WEEKLY RECAPNetwork Held Hostage, Cyberterror Battle Plan

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Czar, Anyone?
Cyberterror is becoming an issue in the presidential campaign, with Democrat Barack Obama playingone-up on the Bush Administration.
The president's US$30 billion plan to improve network monitoringjust doesn't cut it, said Obama, who proposed the appointment of aNational Cyber Advisor position reporting to the president.
Currently, the highest-ranking IT security person in the federal government is under the Department of Homeland Security . Republican John McCain has a plan as well, and he'll tell us whatit is -- just as soon as he can figure out how to use Google (Nasdaq: GOOG) . 'Horrible' Musical
Joss Whedon, the force behind "Buffy the Vampire Slayer," has created a mad doctor with a bad case of evil-genius-wannabe inferioritycomplex as the centerpiece for his new Web-only musical, "Dr. Horrible's Sing-Along Blog."
Reviewers have been raving about the show since its launch thisweek. In fact, it grabbed so much attention that when Act 1 wentlive, the swarm of eager viewers crashed the site's servers.
Whedon came up with the concept for the show during the Hollywoodwriters' strike. Recruiting some actor friends -- including "How IMet Your Mother's" Neil Patrick Harris -- and putting up his ownmoney for the project, he shot the show on unused Universal Studioslots. "Dr. Horrible" is the latest example of unique media content-- largely free of studio interference and unsupported bytraditional marketing -- making its debut online.
It joins a list that includes "Quarterlife," the brainchild of"Thirtysomething's" Zwick and Herskovitz; Will Ferrell's Funny orDie Web site; and the Web-only episodes of the CW network's teendrama "Gossip Girl."
Act 2 of "Dr. Horrible" is now available online, and Act 3 will golive on Saturday. The show is also available on iTunes. Have awicked time watching. Console Confab
The gaming industry held its annual E3 show-and-tell conferencethis week and, like last year, it was a cloistered affair designedto keep insiders in and keep people who merely enjoy the productsout.
Oh well, perhaps that's the only way to get any business done whenthe alternative is to deal with hordes of craven fanboys gropingfor whatever free schwag they can get their hands on.
Nintendo highlighted the WiiMotion Plus, an upcoming attachment that refines the Wiiconsole's motion-sensing abilities. Microsoft announced a streaming movie deal with Netflix along with some other newentertainment features, while Sony gave its PlayStation Network a new video download store. The 'G' is for Glitches
The iPhone 3G went on sale a week ago, and by Monday Apple (Nasdaq: AAPL) claimed to have sold 1 million of the things. Last year, it took74 days to sell the first million original models.
What's new with the iPhone? 3G network capabilities, GPS , the option of a white-colored model, and a headphone jack thatdoesn't require a $20 adapter to use most headphones. What's thesame? Lines. Users who simply must have it first lined up aroundApple and AT&T (NYSE: T) stores again this year -- and just like last year, there were some technical problems .
This year's activation hiccups mainly occurred in stores ratherthan in users' homes, though, so that meant waiting in line to getone took even longer. Love hurts. It's the Outlook, Stupid
Investors sent eBay (Nasdaq: EBAY) shares down nearly nearly 14 percent despite impressive second-quarter earnings . eBay turned in a 22 percent rise in profits for the quarter, withmost of the growth stemming from its Skype and PayPal businesses.
It's ironic that eBay's shares were under pressure, as the 43 centsa share return beat analyst expectations by two cents. But thatwasn't enough to offset its disappointing guidance for the thirdquarter.
The company's outlook calls for adjusted earnings of $1.72 to $1.77a share for the rest of the year. After taking into account the Q2gains, those numbers are basically unchanged from the company'sforecast three months ago. Revenues rose 20 percent over last year-- but that was the slowest pace in the company's history. Eating Tiffany's Breakfast
On a brighter note for eBay, a U.S. district judge has ruled against luxury jeweler Tiffany in its four-year-old trademarkprotection lawsuit against the auction house.
The judge found that that eBay's process for removing suspectedcounterfeit items from its site was sufficient, and that Tiffanybears the lion's share of responsibility for watching over itsbrand in cyberspace.
The judge agreed with eBay's contention that it should not beobliged to pre-emptively remove counterfeit items merely on thebasis of its own doubts over their authenticity. The ruling is arare win for eBay in this rapidly evolving area, and it could havean impact on related legal challenges overseas. European courtshave already found in favor of LVMH group, Moet Hennessy LouieVuitton, and Rolex in trademark lawsuits against the sale ofcounterfeit goods. Apple's Fury Unleashed
First it looked like a hoax, then it looked like a scam. After afew days it looked like it could be the real deal. Now it lookslike dead meat. Psystar is a Florida company that made quite an impression a few monthsago when it went live with a Web site offering a computer calledthe "OpenMac."
It was a white box running Mac OS X Leopard, in apparent violationof Apple's licensing restrictions. That product's name was quicklychanged to "OpenComputer," and the business's stated addressquickly changed a few times as people tried to figure out whetherit was for real or not.
A few brave souls placed credit card orders, and when they gottheir computers in the mail, they turned out to be real, workingdesktops. Fan's kinda loud, but they apparently did the job.
But what about Apple -- wouldn't it have its lawyers just descendon this outfit with subpoenas, baseball bats and flame-throwers?Well, now they finally have .
Not only has Apple filed a lawsuit meant to sue Psystar's pants offthree times over, but it's also requested a recall of all thecomputers the company sold.
Think you can keep that Psystar desktop you thought was a bargain?
Tell you what -- just give Apple your address and they'll send youa CD. Run the CD on your OpenComputer, it'll brick the machine, andyou're off the hook. Then we can pretend none of this everhappened. The Real Deal
Cloned Macs might be having a bad week, but things are looking bright for Apple's real computers.
The company is scrapping with Acer for third place in the U.S. PCmarket, behind Dell (Nasdaq: DELL) and HP (NYSE: HPQ) . Research firm Gartner (NYSE: IT) says Apple's there already; IDC says not quite but almost. Either way, that's a big step up forApple.
Both research firms have the company making huge gains in sales since the same quarter last year. Sales grew over 31 percent sincethe second quarter of 2007, according to IDC, while Dell, forexample, grew just over 12 percent. On the worldwide stage, though,Apple didn't make the top 5. Run-Up to the Showdown
In less than three weeks, Yahoo's (Nasdaq: YHOO) shareholders are scheduled to meet, and the drama meter is headinginto the red zone.
In the latest flurry of wheeling, but not dealing, Microsoft andbillionaire investor Carl Icahn submitted a joint offer to buyYahoo's search business last weekend that was summarily rejected .
Yahoo fired out a press release that same day, claiming thatMicrosoft and Icahn gave it less than 24 hours to accept the offerand made fundamental terms nonnegotiable. Yahoo also said the dealwould have put inexperienced executives in charge of the company.
Microsoft sent its response across the wires on Monday, asserting that Yahoo Chairman RoyBostock was the one who actually initiated the idea of the partialpurchase and that it was not a take-it-or-leave it ultimatum.Bostock encouraged CEO Steve Ballmer to draft a proposal, Microsoftclaimed, but then Yahoo immediately rejected and ridiculed theoffer.
Microsoft also said its proposal did not include any changes toYahoo's management. If Microsoft is telling it like it was, itseems there's some internal dissent brewing among Yahoo's upperbrass -- a dangerous sign this close to next month's shareholders'vote. Microsoft has washed its hands of Yahoo so many times theymust be pretty raw by now.
Now there are signs Redmond is talking with Time Warner's AOL about a possible combination that could let it walk away fromYahoo for good. FCC Takes a Stand
Ever since the Associated Press discovered that Comcast (Nasdaq: CMCSK) had been throttling the connections of some of its customers --the ones who the company thought used more than their fair share ofbandwidth by spending too much time with BitTorrent -- the companyhas become a whipping boy for consumer groups who called itsactions illegal.
Comcast -- and other cable Internet service providers who are fighting for their right to tinker with thepipes -- say it's the only way to provide fair service for alltheir customers. Now the chairman of the FCC has chosen a side -- he wants to clearly prohibit Comcast from blocking Web trafficbetween peer-to-peer networks.
The recommendation still requires action from the full commission,but if it's approved it could set a major precedent. Fees Terminated
Chalk up a point for U.S. wireless customers. Although it hasn'tadmitted any wrongdoing, Verizon Wireless has agreed to pay $21 million to settle a flurry of lawsuits alleging itsearly termination fees were unfair.
The settlement covers a California-based class action and a varietyof cases pending in other parts of the country. The decisionfollows Federal Communications Commission hearings held in June to look into the fees.
FCC Chairman Kevin Martin voiced his concern that they were notbeing used to offset costs but were a means of locking consumersinto a service provider.
Wireless operators argue the fees help recoup subsidies thecompanies offer customers when they purchase a mobile handset witha standard two-year contract. Meanwhile, Sprint (NYSE: S) is awaiting a verdict in a similar case in California.