by Arie Slob

Dear Windows-Help.NET subscriber,

Last week Intel, the embattled chip giant from Santa Clara, California, announced it would embed a 96-bit serial number in its upcoming Pentium III chip. This would be an individual number for each chip, which would make it easy to track a user's whereabouts if he uses the Internet.

Official use of the serial number was meant to be for transaction security techniques, such as encryption and passwords.

According to Intel, the feature creates a random identifying number that will add an extra layer of security to orders placed on e-commerce sites. Each number will belong only to a particular machine. So to gain access to a secure Web site, a password and user name have to be submitted, after which the Web server sends an "agent" to "read" the serial number. Only when all three match, will access be granted.

Intel expected the serial number to be available on Celeron chips at a later date.

This announcement immediately drew the criticism of two privacy groups, the Electronic Privacy Information Center and the consumer-advocacy group JunkBusters. The groups are calling for a boycott on Intel products until the company drops the security feature from the chip's design.

The privacy groups argue that it will make it far easier to identify particular users, and when used in combination with the information users give about themselves when purchasing goods and/or services online, this feature will enable companies to potentially amass a huge amount of data on each user.

Intel reacted by announcing that it changed the default setting of the feature to "off", where it was previously set to "on" by default. Intel admitted that users could potentially be identified and tracked.

The privacy groups maintained that the decision to set the default value to "off" wasn't good enough. They explained that e-commerce sites still could force people to use the feature, before being able to place orders.

Intel's rivals in the chip market played down the feature, calling it inflexible and impractical. This feature will only give a person access to a secure Web site from one computer. Since users are accessing the Internet through a variety of devices (PC, laptop, WebTV) this system would be very limited. In the near future it is expected that even more non-PC based devices are going to access the Internet, thus rendering this feature extremely limited.

For more information, see Bruce Schneier's comments on ZDNet, explaining why this ID tracker won't work.

Intel also introduced four mobile processors last week, the 333MHz and 366MHz Pentium® II (picture), and the 266MHz and 300MHz Celeron™ (picture) chips. The new Pentium II design (code name Dixon) uses a full-speed, integrated 256KB Level 2 cache, whereas in the past the Pentium II used 512KB L-2 cache, running at half the CPU's clock speed. By comparison, the Celeron sports a 128KB integrated L-2 cache. All major PC makers (Compaq, Dell, Gateway and Hewlett-Packard) announced systems based on the new chips. Check this PC Magazine article where PC Labs tests eight systems with Intel's new Mobile Pentium II CPU!

Intel also announced that a mobile Pentium III is expected later this year, introducing the 100MHz Front Side Bus (FSB) to the mobile market.

In the mean time, the Federal Trade Commission pushed back the start of Intel's antitrust trial to March 9. For more information on the merits of this case, see the Newsletter of 09 January 1999.

As reported in last week's Newsletter, the portal market is still in the process of settling. This week Compaq announced that it will spin off AltaVista, which it acquired when it purchased Digital Equipment Corp. early last year in a $ 9 billion deal. The IPO (Initial Public Offering) is expected by years end. Compaq has not commented on the value of AltaVista, but analysts estimate that the value could be between $ 2 billion and $ 4 billion, based on the number of page views. AltaVista is ranked the 11th most popular Web site.

In an attempt to increase AltaVista's portal capabilities, Compaq recently purchased Shopping.com, in a (stock) deal worth $ 220 million. Compaq also announced it will license Microsoft's Hotmail free e-mail service, another must-have for a potential portal. AltaVista will become the primary search engine for MSN as part of this deal.

It was announced a few days ago that Yahoo is planning to buy GeoCities, the provider of free space for non-commercial Web sites, which boasts over 3.5 million members. The value of the deal is estimated at around $ 4.5 billion. According to Yahoo, they are still looking for other possible acquisitions.

This is a different deal then the one we just witnessed with @Home & Excite, and the NBC & CNet deal, which are more about offering broadband (high-speed) services. When GeoCities is added to the Yahoo network, the combined unduplicated reach would exceed 58 percent, making it the second largest network of properties on the Web.

Once the redesign is complete, I'll focus on adding content, making the Windows-Help.NET Web site the best in its field!