Wi-Fi’s true believers see powerful ‘grass-roots’ force

John Markoff NYT Monday, July 14, 2003

  SUN VALLEY, Idaho Is the Wi-Fi boom about to bust? Even though that has lately become the fashionable view, the answer is probably no.

Critics argue that there are too many competitors trying to deliver high-speed wireless connections to the Internet. Prices for most commercial Wi-Fi services are too high, they say, and free or subsidized operations abound, including those like the one McDonald’s started rolling out last week at its fast food restaurants in San Francisco.

All this will make it practically impossible, the skeptics insist, for anyone to build a profitable business in Wi-Fi, a short-range wireless radio technology that frees personal computers from their physical tethers to the Internet.

A surprising number of true believers in Wi-Fi were present at this famed mountain resort during an annual conference, organized by the investment banker Herbert Allen, that brings together technology, media and entertainment industry leaders.

Intel, in particular, is betting a lot of its own money on Wi-Fi. And that may be exactly what the new technology needs to succeed.

Intel’s two top executives, Craig Barrett and Andrew Grove, were here this year to preach the virtues of Wi-Fi, in the belief that it will be a powerfully disruptive force in the telecommunications industry.

It has certainly been a disruptive force at Intel. The industry and analysts have focused their attention on the current frenzy to build out wireless Internet locations known as hot spots at airports, coffee houses and hotels. But Intel has a much bolder wireless plan in the works: it wants to close the so-called “last-mile” gap between homes and the Internet backbone with cheap, super-fast connections so that businesses can deliver interactive entertainment and a host of other digital products and services right into America’s living rooms and dens.

The new Intel bet is remarkable given that the company initially backed the wrong wireless standard, putting its resources behind a competing standard known as Home RF. But Intel, the world’s biggest computer chip maker, changed its strategy after company executives realized the power and potential pervasiveness of the unregulated Wi-Fi wireless networking standard.

The Wi-Fi standard was developed and commercialized at Apple Computer as early as 1999. Ultimately, though, it gained widespread popularity on its own, Mr. Barrett acknowledged in an interview here, as a grass-roots, from-the-bottom-up movement. That success stands in striking contrast to top-down wireless data strategies, like the 3G cellular approach pushed by the telecom industry, which has so far been an expensive bust.

Barrett now says that people who predict a Wi-Fi shakeout are missing the point, as well as failing to see the deeper implications of the technology. “What is missing is the realization of how many legs this technology has,” he said.

In the three months since Intel introduced its new wireless PC chips, the company has become the dominant force in the Wi-Fi market. It is now putting Wi-Fi circuitry in all of its chip sets for portable computers, investing widely in Wi-Fi industry start-ups and spending almost its entire annual marketing budget in a $300 million advertising campaign trumpeting the virtues of its unwired Centrino brand.

“Intel has raised the level of the water and is floating all the boats,” said Glenn Fleishman, editor of Wi-Fi Networking News, a Web-based daily newsletter.

Of even greater potential import, Intel plans to start a test in Texas in a few months that will use a combination of wireless technologies, including Wi-Fi, to bring broadband Internet connections directly to homes. Last week the company quietly announced that it was teaming with a small equipment maker, Alvarion, of Tel Aviv, Israel, to back a complementary wireless standard that is intended to send data over distances of as much as 30 miles and at speeds of up to 70 megabits per second. The data rate is high enough to comfortably stream high-definition television video broadcasts, and the range makes it possible to quickly deploy a system in a large urban or suburban area.

By comparison, current Wi-Fi technology is limited to several hundred feet and speeds of 11 megabits per second. The Intel test, however, will explore using the 802.16 standard, known as WiMax, to distribute the data to Wi-Fi antennas in local neighborhoods. If Intel is able to jumpstart the market to reach millions of homes with a relatively inexpensive interactive data and video service, the technology could quickly alter the communications landscape. That is already starting to happen. There is now an explosion of Wi-Fi hot spots in hotels, coffee shops, restaurants and airports, and a new wave of handheld gadgets will soon supplement portable personal computers for a class of mobile workers that analysts are calling windshield warriors.

In a speech here, Barrett sketched a portrait of a rapidly growing market. There are now about 40 million Wi-Fi users, he said, and new access points are selling at the rate of about 15,000 a day, which makes Wi-Fi a much faster-growing technology than cellular telephony.

While prices for connection times are certain to keep falling, industry executives say they are already seeing usage patterns that suggest that Wi-Fi commercial services are working and are here to stay. Moreover, they say they believe the services will complement and not compete with free services that are emerging in urban areas around the country. “We have a good business model in hotels, said Dave Vucina, chief executive officer of Wayport, a provider of Wi-Fi hot spots in hotels, airports, restaurants and other locations that is based in Austin, Texas.

In the hotels that Wayport serves, he said, the company is seeing between 8 and 12 percent nightly usage rates for each occupied room. He said he believed that the rate could go as high as 15 to 24 percent. Those numbers are credible, industry analysts said, because out of the 40 million business travelers in the United States, 30 million now carry personal computers when they hit the road.

The central issue in the debate is whether those workers will be able to meet their data needs with next-generation cellular telephone networks, or whether the far higher data rates available on Wi-Fi networks will prove preferable.

Copyright © 2003 The International Herald Tribune

When George W Bush arrived in the White House, it was hardly surprising that he looked after Enron – the company had been looking after him for years. In the final extract of his book, Robert Bryce describes how the firm bought its way into Washington’s corridors of power

Wednesday November 6, 2002 The Guardian

Pipe Dreams Buy Pipe Dreams at Amazon.co.uk

Surely it’s just a coincidence. What else would explain why Enron Oil and Gas, a subsidiary of Enron Corp, would have been in business with George W Bush back in 1986? Bush the Younger was many things, including the eldest son of the vice president of the United States. A successful oilman he was not. Bush’s forays into the energy business had been nothing short of disastrous. In 1984, Bush had no choice but to merge his faltering firm, Bush Exploration Company, with another company, Spectrum 7. But by mid-1986, Bush had done his magic on the privately owned Spectrum 7. The company wasn’t producing much energy of any kind, and Bush was actively trying to sell again. Despite Spectrum 7’s lousy record, it somehow got into business with Enron Oil and Gas. And on October 16, 1986, Enron Oil and Gas announced that it had completed a well a few miles outside of Midland, Texas, that was producing 24,000 cubic feet of natural gas and 411 barrels of oil per day. Enron owned 52% of the well; 10% belonged to Spectrum 7.

Now, the oil and gas business is full of speculators, and wells are often drilled with multiple investors with varying backgrounds. But the early Bush-Enron connection points out just how small the energy business is. Lay’s ties to George W Bush go back to 1980, when Bush made his first bid for the White House. Bush, who had recently served as director of the Central Intelligence Agency, needed campaign funds after his surprise win in the Iowa caucuses. So Lay, who had probably met Bush through mutual friends in the energy business in Houston, gave money to Bush’s campaign. Though Bush didn’t win, Ronald Reagan made him vice president. Bush went on to chair the panel that pushed Reagan’s task force on deregulation. One of Reagan’s biggest moves in deregulation involved the lifting of federal controls on natural gas markets, a move that Lay had long favoured.

When the elder Bush got to the White House, he didn’t forget Lay. Bush rewarded Lay during his presidency with one of the most coveted perks of being a presidential pal, a sleep-over at the White House.

When Bush the Younger decided to run for governor of Texas in fall 1993, one of his first stops on the campaign trail was Houston. During his visit, George W Bush asked Lay to be the finance chairman of his campaign in Harris County, which includes Houston. Lay didn’t take the job. He preferred to give George W Bush a $12,500 (£8,000 at today’s rates) cheque and work behind the scenes. In his stead, Bush’s campaign in the county was headed by Lay’s second in command at Enron, Rich Kinder. In all, Lay, Kinder, and other Enron executives donated $146,500 to George W Bush, almost seven times more than the amount they gave to the incumbent candidate, Democrat Ann Richards. The donations by the execs, combined with money from Enron’s political action committee, made the Houston company Bush’s biggest campaign contributor.

After George W Bush defeated Richards, Enron gave $50,000 to Bush’s inaugural committee. Lay began lobbying Bush almost immediately. In December 1994, before Bush moved into the Governor’s mansion in downtown Austin, Lay began sending him regular letters on energy policy, tax issues, lawsuit reform and other matters. That month, Lay asked Bush to appoint Pat Wood, who supported the deregulation of electric utilities, to the state’s public utility commission. Bush complied with Lay’s request. And later on, Bush would appoint Wood – again at Lay’s recommendation – to the federal energy regulatory commission.

And while Lay maintained close ties to the Bush family throughout George W Bush’s stint as governor of Texas, those connections would be even more valuable to him and to Enron if Bush the Younger could throw the Democrats out of the White House. In December 1999, while Bush was pounding the campaign trail, Lay again wrote to his friend, addressing it to “George and Laura” [Bush’s wife]. “Linda and I are so proud of both of you and look forward to seeing both of you in the White House.”

Lay had been one of Bush’s first “pioneers”, each of whom pledged to raise $100,000 for Bush. He had also made Enron’s fleet of aircraft available to his campaign. The Bush campaign used Enron’s jets to fly to different events on eight different occasions – more than any other corporation. During the 2000 election cycle, Lay contributed more than $275,000 to the Republican National Committee. Enron’s total donations to the party exceeded $1.1million. When the outcome of the election was in doubt after the polls closed in November 2000, Lay and his wife, Linda, gave $10,000 to help finance the Bush campaign’s Florida operation during the recount after the election.

After Bush prevailed in the election (thanks to assistance by the US supreme court) Ken and Linda Lay gave another $100,000 to help finance Bush’s inaugural gala. In all, Enron and its top execs kicked in $300,000 for the inauguration festivities. Naturally enough, the day after the inauguration, Lay went to a private lunch party at the White House, where he got to schmooze with the new president one on one. A few weeks later, Lay had dinner with the president.

It wasn’t long before Enron’s bet on George W Bush was paying off in more important ways, too. Although the California energy crisis was raging throughout his first few months in office in 2001, the president refused – for nearly six months – to consider the possibility that the golden state’s power markets were being manipulated. In some parts of the state, electricity rates had gone from $30 per megawatt hour to an alarming $1,500 per megawatt hour. Rolling blackouts – and threats of blackouts – had the state in a near constant uproar. By the time Bush had spent about 180 days in the White House, the state of California had spent nearly $8 billion buying power on the open market just to keep the lights on.

Despite the crisis, Dianne Feinstein, a senator from California – the most populous state in the union – couldn’t get an appointment with Bush. The White House had plenty of time for Enron, though. On April 17 2001, Vice President Cheney had a private meeting with Enron chairman Ken Lay. During the meeting, Lay offered suggestions for Cheney’s energy task force and lobbied Cheney against price caps in California. Cheney quickly adopted Lay’s argument. The day after his meeting with Lay, Cheney mocked the idea of price caps. He told the Los Angeles Times that caps would only provide “short-term political relief for the politicians.” In late May, Bush visited California and, like Cheney, attacked the idea that price caps – something the California governor, Gray Davis, and Feinstein had been begging for – might help the state restore order to its electricity system.

Bush and Cheney were wrong. Enron and several other power companies had been manipulating the California energy market for months and collecting huge revenues for their efforts. Using strategies with colourful names like Death Star, Get Shorty, Fat Boy, and Ricochet, Enron had apparently figured out ways to play the state’s power system and drive up prices. Finally, on June 18 2001, after weeks of rising intrigue, the federal energy regulatory commission approved limited price caps for California. The move quickly settled the state’s power markets.

Enron’s connections in the White House went much further than George W Bush. The new president’s chief economic adviser, Larry Lindsey, was on Enron’s payroll before going to the White House, earning $100,000 in consulting fees from the Houston company. Marc Racicot, the former governor of Montana, lobbied for Enron before Bush named him to lead the Republican national committee. Robert Zoellick, Bush’s choice for US trade representative, served on an Enron advisory council. Thomas White, Bush’s secretary of the army, was the vice chairman of Enron Energy Services, a money-losing charade of a company. Nevertheless, when White left Enron, he owned more than $25 million in the company’s stock. Bush’s chief strategist and political guru, Karl Rove, owned more than $100,000 of Enron stock when Bush took office.

Bush’s White House provided Lay and Enron with unprecedented access. In addition to the meeting with Lay, Enron officials met with Cheney’s task force (the national energy policy development group) five times and talked to it by phone on at least six other occasions about the measure. Their effort shows. The national energy policy development group’s final report – Reliable, Affordable and Environmentally Sound Energy for America’s Future – released in mid-May 2001, contains a number of provisions very favourable to Enron. For instance, the report recommends the creation of a national electricity grid, a move that could allow Enron to trade electric power more readily in all regions of the country.

The report says permitting for gas pipelines should be expedited, a factor that would help Enron, already one of the largest pipeline companies in the world, build more capacity more quickly. The report talks about the California crisis, the need for energy efficiency, increased domestic natural gas production and, of course, India. Didn’t you know that the cost of butane in Bombay is critical to soccer moms in Seattle? Cheney’s group recommended that “the president direct the secretaries of state and energy to work with India’s ministry of petroleum and natural gas to help India maximise its domestic oil and gas production”.

Not only could Lay get Bush’s ear on appointments, he could get federal reports to mention countries like India, where Enron, with the Dabhol electricity and liquefied natural gas project (also mentioned in Cheney’s report), was a major investor.

To be fair, the energy report also discusses America’s growing reliance on energy from Mexico and Canada. But the state department, which participated in the writing of the energy report, didn’t add the India section; the White House did. Ken Lay’s money on George W Bush had been well spent.

———–

Apple’s Chief in the Risky Land of the Handhelds By JOHN MARKOFF

AN FRANCISCO, Aug. 18 — It has long been Silicon Valley’s favorite guessing game: What is Steven P. Jobs going to do next?

The question is particularly engrossing as Apple Computer prepares to introduce the new version of its Macintosh OS X software operating system.

There are signs that, with the new version of the Macintosh OS, Mr. Jobs, Apple’s founder, chairman and chief executive, may be approaching a precipice like the one that led to the downfall seven years ago of the man who was then Apple’s chief executive, John Sculley.

Mr. Sculley’s great tumble came after he staked his and Apple’s reputation on the ill-fated Newton hand-held computer — an ambitious product based on handwriting-recognition technology that was ahead of its time. And now come signs that Mr. Jobs means to take Apple back to the land of the handhelds, but this time with a device that would combine elements of a cellphone and a Palm-like personal digital assistant.

Mr. Jobs and Apple decline to confirm those plans. But industry analysts see evidence that Apple is contemplating what inside the company is being called an “iPhone.”

Among the evidence, they say, is recent behind-the-scenes wrangling between Palm and Apple over linking Palm’s own devices to Apple’s new operating system — apparently with little cooperation on Apple’s part.

Analysts also cite Apple’s deal with Pixo, the tiny company that designed the software for Apple’s popular iPod MP3 music player; that deal includes a license for Apple to use Pixo’s software with a second product.

And analysts note that the presence of a variety of features in the new Macintosh OS software that would make more sense in a hand-held device than a desktop computer.

“When you connect the dots, you end up at a phone,” said Charles Wolf, a financial analyst who follows Apple for Needham & Company.

Compared with the Newton, which was delivered prematurely in 1993 to a market not yet ready for such products, Apple’s new device would reach a field in which other companies have already plowed the ground — including giants like Microsoft, Nokia and Motorola, as well as start-ups like Handspring and Danger. This crowded field could pose risks for Apple, if its product were seen to fall short of the competition.

And yet, entering an already established market could give Mr. Jobs the opportunity to show off his and Apple’s vaunted innovation and marketing skills.

Certainly, Apple’s push into the market for a hand-held communicator would be an abrupt departure for Mr. Jobs, who continues publicly to disavow talk of such a move. But analysts and people close to the company say that the plan is under way and that the evidence is manifest in the features and elements of the new version of the Macintosh operating system.

Mr. Jobs — who was a co-founder of Apple and handpicked Mr. Sculley as its president, only to be forced out by him in 1985 — returned five years ago when the company was on the brink of collapse.

In a remarkable turnaround effort, Mr. Jobs has taken pains to distance Apple from the Sculley-Newton legacy. He canceled the Newton soon after returning and has pooh-poohed the industry’s personal digital assistants as “junk” and worse.

Behind the scenes, though, Mr. Jobs has been actively exploring the computing world beyond the desktop. Soon after he arrived back at Apple, for example, he attempted to buy Palm for $1 billion, according to a Silicon Valley executive familiar with the offer. Palm rejected the idea, this executive said.

Now, with the release of the newest version of the Macintosh operating system, Mr. Jobs appears intent on taking Apple itself into the hand-held market. The move would play into Apple’s so-called digital hub strategy, in which the Macintosh desktop computer is the center of a web of peripheral devices.

The highly anticipated Macintosh OS X, Version 10.2, which began shipping on the company’s newest computers last week, will go on sale for existing Macintosh users on Saturday. While the software is being marketed as an improvement for desktop computer users, it could have just as big a future in powering a yet-to-be announced Apple hand-held computer-phone.

Mr. Jobs continues to be coy. He insists that he still dislikes the idea of the conventional personal digital assistant, saying that the devices are too hard to use and offer little real utility. But a telephone with personal digital assistant features is another matter.

“We decided that between now and next year, the P.D.A. is going to be subsumed by the telephone,” he said last week in an interview. “We think the P.D.A. is going away.”

And even while protesting that the company had no plans to introduce such a device, he grudgingly acknowledged that combining some of Apple’s industrial design and user-interface innovations would be a good idea in a device that performed both phone and computing functions.

A look at the laundry list of features in the company’s new version of OS X indicates that a computer-phone is much more than a vague idea for Apple.

Of the 12 new OS X features the company has been emphasizing on its Web site, most would be desirable for a hand-held phone, including chat capabilities, mail, an address book, calendar features, automatic networking and a synchronization feature that will become available in September.

And several of the features, including the company’s handwriting-recognition technology and Sherlock information-retrieval program, would be much more relevant to a small, portable device than to a desktop computer.

Sherlock in particular has been repositioned in a way that would make it a perfect counterpart for a portable phone. Its original purpose, which was finding files and content on the computer’s local disk, has been transformed into a more general “find” utility program. Now, Sherlock is being extended to search for types of information like airline and movie schedules and restaurant locations. The software can display maps and driving directions.

But details of the plan are unlikely to emerge from Mr. Jobs or his team before Apple is ready to introduce a new product. The company, which in the 1980’s and 90’s was known among reporters as “a ship that leaks from the top,” is now obsessive about guarding the secrecy of its future products.

All Mr. Jobs would say on the matter was that the cellphone computers already on the market fall far short, and that some of the user-interface and industrial design touches already evident in the iPod would be perfect for an improved, consumer-friendly version of such a product.

An Apple phone could be a particularly tempting product for Mr. Jobs, giving him the opportunity to overcome Mr. Sculley’s largest failure. He could also rectify the Newton’s single biggest shortcoming: the device’s inability to communicate easily with the Macintosh desktop computer. Apple has already begun offering Bluetooth local wireless networking technology for peripheral devices, a feature that would make it simple to share information between a phone and a computer.

Furthermore, the cost of adding phone capabilities to palmtop computers is falling rapidly.

“It’s easier and easier for a company like Apple to go to a Taiwanese manufacturer for wireless telephone components,” said David Carey, chief executive of Portelligent, a technical market research company based in Austin, Tex. He said the parts required for adding advanced cellular capabilities to a device now cost as little as $50.

Of course, that is why Mr. Jobs’s greatest challenge with an iPhone might be elbowing his way into a crowded marketplace, where other companies already have supplier and manufacturing relationships in place.

“There’s no question that Apple could design a cool phone,” said Andy Neff, a Bear, Stearns analyst in New York. “The key is being able to build an infrastructure.”

———–

—-

http://biz.yahoo.com/ri/020715/health_drkoop_1.html

Monday July 15, 12:00 pm Eastern Time

Reuters Internet Report Former Internet Darling DrKoop.com Sold for $186,000

BOYNTON BEACH, Fla. (Reuters) – DrKoop.com, the online consumer health information pioneer that rode the Internet frenzy from boom to bankruptcy, on Monday was bought by Vitacost.com, a seller of health-related products over the Internet, for $186,000, Vitacost said.

At one time worth more than $1 billion, DrKoop.com — founded in 1997 by former U.S. Surgeon General C. Everett Koop — fell into bankruptcy in December as it struggled to turn public interest in its online health information into a reliable revenue stream.

Vitacost, a privately held company based in Boynton Beach, Florida, sells health and nutrition products over the Web.

Vitacost paid $186,000 in cash for DrKoop.com’s assets, which included the brand name, trademarks, domain names, the Web site, and the e-mail addresses of its registered users.

The site attracts more than 900,000 visitors a month and has a database of more than 2 million registered users, Vitacost said in a statement.

DrKoop.com became a case-study for the roller-coaster ride of the dot-com era. Unveiled with a splash as Empower Health, the company sank into a cash crisis barely a year later, only to find an angel investor who provided enough backing until the company could sell itself to the public in 1999 as DrKoop.com.

The float brought in about $88 million even though the company had tiny revenue and was $15 million in the hole. It didn’t stop DrKoop.com from moving in to plush new headquarters in Austin, Texas, following the IPO.

Amid the portal rage of 1999, DrKoop.com signed a multimillion-dollar deal with Walt Disney Co. (NYSE:DIS – News) and its Go site, which eventually would be shuttered. It also agreed to pay America Online, now a unit of AOL Time Warner Inc. (NYSE:AOL – News), an enormous sum to provide health information to its users.

Those types of deals eventually would be mocked on Wall Street, but were an Internet mainstay at the time.

The site’s main commodity, Dr. Koop himself, began to suffer when he faced questions about his ethics in a front-page story in The New York Times about how Koop was earning commissions for products sold on the site.

By 2000, DrKoop.com’s auditors had serious doubts about the company’s ability to survive as it piled up debt. Directors dumped shares, mass layoffs began and the stock sank to less than $1.

Vitacost now boasts about the more conservative approach it took than its online peers did.

“In fact, we did not have and do not have one venture capitalist investor nor did we do an IPO,” Vitacost President Allen Josephs said.

Vitacost has achieved profitability and is using the money to buy brands like DrKoop.com, he added. The company still sees medical information as a burgeoning area on the Internet.

“Consumers are increasingly hungry to educate themselves about how both mainstream and natural or complementary medical practices can enhance their personal health and wellness,” Josephs said.

He said he hopes to achieve DrKoop.com’s original promise — of becoming the most trusted repository of medical information on the Internet.

———–

-Ian.

——- http://pulver.com/reports/vonews.html

Key3Media, the World’s Leading Producer of Technology Tradeshows and Events, Announced Its Strategic Acquisition of Networking Pioneer pulver.com’s VON and SIP Events

LOS ANGELES–Sept. 11, 2001–

Global Acquisition Completes Months of Planning that Places Key3Media at the Forefront of Networking Space

Key3Media Group, Inc. (NYSE: KME) today announced that one of its wholly-owned subsidiaries has acquired two major pulver.com event brands: Voice on the Net (VON) Conferences and Session Initiation Protocol (SIP) Summits. Pulver.com is considered one of the industry leaders in the Networking and IP communications space. As part of a long-term agreement, pulver.com President and CEO Jeff Pulver will continue to manage the VON and SIP tradeshows and conferences for Key3Media.

This acquisition culminates six months of strategic planning and analysis to position Key3Media as the industry leader for networking tradeshows and events. After months of research it became quite clear that pulver.com’s VON and SIP events were a perfect fit for Key3Media and a match that will quickly differentiate Key3Media networking events in the future.

“Ten years ago the PC defined the IT industry. Today the network is defining the industry and will continue to do so for the next decade. This acquisition strategically positions Key3Media to play a dominant role in the networking space,” said Fredric D. Rosen, Chairman and CEO of Key3Media Group, Inc. “Key3Media’s NetWorld+Interop brand has always been the definitive networking event in the industry. Now the synergies created with this new acquisition position Key3Media as the unparalleled leader, bringing together buyers and sellers in the networking and IP communications industries.”

Jeff Pulver, President and CEO of pulver.com, Inc., is a globally respected visionary with more than a decade of experience in Internet and IP communications and is a dynamic entrepreneur. He is the publisher of Internet technology related research such as The pulver Report, the founder of the VON and SIP events, and the producer of the Presence and Instant Messaging (PIM) trade show. Mr. Pulver is the co-founder of the VON Coalition, Free World Dialup, Vonage and WHP Wireless and is one of the true pioneers in Internet telephony whose expertise is widely utilized in the telecommunications industry.

There are six VON Conferences around the world each year. The VON Conferences focus on the convergence of the telecom and Internet industries. The next VON Conference, Fall 2001 VON, will be taking place October 15-18, 2001 at the Georgia International Convention Center in Atlanta, Georgia. Other upcoming VON Conferences will be held in Hong Kong in November, San Jose in January, Seattle in April, and Helsinki in June. There are currently two SIP Summits each year. Fall 2001 SIP Summit will be taking place September 10-13 in Austin, Texas. SIP Summit enables attendees to listen to the senior executives responsible for driving the international SIP industry forward and to meet with these players to take advantage of unique business and personal networking opportunities.

“As the world’s leading information technology event producer, Key3Media has set out to reinvent the tradeshow industry with customer-centric programs and community-focused content,” said Jeff Pulver, President and CEO of pulver.com, Inc. “I am pleased that pulver.com’s VON and SIP events will now have a unique opportunity to grow to the next level under the Key3Media umbrella.” Corporate Solutions of Fairfield, Connecticut was the exclusive representative for pulver.com in this transaction.

About pulver.com

pulver.com builds community for the IP Communications industry through conferences, newsletters, mailing lists, analysis, liaison roles, advise to start-ups, summits, test projects and its web site. This role started with the emerging VoIP industry and has expanded into the instant messaging, wireless internet and broadband home spaces, since such services provide an integral back end to the increased functionality of IP-based communications. The company’s founder, Jeff Pulver, has been involved with the technology since the beginning. For more information, visit www.pulver.com.

About Key3Media…

Key3Media Group, Inc., is the world’s leading producer of information technology tradeshows and conferences, serving more than 6,000 exhibiting companies and 1.5 million attendees through 60 events in 18 countries. Key3Media’s products range from the IT industry’s largest exhibitions such as COMDEX and NetWorld+Interop to highly focused events featuring renowned educational programs, custom seminars and specialized vendor marketing programs. For more information about Key3Media, visit www.key3media.com.

Certain matters discussed in this release are “forward-looking statements,” including statements about Key3Media’s future results, plans and goals and other events which have not yet occurred. These statements are to qualify for the safe harbors from liability provided by the Private Securities Litigation Reform Act of 1995. You can find many (but not all) of these statements by looking for words like “will”, “may”, “believes”, “expects”, “anticipates”, “plans” and “estimates” and for similar expressions. Because forward-looking statements involve risks and uncertainties, there are many factors that could cause Key3Media’s actual results to differ, materially from those expressed or implied in this release. These include, but are not limited to, economic conditions generally and in the information technology industry in particular; the timing of Key3Media’s events and their popularity with exhibitors, sponsors and attendees; technological changes and developments; intellectual property rights; competition; capital expenditures; and factors impacting Key3Media’s international operations. In addition, the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Prospectus Supplement dated June 22, 2001 filed by Key3Media with the SEC under Rule 424(b) relating to its high yield bond offering and the section entitled “Item 1.Business – Certain Factors That May Affect our Business” in the Annual Report on Form 10-K for the year ended December 31, 2001 filed by Key3Media with the SEC contain important cautionary statements and a discussion of many of the factors that could materially affect the accuracy of Key3Media’s forward-looking statements and/or adversely affect its business, results of operations and financial position. These statements and discussions are incorporated herein by reference. Key3Media does not plan to update any forward-looking statements.

Key3Media, COMDEX, NetWorld+Interop, Interop and associated design marks and logos are trademarks owned or used under license by Key3Media Events, Inc., and may be registered in the United States and other countries. NetWorld is a service mark of Novell, Inc., and is registered in certain jurisdictions. Other names mentioned may be trademarks of their respective owners.

-Ian.

—- http://dailynews.yahoo.com/htx/nm/20010311/wr/tech_lifestyle_dc_1.html

Sunday March 11 8:01 AM ET Internet Stock Flop Zaps Dot-Com Lifestyle

By Michael Kahn

SAN FRANCISCO (Reuters) – Last year the struggle for dot-commers was finding a car dealer who still had the latest BMW in stock — this year, it’s affording one.

Welcome to the brave new world of dot-com workers, where the once promising prospect of stock-option riches from Internet start-ups has faded into a grim reality of lay-offs, bankruptcies and plummeting stock prices.

“The atmosphere has definitely changed,” said Sheeraz Haji, co-founder of LocusPocus, a San Francisco area Internet start-up that allows nonprofits to communicate with their members. “There was an expectation of joining a start-up and there would be a big payoff in three or four months when the company goes public.”

This once unbridled enthusiasm of mostly young dot-com workers sparked a second California Gold Rush as many hopped from job to job looking to hit the stock-option jackpot.

While the dot-com lifestyle shimmered in golden ghettos stretching from Boston to Austin and points in between, the frenzy peaked in San Francisco and nearby Silicon Valley — where high-tech workers happily assumed their jobs were automatic tickets to fortune.

That dream, however, began to crumble as dot-com companies hit the skids last year, leaving many workers scrambling as their paper riches evaporated.

Haji, for example, said his stock options in his former employer Digital Impact (NasdaqNM:DIGI – news) were worth some $2 million before shares in the online direct marketer dropped so low that he jumped ship last June, leaving those dreams of riches behind.

But Haji was lucky in that unlike many other dot-commers, he held off using the promise of future millions to finance a new sports car, fork out an exorbitant down-payment on a new home or plunk down wads of cash on some other flashy big-ticket item.

“It’s hard to believe it but people actually made purchases on unvested stock,” he said in a recent interview.

It wasn’t just dot-commers who were tempted by the lures of the New Economy. Venture capitalists poured billions of dollars into Internet start-ups and the Nasdaq soared, hitting an all-time high of 5,132.52 on March 10, 2000.

But one-year later the tech-heavy exchange is hovering around the 2,200 range, while surviving dot-coms have tightened their belts in hopes of making it to the next quarter rather than plotting lucrative initial public offerings.

“People had the impression they had made it already,” said Paul Nock, director of mobile technologies at MedicinePlanet, which provides health care and well-being content to wireless portals. “It was kind of believing their own hype, really.”

>From Launch To Pink-Slip Parties

The dot-com bust has also marked the end of the lavish launch parties that trumpeted the arrival of yet another Internet firm, where dot-commers munched shrimp, sipped champagne and toasted the New Economy.

Taking their place today are pink slip parties for newly laid-off workers and Web sites tallying the mounting number of dot-com failures such as well-funded Internet retailers eToys Inc. and Pets.com.

Even worse for dot-commers, their Internet jobs no longer carry the cachet they did a year ago. Most start-ups firms that once sought to highlight the .com in their name now seek to shed that suffix.

“The attitude used to be: ‘I’m doing the hippest, coolest thing,”’ said Haji. “It is no longer fashionable to work for an Internet start-up.”

This does not necessarily mean that experienced tech workers are crowding the unemployment lines.

Industry experts say Northern California has such a wealth of established high-tech firms that many have simply traded in their dicey dot-com credentials for cubicles at giant corporations such as Cisco Systems Inc. (NasdaqNM:CSCO – news), Intel Corp. (NasdaqNM:INTC – news), or Oracle Corp. (NasdaqNM:ORCL – news)

Nevertheless, expectations among workers looking for jobs at dot-coms have also changed, Nock said. Employees once swayed by perks like stock options and pool tables at the office now worry more about job stability and salary, he said.

“I didn’t join on the basis of what stock I might get,” Nock said.

Dot-Commers Rein In Spending

The Internet stock free-fall has also put an end to a spending frenzy that saw dot-commers burning through money like there was no tomorrow, said Michael Gilmore, CEO of SnapHire, a San Francisco start-up that provides software to help corporations to recruit employees.

These fashion-conscious, paper millionaires networked their way through the trendiest bars and restaurants, shopped at the most expensive stores and raced to car dealerships to snap up the latest model BMW or Mercedes, he said.

But the stock-market dip translated into a hard dose of reality for the high-flying high-tech workforce.

“It was meet as many people as you can and just spend money basically,” Gilmore said. “People are now having to look at their checkbooks just as companies are doing,” Gilmore said.

But the decline and accompanying layoffs have had a silver lining, he added. It’s now easier to find a place to live in a still-pricey housing market, last-minute dinner reservations are not as big a hassle and driving on northern California’s notoriously gridlocked highways is less stressful because there are fewer drivers headed to work.

And maybe the best thing about the Internet shakeout is that it is no longer necessary to live the frenetic lifestyle where every waking minute is spent chasing the dot-com dream, he added.

“Hopefully, it will become more like real life again instead of this kind of sick fairy tale,” Gilmore said.

B.C. you later Net entrepreneurs are heading to U.S. Steve Ernst Staff Writer

Speeding tickets are no longer a worry for Dimitri Sirota.

Until a few months ago, the 29-year-old entrepreneur was driving 300 miles twice a week. He would zip down to Seattle to raise money and line up partnerships, then travel back to Vancouver, B.C., to run his telecommunications infrastructure start-up, eTunnels Inc.

Finally, like a growing number of his countrymen, Sirota moved his 8-month-old company to Seattle in hopes of attracting more venture capital and establishing a foothold in the much larger U.S. market.

“It’s very, very hard for an Internet company to make it in Canada,” he said. “And it’s not just because of the taxes. The Canadian business environment just doesn’t offer the opportunities that are here. People are more conservative and are far more risk-averse up there.”

An increasing number of Canadian entrepreneurs are being lured to the Seattle area by the city’s large pools of venture capital, this country’s more accommodating tax and securities regulations, and the proximity of other established e-commerce and technology companies. While start-ups in Canada don’t pay for employee medical benefits and can receive liberal tax credits for research and development, those advantages don’t seem to offset other factors luring firms to the United States.

Sirota is following a trail most recently blazed by Canadian expatriate Glenn Ballman, chief executive officer of Onvia.com Inc. Ballman moved his company’s headquarters to Seattle in 1998 and went on to raise $71 million in venture financing for the small-business e-commerce site before taking it public last month.

And he isn’t alone. This week Canadian Terry Drayton will take public the company he founded, HomeGrocer.com Inc. Drayton started the company in Vancouver before heading south in search of capital.

The publicly traded company NetNanny Software International Inc., an Internet filtering and security firm, last month moved its headquarters from Vancouver to Bellevue, in hopes of raising more private equity and to be closer to its biggest market.

George Hunter, executive director of the British Columbia Technology Industries Association in Vancouver, is familiar with the syndrome. “The story I hear most often is Canadian companies can achieve better valuations by moving to the States,” he said. “Many of them link up with U.S. venture firms early on and set up their business development and marketing headquarters in the U.S., but keep research operations in Canada.”

Canadian venture investors also tend to be more conservative than their American counterparts, said Gordon Ross, CEO of NetNanny and a third-generation Vancouverite.

“Getting investments in Canada can be a long, long process,” Ross said. “And with technology companies, you really can’t wait. Venture capitalists down here really understand that, they understand the risks and the nature of the business.”

Last year overall venture capital investment in the United States was 18 times greater than in Canada, according to a study conducted by the Boston Consulting Group, a Boston-based research firm. An estimated $1.2 billion in venture capital flowed into the Pacific Northwest last year, while all of Canada collected about $2 billion in private financing.

One thing Canada lacks is a large pool of institutional investors, the report concluded. “The environment is less dynamic in Canada because the venture capital market is dominated by passive and semi-public investors,” the report stated.

Canadian law prevents pension funds and other government-sponsored investment funds — which constitute more than 60 percent of the venture capital investors in Canada — from taking a large ownership stake in companies. Those venture capital investors tend not to take an active role in companies primarily because labor-sponsored funds receive an upfront tax credit for their investment, lessening their drive for high returns, the report concluded.

Ross, who started NetNanny 10 years ago, plans to keep the company’s software research and development operation in Vancouver to take advantage of tax credits and government grants.

The company also recently closed on $6 million in private equity from a group of European investors.

“It’s a totally different dynamic here,” said Buzz Leonard, chief operating officer of NetNanny. “Investors here really understand the business models of dot-coms and software companies and they know how to help them. In Vancouver, particularly, it’s still very much a resource-based economy and investors just don’t move as quickly.”

In addition to a lack of early-stage investment capital, Canadian start-ups are also following Interstate 5 south to escape tax and securities regulations that can inhibit a company from going public.

Last year 165 U.S. technology companies went public on the Nasdaq exchange, while only four Canadian companies held IPOs on Canada’s major exchange, the Toronto Stock Exchange, according to the Boston Consulting Group’s report. Venture capitalists trying to cash in on Canadian investments can face several challenges, observers said.

In many cases, capital gains tax rates in Canada are double those in the United States, eating into investors’ winnings.

Also, under Canadian securities laws, investors who acquire shares of a company before its IPO must hold those shares for 12 months after the IPO date. Underwriters in the U.S. typically require pre-IPO investors to hold their shares for at least 180 days.

American VCs can also face higher tax rates when investing in Canadian companies. Most venture capital firms in the states are formed as limited liability companies or partnerships and under Canadian law those operations are subject to higher capital gain tax rates. Canadian firms trying to raise money across the border also face a similar problem.

In addition, stock options for Canadian workers are typically taxed when the options are exercised, as opposed to when the shares are sold. That gives workers even more incentive to join what Canadians are calling “the brain drain” by moving south of the border.

ETunnels CEO Sirota got what he was looking for: he is now using a $4 million infusion of venture capital, garnered from a mixture of Silicon Valley and Canadian venture firms, to set up shop in Seattle.

“It’s also just a much bigger market,” Sirota said. “It just makes more sense to start a company here or San Francisco or Boston or Austin than in Canada.”