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Archive: March 2002 News Headlines
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We Take An Easter Break

Australian Cybermalls News will be taking a short Easter break from today until next Tuesday, 2nd April 2002. We wish all our readers an enjoyable Easter break themselves.


Fairfax Ditches CitySearch

The long, slow and painful retreat of major Australian publishers from the Net took another step today when John Fairfax Holdings announced that it was closing CitySearch's Sydney print directory and looking at the possibility of further sales and/or joint ventures in other cities. Fairfax had originally bought 60% of CitySearch in 1998 for AU$9 million - largely on the strength of its internet business - and had purchased the extra 40% it didn't already own in 2000 for an undisclosed amount. Unfortunately, however, the business never lived up to the company's aspirations and instead lost enormous amounts of money (most recently, AU$7 million in the December 2001 half year). Two months ago, Fairfax sold the online arm of the business to White Pages for AU$20 million. The closure of the Sydney printing plant - with the loss of 30 jobs - completes the company's exit.


auDA Warns On Domain Renewal Scams

The Australian Domain Administration (auDA) issued a consumer alert today following repeated complaints about bogus domain name renewal scams being run by some Australian companies. The auDA alert advises consumers not to give their registry keys to anyone. The move has come following complaints over the last few months that consumers have been receiving unsolicited "renewal notices" advising that registry keys are now required to renew a domain name. auDA advise that this isn't so if consumers renew the domain through the original registrar, and registry keys are only ever required if consumers elect to swap registries. Otherwise, their sole purpose is to allow the holder of the key to find when the domain is due to expire, and to change contact details and delegation information. auDA has also been referring some of the complaints it has received to the Australian Competition and Consumer Commission for future legal action against perpetrators of the scam.


Email Outstrips Snail Mail In UK

In a report likely to have strong parallels in Australia, research firm NetValue say that email has now become more popular than postal mail in the UK, with the number of emails being sent and received from households exceeding letters by nearly 300 million. The UK also leads Europe in email usage, sending more than 170 million more emails than the French and 185 million more than the Germans per month. The company tracked email usage in Germany, France, Denmark, Spain and the UK during December 2001 and January 2002 to draw its findings. NetValue believe that more than 550 million emails were sent and received by British households during January 2001 alone, including an estimated 100 million web based emails sent through services such as HotMail and Yahoo. NetValue also say that nearly 13 million people now regularly use email from their home computers in the UK, with an average home user sending 12.3 emails and receiving 39.1 emails per month.


Microsoft Clamps Down On HotMail

Microsoft have begun urging customers to upgrade from the company's free HotMail service to a paid US$19.95 service by the employing the unusually heart-warming tactic of clearing out their email folders without notice and bombarding them with spam for the paid service instead. Earlier this week - without warning - HotMail users found themselves being diverted to the company's Passport sign-on screen to gain access to their accounts; and many others then found their entire email boxes had been wiped. Microsoft acquired HotMail in January 1998 for US$400 million, and the service has been losing money ever since. Several months ago HotMail altered its terms of service to require users to log in at least once every 30 days or risk losing their account. Then the company restricted HotMail boxes to 2Mb limits, asking users to pay US$12.95 for extra storage. The aggressive new push for Passport sign-ups is seen by analysts as a desperate drive to get as many users involved in the company's .Net services strategy ahead of possibly severe penalties being levied against it in the USA and Europe for anti-competitive behaviour, and the possible rise of the competing Liberty Alliance - an alternative to .Net - being backed by most of the company's competitors.


Australian Business Highly Net-Savvy

New Zealand households may be marginally more wired than Australia (see yesterday's story) but Australian businesses leave their Kiwi counterparts well in the shade when it comes to using IT, according to a new report released by the Australian Bureau of Statistics (ABS) today. In their "Business Use of IT 2000-01" study, the ABS report that 84% of urban businesses and 82% of rural businesses now use computers; 71% of city firms and 65% of rural firms have Net access; and 23% vs 19% now have web presences. Not surprisingly, the ABS found that the larger the firm the more likely it was to have both Net access and a web site, noting that penetration of all three technologies was lowest amongst the country's 457,000 small businesses (79% using PCs; 64% using the Net and 14% with a web presence) but highest amongst the country's 6,000 largest firms (100%, 99% and 81% respectively). The ABS also found that the levels of penetration varied widely amongst different industries with the accommodation, cafes and restaurants industry trailing the field. The ABS estimates that there are 153,400 Australian web sites - very similar to the estimate produced by our own AIGI.


New Zealand Slightly More Wired

According to the Statistics New Zealand (SNZ), 37% of New Zealand households had Net access by the end of 2001 - slightly more than the estimated 33% of Australian households reported by the Australian Bureau of Statistics for the same time period. Households in urban areas, households in apartment complexes and households where the home was owned by one of its residents were more likely to have Internet access, SNZ found. Net penetration was also higher among households with bigger annual incomes, achieving in excess of 70% penetration amongst households with incomes over NZ$100,000 but managing only 10% percent amongst households with incomes under NZ$15,000. However small business use of the Net in the shaky isles still remains low. According to a survey by New Zealand's Employers & Manufacturers Association, the most common use for small business PCs in the country is to look after financial and accounting records. Only 39% of NZ companies surveyed use their PCs to go online at the present time.


Europe To Create Own Satellite Network

European Union (EU) leaders approved a multi-billion-dollar satellite network over the weekend at an EU summit in Barcelona, Spain. The project - a 30-plus satellite system known as Galileo - is expected to cost $A6billion in public and private funds and is designed to break an existing US stranglehold on global satellite communication systems. It is proposed to be running by 2008. The satellite system could be used in air traffic control, military and intelligence operations and for operating mobile phone networks, ending current US dominance in all these areas in the European marketplace. Britain and the Netherlands dropped their long-standing concerns about the cost of the system after intense lobbying from France, Italy and Spain. French President Jacques Chirac had warned last year that Europeans risked becoming ``vassals'' of the USA if the EU didn't proceed with the project. The final details of the plan will be finalised by European transport ministers later this month.


AOL To Ditch Internet Explorer?

America Online (AOL) - the world's largest ISP - may swap from using Microsoft's Internet Explorer in its browsers to using new technology developed by its subsidiary Netscape. The company confirmed yesterday that it is trying out Netscape's Gecko rendering engine in its latest browser release and may swap to it completely in AOL 8.0, which is expected to be due out in about 6 months. While the move may have little direct impact in Australia - where AOL has largely failed to achieve any significant market share against domestic giants BigPond or OzeMail - a swap in the USA could reignite the "browser wars" by decimating Microsoft's existing Internet Explorer market share and significantly boosting Netscape's within a matter of months. The move could also frustrate Microsoft's .Net plans, which rely heavily on having the majority of users tied to the company's technology. AOL - with 34 million subscribers - currently accounts for about 14% of the world's online population. In the USA, pundits believe that Netscape's market share is between 10% and 20%. In Australia, however, the browser generally commands a share of between 35% and 45%


.Com.Au Glitch Puts Sites Out Of Action

A rare glitch in Australia's name server caused havoc to some Australian users today, preventing many from sending out emails and making a number of web sites uncontactable on the Net for several hours as well. According to the Australian Domain Name Authority (auDA), the problem occurred because of an accidental mismatch between zone files held in Australia and one held by RIPE, a Dutch-based organisation which administers IP addresses for Europe. The problem began at approximately 7:00am AEST when a Melbourne IT server generated an incomplete zone file that was copied to RIPE via one of auDA's nameservers. The problem was detected soon afterwards and correct files were regenerated by Melbourne IT at 8:00am and then again at 9:00am. However, RIPE's server was unable to receive a copy of the newer, corrected file until shortly before 12 noon. Further - because of DNS caching - the problem continued to affect at least some internet users for several hours after that.


3,000 Apply For Virtual Citizenship

The fictitious European nation of Ladonia will alter its web site after receiving more than 3,000 applications for citizenship from Pakistanis in the last month. Ladonia - created by artist Lars Vilks in 1996 after a long fight with Swedish authorities over two sculptures he'd built - physically "occupies" 1 square km of windswept coastline in Sweden. Most of the country exists in cyberspace. But that has not deterred an immigration rush. "It all started a month ago when we began getting the first applications from Pakistan", Vilks said. "Then the pace really picked up and we started receiving regular mail asking how to get to Ladonia and where our embassy in Pakistan was situated." But surprised that the web site had given people false hopes, Vilks has temporarily shut down the site's citizen application facility (the imaginary country already has 6,000 registered "citizens") "I just spoke with my Minister of Internet. We are going to try and open it again with a message warning people that we cannot provide jobs or housing," Vilks said.


Knowledge-Sharing Becoming More Common

More signposts of the Information Age: according to a new study by Xerox, more than half of all office workers now find sharing knowledge electronically more effective than talking face-to-face, and knowledge-sharing is now becoming an integral part of modern business practice. In a survey of IT decision-makers and other IT professionals attending a recent annual US trade show, Xerox found that 52% of respondents ranked email, intranets and extranets as the most effective ways to share information compared with 18% who ranked talking to people face-to-face as the best method of knowledge-sharing. The survey also found that 50% of respondents now share more than half their work in any given day, while 33% share less than half and 18% a quarter of their work. 33% volunteered that they shared information as part of company practice while 21% did so because they wanted to educate colleagues. A further 21% did so to provide direction, 11% to foster a team environment and 8% to solicit feedback.


Mobiles Dip; B2B Rises

In signs of continuing changes brought about by the Net, Gartner Dataquest (GD) reported on Saturday that global mobile phone sales dipped below 400 million units in 2001 - the first decline ever seen in the history of the industry. GD estimate that overall consumer sales declined by 3.2% to 399.6 million units last year, a sharp drop from the 60% pa average growth rate seen between 1996 and 2000. GD said that saturated markets in Europe, the removal of subsidies by telecoms operators, a burgeoning second-hand market in developing countries and stock dumping by suppliers eager to offload unsold inventories have all contributed to the fall and the boom days of mobiles may now be over. Meanwhile, worldwide B2B ecommerce looks set to grow strongly over the next several years according to International Data Corp. (IDC). They predict that after a slow uptake in 2000-2001, worldwide B2B sales will quickly grow from US$282 billion in 2000 to US$4.3 trillion by 2005. According to IDC, the USA will remain the largest region for B2B e-commerce, with purchases increasing at a compound annual growth rate of 68% over 2001-2005. In Western Europe, B2B purchasing will increase at 91% pa during the same period, while the Asia-Pacific will see a compound growth rate of 109% pa.


Sun Sues Microsoft

Sun Microsystems today filed a private anti-trust suit against Microsoft, alleging that Microsoft's handling of Java has led to Sun suffering "diminished licensing fees, lost computer workstation sales, lost server sales, lost software product sales, lost sales of consulting services and a diminution in value to Sun's trademarks, reputation, and goodwill" The suit will seek up to US$1 billion in damages and a number of punitive remedies against the company including the unbundling of Internet Explorer, IIS and Microsoft's forthcoming .Net initiative from the company's underlying Windows operating system. Commenting on the suit - which had been rumoured for some time - Sun's General Counsel Michael Morris said that Sun is trying to stop Microsoft from making its products a mandatory part of the Net by using its monopoly power to create "Microsoft-controlled choke points to Internet access". The suit follows a similar private anti-trust suit launched by AOL Time Warner in January over the damage Microsoft allegedly caused to Netscape (now owned by AOL) during the "browser wars".


Almost Half A Billion Now Online

According to a study by US-based research firm Nielsen NetRatings (NN), there are now almost half a billion people with home Internet access around the world. NN estimate that 498 million people had home Internet access by the end of last year, up 5.1% from the previous quarter. 40% of home users were in North America, 27% were in Europe, the Middle East and Africa, and 22% were in Asia. NN note, however, that Asia now has the fastest growing home Internet population and estimates that the number of people online there grew 5.6% in the 4th quarter of 2001 compared to a 4.9% increase in Europe, 2.5% in the USA and 3.3% in Latin America. Meanwhile, new figures from the UK-based Oftel indicate that 45% of households in the UK now have Internet access, up from 30% less than a year ago. The agency attributes the rise to a growth in "unlimited access" Net subscription services.


45% Distrust Online Banking

Repeated system outages and concerns over security have left 45% of Australians either completely disinterested in or strongly distrustful of online banking, according to a new report from Corillion International. While Australia now had one of the highest uptake rates for online banking in the world (23% versus a US uptake rate of 15% and a UK uptake rate of 12%), frequent service breakdowns, outages and recurrent stories of security breaches have made many Australians reject online banking outright. Further - in an ironic twist - Corillion also suggest that most Australian banks are currently losing money with their online banking services and that hoped-for cost savings have yet to eventuate. This, they believe, is because few customers want to do all their banking online. Accordingly, higher transaction fees and reduced levels of customer service introduced by most of the big banks in the last decade in their efforts to discourage consumers from face-to-face banking may simply be encouraging many to swap to smaller, more human banks instead.


Online Fraud Increasing

Online fraud in the USA last year was 19 times higher than offline fraud, dollar for dollar, according to Internet research firm GartnerG2. And while they estimate that only $US700 million of the $US61.8 billion spent online by US consumers last year was lost to fraud (ie around 1.14%), this amount still exceeded the total dollars lost to offline credit card fraud by a margin of almost 19 to 1 and is a significant issue of concern with both consumers and legitimate etailers. In a survey of 1000 US online buyers, Gartner found that 5.2% of them reported suffering some form of credit card fraud at some time while another 1.9% said that they were victims of identity theft. Gartner report that this issue is of such concern to a significant minority of consumers that 18% are now using digital theft protection software currently being promoted in the USA by Visa and Mastercard. Gartner also found that most online fraud is aimed at high profile ecommerce sites; that it roughly triples during the Christmas season when the volume of transactions means merchants have less time to check each individual order for suspicious behaviour patterns; and that the three countries currently generating the highest levels of fraudulent orders online were the Ukraine, former Yugoslavia and Indonesia.


Net Becoming An Everyday Tool

In a new study likely to have strong parallels in Australia, the Pew Internet & American Life Project (PEW) has found that as Internet users gain experience online, they increasingly turn to it to perform work-related tasks, to make purchases and do other financial transactions, to write emails with weighty and urgent content, and to seek information that is important to their everyday lives. PEW's year-long survey of 1,501 Net users found that the more experience users have of the Net, the less they use it (PEW report a slight dip in the length of the average online session, from 90 minutes to 83 minutes over the course of one year) but the more productive they become with it. Users also find that it becomes more and more indispensable to daily lives across time. Interestingly, Net use also appears to modify offline behaviour, with many study subjects reporting they now watch less TV and do shop less physical shopping than they did 12 months ago. PEW's study also found that Net users were more likely to bring their work home with them, and that spam emails were now a significant problem for 44% of people connected to the Net.


Australian Net Suffers Die-Back

After patchy and uneven growth in January, the Australian Internet suffered a general die-back in February 2002 according to the search engines we poll to construct our monthly Australian Internet Growth Index (which has been attempting to measure the number of live Australian web sites - as opposed to the number of registered domains - since January 1996). Growth ranged from -9.8% in Sydney, - 4.8% in Adelaide and -3.4% in Melbourne to a modest +1% in Brisbane, Perth and rural Australian areas. We estimate that approximately 6,200 web sites vanished during the last 28 days . All the same, whether this die-back actually occurred in February or a few months earlier due to the delays most engines now have in indexing sites is difficult to determine. The March 1st figures (with February 1st figures in brackets) are as follows:

  Australian Internet Growth Index February 2002
  (Figures Show Estimated Live Sites)
  • Brisbane - 12,090 (11,970)
  • Sydney - 46,242 (51,266)
  • Melbourne - 43,907 (45,453)
  • Adelaide - 8,478 (8,905)
  • Perth - 9,622 (9,527)
  • Hobart - 4,048 (4,110)
  • Canberra - 8,555 (8,739)
  • Darwin* - 10,916 (10,808)
NB: The Darwin figure includes rural Australian sites

During February 2002 Australian Cybermalls hosted 68,830 visitors, a fall on January's 79,701 as we passed through the shortest month of the year. Our visitors viewed 310,131 page displays from our servers, which in turn consumed 14.8 Gb of bandwidth.

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