand said that the organisation was responding to the needs of the marketplace and that market research had identified fast turnaround times, secure online payment facilities and warnings of potential infringements of 3rd-party intellectual property as three major unfilled needs amongst registry users. The new service debuted online last week but suffered some teething problems during the first 48 hours of operation. Real-time online payment facilities will be introduced to the site shortly through the National Australia Bank's InterPay system.


UK Has Negative View Of Net

The British public view the Internet as a purveyor of porn, facilitator of fraudsters and general bad influence according to a recent study by consumer magazine Which? The magazine's survey reported that 58 percent of respondents believed the Net undermined public morality. The ease of access to pornography and other illegal materials was cited as the main reason why 72 percent are in favour of regulation. And one in three of 2,124 people randomly surveyed saw the Net as a threat to national security. Furthermore, nearly half said they thought the risk of fraud was high. And unsociable computer "anoraks" were cited by 22 percent as a dire consequence of the Net - survey respondents said they felt such people posed a threat to traditional family life because they were in danger of losing touch with reality. Among Britain's 7 million Net users, only one in ten admitted to spending too much time in front of their screens. Three-quarters went online for less than five hours a week, with 5 percent spending more than 20 hours surfing the Net. All the same, the report noted, the Internet is surging ahead in Britain, with half of all users signing up within the last 12 months.


Online News Market Grows 300% In 24 Months

In what may prove a mixed blessing for publishers and broadcasters, the number of Americans reading news on the Internet at least once a week has more than tripled in the past two years according to a survey released yesterday by The Pew Centre. However, people who go online for news don't appear to cut their consumption of information from other sources such as newspapers and television. The telephone survey of 3,002 adults conducted between April 24th and May 11th found that 20 percent of the sample went online for news at least once a week, against 6 percent in 1996 and 4 percent in 1995 - an effective total US audience of 35 million (against 11 million in 1996). However, the centre noted that "the survey gives no evidence that going online for news leads to less reading or viewing of more traditional news sources." Instead, the study found that despite increasing use of the Net for news broadcasting, between 40% and 57% of Americans would turn to either cable or network news if a major story broke, reflecting the dominant position TV has held in the traditional media mix for several decades.


1998 Telstra/AFR Awards Open

The 1998 Telstra/Australian Financial Review Australian Internet Awards opened for nominations today. The awards, which attracted more than 1,000 entries in 1997 and are now entering their third year, attempt to provide external recognition of the best that the Australian Internet has to offer. They will remain open for nominations until August 5th and final winners will be announced in early November. This year - in an effort to stay abreast of the rapidly-changing online environment - the Awards have been extended with the addition of three new categories: electronic commerce, email-based sites and a special Youth Internet award. And a heavily-criticised award for advertising agencies (which was offered in 1996 and 1997) has been scrapped. Ironically, many of Australia's best sites are physically housed in the USA because of Telstra's world-leading bandwidth charges .This means that they are ineligible to nominate under the competition's rules, which specify that only domestically-hosted sites may participate. This clause includes several banks, a number of domestic search engines and Australian Cybermalls itself, which has been hosted from Boston ever since early 1997.


US Government Heads For Y2K Meltdown

The US Government's attempts to come to grips with Year 2000 problems appear to be headed for disaster according to a report tabled by House of Representatives member Steve Horne. Horne's report found that most US government departments have failed preliminary Y2K readiness inspections and that most have yet to meaningfully address the Y2K issue in all its dimensions - especially the area of embedded chips. The report also states that less than 30% of US Government systems are estimated to be Y2K compliant, and adds that even the compliance standards used have yet to be given any meaningful evaluation. While most US banks have already retooled their software and systems to ride out the new millennium, Horne speculates that unless urgent action is taken the US Government is likely to stricken with catastrophic systems failures in little more than 18 months. US President Bill Clinton is expected to make a major speech on the Y2K issue within the next quarter.


Au.Com Sells 1,100 Generic Sub-Domains

The new .AU.COM domain recently launched by Net Registry Australia(NRA) sold more than 1,100 generic sub-domain names to a Sydney speculator in May for more than $200,000 it was announced late last week. Sydney businessman Kerry Henry purchased names such as, etc from NRA for $200 each. NRA, which began trading in February this year after it secured the domain name AU.COM, began selling off sub-domains to create a new "domain space" for Australian businesses seeking an alternative to MelbourneIT and its stringent rules for .COM.AU domains. Henry's company Strategic Synergy has already established Click-On Australia as a vehicle for the business, the company said when it confirmed the buy, and was "upbeat about the potential of the internet, especially with product and service awareness, delivery and financial transaction capability". According to Blue Tongue Technologies - which keeps a count of the number of sites registered on the internet in each domain - there are now around 1,700 names registered as By comparison, there are around 43,000 names and 3,400 names.


Stories Of The Week

Australian Cybermalls updates were delayed last week due to a computer systems fault at our offices. This fault affected all sites including our daily news column and meant that most emails sent to us in the last 30 days were also lost. We apologise to all our regular visitors for this unexpected inconvenience. The stories we found most interesting and would've covered in more detail had we not been held up by the fault last week were as follows:
ACCC Hits Telstra With Anti-Competition Notice
The Australian Competition and Consumer Commission hit Telstra with a competition notice early in the week demanding that the former monopolist offer Australian ISPs the same peering arrangement that US carriers offer to American ISPs - that is, that Telstra refund ISPs for traffic they put onto Telstra's network as well as pay for the traffic they draw from it. Telstra were originally given until Friday June 5th to comply with the notice or face a fine of $10 million plus $1 million per day for every day they ignored it.However, Telstra managed to obtain an injunction by mid-week which had the affect of deferring further action until mid-month. Telstra had struck Australia's first peering agreement with OzEmail only a few days before the ACCC move.
US Regulators Eye Off Intel
The ongoing action between the US Department of Justice, 20 US State attorneys general and Microsoft over its marketing practices for Windows95 and Internet Explorer may only be the start of a slew of anti-competition lawsuits against the industry giants of Silicon Valley. It was widely tipped this week that if the DOJ succeeds in its action against Microsoft, chip-making giant Intel may be the next company in the regulators' line of fire. Regulators have pointed out that Intel's share of the chip market has remained static at almost exactly 80% for the last 5 years and infer that this is a sign of market manipulation. They claim that the company is so dominant in the PC chip market that it, too, constitutes a new form of "silicon monopoly" - one that can set its own level of market penetration
Senators Support Spam Control Bill
Support is growing in the USA for a spamming bill to control the practice.Although US senators were unanimous in their support for the legislation, concerns have been expressed that parts of the proposed bill may only make matters worse. One aspect of the bill that is provoking particular concern amongst anti-spam lobbyists will require that all unsolicited commercial email carry complete and correct reply information. The Coalition Against Unsolicited Commercial Email (CAUCE) believe that this alone may confer respectability on junk mailers and that far from stamping out the practice, may cause an avalanche of new advertisers to be attracted by the legitimacy this would afford spamming, making the problem worse than ever. The new bill also proposes that spammers would have to honour a recipient's request to be removed from a mailing list and proposes fines of up to $US15,000 a time if this request isn't honored.


Australian Net Grows 15%

The Australian Internet took an upward swing of more than 15% last month after the search engines we monitor to construct our monthly Australian Internet Growth Index (AIGI) took a fresh look over .AU domains and updated their databases. The AIGI, which is constructed from a composite of several major international engines, has been measuring the approximate number of Australian sites on the Internet since January 1996. The latest figures show that Sydney broadcasts the most sites, followed by Melbourne. On a pro-rata basis, however, the ACT is responsible for the highest number of web sites per capita. The June 1st figures (with May 1st figures in brackets) are as follows:

Australian Internet Growth Index May 1998
(Figures Show Estimated Sites)
  • Brisbane - 2,798 (2,191)
  • Sydney - 10,068 (8,107)
  • Melbourne - 7,305 (6,155)
  • Adelaide - 2,848 (2,694)
  • Perth - 2,869 (2,191)
  • Hobart - 1,207 (1,100)
  • Canberra - 2,348 (2,694)
  • Darwin - 2,700 (2,191)

During May Australian Cybermalls hosted 46,713 visitors, almost even with the 47,953 visitors who dropped by to see us in April 1998. We were also offline for several days during the month with computer system faults.


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