Australian Cybermalls News

Controversial online casino GoCorp announced yesterday that it had lost $AUD6.6 million in the quarter to September 30th on total revenues of $67,000. Losses have been so significant that the company has since retrenched 35 people - 50% of its staff - and a number of its executives have taken pay cuts. GoCorp's capital has also dwindled sharply: the company raised $20 million from listing on the Australian Stock Exchange earlier this year but reported it now has less than $10.5 million left. Nonetheless, directors said they were "encouraged" and that business at the online casino was "picking up". The news may reflect a surprise study released by Greenfield Online last month which showed that online gamblers didn't spend much, had little loyalty to any online casino, really didn't like online gambling sites and trusted them even less. Ironically, GoCorp first rose to prominence in July last year when Brisbane's Courier-Mail disclosed that three prominent ALP identities owned substantial shareholdings in the company and that the State's ALP government had granted GoCorp an online gaming licence even though one of the licence applicants had a criminal record. The politicians involved had hoped to make massive windfall profits from the online casino licence, and the outcry that followed led to a major public inquiry and the temporary standing down of Queensland Treasurer David Hamill, who'd given GoCorp the go-ahead.

Microsoft has moved into damage control after news about a hacker breaking into the company's headquarters spread around the world over the weekend (see Friday's story). Yesterday the company claimed that it was aware of the hacker on October 14th and that the intruder only had access to highly secure areas of the company's network for 12 days - not 5 weeks as earlier thought. Microsoft also claimed that it had the hacker under constant surveillance and thought it unlikely that any of its source code was downloaded in the incident, even though the hacker gained access to plans for the company's future products. However, experts are already warning that any companies which use Microsoft's Exchange groupware system are liable to similar attacks regardless of what email client they use, and should take all possible precautions. The incident also appears to have severely dented Microsoft's credibility in the high-end corporate market - a lucrative area where it had hoped to make some inroads with its Windows 2000 product line. The hack has, however, vindicated the Gartner Group who warned in October 1999 that the Windows 2000 product line would be unsafe to use until 2001/2002. This was a claim that Microsoft scorned at the time.

The Wall Street Journal disclosed today that Microsoft headquarters at Redmond have been hacked by someone using an email account in St Petersburg, Russia. According to reports, the hackers appear to have exploited ongoing security holes in the company's Outlook email program to send a trojan horse attachment with an email which allowed the hacker to gain access to Microsoft's closely guarded software blueprints across the company's internal network. Worse, it appears that the hacker first gained access more than 5 weeks before the intrusion was discovered, making the exact nature of their activities difficult to determine. Microsoft have now called in the FBI. Company spokespeople at first thought the hacker had gained access to the blueprints for existing Microsoft products, but later in the day Microsoft said that it appeared the hacker had only gained access to plans for future products. Earlier this year the "I Love You" virus - which also exploited security holes in Microsoft's web products - caused an estimated $40 billion damages world-wide. Microsoft escaped liability over the incident because it sells its software without warranties of any kind.

Microsoft launched MSN Explorer today - a software upgrade that bundles several Microsoft services directly into the company's Internet Explorer browser. The 19.4Mb freeware download incorporates access to MSN Hotmail®, the MSN Messenger service and MSN Calendar, a Windows Media Player and embedded links to various Microsoft and affiliate services. Microsoft say that the upgrade will import existing Internet Explorer favorites or contacts from Outlook® Express or AOL. MSN Explorer will also incorporate an auto-updating feature, automatically polling and installing upgrades or bug fixes as required. The product will also offer an enhanced IE browser interface and support for up to 9 users, each with their own personal settings such as favorites, e-mail and instant messaging buddies. The software will be backed by a $150 million global advertising campaign.

Internet performance benchmarking company Keynote Systems (KS) announced today that it had created the first objective, quantifiable benchmarks for measuring the performance of streaming media. It also announced that - at present - most Internet streaming media rate a very poor 1.8 on a scale of 10. To conduct the study, Keynote measured the quality of live audio and video streaming at 20 popular Web sites over a two week period. The company then graded the results on their 10-point scale, where 10 represents near-DVD broadcast quality. According to KS, the best broadcaster in the study (MTV Interactive) scored a 3.46 out of 10. Other high-rated sites were Barnesandnoble.com for audio e-commerce, WUSL-FM 99 in Philadelphia for broadcast radio, and CNBC.com for financial audio. However, KS found that the overall standard was quite low. As a result, KS suggest that most web users at the present time find online video jerky, grainy, slow and largely unwatchable - and the addition of streaming media may not be as popular a drawcard as some site operators might imagine.

The respected Forrester Research (FR) group claimed today that according to a new study it had undertaken, Microsoft's much vaunted .net strategy may be far less ready for the corporate market than the company believes. According to FR, the corporate software market has changed and will no longer buy "technology for technology's sake". Instead, it now buys provable benefits. Microsoft will need to rethink its .net strategy to ensure a successful delivery into the corporate market, Forrester say. And they believe the company will face an uphill battle because of an unfocused strategy and ill-equipped sales model. The study referred to the new 9i database released by Oracle as being a major threat to Microsoft.net because it runs on both Windows 2000 and Unix systems. "Unix is still the preferred operating system for most large organisations," Forrester said. "With Microsoft's traditional focus on the consumer market and operating systems, the company will need to address business needs to gain some market share."

According to a report by eMarketer, Hong Kong's estimated 1.2 million Internet users will spend USD$601 million online this year. However, only 10 percent of this (ie $US60 million) will be spent with online retailers - the rest will be business purchases. A recent survey by Taylor Nelson Sofres found that the most popular retail products bought online in Hong Kong were groceries and books (at 32% and and 29% respectively). CDs and clothing ranked much lower. eMarketer suggests the relatively low amount of B2C transactions are due to Hong Kong's demographic and cultural make-up. In Hong Kong's urban, densely populated environment retail shops are within easy reach of most web users so the convenience of web shopping is not a factor. However, online grocery shopping is popular because grocery shopping is seen as a chore. Other popular sites for Hong Kong residents are online stockbrokers and casinos.

The volume of email sent over the Net looks set to increase from its current estimated f 10 billion a day to as much as 35 billion a day by 2005, according to a new study by International Data Corporation (IDC). IDC';s Email Usage Forecast and Analysis report further estimates that the number of emails sent annually in Western Europe will be 1.6 trillion in 2005, up from 511 billion in 2000. IDC said that in order to plan solutions for dealing with this amount of emails, Internet professionals need to understand how email use will evolve over time. The report also predicts that web browsers such as Internet Explorer and Netscape will become more popular than standalone applications for sending and receiving emails.

According to a new survey of 150 leading web sites by Byte Level Research (BLR), the majority are still "too fat" and the average web page still clocks in at 90K - about 50% more than the 60K ideal, and more than double an optimum 40K size. Worse, this may be costing the sites' owners millions of dollars a month in lost sales - simply because prospective customers won't wait for slow-loading web sites. BLR found that some of the worst offenders for slow-loading sites appeared to be giant US retailers (some of the sites they polled had front pages ranging between 200K and 450K). And some of the best appeared to be search engines (which ranged from Google's 12K to Lycos' 30K and Yahoo's 37K). Surprisingly, BLR also found that within certain categories the weight of competitor's pages only varied minutely. This implied that competing sites were gauging their speed off each other rather than off absolute rules. It also implied that a lean, mean competing site could easily make a dent in some online categories where fatness remained the general rule.

Australia's National Australia Bank (NAB) is expected to announce tomorrow that it will join the ANZ and Commonwealth Banks in charging customers for online banking transactions. The NAB is expected to tell its customers that it will introduce a 20c fee for every Internet transaction from December 1st, 2000. The NAB's online banking service was originally introduced in March 1999 and was free. The NAB is also expected to announce the closure of another 100 branches nationwide over the coming year as it moves further towards computer-based banking. The new fee will match the 20c per transaction levied by the ANZ, and halve the Commonwealths 40c per transaction fee. The cost of each online transaction to the banks is approximately 1c. The announcement comes only days after a new study suggested as many as 18% of online Australians now used Internet banking facilities.

Pioneering Australian free ISP FreeNet has announced to its 60,000 subscribers that it will be shutting down its service by the end of this week. The company, owned by the Aly family, said that they'd taken the decision to close the service because they felt a free Internet access model was unviable in Australia at the present time. The family firm said that it intends to concentrate on its established IT reseller business instead. The company's assets are now up for sale or lease - including a network of dial-in POPs in most capital cities. Competitors FreeOnline and GoConnect said they felt FreeNet hadn't exploited all potential revenue sources in the free ISP model, and that they intended to continue in business.

According to a new study of online banking in Australia, 1.37 million Australians - about 18% of all wired households - now do their banking online. Consulting group Market Intelligence Strategy Centre (MISC) compiled the survey from data provided by most major Australian banks. The data accounted for 92% of all internet transactions carried out in Australia during the study period, MISC said, and showed that on a per-capita basis Australia was now one of the leading online banking nations. MISC attributed this at least partly to Australians' love of new technologies and partly to the efficiencies of the online banking systems on offer. MISC also noted that because Australia had only adopted the technology on a mass scale during the last 12 months, there was more chance the overall numbers would grow than in the US, where about 14% of Net users conduct online banking.

Pioneering Australian online radio venture Bigfatradio announced today that it was folding due to lack of financial support. The venture, which had hoped to draw youthful listeners with a selection of ex-JJJ DJs including Helen Razer, Ian Rogerson, Debbie Spillane and Michael Tunn was launched earlier this year as the country's first concerted effort to mount a high-profile celebrity Net radio station. However Bigfatradio was unable to raise sufficient advertising support or financing to stay afloat. The news comes immediately prior to Monday's launch of Talk Australia, which has been under development for more than a year. The new station will adopt an all-talk format with former game show host Larry Emdur taking mornings, followed by ex-60 Minutes journalist Ian Leslie, Lochie Daddo, Tracy Bowden, Brady Halls and Rob Doorey. Weather reports will be provided by Mike Bailey.

The Australian Federal Government's plans to sell the remainder of Telstra received a setback today when the Telecommunications Service Inquiry (TIS) reported it had found that a "significant proportion" of Australians have concerns about the quality of phone and Internet services they receive. The TIS, set up by the Government to look into the performance of regional telecommunications services, said in its final report that it had unearthed major problem areas with services in regional, rural and remote locations. These included mobile phone coverage and pricing, fault repair times and Internet access speeds. The TIS held 31 roundtable meetings around regional Australia, it said, and slow Net access speeds came up as an issue at almost every meeting. Further, the TIS received a significant response from the bush. Approximately 30% of all submissions were from the 6% of Australians who live in locations classified as very remote, remote or moderately accessible, it said. The Government said today that it will publish a "plan of action" to address concerns when it responds in detail to the report. However, National Party Senator Ron Boswell conceded to the media that the TIS report is likely to put off the sale of Tesltra "for some time".

According to a new UK survey, many people are becoming bored with the publicity surrounding the Internet. In a new study of UK web surfers carried out for MSN, 21% of those polled said they were getting weary of Internet hype - and stories of how the Internet would change people's lives were found to be particularly tiresome. The survey also revealed that 62% of respondents felt that the phrase "dotcom" had become hackneyed, and that close to 66% said they were bored by tales of young Internet millionaires. MSN said it isn't surprised with the results. According to a spokeswoman for the company, people no longer want to hear hype about the Internet because it's already become a part of everyday life. This was evidenced by the fact that while respondents generally showed a negative reaction to towards Internet publicity, over 77% said they couldn't live without the Internet and were still very interested in the Web itself.

The emerging field of online law gained a new Australian precedent today when the Human Rights and Equal Opportunity Commission ordered the South Australian-based Adelaide Institute (AI) to remove racially offensive material from its web site. Commissioner Kathleen McEvoy found that AI had breached section 18C of the Racial Discrimination Act by publishing material on the site which was 'vilificatory, bullying, insulting and offensive' to Jewish people. The Commission found that the Institute's web site contained material on the Holocaust which was not of an historical, intellectual or scientific standard. "The main purpose of the publication of the material was the humiliation and denigration of Jewish people." Commissioner McEvoy determined that Dr Fredrick Toben should remove the contents of the web site and not republish its contents in public elsewhere. She also determined that Dr Toben should make a written statement of apology to members of the Jewish Community in Australia, to appear on the home page of the web site, for "having published materials inciting hatred against the Jewish people".

The Australian Federal Government's controversial proposal to declare a 12-month ban on Internet gambling sites failed to pass the Senate tonight. In a tight 33-all vote, the Government's "Interactive Gambling (Moratorium) Bill" fell one vote short of being passed. The Bill was supported by the Liberals, Australian Democrats senators John Woodley and Lyn Allison, and Tasmanian independent senator Brian Harradine. It was opposed by the ALP, remaining Australian Democrats, Greens leader Bob Brown and One Nation senator Len Harris. The ALP called on the Government to regulate the industry to keep monies onshore rather than attempt to suppress it, saying that the online gambling industry would be difficult if not impossible to police if Australians were forced to gamble at offshore facilities. Opponents of the Bill also attacked it as a threat to local jobs and an invitation for the existing Australian online gambling industry to move offshore.

Despite persistent problems with poor infrastructure and the results of a controversial Telstra-sponsored study in August which concluded that the majority of rural Australians were simply "too poor, dumb and old" to use the Net, a new study released by the Australian Bureau of Statistics (ABS) today showed that use of the Net on Australian farms increased by as much as 65% during the last 12 months. The ABS found that 49% of the nation's 147,181 farms owned or used a computer as of March, 1999 (an increase of 29% over the previous year) and 18% of these had Net access (a rise of 65%). The study also showed a strong relationship between farm size and technology use, with the proportion of farms using computers and the Net rising with the value of farm operations. The ABS found that 14.6% of farms earning less than $25,000 were connected to the Internet while 41.6% of farms turning over more than $1 million were online. Similarly, computer use varied from 39% to 84% within the same value range. The NT and ACT reported the highest proportion of farms using computers (65% and 64% respectively). However, less than 4% of farms had so far used the Net to purchase goods or services.

Australia's Telecommunications Industry Ombudsman (TIO) was overloaded and unable to fully meet demands for its services over the last year, according to its annual report released today. Complaints are becoming increasingly complex as well, the TIO said, which it felt was an indication "that industry and consumers are struggling to keep pace with increasing competition." The TIO reported that it had made almost 68,000 contacts in the last year, and that complaints against telecommunications companies still formed the bulk of is work (less than 7.5% of all complaints were against ISPs, the TIO reported, up from 6.0% the previous year). Most telco complaints concerned billing issues (26.4%), service provision (16.3%), staff attitudes (6.3%) and delayed or unauthorised transfer of customer accounts (also known as "slamming") (14.6%). The TIO report reflects the Australian Communication Authority's separate quarterly report released last month, which showed that complaints against Australian telcos - and about Australia' largest telco Telstra in particular - were at an all-time high.

US automotive site Autobytel opened an Australian version of its site today. The new site will initially offer new and used cars from the inventories of 160 accredited car dealers around Australia (though Autobytel hope to increase this to 250 dealers within the next year). Visitors will be able to find and compare cars at the site, as well as arrange financing and insurance. Dealers accredited by Autobytel will be trained to deal with online sales and will be alerted via pagers whenever a query is made at the site for a car they offer online. The new site is partly Australian-owned, with investments from the Royal Automobile Club of Victoria, St George and Strathfield E-Ventures. In the USA, Autobytel claims to hold 50% of the online car buying market and to have sold 500,000 cars through its site in 1999. The new site will compete with NineMSN's Carpoint, Fairfax's Drive, CarNet Australia and many existing private dealer sites.

The Internet has grown in size by almost 65% planet-wide over the last 12 months according to the Internet Software Consortium (ISC). Announcing the results of its regular bi-annual Internet Domain Survey today, the ISC reported that it had detected in excess of 93 million hosts in its July 2000 survey - up from the 56 million it detected in July 1999, and well up from the 1.3 million it detected in its first survey in January 1993. This survey ISC also reported that it had noted a drop in the number of sites prefixed by "www". It speculates that this is because many domain administrators are assigning "www" as their alternative web site address, indicating a growing preference world-wide for dispensing with "www" prefixes altogether. Australia is now the 7th most popular country code below Japan, the USA, UK, Germany, Canada and Italy. However, global .COM, .NET and .EDU domains still outpace all country codes by a significant margin.

The Australian Internet continued to expand during September despite the general gloom surrounding the country's high-profile dot.coms, according to our monthly Australian Internet Growth Index (AIGI). All capitals recorded growth during the month, with Sydney and Melbourne the stand-out performers, followed by Brisbane. The October 1st figures (with September 1st figures in brackets) are as follows:

Australian Internet Growth Index September 2000
(Figures Show Estimated Live Sites)

Brisbane - 6,538 (5,822) Sydney - 28,613 (24,365) Melbourne - 19,645 (16,275) Adelaide - 5,886 (5,846)	Perth - 5,708 (5,613) Hobart - 2,142 (2,125) Canberra - 6,819 (6,486) *Darwin - 5,290** (5,211)
NB: The Darwin figure includes rural Australian sites