In brief: Microsoft, AOL Time Warner settle suit

Plus: New Apache update fixes flaws; Microsoft says Spam can be contained within two years; Ask Jeeves sells enterprise software unit; IDC study shows more companies looking at application infrastruction service providers.

•  Microsoft will pay AOL Time Warner  $750 million to settle a private antitrust suit filed on behalf of Netscape by AOL in January 2002, the companies announced last week. As part of the deal, AOL Time Warner’s America Online Internet division will receive a royalty-free, seven-year license to use Internet Explorer with AOL’s client software. They also will collaborate to make their respective instant-messaging clients work together, though “no time frame has been set for that,” Microsoft Chairman Bill Gates said at a press conference to discuss the deal. The industry giants also will collaborate on long-term initiatives for distributing digital media to consumers, and to support new business models for content owners, the companies said. The antitrust suit, filed in U.S. Federal District Court for the District of Columbia, alleged that Microsoft harmed Netscape’s browser business through anticompetitive practices related to the Windows operating system.

•  For the second time in as many months, the Apache Software Foundation  released an updated version of the popular open source Web server software, only to warn users of a critical security hole in previous versions that the update patches. The new version of Apache, 2.0.46, was described as “principally a security and bug fix release” in a bulletin released by the open source organization last week. Among those fixes is a patch for a security hole in the mod_dav module that could be exploited remotely, causing an Apache Web server process to crash, according to the bulletin. Mod_dav is an open source module that provides WebDAV (World Wide Web Distributed Authoring and Versioning) protocol support for the Apache Web server. The vulnerabilities affect versions of Apache ranging from 2.0.37 up to the most recent release, 2.0.45, which came out in April.

•  Spam can be contained within two years but will first reach unprecedented proportions, Microsoft’s chief spam fighter said last week. “Spam has reached epic proportions and we are in a crisis situation,” said Ryan Hamlin, general manager of Microsoft’s antispam technology and strategy group. “For a lot of people out there the situation has gotten so bad that they are willing to give up e-mail if the spam situation does not get better,” he said. Almost half of all e-mail today is spam, according to Hamlin, who cited figures from Brightmail. And it is about to get worse. The amount of spam is still growing and Hamlin predicts as much as 65% of all e-mail next year could be spam. The cost to U.S. businesses to combat spam will double from the $9 billion spent in 2002, he predicted. This cost includes the price of filtering software and storage hardware and other costs. Loss of productivity is not factored in, Hamlin said. Microsoft, together with industry partners and even traditional rivals such as AOL, is working to can spam.

•  Ask Jeeves last week announced plans to sell its enterprise software division, Jeeves Solutions, to Kanisa . Kanisa will pay $4.25 million for all assets of the division, including its JeevesOne technology and about 40 corporate customer accounts, Ask Jeeves said in a statement. The sale is expected to be complete by July. JeevesOne technology, launched last year, combines search and CRM technology, aiming to make search results on a corporate site more relevant to customers. Ask Jeeves plans to concentrate on its Web-search business, which it claims is the second most visited pure search site in the U.S. It upgraded its site last month, adding picture, news and product search tools, clarification options, spell check and a faster-loading Web page, plus “smart search” options that it says are more intuitive, to try to gain market share from Google and other major search sites.

•  A new study by IDC shows that companies are continuing to look to application infrastructure service providers as they do more business on the Web. The study predicts that the market in the U.S., which includes players such as Cable & Wireless, Electronic Data Systems, HP and IBM Global Services, will grow 11.5% between 2002 and 2007; it is expected the market will grow 8.5% this year. The growth is driven largely by customer efforts to reduce costs and improve efficiencies, the study says. “This is a market that has not only become accepted as an integrated part of IT outsourcing, but also as a stepping stone to providing utility computing services,” says David Tapper, analyst for the outsourcing and utility services program at IDC.