Australian Cybermalls News

Australia had more than 3.9 million Internet subscribers at the end of December 2000, according to a new report released today by the Australian Bureau of Statistics (ABS). Of these, 512,000 were business and government subscribers and the remainder were household users. The ABS also reported that there were 696 ISPs in the country (down from 718 in the previous quarter) but that the 6 largest ISPs accounted for approximately 53% of the dial-up market between them. The ABS reported that Australian ISPs hosted 97,165 business and government web sites - but fewer than 4,233 of these (about 4%) provided facilities for secure ecommerce. The ABS also disclosed that 10% of all Australian Internet subscribers were on a free Internet access plan during the quarter, with 66% on monthly, quarterly or annual access plans and 21% on hourly access plans. However the ABS noted that the number of subscribers using free access plans appeared to be declining sharply with the ongoing collapse of the free ISP model. The average home subscriber downloaded 171 Mb of data during the quarter, the ABS said, while the average business or government subscriber downloaded 912 Mb. This produced a nationwide average download of 268 Mb per subscriber for the period.

Australia has joined Burma, China and a number of other countries in Asia, the Middle East and Europe in a French press group's list of the most repressive Internet regimes on Earth. Reporters Without Borders (RWB) today named Australia as one of the countries most likely to censor online activity and/or try to control its citizens' movements on the Internet in their "Enemies of The Internet" report. The group fingered Australia's controversial Broadcasting Services Act (1999) for particular scorn, saying that the inability to appeal against censorship decisions made by the Australian Broadcasting Authority was "extraordinary" and "abnormal". RWB also pointed out that the introduction of the Act had forced Electronic Frontiers Australia and other Australian free-speech groups to relocate their web sites offshore. Nonetheless, Australia scored somewhat higher than Burma (which restricts access to a few privileged officials); China (which users filters to block foreign content); and Russia (which forces ISPs to route data through law enforcement computer systems so that content can be monitored).

America Online (AOL), the world's largest ISP and owner of the Netscape browser, may drop its exclusive support for Microsoft's Internet Explorer browser within the next few months according to a leaked report that surfaced on the Net today. Betanews reported that AOL has been secretly testing new software - code-named Komodo - which would allow it to offer its users multiple browsers. Under a deal signed between AOL and Microsoft 5 years ago, AOL gained positioning on Windows in exchange for supplying all its users with a customised version of Internet Explorer. However, the company acquired the Netscape browser in 1999 and when its contract with Microsoft expired on January 1st this year, elected not to renew it. AOL also appeared as a witness against Microsoft in last year's anti-trust trial in the USA (which is now in the US appeals courts) and has been having increasingly strained relations with Microsoft because of the success of its messenger product. AOL's dominance of the ISP market is so large that analysts believe if it dropped its support for Internet Explorer, the company could substantially alter the balance of power in the browser market overnight. This would deal Microsoft's plans for its .Net initiative a significant blow.

There are now in excess of 109 million hosts connected to the Internet, according to the latest bi-annual survey of the Net's growth by the Internet Software Consortium (ISC). Releasing their most recent half-yearly survey results for the period to January 2001, the ISC report that despite the dot.com crash of the last year the Net has continued to grow in an almost exponential fashion, rising from 72,398,092 hosts in January 2000 to 109,574,429 in January 2001 - a growth rate of slightly more than 50% in the last 12 months. The ISC, who've been attempting to calculate the number of hosts hooked up to the Net since January 1993 (when they estimated there were slightly more than 1.3 million hosts world-wide) say that they also noted in the most recent survey that some unspecified countries reported a decrease - but whether this is due to a real decline occurring or problems with their survey methodology they're unable to determine at the present time. Australia slipped from 10th to 11th place as the most common domain in the latest survey, being pipped by Italy.

The Australian Competition and Consumer Commission (ACCC) has launched a new "Slam A Cyberscam" web site to make it easier for aggrieved consumers to complain about shady web sites. The site is an automated service "with the capacity to take thousands of complaints at a time about illegal online selling practices" according to ACCC chairman Professor Allan Fels. He said the new site had been developed to give the ACCC a tool to help it identify emerging problems in ecommerce and deal with them more swiftly. Fels said that information received through the site "will be reviewed by the ACCC and, where necessary, acted upon". While complaints can be lodged anonymously, the ACCC prefers complainants to provide full details. "Businesses must remember that consumers have the same rights online as they do offline," Fels said. "These rights cannot be denied or over-ridden." Fels said that the new site was an expansion of the ACCC's work to educate and protect consumers and businesses as ecommerce becomes more prevalent. The will not, however, take complaints about spam. And anyone wishing to complain about offensive contact is directed to the Australian Broadcasting Authority's site instead.

The .AU Domain Administration's (auDA) Name Policy Advisory Panel has recommended liberalising Australia's strict domain name rules. In a new report delivered late last week, the Panel has suggested that numbers should be allowed in Australian domain names and that companies should be allowed to own an unlimited number of domains (rather than just one, as at present) providing each additional domain can be shown to have a demonstrated connection to the firm's business, such as a trademark or brand. It has also suggested that if generic domain names are ever allowed in the .com.au name space - such as baby.com.au or cars.com.au - they should be sold by auction to the highest bidder. In addition, it has also recommended that a standard set of policies covering .com.au, .net.au and .org.au domains be put in place to ensure that a consistent set of rules apply across all second-level areas. However, the Panel has recommended that existing bans on offensive and geographic domain names should stay in force, and that the two-year limit for .com.au registrations remain in place as well. The report's recommendations have drawn widespread industry support and are likely to be accepted when the board of auDA meets in May. However, they're unlikely to be effected until a separate report on competition in Australian domain name sales is finished and acted upon. This may not occur until the end of this year.

According to a new study by the Gartner Group, the majority of Net-enabled workers now spend an average of 49 minutes every workday managing email and almost 1 in 4 spend more than an hour a day on the task. Yet as much as 34% of the internal business emails employees receive are unnecessary and only 27% of all emails demand immediate attention. Gartner report that while it seems employees are now writing to their co-workers at a higher rate in order to be more helpful or communicative, the constant load of emails is - in fact - simply clogging up email in-boxes, filling up servers and sapping overall office productivity. Instead, Gartner recommended that managers train employees to use email more efficiently. Steps for cutting down excessive emails include using distribution lists cautiously; only sending email to those who need the information; and avoiding sending needless responses. Gartner also suggest that chat rooms, bulletin boards and instant messaging can prove to be more efficient than email where employees are working in teams.

New studies by Jupiter Media Metrix (JMM) and Forrester Research (FR) show that despite the tech stock crash over the last year, both US consumers and US businesses are now using the Net more than ever before. JMM report that most users logged onto the Net 15 days out of 31 during March 2001 (up slightly from 14.5 days in March 2000 and 14.2 days in March 1999). However, they spent around 20 hours looking at web sites - up from 15.9 hours last year and 12.8 hours the year before. This near-60% rise in viewing time, JMM suggest, indicates that the general Net audience is becoming increasingly comfortable and involved with the medium. Meanwhile, Forrester report that 88% of US businesses now see the Internet as important to their buying plans and over 25% say they see cost savings from doing business online. FR also found that 71% of US firms now make indirect purchases online (up from 61% in the last quarter of 2000) and firms that bought online made 9% of all their purchases over the Net rather than through traditional channels. FR also report that over half of the companies they polled said they see themselves as being in the earliest stages of buying online.

Yahoo announced today that it had ended its search for a new CEO following Tim Koogle's announcement last month that he wanted to step down from the position. Koogle's shoes will be filled from May 1st by Terry Semel, former co-chairman of Time Warner's movie and music division, while Koogle will retire to the company's board. Semel, 58, and partner Robert Daly were widely credited with building Warner from a single-stream, US$1 billion a year company to a multi-stream US$11 billion a year company over 24 years. Before Warner, Semel had formerly worked as president of Walt Disney's Theatrical Distribution division and previously was president of CBS' Theatrical Distribution division. Semel said he was excited to join the firm and purchased 1 million Yahoo shares at US$17.62 to prove it. Meanwhile - in a separate development - Yahoo has reversed its recent decision to sell adult products following widespread reports on the matter in the US media over the last few days. While the company said that it would honour all existing contracts, representatives said that the contracts will not be renewed when they expired.

In what may be a timely warning to consumers, a hacker writing in the latest edition of Australian hacker magazine Infosurge has suggested that as many as 7 out of every 10 ecommerce sites currently running Microsoft's IIS web server are vulnerable to attack. Consumers who patronise them do so at their own risk, he warned, and may be safer off avoiding them entirely and simply ordering by phone or fax. The author, a hacker known only as "Black Hand", said that his quick survey of ecommerce sites showed while some had applied security patches to their front-end systems, most of the back-end systems seemed to be ignored and were "wide open" for attack. Many of the affected sites were very high-profile operations, he suggested, adding that he believed that as many as 5 in 10 Australian online banking operations using IIS are so poorly secured at the present time that any file stored on their systems can be read. In related hacking news: 9 Australian web sites were attacked over the recent Easter break, according to Attrition.org. They included two Queensland University of Technology sites, three West Australian primary schools and a NSW Government site. The attacks appear to have emanated from Brazil - and all attacked sites were running Microsoft's IIS.

Yahoo - the third busiest site on the Net - reported today that it made a pro forma net income of US$7.6 million on sales of US$180.2 million during the last quarter and said that it expects earnings before interest, taxation, depreciation and amortization (EBITDA) will come in at something between a $10 million loss and breakeven for the second quarter. This would give the company a total annual profit of anywhere between US$0 and US$50 million for 2000/2001. The latest figures are substantially down on the same period last year and reflect the collapse of the dotcom market, analysts said, adding that if Yahoo is finding it tough to generate profits, then most other web portals would be in similar or significantly worse straits. Yahoo also announced today that it intends laying off 12% of its staff and reigning in other costs in an effort to drive up profits. One new area revenue-raising that it will also explore is selling adult products on its shopping site alongside other products like children's toys, apparel and computers - a move a company spokesperson said Yahoo is "comfortable" with. Yahoo typically charge merchants for a listing on their site, along with a percentage of all sales they make.

In a new study unlikely to surprise many, an independent survey commissioned by British web indexing company WebTop has found that information overload on the Net can now cause users to feel frustrated and stressed and can even lead to “Internet rage” in extreme cases. The study found that 71% of British Net users reporting having suffered from Internet rage at least once, and that most users' patience limit when looking for information online is now around 12 minutes. "The sheer volume of information now available on the Web - and the slowness in accessing it - causes a great deal of stress," Webtop said. The survey adds weight to previous studies focused on anger and stress-related problems cause by computers, including a UK study last year by ICL which found more people were stressed out by computer glitches than by traffic jams, waiting in line and problems with in-laws; and that one in five people considered computer problems as stressful as or more stressful than being abandoned by a partner. The same study also found that a third of employees spent at least 30 minutes a week helping others with problems associated with information technology.

In a study likely to have strong parallels in Australia with the latest round of quarterly reports due to be released soon, US market research firm Webmergers (WM) reports that spending on mergers and acquisitions fell substantially in the US during the first three months of 2001 while the number of Internet companies collapsing continued to rise. WM found that over 380 Internet companies were acquired in Q1 for a total of US$13 billion. But of these transactions, 132 (worth US$9 billion) involved infrastructure companies while deals involving Internet destinations accounted for 184 transactions but were worth only US$2.2 billion - significantly down from the US$52 billion spent on destination deals in the same quarter a year ago. Meanwhile at least 369 ‘substantial dotcoms’ have shut down in the US since January 1st 2000, in comparison with 5 during the same quarter last year. Collapses have occurred amongst ecommerce sites, web design firms, Internet consultancies and access providers, but M report that most of this quarter's casualties occurred amongst ecommerce and content sites.

With an estimated 75% of large Australian companies already spying on staff emails, the NSW State Government will soon attempt to introduce new laws which will clearly define workers' rights - the first State Government in Australia to do so. Under the new laws (outlined in a report by the NSW Law Reform Commission) management will only be able to inspect email messages with an employee's consent or with 14 days' advance notice. Covert surveillance of employees' email accounts could only be carried out if an employer obtained authorisation to do so from the State's Industrial Relations Commission. They would need to show the Commission that an employee was suspected of using their office email in illegal activity or misconduct worthy of dismissal. However, civil liberties groups have criticised the proposed new law as a "sham", saying that it is now common practice for employees to be told upon hiring whether company management intends to look through email messages or not. They said that new hirees would feel pressured to give their consent, thus providing employers with a convenient "opt-out" from the intent of the new law. In related news: Senior Fairfax journalist Bernard Lagan resigned from the Sydney Morning Herald yesterday after admitting that he'd hacked into a number of staff email accounts, including the mailbox of CEO Fred Hilmer. Lagan had accidentally discovered that a number of staff - including Hilmer - hadn't bothered to alter their default intranet email passwords.

The Australian Securities and Investments Commission (ASIC) released its long-awaited Electronic Funds Transfer (EFT) Code of Conduct yesterday afternoon, hailing it as a "world first" in consumer protection. Under the Code - which will apply to ATM, EFTPOS, phone and Internet banking transactions from 1st April 2002 - banks and other financial institutions who provide these facilities will be forced to shoulder more responsibility for their electronic banking systems and will no longer be able to rely on the "software defence" (ie "use of our system means that you accept all liability if something goes wrong and you waive your rights to any action against us"). Instead, financial institutions will be deemed liable for any losses resulting from fraud or system malfunctions unless they can prove a customer has caused a security breach, such as by disclosing a PIN or password. The new code is, however, entirely voluntary and can be ignored or breached by any bank or other financial institution without penalty. The Code has been welcomed by the Australian Consumers Association as an "important advance" on current self-regulatory regimes. It has also been welcomed by the Australian Bankers Association, who became embroiled in the country's biggest payola scandal last year after it was disclosed they'd secretly paid Sydney radio personality John Laws large sums of money to mute his strident on-air criticism of the banking industry.

It emerged today that Australian online gift store Wishlist has been caught in the meltdown of dStore's owner Harris Scarf (see yesterday's story) and may wind up losing all or most of its investment in the luckless etailer. Wishlist had purchased a 20% stake in dStore for $600,000 when Harris Scarf bought out the beleaguered company in December 2000, but had an agreement with the company that it would later buy back 8% of the stock to reduce Wishlist's final holding in dStore to 12%. However, the sudden collapse of Harris Scarf means that Wishlist will now have to join a queue of creditors owed an estimated $190 million by the retailer. These include the ANZ Bank (owed $65 million), which suggested today that it is almost certain to initiate a receivership of the group within the next few days. The Australian Securities and Investments Commission also confirmed today that it had launched a full investigation into the collapse. Voluntary administrator KPMG have passed ASIC videotapes and other documents which allegedly show that the retailer was subject to widespread pilfering - as much as $250,000 per quarter - in the years before the collapse.

The "Curse of dStore" struck again yesterday when its new owner - Australian retail chain Harris Scarfe - was placed into voluntary administration. Harris Scarfe's board told the Australian Stock Exchange it had appointed KPMG as voluntary administrator of the group after the discovery of continuing accounting errors last Thursday which stretched back over the past six years. The discovery followed the departure of some of the company's senior managers, and the Australian Securities and Investments Commission is now also looking into the matter. Harris Scarfe directors said they were "shocked" to discover the errors which had given them a "deliberately false and misleading view" of the company's true financial position. Directors have requested that the relevant authorities investigate the actions of both the company's senior management and the role of the auditors, who'd sanctioned the firm's accounts on 3 occasions over the last 15 months. Harris Scarfe acquired dStore in December 2000 after the etailer had run up losses of more than $23 million. Last month Harris Scarfe warned that it was facing a 45.3% slide in first-half profits.

A dangerous new security hole has been found in Microsoft's Internet Explorer by Spanish security expert Juan Cuartango. The hole - which Cuartango described as "the biggest IE vulnerability I've ever discovered" - allows attackers to gain complete access and control over any computer running any version of Windows and Internet Explorer 5.x using a HTML-formatted e-mail with an attachment that contains a small remote-control program. The e-mail can be sent directly to the victim or can be placed on a website, and unlike most e-mail-activated attacks, the victim doesn't have to download the e-mail or click on the attachment for it to work. If a malicious user sends an affected HTML e-mail or hosts an affected e-mail on a website, and a user opens the e-mail or visits the website, Internet Explorer automatically runs the executable program on the user's computer. Microsoft were informed on the flaw on February 14th but official confirmation of the flaw was only announced over the weekend. A patch is now available. Meanwhile - in Australia - Kelloggs' site was hacked overnight by an unknown vandal, who defaced its front page. As with all previous hacks (including a number of Government sites in January), the site was running Microsoft's IIS on Windows NT.

The spectacular collapse of high-profile dotcoms over the last year has failed to dampen the enthusiasm of SME's for opening their own web presence, according to our monthly Australian Internet Growth Index. The AIGI showed a nationwide increase of 8.2% in the number of live web sites during the last month, though growth was far from uniform - ranging from a slim 0.9% in Perth up to a bloated 12.5% in Canberra. According to our estimates, there are now around 93,000 live web sites in Australia, up from around 5,000 at the start of 1996. The April 1st figures (with March 1st figures in brackets) are as follows:

Australian Internet Growth Index March 2001
(Figures Show Estimated Live Sites)

Brisbane - 8,221 (7,691) Sydney - 30,587 (28,217) Melbourne - 24,648 (22,634) Adelaide - 6,505 (6,012)	Perth - 6,285 (6,223) Hobart - 2,614 (2,341) Canberra - 7,677 (6,824) *Darwin - 6,291** (5,815)
NB: The Darwin figure includes rural Australian sites