Business Tech

The Mozilla Foundation's revenue grew 5 percent to $79 million in 2008, with its Firefox search-ad deal with Google still the biggest benefactor, the organization said Thursday.

The figure is notable for an open-source effort, but the growth tapered off significantly. For 2007, by comparison, the Mozilla Foundation reported $75 million in revenue, a 12 percent increase over 2006.

Mozilla Chairman Mitchell Baker revealed the latest Mozilla figures on her blog Thursday.

Update: for further details and commentary from Baker, check this follow-up interview.

Firefox has won over about a quarter of the world's users of Web browsers, taking most of that share from Microsoft's still dominant Internet Explorer. The browser faces new challenges, though, in the form of newcomer Google Chrome and Microsoft's resurgent effort to improve Internet Explorer. On Wednesday, Microsoft showed off some elements of the forthcoming IE 9, and Thursday, Google released the source code underlying its Chrome OS, a browser-based operating system for lower-end computers.

Google supplies "the bulk" of the Mozilla Foundation's revenue through a deal that currently lasts through 2011, the foundation said. Under that deal, people performing searches through Firefox using the default Google search engine see and sometimes click on search ads at Google; Google and Mozilla share the resulting revenue. In 2007, Google supplied 89 percent of Mozilla's revenue.

Google isn't the only revenue source, though. Here's how Mozilla described its sources in an FAQ:

"The majority of this revenue is generated from the search functionality in Mozilla Firefox from partners such as Google, Yahoo, Amazon, eBay, and others. Mozilla takes in additional revenue from donations, online affiliate programs, the Mozilla Store, and income on our invested assets. In 2008, we expanded our Firefox partnerships with new firms such as Yandex (Russia Search), Canonical (Ubuntu), and Nokia (Mobile).

Intel Labs Europe is joining a handful of French institutions to investigate large-scale computing challenges that face today's information technology industry.

The Exascale Computing Research Center will investigate machines that can perform 1,000 times more calculations than today's top supercomputers, Intel said, and the chipmaker is spending millions of dollars on the three-year partnership.

The effort also includes Commissariat a l'Energie Atomique, Grand Equipement National de Calcul Intensif, and the Universite de Versailles Saint-Quentin-en-Yvelines. Those organizations will jointly match Intel's investment, Intel said.

"France has taken a leading role in driving high-performance computing research in Europe. We chose to work with these three organizations because of their world-class software competency in exascale and high- performance computing," said Steve Pawlowski, general manager of the Intel Architecture Group's central architecture and planning, in a statement.

The move also raises the company's profile in a jurisdiction that's been tough on Intel. The chipmaker ended up on the losing end of a European Commission antitrust judgment, and is now appealing the resulting fine of 1.06 billion euros ($1.58 billion). Intel just settled a separate antitrust case brought by rival AMD.

Intel Labs Europe employs 900 researchers in Europe, the chipmaker said.

Canon's new S90 high-end compact camera.

(Credit: CNET)

Adobe Systems released beta software on Wednesday to support raw images from Canon's higher-end new compact cameras, the Powershot S90 and G11, Olympus' rival E-P2, Panasonic's FZ38, and a host of SLRs.

The software updates are betas of Lightroom 2.6, the Camera Raw 5.6 plug-in for Photoshop CS4, and the DNG Converter 5.6. All the software uses the same raw-image processing engine.

Raw images provide more flexibility and image quality but require more processing; typically only higher-end cameras support raw file formats. Most folks are happy with JPEG, but many photography enthusiasts prefer raw.

It's a hassle, though: Adobe and various competitors spend a lot of energy reverse-engineering each new camera's format before software such as Lightroom, Aperture, or Picasa can open and edit the photos.

Raw images are the norm for SLRs. The new beta software supports raw images from Canon's higher-end EOS 7D, and Nikon's new professional-grade D3s, the Pentax K-x, and Sony's A500, A550, and A850. Also on the list are medium-format models from Mamiya and Leaf. For a full list, check the blog post announcement from Lightroom Product Manager Tom Hogarty.

The new software also corrects an error in Lightroom 2.5 and Camera Raw 5.5 that could mar images from some Sony, Olympus, and Panasonic and from various medium format digital camera backs. The glitch only affected people with PowerPC-based Macs.

Update 8:02 p.m. PST: As Michael Reichman observed on the Luminous Landscape site, Canon's S90 is a member of a newer breed of camera that corrects lens distortion on its own, making parallel lines parallel again. Naturally, I was curious if Adobe's raw processing techniques did the same, because the distortion can be pretty severe, and fixing that manually is impossible in Lightroom and a hassle in Photoshop.

So I asked Adobe. The answer: yes.

"The S90 raw support in the release candidates (Camera Raw 5.6 and Lightroom 2.6) provides distortion correction that allows our raw processing results to match the optical characteristics of the JPEG output and what's viewed on the camera LCD," Hogarty said.

With Internet Explorer 9, Microsoft showed Wednesday it's trying to retake the browser initiative.

IE remains the Net's dominant browser. But perversely, it became something of a technology underdog after Microsoft vanquished Netscape in the browser wars of the 1990s and scaled back its browser effort.

That left an opportunity for rivals to blossom--most notably Firefox, which now is used by a quarter of Web surfers, but also Apple's Safari, which now runs on Windows as well as Mac OS X, and Google's Chrome, which aims to make the Web faster and a better foundation for applications.

Microsoft has been pouring resources back into the IE effort, though, and at its Professional Developers Conference in Los Angeles, some fruits of that labor were on display. In particular, Windows unit president Steven Sinofsky showed off IE 9's new hardware-accelerated text and graphics.

The acceleration feature takes advantage of hitherto untapped computing power in a way that's more useful than other browser-boosting technology--Google's Native Client to directly employ PC's processor and Mozilla's WebGL for accelerated 3D graphics, for example--according to Dean Hachamovitch, general manager of Internet Explorer.

"This is a direct improvement to everybody's usage of the Web on a daily basis," Hachamovitch said in an interview after Sinofsky's speech. "Web developers are doing what they did before, only now they can tap directly into a PC's graphics hardware to make their text work better and graphics work better."

Earlier in November, Firefox surpassed 25 percent usage share of Web browsers, according to Net Applications.

(Credit: Net Applications)

Mozilla released a third beta of Firefox 3.6 on Wednesday, adding stability and performance features, and said it hopes to lock down the code soon for its first release candidate.

The new beta, for Windows, Mac, and Linux, includes a component directory lockdown that makes it harder for other software to meddle with the open-source browser's state by preventing that software from sidling into the same folder as the browser's own components. The result should be fewer crashes, said Mozilla's Johnathan Nightingale in a blog post, and Firefox still is open to third-party extensions via its official add-on mechanism.

The change should improve security, too, added another Mozilla programmer, Vladimir Vukecevic, who wrote in his own blog post that Mozilla is considering bringing the change to Firefox 3.5, too.

"Creating binary components to interface with the operating system or with other applications is fairly straightforward, though ultimately dangerous. Binary components have full access to the application and OS, and so can impact stability, security, and performance," Vukecevic said.

Also in the latest beta of 3.6 is a feature that lets the browser run some Web-based JavaScript programs asynchronously, which is to say without being so picky about the order the scripts run. This can improve the speed that Web pages load, Mozilla said.

The biggest Firefox 3.6 feature most folks will notice is Personas, the reskinning add-on that's now being built in. More than 10 million Personas have been downloaded so far, Suneel Gupta and Myk Melez of the Personas team said Wednesday.

Mozilla is working to release a final version of Firefox 3.6 before the end of the year, and one sign the project is wrapping up is that the developers are locking down the features and changes that can be added into the release candidate 1. Code freeze for RC1 is scheduled for Wednesday but might be at risk, a Mozilla planning site said this week.

Firefox is steadily gaining in use. Last week, Web traffic monitoring firm Net Applications announced Firefox cleared 25 percent share of those using browsers worldwide--not dethroning Internet Explorer by any means but still winning over new users. Mozilla estimates there are more than 300 million Firefox users total, and this week said there are more than 300,000 testers using the Firefox 3.6 beta

Google's Chrome, meanwhile, is appealing to some of the same browser enthusiasts who were Firefox's first users. One of its big selling points is speed, and Google is working on other ways to make the Web faster, too. Chrome gives it a vehicle to test such ideas out in the real world, a strategy that Apple, Opera, and Firefox have employed to advance the Web state of the art.

One Mozilla programmer, Alexander Limi, revealed a speedup technology called Resource Package for Mozilla, too, on Tuesday. His proposal calls for bundling many Web page elements up into a single compressed file that can be retrieved in a single Web-page request action. Browsers are limited in the number of such actions they can take in parallel, so consolidating the interactions can make pages load faster. The approach is backwards compatible with existing browsers that don't support the feature, he added.

"If the feedback is good we're likely to try and get this implemented for Firefox 3.7," said Mozilla evangelist Christopher Blizzard in a blog post Tuesday.

The developer preview version of Chrome now promotes an as-yet unworking link to an extensions gallery.

(Credit: Screenshot by Stephen Shankland/CNET)

Google is on the verge of launching a Web site to showcase its extensions to customize what its browser can do.

The company's latest developer preview edition, Chrome 4.0.249.0, promotes the feature on its opening screen and its new-tab page. "New! Google Chrome now has extensions and bookmark sync," the page reads, offering a link to a site that's not public yet, https://chrome.google.com/extensions. (Bookmark sync is already available.)

Extensions and support for Mac OS X and Linux are the headline features of Chrome 4.0. It's available as a beta for Windows, with Mac OS X and Linux beta availability expected in early December. According to the Chromium development calendar, the beta is planned for December 8 release and the stable release of Chrome 4.0 is due January 12.

A number of third-party galleries for Chrome extensions already are available, but programmers for the project have said on mailing lists that a Google site is planned. Earlier this year, Google shipped a version of Chrome that pointed to a collection of visual themes before the Chrome themes gallery was actually live to the public.

Extensions are a key asset of one Chrome competitor, Mozilla's Firefox; extensions permit people to customize the browser and add new features without burdening the overall project. Firefox is getting a new extensions framework, Jetpack, starting with version 3.7 due in the first half of 2010, and Mozilla has just launched its own Jetpack gallery.

At the same time that Intel settled Advanced Micro Devices' antitrust lawsuit for $1.25 billion, the chipmaker settled another legal matter as well by hiring A. Douglas Melamed as its new top lawyer.

Melamed, who most recently worked as a partner at the law firm of WilmerHale, is expected to assume his new role this month, said a source familiar with the situation. Melamed has been based in Washington, D.C.

He has extensive antitrust experience, which could come in handy given Intel's remaining legal issues with the European Commission, the New York attorney general, and the Federal Trade Commission. From 1996 to 2001, he was acting assistant attorney general in charge of the Justice Department's Antitrust Division. Before that, he was the Justice Department's principal deputy assistant attorney general, where he was responsible for "civil non-merger and merger investigations and litigation involving most of the division's litigating sections; the division's appellate matters; policy matters involving, among others, the communications, electricity and tobacco industries; and international antitrust enforcement matters," according to WilmerHale.

Intel declined to comment on the matter. The Wall Street Journal reported the new hire Thursday.

Intel's previous general counsel, Bruce Sewell, left Intel to take the top legal job at Apple in September.

Even for a company as powerful as Intel, with $13 billion in cash on the books, $1.25 billion is a lot of money. So why drop that huge quantity of money in the lap of its biggest rival, Advanced Micro Devices?

The payment is, of course, to settle the antitrust suit AMD brought against Intel five years ago. AMD's stock surged 22 percent Thursday after the chipmakers announced the agreement, but Intel's share price dropped 1 percent, indicating which company the investors thought got the better deal.

Paul Otellini, speaking in September and holding a wafer of silicon chips

(Credit: Stephen Shankland/CNET)

AMD does indeed come away with some serious perks--not just the cash, but also a new patent cross-license agreement that removes Intel's objections to AMD spinning off its chip-manufacturing business, enables multiple manufacturers to build AMD's chips, and eliminates the earlier patent agreement's payments to Intel. And it has Intel's agreement not to violate a list of restraints on its business practices.

But Intel gets something out of this, too.

Spend now, save later
Let's start with the money. Sure, shareholders likely frowned when they heard Intel's fourth-quarter expenses are expected to climb from $2.9 billion to about $4.2 billion. But Intel could have been out a lot more money if things had gone south.

In the European Union, Intel is wrestling with an antitrust case that produced a fine of 1.06 billion euros, or $1.6 billion at today's exchange rate. Intel appealed the European Commission fine, but it's a very concrete example of just how severe the Intel punishment could be.

There are other financial factors, too. Intel and AMD were set to begin their jury trial in March, and jury trials are famously unpredictable. Add on top of that risk the fact that antitrust suits can come with triple damages.

"It was a small multiple of the damage that could be awarded in a jury trial," Intel Chief Executive Paul Otellini said of the price tag in a conference call earlier Thursday.

Treble damages of the scale of just the European Commission fine would have been more than $4 billion, Technology Business Research analyst John Spooner observed. Facing that prospect, "Intel chose to control its own destiny and settle up front."

Taking commercial cases to a jury trial is indeed risky, said Richard Brosnick, who's involved in antitrust law at the firm of Butzel Long.

"Any complex commercial case going to the jury phase is challenging, and antitrust, given the economics, is probably more challenging," Brosnick said. "Trial is expensive overall, not in billions, but in terms of the risk you'll be able to explain these issues in a way that will be understood by and persuasive to a jury."

Goodwill in other antitrust cases
AMD's antitrust case isn't the only one Intel faces. It's also got the European Commission fine discussions, a new antitrust lawsuit from New York Attorney General Andrew Cuomo, and an antitrust investigation from the Federal Trade Commission.

The AMD settlement doesn't make those cases evaporate, but Intel hopes it'll help.

"We hope that having this major litigation settled with AMD would be viewed favorably by these regulatory bodies and eventually the cases would be dropped," Intel spokesman Tom Beerman said.

Certainly those regulators won't face as much of AMD's active prodding. Among the terms of the settlement is this, regarding all the regulatory actions AMD is involved in:

AMD agrees to promptly...notify in writing each authority...that except as provided in Section 3.5 AMD has resolved its disagreements with and complaints concerning Intel contained in that Administrative Complaint and believes that this Agreement provides AMD with fair compensation for any and all actual or alleged harm and damages that AMD did or may have suffered in connection with matters discussed in the Administrative Complaint. In addition, AMD agrees that it will not ghost-write or edit any other briefs, pleadings, or "friend of the court" or "friend of the tribunal" materials or briefs in any Administrative Action.

But whether Intel will actually get what it wants isn't certain.

"It's certainly possible that the public agencies will view this as a compromise they can live with, but it's equally possible not," Brosnick said.

One issue is Intel practices described in the section 3.5 mentioned above, where AMD and Intel still disagree. Brosnick said the governmental agencies still might be concerned about any of those practices--called "retroactive discounts," "accused bid bucket," and "accused end-user discounts" in the settlement.

Intel digging in its heels?
Though the agreement didn't preclude those practices as it did some others, it did agree not to defend them as hard as it might in settlement talks with the government organizations.

"Intel agrees that in the event it enters into voluntary settlement discussions with a government authority in the EC litigation, New York litigation, or the FTC investigation, and if such government authority proposes to include in a consent judgment or other governmental order a prohibition against Retroactive Discounts, Accused Bid Buckets or Accused End-User Discounts, Intel will not challenge such a prohibition as a general matter, although it may challenge the scope or specific language of the prohibition," the settlement agreement said.

Just how deeply Intel will dig in its heels in the other cases remains to be seen. Although it settled a big case, Otellini hardly sounded contrite. He reiterated on several occasions his belief that Intel didn't do anything illegal. He said airing the full context of seemingly incriminating e-mail would show Intel in a better light. And he vehemently attacked the New York case.

"We strongly disagree with the New York attorney general case and believe the complaint is entirely without merit," Otellini said. "Discounts and rebates are entirely fair business practices, and it's unfortunate the New York attorney general chose to distort the facts. We would have preferred to engage in a dialog with the New York attorney general."

Then again, Intel spoke in strong terms about the AMD trial. Perhaps Intel's pragmatic side will show in the other cases next.

Burying a very large hatchet in the computing industry, Intel has agreed to pay Advanced Micro Devices $1.25 billion as part of a settlement of a long-running antitrust case.

The pact, announced Thursday, resolves the private antitrust lawsuit AMD filed in 2004 and extends the companies' patent cross-licensing agreement. The new patent arrangement removes hindrances to AMD's effort to spin off its chip manufacturing business and to have other manufacturers build its processors.

In addition, Intel has agreed to "abide by a set of business practice provisions." Check below for a full list.

In turn, AMD says it will drop all pending litigation, including the case in U.S. District Court in Delaware and two cases pending in Japan, and will also withdraw all of its regulatory complaints worldwide.

AMD investors were delighted, sending the company's stock up 21 percent to $6.46 in morning trading. Intel's stayed flat at $19.84.

"While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development," the chipmakers said in a joint statement.

Government cases unaffected
Well, it probably won't end everything exactly. The settlement between the companies doesn't stop antitrust cases brought by governments.

After AMD filed its case in 2004, European regulators brought a separate case that led to a $1.5 billion fine, which Intel is now appealing. And last week, New York Attorney General Andrew Cuomo filed another antitrust suit against Intel.

"Those cases filed by those government regulators will continue," Intel spokesman Tom Beerman said. "We will continue at the same time to work with the regulatory bodies to work on those issues."

Added AMD's Drew Prairie, "We've notified the regulatory authorities of the settlement. They didn't have ongoing investigations because of us...That's a snowball rolling downhill."

Intel still must reckon with an investigation from the Federal Trade Commission, too. "Certainly we plan to review the settlement between Intel and AMD in their private litigation. The FTC has an ongoing independent investigation of Intel's practices so we cannot comment further at this time," FTC Chairman Jon Leibowitz said in a statement Thursday.

The European Commission didn't comment on whether Thursday's settlement would affect discussions about Intel's fine, but did say the agreement doesn't affect its regulatory scrutiny of the chipmaker.

"Intel has an ongoing obligation to comply with the Commission's May 2009 decision and with EU antitrust law," said spokesman Jonathan Todd. "The Commission continues to vigorously monitor Intel's compliance with its obligations under the May 2009 decision."

The cross-license agreement has been updated to reflect AMD's move to spin off its processor manufacturing business into a separate company, Globalfoundries, which currently is an AMD subsidiary. Under the updated agreement, AMD will be able to operate as a "fabless" processor company--one that relies on others to build its chips. In addition, Globalfoundries "is free to operate independently and go after third-party business without issues," Prairie said.

Another change: in the earlier patent cross-license agreement, AMD had to pay Intel royalties. Now neither company makes payments, Prairie said.

Intel: Settlement was 'practical'
Intel Chief Executive Paul Otellini didn't show much in the way of contrition in a conference call.

"We have competed fairly and legally," Otellini said, including the price discounts it offered computer makers as incentives to use Intel chips. In the United States, 98 percent of private antitrust cases are settled, he added. "It pains me to write a check at any time, but in this case it made a practical settlement. It was a good compromise between the two companies. In many ways it was a small multiple of the damage that could be awarded in a jury trial."

And Andy D. Bryant, Intel's chief administrative officer, said the restraints Intel agreed to don't really change Intel's behavior in practice, because it wasn't doing those things in the first place.

"AMD believes we have done business in some fashion they believe is inappropriate," such as punishing computer makers that don't buy a certain amount of chips from Intel. "We have said we don't do the acts they say we're doing...There are no changes to pricing practices as a result of this contract."

He did add that Intel changed some pricing practices as a result of the European Commission case.

Intel also said that as a result of the settlement, its fourth-quarter spending will increase from its earlier projection of $2.9 billion to about $4.2 billion; Intel is paying cash within 30 days. However, Intel's effective tax rate should decline from 26 percent to 20 percent for the quarter, Intel said.

A new relationship
The companies didn't agree to become best friends, but AMD and Intel are turning over a new leaf, moving toward "fierce but fair" competition, Tom McCoy, AMD's executive vice president of legal, corporate and public affairs, said in a conference call.

"With this agreement, we are trying to reset our relationship between AMD and Intel," McCoy said. That relationship has been "intense, emotional, and acrimonious for all too many years...We wanted to put this behind us. We didn't want pressures to build up. We wanted a healthy, normal relationship. Therefore we will see in the agreement, a thought-out procedure [through which] we will build trust and try to resolve our differences before spilling into the courts or into [the] public affairs domain."

Intel's Bryant said the agreement includes mechanisms for mediation and arbitration that provide "a very thorough ability to...resolve differences."

The constraints on Intel's practices caught the attention of Richard Brosnick, an attorney at Butzel Long who focuses on antitrust law.

"In settling a suit that arose from claims that steep discounts were anticompetitive, Intel has now agreed with its rival to a set of 'business practice provisions' that will presumably limit Intel's ability to compete with AMD on price," Brosnick said. "Of course any analysis would depend on the details of the deal, but as a general antitrust matter, I'd call that ironic to say the least."

Intel's restraints
According to AMD, Intel will refrain from these practices:

• Offering inducements to customers in exchange for their agreement to buy all of their microprocessor needs from Intel, whether on a geographic, market segment, or any other basis

• Offering inducements to customers in exchange for their agreement to limit or delay their purchase of microprocessors from AMD, whether on a geographic, market segment, or any other basis

• Offering inducements to customers in exchange for their agreement to limit their engagement with AMD or their promotion or distribution of products containing AMD microprocessors, whether on a geographic, channel, market segment, or any other basis

• Offering inducements to customers in exchange for their agreement to abstain from or delay their participation in AMD product launches, announcements, advertising, or other promotional activities

• Offering inducements to customers or others to delay or forebear in the development or release of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis

• Offering inducements to retailers or distributors to limit or delay their purchase or distribution of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis

• Withholding any benefit or threatening retaliation against anyone for their refusal to enter into a prohibited arrangement such as the ones listed above.

Those constraints will benefit the chipmakers' customers, computer makers such as IBM, Hewlett-Packard, and Dell, McCoy said.

"When we aggregate all these things together, we believe we have delivered to [the] marketplace and to mutual customers something they've wanted, which is more freedom of action to choose," McCoy said.

Updated at 7:00 a.m., 7:30 a.m., 7:56 a.m., 9 a.m., and 10:50 a.m PST with further details and comments.