In brief: Microsoft pushes security on two fronts

Also: Ctrl+Atl+Delete creator retires; IBM server, semiconductor groups join forces; router market set to rise; Novell heads east; and more

• Microsoft sought to advance its Trustworthy Computing Initiative last week, first announcing that it would devote more of its $6.8 billion research and development budget to address security and then revealing changes to its Internet Explorer browser that are designed to protect consumers. Speaking in Prague at the World Economic Forum, Bill Gates, Microsoft’s chief software architect, said security would continue to be the company’s top R&D focus for years. Later in the week, Microsoft said it would release an update to its browser software. The update would disable a mechanism that lets hackers hide code in Web addresses that can direct users to bogus Web sites. The technique typically is used in scams to defraud Web surfers. The company did not say when the update would be available, but security experts hailed the move and said it would make Internet use more secure.

• Ctrl+Alt+Delete inventor David Bradley is retiring from IBM after 28 years. The engineer, one of 12 who created the IBM PC, needed a way to restart the computer without turning it off. On a panel with Microsoft founder Bill Gates to celebrate the birth of the IBM PC, Bradley quipped, “I may have invented it, but Bill made it famous.” Gates didn’t laugh.

• IBM’s server and semiconductor groups are joining forces in hopes that by working together the two will help each other improve their product lines, an IBM spokesman said. The new IBM Technology and Systems Group is a combination of the Technology Group headed by John Kelly, senior vice president and group executive, and the Systems Group, headed by William Zeitler, also a senior vice president and group executive. The two men will equally share responsibility for the new division, overseeing their respective areas, said Chris Andrews, a company spokesman. Kelly’s group designs, manufactures and sells processors to external clients and IBM’s server group, while Zeitler’s organization designs and develops IBM’s range of server technology from mainframes to blade servers.

• The worldwide router market will increase 6% over the next five years, while optical transport and mobility infrastructure won’t see significant growth until 2005, according to Dell’Oro Group. In a set of five-year forecasts, Dell’Oro said the router market will grow from $6.3 billion in 2003 to $8.6 billion in 2008. The second half of 2003 was the “turning point” for the market, which had experienced declining sales for several years, Dell’Oro says. Telecom service providers and businesses are planning to increase investment in their router networks this year, and Dell’Oro expects this trend to continue for the next five years. The optical transport equipment market will be flat this year, after years of decline, and will return to sales growth in 2005, Dell’Oro says. Optical transport equipment sales will reach $7.3 billion by 2008, the firm predicts, from $6.1 billion in 2003.

• Long rumored, Novell  is officially moving its headquarters from Provo, Utah, to Waltham, Mass., the home of much of its executive and management teams. Novell, which has 2,000 employees in Utah, will maintain its company locations in that state. In recent years, Novell has acquired three Massachusetts companies: Cambridge Technology Partners, Ximian and Silverstream Software. The company once had large offices in San Jose and Austin, Texas, but closed those.

• A distributor of window blinds and wallpaper has filed a lawsuit against Google, saying the search engine’s keyword-based advertising violates its trademarks. American Blind & Wallpaper Factory, based in Plymouth, Mich., filed the trademark lawsuit in the U.S. District Court for the Southern District of New York. Codefendants in the lawsuit include Netscape and Ask Jeeves, sites that use Google’s search engine. American Blind argues that Google, by selling keyword-based advertising to competing retailers when Google users search on “American Blind” or “American Blinds” is violating the company’s trademark. American Blind had threatened to file the lawsuit last year. That prompted Google, in a filing with the U.S. District Court for the Northern District of California on Nov. 26, to argue that “American” and “Blind” and other words American Blind was claiming as trademarks are descriptive and shouldn’t enjoy trademark protection.

• Gateway plans to acquire eMachines for about $200 million to increase its shrinking PC revenue while it pursues the consumer electronics market, the companies announced last week. The deal will provide Gateway with the revenue generated by eMachines’ strength among consumers in retail channels, the companies said. EMachines sells low-cost PCs that have made inroads with U.S. consumers, who purchased enough PCs from the company to lift it into fourth place ahead of Gateway in the fourth quarter, according to IDC. Gateway Chairman and CEO Ted Waitt will give up the CEO title to eMachines CEO Wayne Inouye, but will remain as chairman and will have an active role in Gateway’s future, the company said.