WinInfo Daily UPDATE, May 20, 2004

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In the News

- Napster Beats iTunes to European Launch
- Microsoft Plans Email Caller ID Standard

==== In the News ====

by Paul Thurrott, [email protected]

Napster Beats iTunes to European Launch

Digital-music download and subscription service Napster became the first service of its kind to open its virtual doors in Europe, handing key rival Apple iTunes Music Store an embarrassing defeat. Roxio, Napster's owner, announced late yesterday that its service will go live today in the UK, giving customers there their first peek at services the United States has enjoyed for several months. Europeans have had access to other exclusive music services for some time now, however, including On Demand Distribution (OD2), which sells songs through partners such as MSN Music Club and HMV Digital Downloads.
"The UK is a $2 billion music market," Roxio Chairman and CEO Chris Gorog said. "It's the third largest in the world. It's a very important market for us." More important, perhaps, is the lead time Napster now enjoys. The iTunes Music Store was able to drum up a lot of momentum during the 6 month lead time it had in the United States last year. In Europe, at least, time is on Napster's side.
But Napster will have more help as it takes the fight against the iTunes Music Store global. Apple Computer's European presence is more subdued than its US presence, and the company's computer products have even less market share in Europe than they do in the United States. And thanks to the company's supply problems with the Apple iPod Mini, European customers are still waiting for a chance to order the hard-to-find devices, whereas many Napster-compatible portable devices are widely available there.
Meanwhile, contract-negotiation problems with the five major music companies are holding up Napster and iTunes Music Store rollouts in other European countries. Gorog said that he hopes the UK launch will help alleviate concerns. "We'll be looking to move into one or more European territories by the end of the year," he said. "The faster we can roll out across Europe, the faster we can achieve cash break-even."
In related news, Apple announced this week that it will split the company, operationally, into two parts, separating the people who develop iPod-related products from those who work on the company's flailing Macintosh computers. The move corroborates opinions, including that of yours truly, that Apple is slowly shedding its computer-maker roots to concentrate on consumer electronics, and the company is expected to make a series of consumer-electronics-related announcements next month at an annual developer show. Furthermore, Apple's Chief Software Technical Officer Avie Tevanian revealed last week that the company can't afford to keep up its Mac OS X development pace and will scale back those efforts. Presumably, the high-margin iPods and the popular iTunes Music Store service have given company a bigger Return on Investment (ROI) than slogging it out with Microsoft in an unwinnable OS battle.

Microsoft Plans Email Caller ID Standard

Yesterday, Microsoft announced that it will submit a proposal to the Internet Engineering Task Force (IETF) to make its Caller ID for E-Mail technology an industry standard. Caller ID for E-Mail is an IP-based authentication scheme for ensuring that an email sender's return address is legitimate. Microsoft hopes that broad adoption of this technology will end one of today's biggest problems with spam: Hostile messages often seem to come from friendly sources because making email messages appear to come from someone else is easy.
Microsoft's submission is "imminent," according to company representatives, and will occur this week or next. But Microsoft isn't the first company to suggest a solution to the spam problem. Last week, Yahoo! submitted to the IETF its DomainKeys solution, which seeks to achieve the same results as Caller ID for E-Mail by using a digital-signatures-based method. And AOL is testing yet another scheme, dubbed Sender Permitted From (SPF), which uses a DNS-based database to check the authenticity of incoming email messages.
AOL and Microsoft say that they're working together to find common ground, and neither company describes the various proposals as competitive. "AOL will evaluate and test Caller ID \[for E-Mail\]--along with other proposals--in our ongoing effort to establish some much-needed email identity on the Internet," AOL said in a statement issued this week. Microsoft, meanwhile, corroborated that Caller ID for E-Mail, DomainKeys, and SPF could work together as a concentrated solution for authenticating email messages.

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