– By Dan Berkes –
This was a better week to be a public company, as the markets came back to life, thanks in no small part to better than expected economic data. In the world of Open Source business: Sun opens up an online ID consortium, IBM wants $7 billion from Linux, and Apple releases a free — if users can find it — OS upgrade.
The Dow Jones Industrial Average closed Friday at 8,847.21, up 165 points from the previous day of trading, and up by 612 points from last Friday’s close. The Nasdaq’s composite index rang the closing bell at 1,498.90, gaining 38 points from Thursday’s close, for a total gain of 78 points since the end of business last week.

The comeback rally, especially Friday’s traffic, is the result of a combination of factors, the most powerful likely being that this week’s end of business also marked the last day of the third quarter. Better than expected economic data in the form of the University of Michigan’s consumer sentiment index also did wonders for improving investor outlook. While consumers felt less confident about the economy, analysts were expecting a drastically worse report. The Chicago Purchasing Management Association took care of the numbers on the manufacturing side of the economy, showing a rise in factory activity in September — analysts had expected a sharp contraction. Last but not least, the second quarter gross domestic product did better than expected, too, indicating economic growth of 0.2 percent, out-pacing the 0.1 percent expectations held by economists.

Foundering tech and dot-com stocks traded on Nasdaq can breathe a little easier, if only temporarily. The market, which once billed itself as “the market for the next 100 years,” announced on Thursday that it had suspended one of its key trading requirements. Until the announcement, stocks that traded under $1 for 40 consecutive days were de-listed and transferred to the over-the-counter market. The new rules permit stocks trading for less than that amount to remain on Nasdaq — at least until January 2002.

The Globe and Mail business columnist Mathew Ingram wonders if the market was really reacting to the market downturns in the wake of the September 11 attacks, as it claimed when suspending this rule. As Ingram points out, about 15 percent of the stocks traded on the exchange can be purchased for less than a dollar these days, but those stocks were in the tank long before planes hit the Pentagon and World Trade Center. “If anything,” writes Ingram, “the rule suspension makes Nasdaq look desperate, and will probably cause investors — and companies — to start looking to the New York exchange as the most important North American bourse.”

While companies are still trying to figure out what the lasting impact recent sharp drops of the American stock markets will have on their businesses,
some of the nation’s richest people already know. Many of the top-paid execs on
Forbes’ list of 400 richest people have lost between 10 and 20 percent of their
net worth since September 11, and the number one money-loser is Microsoft
chairman Bill Gates. Mr. Gates’ net has dipped by 13 percent, or $7.2 billion,
since September 11, leaving him with a mere $46.8 billion. Care packages can be
sent to Microsoft’s Redmond, Wash., headquarters.

Sun shines light on Passport alternative
Sun Microsystems on Wednesday raised the curtain on an industry alliance for handling the digital identify of computer users. Named Liberty Alliance, the group intends to provide a secure Internet identity service that, as Sun CEO Scott McNealy says, doesn’t play favorites, possibly a reference to Microsoft’s .NET and Passport authentication services. Founding members of the Liberty Alliance include Sun Microsystems, General Motors, Bank of America, RealNetworks, Nokia, and RSA Security. Microsoft has been invited to join the new group, but has yet to make a yes or no decision on the matter.

IBM: Linux a key growth area
IBM on Tuesday said it expects to generate at least $7 billion in sales revenue within three years, by focusing on seven key growth areas. One of those seven areas is Linux, along with life sciences, pervasive computing, network processing, data storage, appliance servers, and e-utilities. Linux will undoubtedly factor in Big Blue’s goal to expand sales of existing and new supercomputers and database projects, not to mention data storage computers.

In other news from IBM, the company announced this week that it had sold its 1,000th zSeries mainframe computer. Quite an impressive resurgence of “big iron” computing, and analysts (not mention IBM) say that the revived popularity of mainframes is due in no small part to Linux.

Apple updates its operating system
On Saturday, Apple Computer will launch a new version of its Mac OS X operating system. Version 10.1 of the BSD-based operating system boasts easier DVD disk creation, additional interface customization features, and should fun faster than its initial release. The update is available at no cost, provided you can find it from a participating retailer, or can be ordered at Apple’s store for a $19.95 handling and shipping fee.

Checking in with Corel
Software maker and former Linux distribution developer Corel Corp. made its fiscal third quarter announcement on Wednesday, reporting $500,000 or 1 cent per share net income from revenue of $34.2 million. Analysts were expecting earnings of 2 cents per share. In the third quarter of 2000, the company posted a net loss of $10.7 million or 15 cents per share. The company declined to provide any guidance for upcoming quarters, citing the post-attack economic climate.

Here’s how Open Source and affiliated technology stocks ended the week:

Company Name	Symbol	09/28 Close	09/21 Close
Apple	AAPL	15.51	15.73
Borland Software Int’l	BORL	8.10	7.58
Caldera International	CALD	0.25	0.30
EBIZ Enterprises	EBIZ.OB	0.03	0.03
Hewlett Packard	HWP	16.05	14.96
IBM	IBM	92.30	90.50
MandrakeSoft	4477.PA	e6.18	e6.19
Merlin Software Tech.	MLSW.OB	0.22	0.18
Red Hat	RHAT	3.50	3.51
Sun Microsystems	SUNW	8.27	7.96
TiVo	TIVO	3.32	3.70
VA Linux Systems	LNUX	1.05	0.78
Wind River Systems	WIND	10.50	10.40

From PRNewswire: Computer Associates
International, Inc. (CA), the world leader in eBusiness management solutions,
today announced that Unicenter earned an Editors’ Choice award from Linux
Magazine as the best “heavyweight” network management software. The award, the
product’s third in seven months, underscores the global acceptance of
Unicenter as the leading management solution for Linux.

– By Grant Gross –

For LimeWire founder and CEO Mark Gorton, the decision this week to GPL his Gnutella file-sharing application was an easy call.

LimeWire, the company, was already giving away LimeWire, the application, so the free-as-in-beer debate was a non-starter. All that was left for Gorton to do is make LimeWire free as in speech, and in the competitive, yet immature, Gnutella landscape Open-Sourcing could make LimeWire the reference for file sharing over the loosely organized Gnutella network. By extension, a LimeWire standard could give Gorton’s company a competitive advantage in the Gnutella peer-to-peer protocol that he believes has unlimited potential.

“I saw that there’s a real need to have a very good common core for the whole network, just kind of code that behaves well,” Gorton says. “It’s unhealthy for the network if too many of these bad programs are around.”

Java-based LimeWire and competitor BearShare already dominate the Gnutella file-sharing market. In fact, LimeWire has been the number one download on both the Linux and Mac sections of CNet’s Download.com for weeks, with a combined 75,000-plus downloads for those two operating systems just this week. On the more competitive PC (Windows) section of Download.com, LimeWire is number 10 this week, with more than 200,000 downloads, and it’s been in the top 25 for 28 weeks. The Windows-only BearShare is number nine there, with 290,000-plus downloads.

But there are many smaller Gnutella applications out there, too, and with a decentralized file-sharing protocol like Gnutella, when one program doesn’t play well with others, it can have a ripple effect through the entire network.

If you remember, Gnutella started as a program being developed by Justin Frankel at NullSoft in early 2000, as his company was being bought by America Online. When the corporate masters at AOL, working on a merger with music giant Time Warner, realized they were sponsoring an in-house music-trading project, they shut down the Gnutella project, but not before the beta version was running free on the Internet.

So Gorton believes the potential for Gnutella remains largely untapped. “At this point, Gnutella is a primitive, beta-level protocol and from a technical point of view, is not that sophisticated,” he says. “But it also has the real merit that it’s been written by one guy who’s trying to do things simply.”

LimeWire.com has a whole section on the future of Gnutella and its potential, and Gorton has a vision of many smart file-sharing networks where users can send out requests for all kinds of information and services and can rate those sources of information.

“I really think some of the most interesting problems in computer science are being dealt with on this network,” Gorton says. “It has a chance to become a semantic information-routing network that doesn’t exist right now. In order to do that, it’s a job that’s far bigger than one company can do.”

LimeWire, the company, has a business model centered around larger Gnutella networks, thus allowing the company to give away the LimeWire product for free. By creating LimeWire as the standard for file-sharing over Gnutella, Gorton hopes both to increase the popularity of his product and spread the gospel of the decentralized Gnutella. Because of large companies’ reluctance to step into the legal mess that is music sharing, Gnutella has remained this “pure” network that’s a spawning ground for independent development, Gorton says.

“I would very much like to be the guy who could own a significant chunk of the world’s networks,” he says. “I think that’s what Microsoft is trying to do right now. But I’m also enough of a realist to know that Microsoft doesn’t have much of a chance in pulling off that strategy, and I know I don’t have a chance in hell.”

“My strategy here is to be more open than anybody else and use the power of being virtuous to kind of overpower the larger corporate entities who want to own these sorts of things.”

Gorton, who calls the GPLing of LimeWire “one of the largest corporate projects ever to go from closed to Open Source,” also hopes to remove any fears about LimeWire being owned and controlled by one company that could change its focus somewhere down the line. The site, LimeWire.org is set up to foster outside development of the code.

“We hope that Open-Sourcing will increase the number
of people adding ideas and code to the Gnutella network,” he says. “The
functionality of the LimeWire program should improve and speed with which bugs are fixed should improve. We already have someone who is going to ad a full-featured media player to the application.”

Gorton hopes to attract a handful of developers who have a vision of what Gnutella could be, beyond simple media file sharing, he says. With everyone sharing bandwidth and computing power, Gnutella doesn’t need a home base or even a business plan for users to share information. “I think Gnutella certainly has the potential — whether it gets there or not is another thing — to be one of the core components of the Internet, up there almost with the World Wide Web and email.”

SuSE has announced that version 7.3 of its Linux distribution will be available on October 13. SuSE’s official announcement is in German, and Babelfish provides an interesting, occasionally amusing, translation. Check out the features list (also in German) and its Babelfish translation, too. Some features that need no translation include Linux kernel 2.4.10, glibc 2.2.4, XFree86 4.1.0, KDE 2.2.1, and GNOME 1.4.1, beta 2.

Reported at The Register: “MS Antitrust Judge 2.0 Colleen Kollar-Kotelly has ducked the prospect of early and
intensive legal sessions with the warring parties and told them to sort themselves out
instead. They’ve been given till 2nd November to come to a settlement, and told to
talk 24 hours a day, seven days a week until then.”

The Register reports that AMD will launch its new Palomino processors on October 9. OEM pricing is set at $115 for the XP 1500 (1.3GHz), $124 for the XP 1600 (1.4GHz), $152 for the XP 1700 (1.47GHz), and $210 for the XP 1800 (1.53GHz). AMD is using the XP 1500, etc. names instead of clock speeds, hoping to move away from direct comparisons with Intel’s processor speeds. System builders have been told not to refer to the Palimono processor clock speed in advertising — AMD prefers they use the term “quantispeed technology.”

Reported at Newsbytes: “A group of U.K.-based hackers has cracked computers at the AlShamal Islamic Bank in Sudan and collected data on the accounts
of the Al Qaeda terrorist organization and its leader Osama bin Laden, Kim Schmitz, a flamboyant German hacker/businessman,
has claimed.

Schmitz, who has offered a $10 million reward for the capture of bin Laden, told Newsbytes that the information has been turned
over to the FBI. Bin Laden, a millionaire Saudi exile whose base is now Afghanistan, is suspected of being the driving force behind
the deadly Sept. 11 attacks on the World Trade Center and the Pentagon with hijacked planes.”

“While SunnComm is betting that copy-protected CDs will be the music industry’s answer to digital
content protection, it’s discovering that success stories don’t come easy.

In May, SunnComm provided anti-copying technology on a CD
release by veteran country music singer Charley Pride. But
before the CD was shipped to U.S. stores by Nashville,
Tenn.-based Music City Records, free copies of the songs
appeared on the Internet. Eight of the 15 songs on Pride’s new
album, “A Tribute to Jim Reeves,” were posted on a private Web
page hosted by Yahoo. And later, consumers complained that
the SunnComm-protected CDs could not play properly on all
devices, such as certain DVD players.” Full story at CNET.

Text and images (which alone are well worth the visit) from trygve.com: “When Linux was first ported to the Furby platform, it suffered from significant stability and performance problems, which gave the Furby an unfortunate reputation
as being unsuitable for enterprise-level computing. The conversion of the IRS and NASA computing facilities to Furby-based platforms towards the end of 1999
was seen by many as premature and may have contributed to the problems experienced by those departments during 2000 which did nothing to improve the
Furby’s image in corporate America.”

Linux.com: “Many of the comments emanating from LinuxWorld in San Francisco at the end of August seem subdued, even
depressed, as if somehow the money is gone, the excitement is over, and only the hopelessly loyal are left to fight
on. That’s nonsense, the future of Unix, including Linux and FreeBSD among others, has never been brighter with all
of the needed technological pieces now in place for a Unix takeover of most corporate computing.

That Unix is better, cheaper, faster, and more reliable than Windows does not suffice as the basis for nation-wide
defenestration (the throwing out of Windows). For that to happen we need a cultural change, a massive social
movement in which non technical people shift their allegiance from one set of ideas about computing to another.”