MEDIA GROK: PC Connection Buys Exploding Gerbils ,
 =====================================================================
                           THE STANDARD'S
                         M E D I A  G R O K
           A Commentary on What the Press Is Reporting and Why
=====================================================================
                                        | http://www.thestandard.com |


Thursday, May 31, 2001

TOP GROKS:
* PC Connection Buys Exploding Gerbils
* An FTC Decision About Nothing
* The News Gods Aren't Crazy, Just Desperate

MORE NEWS:
* Microsoft Set for Office XP's Launch
* U.S. Jobless Claims Hit Highest Point in a Month
* Deutsche Telekom Completes VoiceStream Acquistion
* Alcatel Says Plan B Will Include Job Cuts


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TOP GROKS
~~~~~~~~~
PC Connection Buys Exploding Gerbils

Cyberian Outpost and its Outpost.com site, best known for gimmicks
such as free overnight shipping and amusingly tacky commercials, have
been scooped up by rival hardware seller PC Connection. All things
considered, this was probably a better move than that Super Bowl ad
with the gerbil cannon.

PC Connection will acquire Outpost in an all-stock deal alternately
described as "complicated" and "complex." We won't attempt to explain
it, either; News.com did a pretty good job. It's simpler to describe
Outpost's sorry state: Various reporters noted that the company cut 30
percent of its staff last month, it has credit problems, and
executives have been fleeing in Yahoo-like numbers. And those
off-the-wall commercials exemplified bad dot-com marketing circa 1999,
since they cost a fortune and didn't even mention what Outpost.com
sold. Plenty of journalists ignored Outpost's notorious marketing
history - whether out of respect or amnesia, we're not sure.

Cyberian Outpost is more than a dot-bomb, so a few outlets tipped
their hats to the six-year-old biz. It "pioneered selling computer
equipment on the Internet," said the Newsfactor Network, and it "has
long been known for its customer service efforts." The AP said the
deal "combines two of the Internet's best known computer and software
resellers" and quoted PC Connection's CEO gushing about Outpost's
"very strong following."

The Hartford Courant seemed to mourn the sale of Outpost, "one of
(Connecticut's) best-known Internet retailers," though Outpost.com
will hang on to its brand name and continue operating out of
Connecticut. Home-state loyalty aside, the Courant's John Moran
provided solid coverage of Outpost's rise and fall.

PC Connection's CEO acknowledged that job cuts are likely, though he's
"hoping that we can achieve a lot of it through attrition." As long as
he doesn't shoot anyone out of a cannon. - Jen Muehlbauer

Outpost Agrees to Takeover Deal
http://www.thestandard.com/article/0,1902,26777,00.html?nl=mg

Outpost Finds a Way Out
http://www.internetnews.com/ec-news/article/0,,4_775261,00.html

PC Connection Acquires Outpost.com
http://www.newsfactor.com/perl/story/10103.html

Internet Retailer PC Connection Acquiring Cyberian Outpost (AP)
http://www.siliconvalley.com/docs/news/svfront/050956.htm

PC Connection to Buy Cyberian Outpost
http://news.cnet.com/news/0-1007-200-6103275.html

Cyberian to Sell Itself to Rival
http://www.ctnow.com/scripts/editorial.dll?fromspage=CG/articles/business.htm&categoryid=&bfromind=377&eeid=4650380&eetype=article&render=y&ck=&userid=1&userpw=.&uh=1,0,&ver=3.0

PC Connection Agrees to Acquire Cyberian Outpost in Stock Deal
http://interactive.wsj.com/articles/SB991232674624154701.htm
(Paid subscription required.)


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An FTC Decision About Nothing

If "Seinfeld" weren't long gone from NBC's airwaves, Amazon's recent
FTC wrist-slap would have made a great non-plot for the show about
nothing. The FTC declared that Amazon's comparison-shopping subsidiary
Alexa explained its privacy policy in ways that "likely were
deceptive." It also said that since Alexa has fixed the problem -
partially by eliminating an information-collecting software programmed
named zBubbles - the FTC's work here is done.

Amazon and Alexa said nothing to the AP; Amazon directed media queries
to Alexa, and Alexa neglected to return the AP's calls. Alexa did talk
to the Wall Street Journal. The company used to say it didn't use
personal information, the Journal explained, but Alexa's president
says it has changed its disclosure note to "many pages describing that
what we do with this information is nothing."

Still, that's not quite the same as saying the data is anonymous, and
that's why privacy gadfly Richard Smith complained to the FTC in the
first place. Meanwhile, Amazon settled related class actions to the
tune of $2 million, while continuing to insist it did nothing wrong.

Smith isn't happy, and neither is Junkbusters boss Jason Catlett, a
source who we notice has become a bit less ubiquitous.
InternetNews.com supplied a Catlett quote that a New Yorker like
Seinfeld might appreciate: "The FTC's current system for protecting
privacy is about as effective as using a flashlight for eradicating
cockroaches: On the rare occasion targets get found, they simply
scurry away." - Jen Muehlbauer

FTC Says Amazon Unit Probably Deceptive on Privacy (Reuters)
http://www.thestandard.com/article/0,1902,26767,00.html?nl=mg

Amazon May Have Been Deceptive (Wall Street Journal)
http://www.msnbc.com/news/580113.asp

FTC: Amazon Practices 'Deceptive' but Won't Act (AP)
http://www.cnn.com/2001/TECH/industry/05/30/ftc.amazon.ap/index.html

Amazon Dodges Another Bullet
http://www.internetnews.com/ec-news/article/0,,4_775621,00.html

Officials - Deceptive Tech Advertising Is on Rise
http://www.newsbytes.com/news/01/166266.html

FTC Rules Amazon Unit Was Deceptive About Privacy, but Takes No Action
Against Internet Giant
http://seattletimes.nwsource.com/html/businesstechnology/134301226_amazon310.html


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The News Gods Aren't Crazy, Just Desperate

Among the guilty pleasures of a down economy are the wacky and the
madcap items that qualify as news stories. So on this day, when the
Washington Post quoted a Valley exec bemoaning a Jimmy Carter- era
melancholy across the land, we review the newsworthiness of spam, and
we don't mean just the junk mail.

That would be SPAM, as Hormel Foods pointed out. The Minnesota maker
of canned meat announced it is resigned to its brand name as a
euphemism for junk e-mail, as long as folks remember that references
to the "pink luncheon meat," as reporters wrote, should be in all
caps. Who could argue with such magnanimity? Not reporters.

Still, it wasn't much of a story for scribes to dig into, so Reuters
and ABCNews.com padded their coverage with more about SPAM than most
would want to know. ABCNews.com scored with a comment that the news
site attributed to an author named Carolyn Wyman. According to ABCNews
and Wyman, the Net "has helped Hormel bridge the divide between SPAM's
'early adopters' - the Depression and World War II vets who found the
canned pink pork product on their extremely limited menus - and a new
generation of consumers." Who says the Net was over-hyped?

Meanwhile, MSNBC reported an attack of spam (note the lower case) at
SETI, the earnest organization whose formal name is Search for
Extraterrestrial Intelligence. MSNBC played up the story's tech angle,
noting that the program, SETI@home, roams through radio data for hints
of otherworldly life, and that with 3.1 million users, the software is
"the world's largest experiment in distributed computing." That's
perhaps more impressive than the Memorial Day weekend hack, which sent
the following fearsome missive to "hundreds or thousands" of users:
"Dear Seti@home user. Seti@home Webpage been exploited. We have the
intire user database as well all your information about you. SEE FOR
YOURSELF. have nice day."

It's as if an ethereal managing editor somewhere gave us a one-day
reprieve. - Deborah Asbrand

So Down in the Valley
http://washingtonpost.com/wp-dyn/articles/A290-2001May31.html

Hormel Drops Slang Fight
http://abcnews.go.com/sections/business/DailyNews/spam_campaign010530.html

SPAM Maker Cans 'Spam' Complaint (Reuters)
http://news.cnet.com/news/0-1005-200-6110030.html

Invaders Exploit SETI@home
http://www.msnbc.com/news/580466.asp

SETI@home Hacked, Crypto-Jocks to the Rescue
http://www.space.com/searchforlife/setihome_cheats_010524.html


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MORE NEWS AT THESTANDARD.COM
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Microsoft Set for Office XP's Launch
By Dominic Gates
Redmond's new suite of productivity applications is ready for takeoff.
But will it be everything the company makes it out to be?
http://www.thestandard.com/article/0,1902,26787,00.html?nl=mg

U.S. Jobless Claims Hit Highest Point in a Month
By Reuters
The pace of hiring seems to have slowed, according to a government
report that depicts a weakening labor market.
http://www.thestandard.com/article/0,1902,26791,00.html?nl=mg

Deutsche Telekom Completes VoiceStream Acquistion
By IDG
Shares in the German telco remain close to a two-year low as the $4.2
billion snack is digested.
http://www.thestandard.com/article/0,1902,26789,00.html?nl=mg

Alcatel Says Plan B Will Include Job Cuts
By Kristi Essick - Paris Bureau Chief
After the collapse of the Lucent deal, the telecom equipment maker
goes back to the drawing board, and CEO Serge Tchuruk says layoffs are
on the way.
http://www.thestandard.com/article/0,1902,26764,00.html?nl=mg


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MORE LINKS
~~~~~~~~~~
Why Microsoft May Buy AT&T Broadband: Fear, Greed & Envy
http://www.inside.com/jcs/Story?article_id=31901&pod_id=13

Two Groups Back Microsoft's Online Strategy
http://news.cnet.com/news/0-1003-200-6119362.html

Lucent to Make Tough Choices to Survive
http://www.latimes.com/business/20010531/t000045379.html

Identity Thieves Thrive in Information Age
http://washingtonpost.com/wp-dyn/articles/A77996-2001May25.html

Firm Sues Napster Over Old Radio Shows
http://www.sfgate.com/cgi-bin/article.cgi?file=chronicle/archive/2001/05/31/BU63417.DTL&type=business

Not All Luxury E-tailers Are Dead
http://www.forbes.com/2001/05/30/0530luxury.html

Online Bill Paying Coming of Age
http://www.siliconvalley.com/docs/news/svfront/billpy053101.htm


STAFF
~~~~~
Written by Deborah Asbrand (dasbrand@world.std.com), Michaela
Cavallaro (mcavalla@maine.rr.com), Keith Dawson
(dawson@world.std.com), Jen Muehlbauer (jen@englishmajor.com), Lori
Patel (loripatel@hotmail.com) and David Sims (davesims@sonic.net).

Edited by Jimmy Guterman (guterman@vineyard.com).

Copyedited by Jim Duffy (jduffy@thestandard.com).

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