Pc News

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HP Overtakes Dell in PC Sales Worldwide

Hewlett-Packard snatched the top position in global PC shipments from rival Dell by a slight margin in the third quarter.

That's the finding market researchers Gartner and IDC reported separately Wednesday when they released their respective quarterly studies on the PC market.

This is the first time HP has earned top honors since the fourth quarter of 2003, Gartner said. Gartner estimates that HP shipped 9.652 million units, or 16.3 percent of the total, while Dell shipped 9.541 million, or 16.1 percent.

IDC called it closer, estimating 9.831 million units for HP and 9.803 million units for Dell, both equivalent to a 17.2 percent market share and a "statistical tie," the firm said in a statement.

Worldwide PC Sales Up
The two market researchers calculated HP's growth, compared with last year's third quarter, at slightly over 15 percent, and both put Dell's growth at 3.6 percent.

They differed on the rate of growth worldwide for the entire market compared with last year's third quarter. IDC said shipments grew 7.9 percent to about 57 million units, slower than the 9.8 percent growth rate in the second quarter. Meanwhile, Gartner put the growth at 6.7 percent, or about 59 million units.

Both market researchers ranked Lenovo Group in third place, with IDC estimating its market share at 7.8 percent and Gartner placing it at 7.5 percent. Both firms said Lenovo's shipments grew at around 10 percent. Acer took fourth place in both studies with around 6 percent of shipments. IDC put Acer's growth at 34.3 percent and Gartner estimated it at 33.4 percent. Finally, Toshiba finished in fifth place with around 4.2 percent of shipments although IDC put its growth at 20.4 percent and Gartner estimated it at 30.5 percent.

International shipments continued to expand at a roughly 11 percent year over year, but slow growth in the U.S. pulled down overall results, IDC said.

U.S. Shipments Down
The market researchers differed slightly on the U.S. market, but both found shipments fell. IDC put the U.S. drop at less than 1 percent, while Gartner estimated it at 2 percent. IDC said Dell's share shrunk by 6.7 percent, while Gartner put the fall at just over 7 percent. Dell ranked first on both studies, with close to a third of all shipments. HP came in second, with market share of 22 percent in IDC's study and 23 percent in Gartner's. IDC put HP's growth at almost 7 percent and Gartner estimated it at 6.3 percent.

IDC's study includes shipments of desktop, notebook, ultraportable, and x86 server PCs, but not handhelds. Gartner's includes desktop PCs, mobile PCs and x86 servers, and excludes workstations.

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Sony Cuts Profit Forecast

A large recall of Sony-made batteries by PC makers and problems that have hit the launch of the PlayStation 3 console caused Sony to cut its full year profit forecast by more than a third on Thursday.

The company now expects to earn a profit of $674 million this year, down 38 percent from its previous forecast and below its fiscal year 2005 profit of $1 billion. It expects its operating profit to be 432 million, which is 62 percent below its previous forecast and much lower than the $1.9 billion it recorded last year. Operating profit is the amount of money made from operations and excluding exceptional items like gains recorded on stock sales.

Battery Recalls Take Their Toll
The battery problems, which have seen around 8 million battery packs recalled or offered for exchange in recent weeks, will cost Sony around $431 million, it said. That's about double the company's previous estimate made in late August.

Even with Thursday's update that figure could change, Nobuyuki Oneda, Sony's chief financial officer, said at a Tokyo news conference.

"This is our best estimate right now. It could go up, it could go down," he said. Sony is still in discussions with PC makers regarding how much of the cost of the recall it will bear, he said. "We cannot say who will bear the cost but a large part will be borne by Sony."

PlayStation Trouble
Larger losses are expected from the games division.

Problems with starting up mass production of the blue lasers required for the PlayStation 3 console and the subsequent adjustments Sony will make to production of other components will cost about $279 million. Sony will also be hit by a price cut for the console in Japan and the addition of higher-specification components to the machine. Together these will mean a loss of about $253 million, based on the originally anticipated profits.

Sony's PlayStation Portable, the handheld gaming device launched a little under two years ago, is also facing problems. Sales this year--already forecast to be below last year's level--are worse than expected and Sony lowered its shipment forecast from 12 million units to 9 million units. The lackluster sales will further hit revenues and profits in the gaming business, said Oneda.

The revision doesn't come as a surprise. The widening recall of batteries in recent weeks and the PlayStation 3 price cut both gave investors and analysts cause to anticipate such a move by the company. Earlier this week the company said it was considering such a revision.

Turnaround Possible
In the midst of the bad news there were a few indications that, despite the battery and game problems, Sony is making some progress in turning around its electronics business. Product sales targets are being met for flat-panel LCD televisions and digital cameras and Sony said it now expects restructuring costs to be $338 million, which is a reduction from the previously forecast $422 million.

Sony is due to announce its first-half business results next week.

Despite the negative publicity that has come from the battery problems there has been no decision made on whether any senior executives will lose thier jobs.

"Top management regards the situation as quite grave and serious indeed," said Naofumi Hara, a senior vice president of Sony at the news conference. "For the time being they are going to see through voluntary recall and replacement. That's what the management is focusing on, nothing beyond that has been decided."

[Rasputin]

The 15 Freakiest Web Sites

The Internet can be a scary place. And not just from all the witches, ghouls, and goblins (not to mention hackers, stalkers, and phishers) that creep up this time of year. In fact, it's the sites that don't deliberately set out to scare that make you want to crawl into bed and hide under the covers.

This Halloween season we searched high and low for sites with the fright stuff. Our top 15 ranges from the insanely insipid to the terrifyingly untalented. In some cases the horror is limited to one venue; in others, the choices were so rich (and repellant) we couldn't narrow the selection to a single site.

Presented for your approval: scarier than an IRS audit, more disturbing than nude photos of Janet Reno, the 15 freakiest spots on the Net.

15. The Thrill(er) is Gone
A woman sits alone at night in a dark house. Suddenly the candles go out. The phone rings...mysteriously. Who could it be? A serial killer? A collection agent? Her mother, saying she's coming to spend the weekend? The bedroom door creaks open and--EEEK! It's a Microsoft VB Script error! Run for your lives!

Here, then, lies Urbanchillers.com, an occasionally buggy video site that calls itself "The Home of Fear," where you'll find one-to-three minute thrillers starring malicious milkmen, knife-wielding neighbors, and murderous bric-a-brac, made by amateur auteurs who have clearly spent too much time watching The Blair Witch Project. (Don't look now, but...the killer is inside the house!) In most cases the writing, acting, and directing are far scarier than the plots. Is that shadowy figure lurking behind our hero a demon who will devour his soul, or just bad lighting reflecting off the camera lens? We'll never know, because it's over in minute (or three). And that's probably a good thing.

14. Calling Captain Hook
It's a simple rule to live by: Grown men should not wear tights. But this fact has apparently been lost on Randy Constan, proprietor of PixyLand, the Web home of Peter Pan. Here you'll discover many, many photos of Randy dressed in elfin garb, sprinkling pixie dust and singing "Do you believe in fairies?" (Order his self-produced CD, "I Won't Grow Up," for just $10.95--operators are standing by!)

13-11. iPod, Therefore I Am
People who enjoy unhealthy relationships with their personal electronics are always a little disturbing. Thanks to iAttire, they can dress up their iPods as a pirate, a princess, a clown or a cowboy, or simply accessorize by adding bunny ears, a jaunty beret, or some sexy negligee. Prices range from $10 for an argyle cap to $60 for a set of three boxers.

Even scarier: people who dress up as their personal electronics. The Apple Collection features a gallery of individuals who consider it perfectly reasonable to appear in public as their favorite music player. But why wait till they're grown? At iPop My Baby you can make your newborn look like an oversized Nano for $16. The 100 percent cotton onesies feature Apple's trademark click wheel on the chest (but, sadly, no volume controls).

10. Date Crimes
Hell hath no fury like a woman scorned--and Don't Date Him Girl is scorn with a flaming red S. Here women can tell the world about the snakes, skunks, scoundrels, losers, and jerks they have dated and/or married. The scary part, of course: finding your own name--or that of your current love monkey--among the database's 17,000 anonymous entries, each of which include the gentleman's actual name, the city where he lives, a physical description, and in some cases a photograph.

Are the stories true or false? Blatantly libelous or deadly accurate? There's no way to know for sure, though the site lets men post rebuttals that are often funnier and more revealing than the original complaints. Read it for fun or with trembling hands. And if you're unlucky enough to find yourself slandered, consider joining the class action suit that one maligned bachelor is threatening to launch.

9-6. In Goth, We Trust
Is your dream date a cross between Marilyn Manson and Morticia Addams? Are you looking for that special someone with a fondness for formaldehyde? Then you'll love Gothic Personals. Here you can search for soulmates by fetish, religion (Druid, Wiccan, Vampire), type of Goth (MopeyGoth, PerkyGoth, GangstaGoth), and more. If you're desperately seeking a transgendered polyamorous couple that wants to be pen pals, this is the place to look.

Need a name for your gothic persona? Use Necrotic Obsession's Goth Name Generator to get an online moniker like Leather Pleasure or Lips Sewn Shut. (Warning: some of the links on this site are naughty, while others are, well, dead.) Or if you just want to know how Goth you really are, submit your photo to Hot Goth and get rated by other denizens of darkness (unless, of course, you're a vampire and can never be photographed).

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The Five Freakiest
5. To Badly Drone Where No Man's Droned Before
You can have Ella and Frank, Elvis and Aretha. For sheer vocal audacity, I'll take William Shatner. Of the many sites dedicated to the former Star Trek captain's distinctive song stylings, perhaps the most blood-curdling is William Shatner Sings! Here you'll find studio versions of "Lucy in the Sky With Diamonds" and "Mr. Tambourine Man," plus a live 1978 recording of "Rocket Man." Also included: former shipmates Mr. Spock (Leonard Nimoy) warbling "The Ballad of Bilbo Baggins," and Lieutenant Uhura (Nichelle Nichols) navigating her way through a disco-infused version of the "Star Trek" theme song. Beam me up, Scotty--quickly, before they sing again. (For a good Shatner song collection, check out Has Been, the actor's surprisingly snappy 2004 collaboration with musician Ben Folds.)

4. Hamburger Hellper
Whoever thinks beef is just for dinner needs to meat--er, meet--Mr. Beefy, adopted son of the Beefeater Family and star of MeatMation. This demented photo/essay from the mid-1990s is disturbing enough to turn Hannibal Lecter into a vegan. Mr. Beefy is like Gumby, only instead of clay his head is made from chopped chuck and his limbs from raw chicken parts. It seems Mr. Beefy is a cannibal with a fondness for consuming his relatives. He proceeds to dine on Grandma (a fish), Ma (a Hebrew National hot dog), and Pa (a juicy Texas steak) before moving onto the family dog, Grissle. Though last updated in 1997, the site lingers like a McDonald's hamburger in your digestive tract. If you visit, be sure to wait at least 30 minutes before or after eating.

3. The Knife Stalker
Is that Willem Dafoe playing Nosferatu or the former Charlie's Angel Kate Jackson after bad cheek implants? Has Nicole Kidman's face really been injected with enough Botox to paralyze an elephant? What's up (or down) with Britney's breasts? You'll find the answers to these questions and more at Awful Plastic Surgery, which documents the more horrifying examples of Hollywood's obsession with youth (just select from the prolific article archives). The site relies largely on before-and-after photos, informed speculation, and generous helpings of snark. It also links to the ultimate horror show: a photographic history of Michael Jackson's face. Be afraid, be very afraid.

2. The Bod Mod Squad
Two words: Body modification. If that phrase doesn't send a chill down your spine, visit BodyMod.org, a site dedicated to gruesome acts of self-mutilation. If you can tattoo it, filet it, or stick a piece of metal through it, you'll find photos and videos of it here. (Warning: Many of these images are not for the squeamish. Trust me.) The site also sports user forums, a Wiki, and links to parties where, if you know the right people, you can get yourself suspended from a hook.

1. The Devil in Miss Hilton
When YouTube decided to devote a channel to Paris Hilton, the hand of Satan was clearly at work. (The truly demonic part: How anyone this dim could become so rich and famous.) While footage from Hilton's infamous sex tape is noticeably (and thankfully) missing, you can watch America's favorite 'celebutante' licking her lips and saying things like, "I'm really excited to be here," "It's really exciting to be here," and "I can't even describe how excited I am." Watch as she goes shopping in Tokyo, hits the clubs in Miami, and discusses Heisenberg's uncertainty principle with Noam Chomsky and Stephen Hawking. (Just seeing if you're still paying attention.) And if you think Paris is terrifying, check out the fans squealing like stuck pigs as they queue up for an autograph. You'll also find a handful of music videos where Paris displays her true talents, none of which have anything to do with singing. Watch them if you dare, but remember: This is why God invented the mute button.

[Rasputin]

Final Version of Mozilla Firefox 2 Will Be Released Oct. 24

Not to be outdone by Microsoft's recent release of Internet Explorer 7, Mozilla will release the second major version of its rival Firefox browser on Tuesday, October 24.

According to Mozilla Vice President of Products Christopher Beard, Firefox 2.0, which should be available on Tuesday if all goes according to schedule, includes key new usability features missing in the new IE 7.

(Read PC World's comparative review of IE 7 and Firefox 2.)

Updated Mozilla Features
Mozilla has also enhanced the popular tabbed browsing feature in 2.0 that Firefox introduced when it emerged two years ago as the first significant rival to IE in years, Beard adds. Tabs allow users to navigate more easily between multiple Web pages when browsing the Internet, and Microsoft added tabs to IE 7 after Firefox's success with the feature.

In Firefox 2.0, Mozilla has added a "close" button on its tabs, as well as new visual features to make the tabs appear more obvious to the user, Beard says.

New usability features in Firefox 2.0 that differentiate it from IE 7 include one that will restore the browser to pages where the user was working if a sudden OS restart is required. "If your browser needs a restart or the OS asks you to reboot, losing all of those Web pages and content is pretty disruptive," Beard notes.

Firefox 2.0 is offering two options for enabling this feature. One way is that, by default, the browser will give the user an option to restore his or her browser sessions if there is an unexpected shutdown; the other is an advanced option to set the browser so that it always restores the last five pages visited before a sudden reboot.

Antiphishing Filters in Both Browsers
Like IE 7, Firefox 2.0 also has an antiphishing filter that will help protect users from divulging personal information to fraudulent Web sites. But Mozilla has taken a different approach to its antiphishing filter than Microsoft has, Beard says.

Instead of checking individual Web pages users visit against lists of known phishing sites, thus sending information from the site to third parties that keep lists of such sites, Firefox updates its blacklist of known fraudulent Web sites automatically every half-hour to an hour. Beard said this better protects users' privacy because no information from the sites they've visited is sent to any third parties.

Mozilla also has added spell-checking features to the browser similar to those found in word-processing applications. Whenever a user is typing text in the browser--as when typing the name of a Web site, a blog entry, or an e-mail--Firefox's spell checker will underline in red words that appear misspelled. Right-clicking on the word will give a user options for a corrected spelling.

In addition, Firefox 2.0 has a new feature in its integrated search box that will suggest a list of search terms after a user types a few letters of a word, depending on the search engine being used. Firefox 2.0 uses Google, Yahoo, and Ask.com search engines as options for the search box, and each uses a different algorithm to suggest search terms, Beard explains. To ensure that this feature is not disruptive to the user experience, the suggested search terms will appear in a separate pane below the search box, he adds.

Market Share
Though recent figures by Web analytics company OneStat.com show Firefox market share declining 1.44 percent since July--from 12.93 percent to 11.4 percent--Beard says Mozilla partners and users are reporting that the browser is more popular than ever.

"We're not seeing a decline at all," he says. "All of our partners and friends are reporting very strong growth recently." Beard adds he expects that growth to continue with the introduction of Firefox 2.0. Firefox currently has 70 million to 80 million users, he estimates.

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Microsoft, McAfee Trade Barbs Over Vista Security

Microsoft today defended the process for disclosing key security information about its upcoming Windows Vista operating system after security vendors continued to complain that it's too slow and not detailed enough.

Earlier this week, Microsoft released APIs (application programming interfaces) to allow other security software to shut down the Security Center management console, the company's own monitoring panel that will be included with the Vista OS.

Symantec and McAfee had complained that the Security Center would confuse consumers who use their software, as those products come with their own management consoles.

After pressure from European regulators, Microsoft also addressed another complaint, this one regarding Kernel Patch Protection (KPP), a technology that blocks access to the kernel--the core code in Windows. The feature, on the 64-bit version of Vista, is intended to halt invasive software such as rootkits from burrowing into the OS.

But security companies complained that access to the kernel is necessary for certain security features. Microsoft relented, but said it could be a while before those APIs could be released, due to the complexity of the documentation. Microsoft said the APIs could be released in Service Pack 1 for Vista, but service packs for other versions of Windows have taken up to a year to come out.

McAfee Unhappy
The situation was further exacerbated yesterday when a scheduled Microsoft conference call with security vendors on KPP failed due to a technical problem. Late Thursday McAfee complained again about Microsoft's response to security vendor issues, with an outside McAfee counsel issuing a statement blasting Microsoft's "hollow assurances."

Microsoft returned fire today.

"It's unfortunate that McAfee's lawyers are making these kinds of inaccurate and inflammatory statements," Ben Fathi, a Microsoft vice president who deals with security, said in a statement. "We've already taken a number of steps to provide McAfee and our other security partners with the information they need."

Fathi went on to detail Microsoft's e-mail and phone correspondence with McAfee about Security Center this week, writing that Microsoft remains open to answer questions. McAfee officials were unable to immediately comment.

However, other security vendors are also unhappy that they will have to wait for the kernel APIs.

"We've contacted Microsoft to try to get this sorted out," wrote Mikhail Penkovsky, director of sales and marketing for Agnitum, a firewall and network security vendor, on the company's blog. "Microsoft has made a positive decision--but we don't have the [KPP] API yet to analyze it."

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YouTube Deletes Nearly 30,000 Files

The online video site YouTube has deleted close to 30,000 files after complaints from an organization representing Japanese copyright holders, the organization said today.

The Japanese Society for Rights of Authors, Composers and Publishers (JASRAC), which collects royalty payments for musicians, submitted a list to YouTube of 29,549 files that it judged infringed on the rights of 23 Japanese content companies, said Masato Oikawa, a spokesman for the organization in Tokyo.

File Types
The files are mostly entertainment and music TV programs and were discovered during a five-day audit of the site that started Oct. 2, Oikawa said.

The 23 companies that backed JASRAC include all of Japan's major TV networks, public broadcaster Nippon Hoso Kyokai (NHK), some regional and cable TV broadcasters, and other organizations including the Recording Industry Association of Japan (RIAJ) and Yahoo Japan.

A History of Complaints
It's not the first time YouTube has been in the cross hairs of Japanese broadcasters. Earlier this year NHK asked the site to remove a clip of a children's song and said it would go after other files on the site.

YouTube has a lot of Japanese TV clips compared to those of other nations because of the strong cult following that Japanese pop culture has around the world.

It's also growing in popularity with Japanese users. The site posted massive growth in Japan between December 2005 and March this year, with the number of monthly users grew from 201,000 to 2.1 million, according to an estimate from NetRatings Japan in April.

Legal Questions
YouTube agreed to be acquired by Google earlier this month in a $1.65 billion stock transaction. Analysts have wondered about YouTube's ability to avoid lawsuits over the vast amount of copyright material that exists on the site, and some predicted the company would soon be hit with lawsuits.

Universal Music Group, Sony BMG Entertainment and Warner Music Group each signed deals with the companies earlier this week to display their content, which could help shield the video sites from some lawsuits.

[Rasputin]

Google and Yahoo Embrace Photo Sharing

The easiest way to share photos is to publish them online, and the new Picasa Web Albums (from Google) and Yahoo Photos make that easier than ever. I liked aspects of both beta services, but I give Yahoo's service the early edge for its solid search features.

In what Google describes as "pre-beta" form, Picasa Web Albums feels as polished as some of its longer-running rivals. Google ties the site to beta version 2.5 of its Picasa software. You edit and organize your photos in Picasa, and then click the Web Album button to post them online. Picasa's defaults make albums public--so anyone with an invitation can browse them--but switching albums to private viewing is easy. You can upload photos at their original resolution or let the service downsize them to save storage space. Google offers 250MB of space free; you can pay $25 per year for 6GB.

Google's site layout is attractive and functional. You can switch freely among your entire collection, your public albums, and other people's bookmarked albums. You can also see photo metadata like the camera model and exposure information for a selected image, view slide shows, and download photos (yours or others') to your PC.

Strangely, Picasa Web Albums forgoes Google's search prowess, and the company will not say whether such a function is coming later. Currently you have no way to tag photos or search for images.

In contrast, the single best feature of Yahoo Photos is its search function. You can easily add Flickr-like tags to your images so that you can find specific photos via a search box at the top of the page. And whereas Google's photo editing tools are all in the Picasa software, Yahoo's site includes exposure adjustments, cropping tools, red-eye reduction, and even fancy border effects.

Yahoo Photos' biggest weakness is its design. The interface is cluttered with ads and tiered menus that I had to experiment with--even then, I never really felt at home.

The upload system lacks an organizer application. And Yahoo sets images to private by default--odd, since the Web is all about sharing. Also, it's easy to miss the fact that you can upload images at their full size, because that feature is hidden behind a check box that describes the settings in terms of upload speed. At least for now, Yahoo supplies free, unlimited storage.

What Picasa Web Albums lacks in features it makes up for in polish and charm. On the other hand, Yahoo Photos will appeal to folks who like the idea of sharing and editing their photos, all online.

[Rasputin]

Scandoo and SiteAdvisor Make Surfing Safer

The glory days of carefree Web surfing are over, due to the growing ranks of untrustworthy sites that bust your browser and drop ID-stealing malware onto your system. Fortunately, two innovative, free services--Scandoo (public beta) and SiteAdvisor--can help you surf the Web safely. Both use automatic crawlers to scour the Internet for potentially dangerous Web sites, and each uses color-coded icons to signify risk factors for the sites that appear in your Web search results.


I'm a big fan of SiteAdvisor's detailed analysis, seamless browser integration, and indicator icon for currently viewed sites. But Scandoo, through analysis and community feedback, can flag search results based on URL category filters (such as nudity).

Launched in March and snapped up by McAfee in April, SiteAdvisor is a free plug-in for Internet Explorer and Firefox that automatically color-codes both search results and sponsored links in Google, MSN, and Yahoo. A red icon indicates that the site clearly runs afoul of SiteAdvisor's tests for spam, downloaded malware, and links to other malicious sites. Yellow means the site is questionable; green means the site is clean. You can obtain more details and a link to all the testing data if you pass your mouse over the icon. A browser icon displays the color rating for the site you're currently viewing, as well. If a site is exceptionally bad, SiteAdvisor blocks access to it in Internet Explorer but not in Firefox.

Scandoo's Web Filtering

To use the Scandoo service, you must run your searches through its Google-like Web site or install an IE 7 or Firefox plug-in that adds Scandoo as an option to either browser's integrated search box. You can get results from Google and MSN; support for Ask.com and Yahoo is coming.

Scandoo's analysis is far less detailed than SiteAdvisor's. You'll see a black bug icon to the left of results where Scandoo's crawler found a threat. You can mouse over the icon, but there's really no point--you'll get only a generic message saying the site 'may represent a potential web risk'. Also, Scandoo currently does not rate any sponsored links, though the company plans to add this functionality soon.

Scandoo's key advantage over SiteAdvisor is that it lets you flag sites using any of 26 different Web category filters. The service marks any search results that match your selected filters with a red icon. In our informal tests, we saw no significant flaws with Scandoo's site categorization. The service won't block the site in question, either, so you can still visit it if you want; you'll just receive some advance warning about its content.

SiteAdvisor says that it is looking closely at adding Web category filtering, but for now the feature is the deciding factor between the services. If you don't need such filtering, SiteAdvisor's deep analysis and seamless browser integration are far superior to Scandoo's generic warning message for search results only.

[Rasputin]

AOL CEO says sales may shrink for two years: paper

FRANKFURT (Reuters) - Internet service provider AOL's sales may shrink for the next two years as it gives away services to win more users and attract advertising, its chief executive said in an interview published on Saturday.


"Maybe another two years, you are right there," Jonathan Miller said when asked by German newspaper Die Welt whether sales would continue to fall. "But it's about profitability for us in this phase."

"In the past, we invested a lot of money in the infrastructure for the access business and in winning customers. That's over now. Later, sales should rise again," Miller said.

Miller said AOL, a unit of U.S. media group Time Warner, made profits of 20 to 25 percent of sales in its Internet access business but more than 50 percent in its advertising business.

In recent weeks, AOL has sold its Internet access units in Germany, France and Britain for a total of almost $2 billion as it reshapes itself into a free Web portal where popular e-mail and entertainment services are supported by advertising.

Time Warner's online advertising revenues jumped 40 percent to $449 million in the second quarter, bolstering its strategy. But AOL's sales dropped 2 percent to $2 billion due to a decline in subscription revenue as it lost paying customers.

Miller said AOL wanted to expand its European presence and aimed to be represented in most of the continent's countries with its own Internet portal and advertising network in five years' time.

Asked whether a sale by Time Warner of AOL was now off the agenda, Miller said: "For companies, nothing is ever completely off the table. But it also doesn't make much sense. Most media companies are looking for a way into the digital business."

He said an initial public offering for AOL, after Time Warner's announcement this week that it would float its cable TV unit, was "an option."

Miller said he expected further industry consolidation in the wake of Google's deal to buy video site YouTube for $1.65 billion earlier this month and News Corp.'s $580 million acquisition of online music and dating firm MySpace.com.

He said AOL would "definitely" be a buyer, and that the company was looking at various companies, including in Europe.

Miller said he had had talks with U.S. social networking site Facebook, the only hot U.S. Internet property left of any size, but had decided not to bid for it.

Facebook has been reported to be in discussions to be sold to Yahoo for close to $1 billion.

"In the end, it's a question of price," Miller said. "One consequence of Google's acquisition of YouTube is that no one wants to sell under the price they think they can get. The game is becoming ever more expensive."

[Rasputin]

Yahoo Japan profit rises as online stores grow

TOKYO (Reuters) - Yahoo Japan Corp., the country's most popular Web portal, said on Monday its latest quarterly profit rose 22 percent after attracting more stores to its online auction and shopping sites.

Group net income was 13.6 billion yen ($114.5 million) in the three months to September 30, from 11.14 billion yen a year ago. The company's estimated profit range was between 13.1 billion yen and 14.9 billion yen.

Yahoo Japan, 41-percent owned by telecoms conglomerate Softbank Corp., has been boosting its efforts to add more online shops and video clips to compete against rivals such as Rakuten Inc. America's Google Inc., the world's biggest Web search, is also increasing its presence in Japan with new services such as news and searches for cellphones.

Tokyo-based Yahoo estimated net income in the current quarter will land within the range of 13.65 billion yen and 15.2 billion yen. It forecast sales of between 51.7 billion yen and 55.2 billion yen.

America's Yahoo Inc. (Nasdaq:YHOO - news), which owns a third of the Japan unit, said earlier this month its quarterly profit dropped 37 percent to $159 million on higher stock option costs and slowing advertisement sales.

Tokyo-based Yahoo Japan also said advertisement sales, which make up 40 percent of total revenue, were flat at 21.2 billion yen in the second quarter compared to the first quarter, because companies limited spending amid concern about rising oil prices and slowing stock markets.

In the second quarter, total sales rose 24.5 percent to 51.2 billion yen. The company had forecast a range of 51 billion yen and 54.9 billion yen.

The company said revenue at its business service segment, which does not include ad sales, rose 42 percent to 11.4 billion yen, helped by commissions from the increased number of shops at its online mall and auction service.

Yahoo Japan does not provide annual earnings forecasts.

Shares of Yahoo Japan ended flat at 45,500 yen in Tokyo before it announced the results, compared to a 0.8 percent rise in the benchmark Nikkei average

[Rasputin]

Bugs and Fixes: Drive-By Downloads Cruise Through IE

They could lurk in booby-trapped banner ads on a site you regularly visit, or in a poisoned HTML e-mail. And because of new holes, such drive-by downloads can bust your Internet Explorer 6 or Outlook client and fill your PC with malicious software.


This latest risk for IE 6 on Windows XP (SP1 and SP2), 2000, and Server 2003, plus Outlook 2003, is much like the huge WMF vulnerability Microsoft fixed in January. In this case the hole involves a rarely used, Microsoft-only Web graphics format called Vector Markup Language. It's like a little-used basement window you forgot to lock. Worse, you'd only have to read or preview an e-mail or visit a poisoned site in IE to be infected, no click required.


If you have Automatic Updates turned on, you should already have the patch. Otherwise, you can get it here, along with additional information.


But you're not safe yet. IE 6 has another graphics bug, this time in the way it handles movie or game files that employ DirectAnimation.


Exploit code for the hole is already on the Web. Like the VML problem, this one also facilitates drive-by downloads, and the same versions of Windows are affected. Microsoft is likely to have distributed a patch by the time you read this; you can also retrieve it here.


Note that Firefox, Opera, and even IE 7 are unaffected by these holes. If you've been waiting for a good reason to drop IE 6, this might be it.

Media Woes

As if that weren't enough, Adobe patched critical holes in its Macromedia Flash Player as well. Version 8.0.24 and earlier could open you up to yet another drive-by download if you simply view a doctored Flash movie. Microsoft distributed vulnerable versions with Windows XP SP1 and SP2, and with XP Pro 64-bit.


For the fix, upgrade to version 9.0.16.0 (or use Flash's auto-update feature); see the details here.


And just to show that media across the board is unsafe this month, Apple patched six critical holes in all QuickTime versions prior to 7.1.3E running on Windows 2000 and XP. The popular media player has playback flaws with several file formats, including H.264 and native QuickTime movies. Grab the upgrade and more information here.

More Vendors Recall Laptop Batteries

Toshiba, Lenovo, and Fujitsu have hopped on the recall bandwagon for hundreds of thousands of laptop batteries that use defective Sony-made battery cells. Some of the defective batteries pose a fire hazard; others just stop working. To see whether your laptop is affected, check the appropriate link, by the cutoff date of December 31:

Satellite or Tecra series Toshiba notebooks
R, T, or X series ThinkPad notebooks
Fujitsu's LifeBook models

And be ready for more: Sony says it will announce additional recalls for other laptop batteries that use the defective cells.

In Brief
Segways Stumble

Watch out for Segways: The company is recalling all 23,500 of the vehicles for suddenly careening over forward when their wheels reverse direction, with no warning, because of a software bug. Get more details here.

Mozilla Fixes

Mozilla patched four critical flaws in the Firefox browser; two also affect the Thunderbird e-mail program. At press time, there were no reports of attacks exploiting these holes. Get the fix by updating both apps to version 1.5.0.7 via their update feature, or at www.mozilla.org/products. For more information, go here.

PowerPoint Pain

Another zero-day security hole hit PowerPoint 2000, 2002, and 2003. Click here for a patch, and, as always, exercise caution with unexpected e-mail attachments.

BUGGED?

Found A hardware or software bug? Send us e-mail on it at bugs@pcworld.com.


Stuart J. Johnston is a contributing editor for

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Microsoft, McAfee Trade Barbs Over Vista Security

Microsoft today defended the process for disclosing key security information about its upcoming Windows Vista operating system after security vendors continued to complain that it's too slow and not detailed enough.


Earlier this week, Microsoft released APIs (application programming interfaces) to allow other security software to shut down the Security Center management console, the company's own monitoring panel that will be included with the Vista OS.


Symantec and McAfee had complained that the Security Center would confuse consumers who use their software, as those products come with their own management consoles.


After pressure from European regulators, Microsoft also addressed another complaint, this one regarding Kernel Patch Protection (KPP), a technology that blocks access to the kernel--the core code in Windows. The feature, on the 64-bit version of Vista, is intended to halt invasive software such as rootkits from burrowing into the OS.


But security companies complained that access to the kernel is necessary for certain security features. Microsoft relented, but said it could be a while before those APIs could be released, due to the complexity of the documentation. Microsoft said the APIs could be released in Service Pack 1 for Vista, but service packs for other versions of Windows have taken up to a year to come out.

McAfee Unhappy

The situation was further exacerbated yesterday when a scheduled Microsoft conference call with security vendors on KPP failed due to a technical problem. Late Thursday McAfee complained again about Microsoft's response to security vendor issues, with an outside McAfee counsel issuing a statement blasting Microsoft's "hollow assurances."


Microsoft returned fire today.


"It's unfortunate that McAfee's lawyers are making these kinds of inaccurate and inflammatory statements," Ben Fathi, a Microsoft vice president who deals with security, said in a statement. "We've already taken a number of steps to provide McAfee and our other security partners with the information they need."


Fathi went on to detail Microsoft's e-mail and phone correspondence with McAfee about Security Center this week, writing that Microsoft remains open to answer questions. McAfee officials were unable to immediately comment.


However, other security vendors are also unhappy that they will have to wait for the kernel APIs.


"We've contacted Microsoft to try to get this sorted out," wrote Mikhail Penkovsky, director of sales and marketing for Agnitum, a firewall and network security vendor, on the company's blog. "Microsoft has made a positive decision--but we don't have the [KPP] API yet to analyze it."

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