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THE INDUSTRY STANDARD'S
M E D I A  G R O K
A Review of Press Coverage of the Internet Economy
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Wednesday, December 13, 2000

TOP GROKS:
* Microsoft Case Settled! No, the Other One
* Hackers Get Final Y2K Jollies
* You Can't Always Get What You Want

MORE NEWS:
* Online Trading Evolves


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TOP GROKS
~~~~~~~~~
Microsoft Case Settled! No, the Other One

Some former Microsoft "permatemps" will have a little extra dough to
pay off their holiday Visa bills. Microsoft will pay about $97 million
to compensate 8,000 to 12,000 long-term temporary employees for the
stock-purchase plan they never had.

A spate of outlets ran the AP's coverage, including the allegation
that Microsoft's employment practices "once allowed employees to be
classified as temporary for as long as 14 years." (Temporary in the
Buddhist, "all is transitory" way, we assume). The average assignment
was 10 months, MS spokesperson Matt Pilla told Reuters. MS officials
also insisted that many temps don't want to go on payroll, since they
like the flexibility of temping and sometimes the pay is better. The
Washington Post and AP got some anecdotal evidence from former MS
temps who argue that most temps would rather be officially hired. As
for the money, "How many stories have you ever seen about high-tech
contractors retiring at 35 because they made millions of dollars?" a
former two-year temp asked the AP. "If I had had access to what
everyone else had, I would be in the same financial situation as a
number of friends who are already retired," another former temp
complained to TechWeb.

Not that this is all about the bucks, some former permatemps said:
Microsoft hurt their feelings. They "had to wear orange badges, while
regular employees wore blue badges" and couldn't go to office parties
or shop at the discounted company store, said the New York Times. Nor
could they use the corporate health club, added the Washington Post's
writers, who also mentioned how much the temps hated those symbolic
orange badges. "This dichotomy of treatment was a thorn in your side,"
one disgruntled former temp told the San Jose Mercury News. "You were
trying to get your job done and constantly feeling like a second-class
citizen." Sounds like the way most Microsoft techies probably went
through junior high.

To get a better sense of the eight-year legal wrangling surrounding
this case, peruse the New York Times, the Washington Post and the
Seattle Times. Basically, it comes down to this: Legal eagles say it's
not nice to employ people for more than a year and not let them into
the stock purchase plan, but temps are on their own for health
insurance. Microsoft got the hint in the mid-'90s, told contractors to
take at least 100 days off after sticking around for 12 months, let
about 3,000 employees trade their orange badges for blue ones, and
hooked up with temp agencies that provide good benefits. So maybe MS
temps get that health insurance after all, but "the company still
doesn't give temporary workers the right to purchase its stock at a
discount," said the Merc.

Several outlets stressed the importance of this case to high-tech and
the business world in general, but the Seattle Times found a
contrarian. "One thing that has been noteworthy is there haven't been
a large number of cases that have been filed (in the wake of the
Microsoft case)," said the general counsel of the American Staffing
Association. Nor will the case have "a material impact on our
results," said MS spokesman Matt Pilla. That $97 million won't make a
dent, but they can't let their contractors into the company store? -
Jen Muehlbauer

Microsoft Settles Temp Lawsuits (AP)
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734100

Microsoft Settles 'Permatemp' Suits
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734101

Microsoft Settles With 'Permatemps'
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734102

Microsoft Temp Workers Win Suit
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734103
(Registration required.)

Temp Workers Win Big Against Microsoft
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734104

Microsoft, Temps Agree on $96.9 Million Payment
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734105

$97 Million for Microsoft 'Permatemp' Staffers
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734106


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Hackers Get Final Y2K Jollies

The year that started with widespread paranoia and uneasiness seems
poised to end that way, too. As if wobbly tech companies weren't
enough to make everyone nervous, hackers have come out to play.

In the "clich,s come to life" department, a hacker stole a database of
credit card numbers from Creditcard.com and posted the numbers online.
Creditcards.com, a b-to-b site that helps Web retailers accept credit
card payments, told ZDNet the hacker did his deed on Monday. The
company told MSNBC, however, that the suspect broke in four months ago
and has been trying to extort Creditcards.com ever since. That wasn't
the only communications mix-up: The firm never told its customers
about the breach. Creditcards.com also claimed that there was no
evidence of credit card fraud, but MSNBC "was able to find a potential
victim within a few moments of seeing the database" - an Illinois
woman billed for $350 worth of WWF merchandise en route to the
Philippines. Here's a washcloth, Creditcards.com. You've got some egg
on your face.

In a less serious but equally embarrassing prank, a naughty photo or
two appeared on the Web site of Japan's National Police Agency. "At
this point, nothing has been concluded, only that it was not caused by
a virus," an NPA spokesperson told the AP. There's no evidence of a
break-in, said Japan's Daily Yomiuri, so maybe visitors were just
redirected to a bogus site. Nobody can agree on what sorts of
revealing photos were used, let alone the technical details.

Worry about a hack attack at the University of Washington Medical
Center - reported as early as Saturday in the Washington Post, Seattle
Times, and Wall Street Journal - ought to get new life from a piece in
Tuesday's USA Today. Not only can a successful hacker download
confidential medical information, said writer Greg Farrell, "medical
records are a veritable treasure trove for those who would make the
patients victims of identity theft." Yet another hazard of the U.S.
health-care system.

Finally, Business Week regaled its executive readership with tales of
embittered employees taking revenge via malicious hacking. "Insider
hacking" causes $1 billion in damage to U.S. businesses each year,
said Business Week's Dennis Blank, and represents 70 percent of all
attacks. Maybe Microsoft should be glad its disgruntled permatemps
only sued. - Jen Muehlbauer

CreditCards.com Database Stolen
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734107

Extortionist Targets Creditcards.com
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734108

Hacker Puts Nude Photo on Japanese Police Web Site (AP)
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734109

Hacker Modifies NPA-Operated Site
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734110

Medical Records Vulnerable to ID Theft
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734111

When the Hacker Is on the Inside
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734112


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You Can't Always Get What You Want

Is that Wednesday's news theme for everyone but George Bush? Al Gore
is the most obvious choice to lead the disappointed, but techies
coming up short include Compaq and Razorfish (earnings warnings) and
Ask Jeeves (layoffs). Then there are those wireless licenses, the
auction of which produced a frenzy of interest and money in Europe but
stateside are much more modest affairs, and that's a disappointment
for the FCC.

Reporters have grown to love funky auction stories, what with online
sales of body organs and Nazi doodads on eBay. The high-priced bids on
wireless licenses, however, seem to make the media's eyes glaze over.
The Wall Street Journal reminded that wireless-license auctions raised
$30 billion in the U.K. and $40 billion-plus in Germany. The U.S.
auction, which kicked off Tuesday, is estimated to churn up a mere $15
billion to $20 billion, and a Credit Suisse First Boston analyst told
the Journal that $12 billion sounds more likely.

Part of the problem is that no one seems to quite get what's going on.
The Bloomberg posting on News.com helpfully explained that carriers
are using the auction to get additional airwaves to fill gaps in
coverage, especially in major metropolitan areas. The Journal chimed
in (eventually) that wireless companies need the airwaves to beef up
their coverage and reduce the number of pesky dropped calls. That's
why, of the 422 licenses covering 195 local markets, the hottest
action was for hopping markets such as New York, Los Angeles and
Chicago. So far the total bids are up to $501.2 million after two
rounds, the FCC told outlets. The highest bids have been $38.2 million
each by Sprint and DCC PCS, a subsidiary of Dobson Communications, for
licenses in New York City. L.A. was runner-up, with Salmon and Verizon
both bidding $25.5 million for licenses in that market.

The Financial Times blamed the absence "of ruinously expensive
spectrum auctions" on this side of the Atlantic on "the relative
backwardness of mobile telephony in the U.S." The pricey auctions in
Europe have been for fancy 3G wireless licenses, while the U.S. is
still peddling local markets. Expect "a proper 3G auction" to follow
here in two years, the peach paper wrote. A jump in third-quarter
churn rates among telco companies signals that competition is starting
to bite, the Lex Column warned. The high-priced "auction risk"
remains, Lex warned, but don't expect much. Even if you try sometimes,
you still won't get what you need. - Deborah Asbrand

Wireless Companies Bid $501.2 Million In First Two Rounds of U.S.
Auction
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734114
(Paid subscription required.)

Verizon, Cingular Are Top Bidders in Opening Day for Airwaves (Bloomberg)
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734115

F.C.C. Wireless Auction Nets $501 Million on First Day  (Reuters)
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734116
(Registration required.)

US Tightens Auction Rules
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734117

Lex: US Wireless
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734118

Telcel Loses Auction Bid
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734119


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MORE NEWS AT THESTANDARD.COM
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Online Trading Evolves
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734121

CenterSpan Scoops Up Scour for $9 Million
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734122

Microsoft Pushes Into $20 Billion Videogame Market
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734123

B-to-B Becomes Essential, Study Says
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734124

FTC Chairman Has Misgivings on AOL Deal
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734125


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MORE LINKS
~~~~~~~~~~
Compaq Cuts 4Q, 2001 Expectations
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734126

Razorfish Shares Fall Sharply in After-Hours Trading
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734127

180 Workers At Ask Jeeves Get Pink Slips
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734128

CenterSpan, With Intel Backing, Wins Scour Bankruptcy Auction
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734129

IBM to Pump $1 Billion Into Linux Next Year to Push Commercial Use
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734130
(Paid subscription required.)

AOL May Be Contender in Purchase of DirecTV
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734131

King's E-Book: It's Alive!
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734132

Will the Real Y2K Stand Up?
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734133

Airlines Surf Web for Evidence Of Plans for More Job Actions
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734134
(Paid subscription required.)

TRUSTe to Audit Health Sites
http://tm0.com/thestandard/sbct.cgi?s=64349541&i=284790&d=734135


STAFF
~~~~~
Written by Deborah Asbrand (dasbrand@world.std.com), Keith Dawson
(dawson@world.std.com), Michelle Goldberg (michelle@shift.com),
Jen Muehlbauer (jen@englishmajor.com) and David Sims (davesims@sonic.net).

Edited by Jimmy Guterman (guterman@vineyard.com).

Copyedited by Jim Duffy (jduffy@thestandard.com).

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