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January 30, 2003—In this issue:
1. NEWS AND VIEWS
- Microsoft Agrees to EU Changes to Passport Service
- AOL Time Warner Posts Largest Annual Loss in US History
- Back By Popular Demand—Don't Miss Our PacWest Security Road Show!
- Microsoft ASP.NET Connections
3. CONTACT US
- See this section for a list of ways to contact us.
1. NEWS AND VIEWS
(contributed by Paul Thurrott, [email protected])
The European Commission (EC) announced this morning that Microsoft will "radically" change Microsoft Passport, the company's online authentication and eWallet service. Because of the changes, Microsoft won't face sanctions in Europe, where privacy and security regulators have been investigating Passport. Also, the changes will help Passport conform to the strict data-protection rules European Union (EU) countries require.
"Microsoft has agreed to implement a comprehensive package of data-protection measures, which will mean making substantial changes to the existing \[Passport\] system," the EC wrote in a statement. "There would not seem to be any reason to take any form of sanctions against the company," an EC spokesperson declared. "My understanding is that the member states' authorities are now all satisfied that the system will be adapted to the requirements of EU data-protection legislation as reflected in their own national legislations."
Although details about the changes are forthcoming, the commission says that Microsoft agreed to change Passport's personal "data-information flow," ensuring that Passport users will receive more information about how Microsoft is using their data and a wider range of choices to control that use. "The concern has been that users of the system should know what the data that they are providing about themselves can be used for," the EC spokesperson said. Also, because Microsoft uses Passport to store critical information such as credit card numbers, the company will add extra safeguards to further ensure that personal data doesn't fall into the wrong hands.
The EC will continue to examine Passport and similar services (e.g., AOL Time Warner, the Liberty Alliance) because of their ever-evolving nature. The EC noted that it's still concerned about other outstanding Passport-related issues, including electronic advertisements in Hotmail. Also, the EU is still conducting a wider and separate antitrust investigation of Microsoft's server and media-player products. A ruling in that case is expected within a few months.
This week, AOL Time Warner posted the largest annual loss in US corporate history—a whopping $100 billion—for fiscal 2002. The loss includes a $45 billion charge the company took in the fourth quarter to adjust the value of some of its assets, including the AOL Internet service. The world's largest media company, AOL Time Warner is the result of a failed experiment to merge the old media company Time Warner with the new media company America Online; the corporation has been hemorrhaging cash ever since.
From a financial perspective, the company's performance has been poor but will likely get a bit stronger in the coming days. AOL Time Warner grew revenue 8 percent to $11.4 billion, with before-tax earnings rising 16 percent to $2.8 billion, compared with the same quarter a year earlier. And despite the weakness of its online unit, parts of the company continue to excel, including the film and entertainment business, which was recently bolstered by "The Lord of the Rings: The Two Towers," the second film in the Lord of the Rings trilogy. AOL Time Warner expects growth in fiscal 2003 to continue in the mid-single digits.
The company also announced that Vice Chairman Ted Turner will step down in May. With 122 million shares, Turner is AOL Time Warner's largest individual shareholder; he created CNN, the 24-hour cable news station that rose to prominence during the Gulf War. Turner is reportedly stepping down to spend more time on other interests, including his philanthropic efforts.
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