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So what’s happening? To start, the global economy is not doing as poorly as the American economy, and the companies we’re talking about here have a distinctly international flavor. About 51 percent of Google’s revenue comes from international sales (and fears that growth in Google’s search ad business was slowing down appear to have been greatly exaggerated.). About 75 percent of Intel’s sales are outside the U.S. (though that number is a little misleading because many of those sales are to manufacturers who sell PCs and servers back into the U.S.)

Can other companies–not so multinational, not so dominant in their respective markets–dare to be as confident? Probably not. But did anyone expect the party to go on forever?

The American economy may be teetering on the edge of recession, but it appears for now that the high-tech economy is not.

At IBM, international sales accounted for $13.9 billion, compared to $9.9 billion in the Americas. Sales in every geographic region were strong for IBM, but the Americas grew the slowest on year-over-year comparisons: 8 percent growth in the Americas, with 16 percent growth from Europe/Middle East/Africa and 14 percent in the Asia-Pacific region.

What’s more, Schmidt indicated in a question-and-answer session with analysts that he believes Google is well-positioned even if the souring economy should hit tech, because targeted advertising, Google’s specialty, tends to hold up well when other types of advertising head south.

Intel, on the other hand, may be benefiting from a PC replacement cycle. Gartner analysts predict 11 percent growth in PC sales this year, even with shaky consumer confidence. And as for IBM, with international markets growing so quickly (and even tech spending among big American companies still going strong), there’s little to worry about…at least for now.

In order to buy the theory that the tech industry is in no way headed for a meltdown, of course, you need to believe that big companies are a good indicator of the industry’s health. In the case of these three outfits, it seems like a good bet.

Google's Schmidt had good news for the whole tech industry.

Google Thursday afternoon joined the list of tech bellwethers reporting healthy first-quarter earnings and signaling confidence in the rest of 2008.

Tuesday, Intel was positively bullish in its forecast for the rest of year. Wednesday, IBM was the same. Now you have the most important company in PCs and servers, the most important business tech company, and the most important Internet company all saying the same thing: We’re confident in the rest of the year, “regardless of the business environment we find ourselves surrounded by,” as Google CEO Eric Schmidt put it in an earnings call.

(Credit:
Dan Farber/CNET News.com)

There are other factors: Google executives believe that even if total ad spending goes down, they’ll benefit from a flight to online ads and, in particular, targeted online ads. So even if sectors such as automotive sales and the financial industry pull back their overall spending, Google is still going to get its fair share.

Alda pressed Mundie on whether Microsoft would keep funding projects that had no hope of becoming profitable products for the company.

During the talk, Alda and Mundie talked about how computer science is moving into new areas such as biology. One topic they adressed was the notion that at some point drugs may be able to truly be tested on computer cell simulations rather than living beings.

(Credit:
Ina Fried/CNET News.com)

Microsoft aimed to spice up its TechFest keynote event Tuesday by inviting actor and PBS science show host Alan Alda onstage to chat with executive Craig Mundie.

Though perhaps an odd pairing, it’s not uncommon for Microsoft to have celebrities and executives mingle onstage at its events.

Former M*A*S*H star Alan Alda chats with Microsoft’s chief research and strategy officer, Craig Mundie, as part of this year's TechFest.

“We will continue to look for ways to place things where the benefit will continue,” Mundie said. For example, he said that if the company discovered something that would dramatically help farmers in Indonesia, but had limited application beyond that, “we might find a way to transfer that technology.”

Lortz says the success of the MID may ride on whether technologies like this come to fruition. “If we succeed, the MID may confound its detractors and become the next big thing after all.”

Intel Mobile Internet Device could connect wirelessly to a big screen.

Intel is working on technology that would allow handheld Internet devices to wirelessly use big screens.

“Imagine if digital TVs included a wireless display feature (either integrated or through an external adapter) so that a MID could easily use that large display instead of or in addition to the integrated screen of the MID,” he writes. “Intel is working on this and other similar problems…As we identify the necessary set of technologies and standards to support, we will integrate them into our next-generation mobile devices (both laptops and MIDs).”

All technology is a problem looking for a solution (or the converse). Intel is working on technology that would mitigate one of the inherent problems with ultra-small devices: ultra-small screens. Vic Lortz, a research scientist and senior architect at Intel’s Communications Technology Lab in Hillsboro, Ore., discussed a technology that would include a wireless display feature on big-screen digital TVs allowing Mobile Internet Devices, or MIDs, to wirelessly use the display on a big screen.

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Microsoft has officially pulled out of its offer for Yahoo!. With Yahoo! goes Microsoft’s best chance to transform its culture and technology to become more open. With Microsoft goes Yahoo!’s best chance to get the resources and ambition it needs to grow strongly again.

As for Microsoft’s (and Yahoo!’s) insistence that they can go it alone, Paul Kedrosky’s suggestion to the contrary is spot on:

If Microsoft could have solved its advertising and content problems organically, it wouldn’t have been forced to make an outsize and humbling bid of former web wunderkind Yahoo. It’s not exactly short of cash, people or need. To say that it now has the magic solution is, let’s just say, the triumph of hope over recent experience.
If Yahoo really had in place the pieces to make a run at being … something, we wouldn’t be seeing the key employee attrition and weak revenue/traffic growth that we currently see. After all, the only thing that saved Yahoo’s earnings bacon in the just-completed quarter was money gifted from Alibaba gains. It wasn’t a changed company that did it, and wasn’t the magic of Jerry Yang.

The two needed each other. To be fair, I don’t think Microsoft would have gained much in terms of search or web momentum from Yahoo!, because combining two second- and third-place competitors rarely yields a first-place winner, unless it somehow solves their core deficiencies. In the case of Microhoo, it would not have resolved the two companies fundamental inability to wage a strong battle with Google.

But it would have given Microsoft leeway to compete on a broader platform than .Net and other Microsoft technologies, which both pave the way for its success…and ultimate irrelevance.

The future is open. Google “gets” that. Yahoo! “gets” that. Microsoft? Not so much.

Desktop types are always kicking their laptop counterparts around, stealing their lunch money, and making fun of their slow and undersized hard drives.

Most laptops have slower 5,400rpm or even 4,200rpm hard drives, usually between 120GB and 250GB in size. For high-end types, there are 320GB laptop hard drives, and also 7,200rpm laptop hard drives, but you couldn’t get both of those specs in the same laptop drive [dramatic pause...] until now.

Fujitsu, Hitachi, and Seagate have all recently announced 320GB 7,200rpm laptop hard drives, but Dell is the first to stick them in a consumer laptop, using the Seagate drive in the massive 17-inch XPS M1730.

“Laptop users want every bit of capacity, performance, and durability that desktop PCs deliver,” says Michael Wingert, Seagate’s executive vice president and general manager, Personal Compute Business, in a press release.

We checked out the Dell Web site and the 320GB drives are available right now, for $50 more than a standard 5,400rpm 320GB drive. Look for these to show up in Alienware laptops next, followed by desktop replacement systems from other manufacturers.

My Health Info includes personal page customization, personal health devices, and access to multiple family member profiles.

(Credit:
MSN)

MSN this week released its beta version of a new online health information management service, including widgets to upload and organize data stored in HealthVault accounts.

MSN describes My Health Info (requires Silverlight) as a feature designed for busy parents, adults managing aging parents, and anyone managing chronic conditions and multiple medications.

That’s a wide net to cast, and I say it’s about time that those storing data in Microsoft’s HealthVault have online access to their own, well, vaults. For years people have been able to access e-mail, financial, and other accounts online, and even aggregate that data into single management centers; health data and management has been notoriously far behind.

My Health Info comes with some pretty handy tools, including personal page customization (i.e. allergy and blood pressure trackers, a lab results bank, BMI calculators, etc.); personal health devices (heart-rate monitors, pedometers, etc.); and access to multiple family member profiles.

“People care deeply about credible, timely, and comprehensive information about health topics,” said Scott Moore, U.S. executive producer at MSN (who bounced back to Microsoft after a stint at Yahoo). “We are committed to delighting our customers with information, services, and tools that keep them informed and simplify their lives.”

As CNET’s Ina Fried reported two years ago, Microsoft launched HailStorm to manage consumers’ information online. The project eventually buckled under the weight of concerns over data security and privacy, not to mention difficulty in finding partnerships. HealthVault is off to a better start, with partners like the Social Security Administration already lined up. But competitors such as Google and the open-source Dossia will presumably keep MSN on its toes.

In conjunction with My Health Info, MSN also launched a swine flu info center on its Health & Fitness home page this week, where it has joined with Harvard Medical School and the Mayo Clinic, among others, to track the latest news, assess risk factors, and search for nearby vaccination centers and availabilities.

Who would be the most tech-friendly president?

The short answer: it depends. Do you like the idea of Net neutrality so much that you’d hand the Federal Communications Commission the authority to levy open-ended Internet regulations? Do you support pro-fair use changes to copyright law, which many programmers and computer scientists do–but which practically all software and video game companies oppose?

To help clear things up for our readers living in the 24 states that are holding primaries or caucuses on Tuesday, we’ve assembled a sketch of the leading contenders’ technology-related positions in the following chart.

And to stave off the usual objections in advance, we know that the economy, the occupation of Iraq, and so on are more pressing topics than these. We know that there are many methods of evaluating candidates. But this chart provides a useful glimpse of a politician’s core beliefs, including what the role of the federal government should be, and those are important beyond what we write about here at News.com.

Net neutrality legislation
Telecom spying immunity
DMCA fair use reform
Supports Real ID Act
ISP data retention required
Permanent Net-tax ban
Increased H1-B visas Clinton
Strong yes
No
Ducked question
Maybe
Ducked question
Ducked question
Probably yes Huckabee
Maybe*
Ducked question
Ducked question
Ducked question
Ducked question
Probably not*
Ducked question McCain
No
Probably yes
Ducked question
Strong yes
Ducked question
Yes
Strong yes Obama
Strong yes
No
Probably yes
No
No
Yes
Probably yes Paul
No
Strong no
Probably yes
Strong no
No
Yes
Yes Romney
Ducked question
Ducked question
Ducked question
Yes*
Ducked question
Yes*
Yes*

The source for this chart is the 2008 Voters’ Guide we published last month. To create it, we contacted all the leading candidates and reproduced their replies verbatim. Mitt Romney and Mike Huckabee, by the way, refused to respond even though we gave them more than a month, so their positions are gleaned where possible from other news coverage. Because those are our interpretations of their positions, they’re marked with an asterisk.

Anyway, the first thing you probably noticed in the chart is that even candidates who answered some questions ducked others, which is deeply disappointing. Any would-be president should be able to answer without equivocation. Only Barack Obama and Ron Paul gave us forthright replies, and they deserve credit for their directness.

We asked Hillary Clinton whether she supported a permanent ban on Internet taxes, but she evaded the question. (Clinton said only that she supported a temporary moratorium, which is an answer to a different question.) We asked John McCain whether he supported forcing Internet service providers to retain data on their users’ activities. He replied only that he wants to find the “best path forward”–which might be forgivable obfuscation from a neophyte, but not from the former chairman of the Senate committee overseeing this area of Internet law.

Even with the missing answers, these positions seem to reflect the candidates’ broader philosophies. Obama appears more liberal than Clinton, flatly opposing the Real ID Act while she’s less forceful, saying it needs to be reviewed. Both engage in a careful lapse in memory: unlike Paul, Clinton and Obama voted for Real ID as part of a broader “Global War on Terror” spending bill three years ago before turning around and criticizing it.

On the Republican side, Paul is definitely libertarian-leaning: He doesn’t want the government involved in Internet taxation or regulation — even if it’s supposedly done to protect children. If something is pro-law enforcement, like Real ID or retroactive immunity for telephone companies, McCain’s a fan.

In Romney’s case, his major Internet platform seems to be pledging to “fight the modern plague of Internet pornography.” Huckabee seems to be sympathetic to Internet taxes (his counter-argument is here). He also appears to endorse Net neutrality on “fairness” grounds — though his answer was vague — and has criticized warrantless wiretapping.

The questions we asked the candidates that are summarized in the chart’s columns are these:

Q: Congress has considered Net neutrality legislation, but it never became law. Do you support the legislation that was re-introduced in 2007 (S 215), which gives the FCC the power to punish “discriminatory” conduct by broadband providers?

Q: Telecommunications companies such as AT&T have been accused in court of opening their networks to the government in violation of federal privacy law. Do you support giving them retroactive immunity for any illicit cooperation with intelligence agencies or law enforcement, which was proposed by the Senate Intelligence Committee this fall (S 2248)?

Q: The 1998 Digital Millennium Copyright Act’s section restricting the “circumvention” of copy protection measures is supported by many copyright holders but has been criticized by some technologists as hindering innovation. Would you support changing the DMCA to permit Americans to make a single backup copy of a DVD, Blu-ray Disc DVD, HD DVD, or video game disc they have legally purchased?

Q: The Department of Homeland Security has proposed extensive Real ID requirements restricting which state ID cards can be accepted at federal buildings and airports. Do you support those regulations as written, would you want to repeal Real ID, or would you prefer something in between?

Q: The Bush administration has supported legally requiring Internet service providers, and perhaps search engines and social-networking Web sites as well, to keep logs on who their users are and what they do. Do you support federal legislation, such as HR 837, to mandate data retention?

Q: Do you support enacting federal laws providing for a permanent moratorium on Internet access taxes?

Q: Do you support enacting federal laws providing for an increase in the current limits on H-1B visas?

It’s true that the questions we asked the candidates were limited; we didn’t include some that we could have (and maybe, in retrospect, should have) on topics like Internet service providers detecting copyrighted material, the problems of doing business in China, and so on. But even with their limitations, we hope our 2008 Voters’ Guide and the above chart will help you out if you’re voting on Tuesday–assuming, that is, that you bother voting at all.

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Red Hat’s JBoss division has big plans for the future. Fortunately, it’s not squandering its development pool to get there.

JBoss was always an ambitious project and company. It would appear that not much has changed now that JBoss is a division within Red Hat, as Red Hat announced today its intention to push JBoss into 50 percent of enterprise middleware workloads by 2015. This isn’t 50 percent of all installed middleware, but rather than half of every new enterprise middleware deployments in 2015 will be JBoss.

That’s pretty impressive, even if only aspirational at this point.

Much more interesting to me than this marketing aspiration (as this really is all such a number can be at this point, given that we’re eight years away from being able to measure the claim) is the fact that the JBoss development team is still intact. For Red Hat to reach its ambitions, it has to retain good employees that contribute to that vision, and specifically the developers who lead and develop the projects.

During Red Hat’s press conference on JBoss today, therefore, I asked if the reported JBoss defections had hurt JBoss’ momentum.

Craig Muzilla, vice president of Red Hat’s middleware business, was clear that despite some early departures of JBoss employees, mostly from the sales and marketing ranks, the core JBoss development team remains intact and all (or virtually all) of the JBoss developers have stayed with Red Hat. No leading or core engineers from any of the JBoss projects have left, affirmed Sacha Labourey, CTO of the JBoss division.

Muzilla also noted that Red Hat is actively building out its JBoss sales and marketing team.

This is impressive. Marc Fleury left, as did Bob Bickel, Ben Sabrin, and others (to various open-source companies, for the most part). Yet Red Hat has managed to keep the core architects of the JBoss products.

So, even with a JBoss diaspora of talented business executives the JBoss beat goes on….The industry is better for having experienced JBoss people permeating other open-source companies while Red Hat continues to build out the JBoss revolution. Everyone wins.

Except BEA/Oracle/IBM, of course.

Sales of Windows were strong last quarter, but weaker than expected results from online advertising and the Office units led Microsoft earnings to come in a penny per share below analysts estimates. Microsoft also issued an outlook for the current quarter that fell short of what some analysts were projecting.

For the three months ended June 30, Microsoft said it earned $4.3 billion, or 36 cents per share, on revenue of $15.84 billion for the fiscal fourth quarter ended June 30. That was within the range Microsoft forecast in April, although revenue was slightly higher than the $15.7 billion First Call estimate and per-share earnings were a penny lower than First Call projections.

“We’re between our high and low guidance,” Microsoft chief accounting officer Frank Brod told CNET News. He pointed to particularly strong results in the Windows business, where sales were up 15 percent from a year earlier, ahead of Microsoft’s forecast of 7 percent to 11 percent growth. Gains in piracy, particularly in China, helped that. He also noted that Microsoft has now sold 180 million licenses of
Windows Vista.

“Our online services was off slightly from what our expectations as well as our business division was down slightly,” Brod said.

For the current quarter, Microsoft said it expects per share earnings of 47 cents or 48 cents, on revenue of $14.7 billion to $14.9 billion. Analysts were targeting $15.0 billion in revenue and per-share earnings of 49 cents, according to First Call. The company also lowered its forecast for full-year earnings by 1 penny per share, with its new forecast calling for earnings of $2.12 to $2.18 per share.

Brod noted that the company does plan to continue investing in its online business as well as boosting the amount of money it spends marketing Windows.

“Embedded in our guidance for next year is a significant investment in the marketing program around Windows Vista.

Microsoft shares dipped in after-hours trading, changing hands recently at $26.09, down $1.43, or more than 5 percent, according to Google Finance.

Brod said that Microsoft’s bookings pipeline remained strong, although he said Microsoft has seen an expansion of its sales cycle–the amount of time it takes to close deals–as companies spend longer weighing purchases.

“We’re seeing the sales process takes a little longer than it has in the past,” Brod said. “A lot more debate goes on.”

Brod said that IT spending is stronger in emerging markets than in mature ones, but added Microsoft has “not seen a whole lot of pull back in our customer bases.”

The earnings report comes amid continued attention over whether Microsoft will choose to seal a deal in the online advertising arena. In addition to its seemingly endless on-again, off-again moves with Yahoo, Microsoft reportedly met Wednesday with Time Warner to talk about its AOL unit.

For the past decade, one of the most important debates raging in the tech industry is on the topic of piracy. Some people say that it should be stopped with the help of lawsuits and others suggest it can only be done by being slightly nicer by forcing people to pay for media. But whatever happened to the common sense route? Surely it has been espoused before and some even follow it. Why are some organizations so far behind?

As Amazon has proven, allowing people to do what they want actually works in an environment where they can easily get the same song elsewhere for free. In other words, why fight city hall when all you really need to do is agree?

Believe it or not, there is a way to almost entirely wipe out piracy once and for all. No, it’s not by suing those responsible or forcing people into situations. Instead, it’s by giving us what we want in a nice package for an affordable price. Does that sound so hard?

As Amazon’s director of digital music explains, “Songs sold without DRM, at high quality, with album art, that’s the best way to get people to buy music instead of stealing it. DRM is a way to punish people who are buying,” he says. “Offering a great product at a great price is a way to combat piracy.”

For once, I’ve heard someone espouse some common sense on the topic of piracy.

Unfortunately for the RIAA and the MPAA and the rest of these fools who have no real knowledge on consumer behavior, people are not necessarily looking to steal music and movies, but they are willing to do it if they’re not being afforded the respect and product they want.

Piracy is not as much a fight against people stealing as it is a fight against the very foundation of trust. Today’s companies have no idea what consumers want and just because the business started with services like Napster where people freely downloaded songs without paying for them, it doesn’t necessarily mean that that’s what everyone wants to do.

If that was true, wouldn’t iTunes and Amazon have a difficult time selling songs instead of becoming major competitors in music retail? In my mind, the average person really wants to do the right thing and buy songs whenever possible. But if things are made too difficult to do that, why would they?

Let’s face it — the current state of downloading is abysmal. Sure, you can get onto iTunes and download your favorite tunes at $0.99 per song or head over to Amazon’s service and pay $0.89 (or more), but what else does it offer? Does it give you album art? Check. Does it give you high-quality sound? Eh. Does it give you the option to do what you want with that song you just purchased? Amazon’s theoretically does, but aside from EMI songs on iTunes, you can’t.

And so, for those that don’t want to use any other service besides iTunes, they decide instead to find a song they want elsewhere and download it illegally so they can have all of the options we’ve come to expect in a CD.

And isn’t that where the major issue is? With a CD, you can bring it wherever you’d like and can rip it onto any computer in your home and upload it to any device you own. That CD has album art and any extras you that comes with it. But when compared to a digital download, all of the extras are thrown out the window.

Sure, you can have album art on iTunes, but you can’t do anything else with the songs except play them on Apple devices because the recording industry is deathly afraid of watching the world’s second-largest music retailer sell songs to pirates and giving you too many options with your music.

And once again, the idea of trust works its way back into this discussion. Where is the trust from the movie studios and the recording industry? Why don’t they trust that people will not steal songs and movies and buy them instead?

Maybe it’s because they’re not so innocent themselves.

As mothers have been saying for years, the guilty will always assume guilt. Let’s face it — the record labels aren’t the squeaky-clean companies they try to claim they are. Just ask the artists. How many times have you heard cases where the artists see pennies on the dollar while the fat cats running the record labels walk away with the lion’s share of the cash? Once again, the guilty will assume guilt.

But I digress. There’s no debating the fact that piracy is a major problem for the entertainment industry and so far, it really has lost a significant revenue stream to the problem. But in its attempt to stop piracy, the industry is going about it all wrong.

In order to stop piracy, you need to play nice with the pirates and stop playing the enemy. The RIAA and MPAA should give up their lawsuits, lay down their arms and extend an olive branch to pirates by standing by as record labels and movie studios finally give in to the demands of pirates and give them what they want — more compelling reasons to buy at a more affordable price.

The future of this industry rests snugly on the Internet and there is no changing that. The organizations that fight pirates must give up their enfeebled idea of stopping piracy and listen to the public. Trust me, it’s their only hope.