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We probably should have seen this one coming. America Online sources admitted this week that one of the company’s three improperly booked advertising and commerce deals was struck with none other than WorldCom. When AOL filed its report with the Securities and Exchange Commission last week, it revealed that almost $50 million designated as ad or commerce revenue should not have been. Sources told the Washington Post that an AOL employee raised questions about the deal, and that the internal investigation led to the ouster of business affairs exec David M. Colburn last week. The alleged agreement went like this: America Online promised to buy internet capacity from WorldCom division UUNet in exchange for a WorldCom purchase of millions of dollars worth of AOL advertising over several years. AOL Time Warner refused to identify any of the parties involved in the deal, but did point out that the $49 million in question represents less than 0.5 percent of the company’s revenue. WorldCom, meanwhile, has troubles of its own. The SEC has accused the bankrupt company of defrauding investors.
Movie theaters will show anti-piracy PSAs
In an effort to discourage copyright infringement, a leading theater chain has agreed to run public service announcements before movies that trumpet the evils of online movie swapping. News Corp., which made the announcement, did not name the chain involved. The Attorney General’s office estimates that about 500,000 movies are illegally downloaded each day, making this a serious online revenue sucker. The theaters, of course, are hurt when customers can get their product at home for free, as are the studios. The PSAs, which will also be shown on TV and video releases, appeal to customers’ sense of fair play by pointing out that piracy hurts everyone from the movie’s makeup artist to custodian. The AG’s office hopes that online piracy, which resulted in 10 million free viewings of "Star Wars Episode II: Attack of the Clones," will acquire the same social stigma as shoplifting.
Samsung makes airplane-friendly cell phone
Mobile phone maker Samsung has unveiled a new series of cell phones with software that allows people to turn on their phones while on a commercial flight without creating interference. The new software, which is featured on phones such as the Samsung A500 from Sprint PCS, shuts down the part of the phone that sends and receives telephone calls. This enables users to access telephone directories or games stored on the phone. Because cell phones automatically connect to a network when turned on -- even when no call is placed -- the Federal Aviation Administration has banned their use aboard commercial flights. And as mobile phones have evolved into personal organizers, this has proved to be a great inconvenience for many travelers. In recognition of this added feature, Sprint PCS has dubbed the new service "airplane mode."
Xbox Live service will have voice capability
Microsoft has revealed that its Xbox Live online game service, which will debut Nov. 15, will offer voice capability in every game. That gives it a leg up on rival Sony’s service for its PlayStation 2 console, which will initially offer voice capability in only one game. Microsoft says the decision stems from observations at its online game site, The Zone, that communication and a social atmosphere are key to keeping users online. Because of the large bandwidth required to make voice communication practical, the Xbox Live service will only be available with an existing cable modem or DSL connection. While the Xbox will compete against familiar rivals from the console sector such as Sony, it will now have to face off against some long-time partners. Many console software providers, particularly Electronic Arts, have already built up network infrastructure for online PC gaming. In related news, Microsoft said yesterday that it will soon begin using a different video chip in the Xbox that should bring down the console's suggested retail price of $199.
Finnish elk beware: Wireless hunting dogs
Hunters in Finland are hoping to increase their advantage on unarmed game by strapping mobile phones onto their hunting dogs. The mobile dog phone was developed by the Benefon mobile phone company and Pointer, a company that makes dog-tracking devices. It combines a GPS location finder and a normal cell phone, although without a screen or buttons so the dog can’t run up the bill. With a wired dog, its bark can help identify what sort of animal it has tracked from hundreds of miles away. A hunter can also send a text message from his own mobile phone and seconds later receive the coordinates of the dog's position. The canine cell phones are expected to be in high demand next month when large groups of Finnish hunters set out on their annual pursuit of some 85,000 elk.
August 22, 2002© 2002 Media Life
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