The Woeful Economy Dominates

The sorry state of the global economy dominated IT news this week, with analysts saying they expect Microsoft to issue an earnings warning in advance of its second-quarter financial results, DRAM makers lining up for government bailouts and Sony planning to slash 8,000 jobs and close factories. Most of the other top 10 stories of the week weren't appreciably happier.

1. Analysts expect Microsoft to warn on Q2 revenue: Microsoft last issued a warning that its financial results would fall short of expectations back in 2000, but it appears that streak is about to break. Various analysts expect Microsoft will warn that its fiscal second quarter, which ends Dec. 31, is going to fall short of expectations. Analysts also lowered their estimates for Microsoft's quarterly revenue.

2. Governments line up to bail out DRAM makers: Taiwan, Germany and South Korea appear to be ready to offer financial assistance to DRAM (dynamic RAM) chip makers that have been suffering financially because of a chip glut since well before the global financial crisis took hold. DRAM prices are so low that companies have cut production rather than continue to make chips at a loss.

3. Sony to axe 8,000 jobs, close factories: Sony will trim 8,000 jobs, or about 5 percent of its workforce, close factories and decrease electronics investment by almost a third to cope with the ailing economy. The global restructuring will mostly affect Sony's core electronics business, which brings in more than half of the company's sales. The company will decrease or pull out of unprofitable and noncore business, and five or six of its 57 manufacturing plants will be shuttered.

4. Chinese team mistakenly released unpatched IE7 exploit: The Chinese security team "knownsec" released exploit code for an unpatched Internet Explorer 7 vulnerability, mistakenly believing that the flaw had been patched. The mistake could put millions of computer users at risk, although it seems that at least some hackers knew how to exploit the flaw before the code was released. The vulnerability could lead to a PC being infected with malware just by a user visiting an infected Web site -- a worst-case security scenario. And then ...

5. Microsoft IE5, IE6 also affected by browser vulnerability: An unpatched vulnerability in Microsoft's Internet Explorer 7 also affects versions of IE5 and IE6, the company said.

6. FCC leadership ripped in congressional report: U.S. Federal Communications Commission Chairman Kevin Martin manipulated data to help the FCC regulate cable TV companies, alleges a scathing report from the U.S. House Committee on Energy and Commerce. Soon after he became FCC chairman in March 2005, Martin allegedly had his staff rewrite a previous report on "a la carte" cable offerings. He also put substantial pressure on his staff to arrive at a different conclusion from the original report and reassigned the project to other staffers when that didn't happen as he wanted, the committee alleges.

7. Start Page yanked from new Google Apps sign-ups: Google stopped offering the Start Page component for new accounts in its Apps hosted suite in favor of its Sites wiki and Web page creation application. The move was effective for new Apps sign-ups from Dec. 1, although accounts before then will keep the Start Page component. It was done quietly, without an announcement or even notification being sent to Apps administrators. Some of them found the move puzzling, and they discussed what seemed to be the mysterious Start Page disappearance in an online help forum.

8. How many tech jobs might Obama help create? Maybe none, maybe 300K: President-elect Barack Obama is likely to sign into law a huge federal stimulus package in an attempt to try to get the U.S. economy back on track after he takes office in January. But it's unclear how many IT jobs that package, and other initiatives Obama supports, will create. That's not the only thing related to technology that remains unclear, as the next entry explains.

9. Obama administration to inherit a real mess on Real ID: The Obama administration will have to deal with Real ID national identification standards begun under President George Bush. Obama has not had much to say on the initiative under which driver's licenses and other state-issued identification have digital photographs and must be machine-readable so information stored on them can be scanned. Obama didn't vote on the Real ID Act the one time he could have. However, Janet Napolitano, the Arizona governor Obama has nominated as secretary of the Department of Homeland Security, signed into law a bill that bans her state from participating in the program.

10. Cisco planning significant data center assault

: 2009 could be a big year for Cisco -- the company has significant product introductions planned as it works on moving out of the pure networking space and into becoming an IT supplier. A new blade server system is of particular note, and improvements to push energy efficiency in the switching portfolio and an update of its unified communications software are in the works.


Copyright © 2008 IDG Communications, Inc.

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