AT&T looking at charging heavy Internet users extra

AT&T Inc., the country's largest Internet provider, is considering charging extra for customers who download large amounts of data.
"A form of usage-based pricing for those customers who have abnormally high usage patterns is inevitable," spokesman Michael Coe said this week.

The top 5 percent of AT&T's DSL customers use 46 percent of the total bandwidth, Coe said. Overall bandwidth use on the network is surging, doubling every year and a half.

AT&T doesn't have any specific plans or fees to announce yet, Coe said.

Most cable companies have official or secret caps on the amount of data they allow subscribers to download every month. Time Warner Cable started a trial earlier this month in Beaumont, Texas, under which it will charge subscribers who go over their monthly bandwidth cap $1 per gigabyte.

Cable companies are at the forefront of usage-based pricing because neighbors share capacity on the local cable lines, and bandwidth hogs can slow down traffic for others. Phone companies have been less concerned about congestion because the phone lines they use to provide Internet service using DSL, or Digital Subscriber Line technology, aren't shared between neighbors, but AT&T is evidently concerned about congestion higher up in the network.

Those who mainly do Web surfing or e-mail use little data and have scant reason to pay attention to traffic caps. But those who download movies or TV, particularly in high definition, can hit the caps imposed by cable companies.

Download caps could put a crimp in the plans of services like Apple Inc.'s iTunes that use the Internet to deliver video. DVD-by-mail pioneer Netflix Inc. just launched a TV set-top box that receives an unlimited stream of Internet video to a TV set for as little as $8.99 per month.

New and Improved Firefox to be released on Tuesday

A new version of the Firefox Web browser is scheduled for release Tuesday with improvements in security, speed and design.
Many of the enhancements in Firefox 3 involve bookmarks. The new version lets Web surfers add keywords, or tags, to sort bookmarks by topic. A new "Places" feature lets users quickly access sites they recently bookmarked or tagged and pages they visit frequently but haven't bookmarked.

There's also a new star button for easily adding sites to your bookmark list — similar to what's already available on Microsoft Corp.'s Internet Explorer 7 browser.

Other new features include the ability to resume downloads midway if the connection is interrupted and an updated password manager that doesn't disrupt the log-in process.

In a nod to the growing use of Web-based e-mail, the browser can be set to launch Yahoo Inc.'s service when clicking a "mailto" link in a Web page, the ones you might come across clicking on a name or a "contact us" link. Previously such links could only open a standalone, desktop e-mail program.

Yahoo is the only Web service initially supported. To use rivals like Google Inc.'s Gmail and Microsoft Corp.'s Hotmail, developers of those services will have to enable that capability first.

Firefox also will start blocking rather than simply warning about sites known to engage in "phishing" scams that try to trick users into revealing passwords and other sensitive information. The new version adds protection from sites known to distribute viruses and other malicious software.

The list of suspicious sites come from Google Inc. and StopBadware.org, a project headed by legal scholars at Harvard and Oxford universities.

Security researchers who need access to problem sites can manually turn the feature off.

Firefox 3 also offers speed and design improvements — the back button is now larger than the forward button, for instance, because people tend to return to a previous page more often, said Mike Schroepfer, the project's vice president of engineering.

Firefox is the No. 2 Web browser behind Microsoft Corp.'s Internet Explorer. It comes from Mozilla, an open-source community in which thousands of people, mostly volunteers, collectively develop free products.

Mozilla has been developing Firefox 3 for nearly three years and has been publicly testing it since November for Windows, Mac and Linux computers.

Its supporters are organizing launch parties around the world next week, and Mozilla is trying to set a world record for most software downloads in a 24-hour period.

Microsoft is currently testing Internet Explorer 8, while Opera Software ASA released Opera 9.5 on Thursday.

Yahoo seeks Google's aid after Microsoft talks die

But after eluding Microsoft's grasp, Yahoo is now turning to Google to help squelch a rebellion among its shareholders who believe it should have accepted Microsoft's $47.5 billion buyout offer while it was still available last month.

Yahoo announced its decision to let Google handle some of its advertising sales late Thursday, just a few hours after revealing it unsuccessfully tried to persuade Microsoft to renew its previous offer of $33 per share. The snub caused Yahoo to conclude that there is no hope for any kind of deal with Microsoft.

Although Yahoo believes Google could help boost its annual revenue by $800 million, the advertising partnership wasn't enough to ease the disappointment of investors who had been holding out hope for a Microsoft deal.

Yahoo shares plunged $2.63, or 10.1 percent, to finish Thursday at $23.52 and shed another seven cents after the market closed.

Part of the problem for Yahoo is that antitrust concerns might prevent an alliance with Google.

Google already holds about 75 percent of the $11 billion search advertising market in the United States with Yahoo a distant second at 9 percent, according to the research firm eMarketer Inc.

Microsoft and a variety of consumer-interest groups already have signaled they will turn up the political heat in an attempt to prevent Google from working with Yahoo.

The outcry already has drawn the attention of U.S. Sen. Herb Kohl, chairman of the Senate subcommittee on antitrust, competition policy and consumer rights.

"The consequences for advertisers and consumers could be far-reaching and warrant careful review, and we plan to investigate the competitive and privacy implications of this deal further," said Kohl, a Wisconsin Democrat.

Yahoo and Google have voluntarily agreed to wait until late September to begin working together to give the government adequate time to review the arrangement. If it isn't blocked, the partnership could last for the next decade.

The antitrust scrutiny appears to be the least of Yahoo's worries for now.

The Sunnyvale-based company also is trying to fend off a shareholder mutiny led by activist investor Carl Icahn, who has vowed to replace the company's board because of the way the directors handled the Microsoft negotiations during the past 4 1/2 months.

But Icahn has been hoping to engineer a sale to Microsoft, so his campaign could be hurt by the perception that the software maker has lost all interest in buying Yahoo. Shareholders may be reluctant to support Icahn's attempted coup unless he can demonstrate his slate of directors has a better turnaround plan than the current board.

Icahn did not return phone calls seeking comment Thursday.

The fate of Yahoo's board is scheduled to be determined at the company's Aug. 1 annual meeting.

"If you are a Yahoo shareholder, you just have to be scratching your head right now," said Standard and Poor's equity analyst Scott Kessler.

If Wall Street's backlash becomes severe enough, Kessler said he believes Yahoo might have to consider replacing co-founder Jerry Yang as its chief executive — something Icahn has already promised he will do if he wins control of the board.

After Yang took over the reins from Terry Semel a year ago, Yahoo's stock price fell from $28.12 to $19.18 at the time Microsoft launched its unsolicited takeover attempt in January.

Yang "has been slow to move, slow to act and it has cost shareholders as a result," Kessler said.

Many Yahoo shareholders blame Yang for letting his emotional attachment blur his judgment during the Microsoft negotiations.

Yahoo's board sent Yang and fellow co-founder David Filo to a pivotal May 3 meeting in Seattle to discuss Microsoft's oral offer to buy the company for $33 per share, up from its initial bid of $31 per share. After Yang demanded $37 per share, Microsoft CEO Steve Ballmer withdrew the offer.

In recent weeks, Ballmer has been trying to buy Yahoo's search engine instead.

Yahoo concluded that its search engine was too important to sell piecemeal.

Without explaining its logic, Microsoft said it believed a deal involving Yahoo's search engine would have been more valuable to Yahoo than if it had bought the entire company at $33 per share. The Redmond, Wash.-based software maker said it remains open to buying Yahoo's search operations.

Yahoo's deal with Google includes an escape hatch should Microsoft or another suitor buy the company. If Yahoo is sold, Google would receive a termination fee of up to $250 million.

That clause could still raise hope that Icahn might be able to renew the Microsoft talks if he can win control of Yahoo's board.

The deal shapes up as a major victory for Mountain View-based Google, which didn't want Yahoo to fall into Microsoft's clutches.

"I am happy to be helping them to stay independent," Google co-founder Sergey Brin said in a Thursday interview.

With a Yahoo deal off the table, Microsoft could set its sights on a smaller acquisition that still might help its unprofitable Internet operations. Analysts have cited Time Warner Inc.'s AOL, Internet software service provider Salesforce Inc. and leading online social networks, News Corp.'s MySpace and Facebook Inc. as possible targets.

The Google partnership expands upon a two-week trial conducted in April while Yahoo was trying to pressure Microsoft into raising its bid. The tests confirmed Google's technology would generate more revenue for Yahoo than its own system, which cost more than $2 billion to acquire and improve.

Nevertheless, Yahoo still intends to use its own search engine to distribute some ads and process all search requests. Working with Google will give Yahoo "the best of both worlds," Yahoo President Sue Decker said a Thursday conference call.