Neowin.net

Cyberangels, an offshoot of the Guardian Angels groups that patrol city neighborhoods to prevent crime, has launched an effort to protect the Internet from hackers angry at Saudi-born militant Osama bin Laden, the prime suspect in the Sept. 11 attacks on New York and Washington.

Now the group has produced a series of televised public service ads, set to begin airing next week, aimed at convincing computer hackers to stop defacing Web sites they find objectionable. In addition to being illegal, Cyberangels says such activity is unproductive and unethical, amounting to vandalism.

"Some groups, trying to lash out or be patriotic or just angry, have been defacing Middle Eastern Web sites without realizing that only hurts the Internet," Parry Aftab, executive director of Cyberangels said on Thursday.

Shortly after the attacks, some hackers managed to take the Presidential Palace of Afghanistan offline. Other Web sites related to Afghanistan's Taliban government, which has so far refused to hand bin Laden over to the authorities, were plastered with mock "Wanted" posters of the Saudi exile.

The group's Web site promotes several ways for computer users to respond to the attacks, including helping families search for information about loved ones who remain missing or spreading scam alerts about phony charities seeking donations. The group also is looking for computer experts to help with its own technical needs.

News source: Reuters

That's a risky wager, analysts say.

"I am very skeptical about Napster's long-term revenue potential," said Jupiter Research analyst Aram Sinnreich. "They've got one shot to launch a new service that looks nothing like the old one...If they don't get it right, Napster will be dead in the water."

Napster and Bertelsmann declined to comment on the funding.

Like its major media peers, Bertelsmann is in the midst of a scramble to make sure that it establishes as much control over the digital future of its content as it now has in the physical realm. As one of the biggest publishing distributors in the world, its range of content assets is slightly different than rivals such as Vivendi Universal or AOL Time Warner, but its aims are roughly similar.

Unlike AOL Time Warner, Bertelsmann lacks a potent online distribution arm. The company hopes that a revived Napster service, which will charge people to swap or download music files, will fill that missing piece of its Internet strategy. The service potentially could let consumers trade other types of digital content beyond music files, such as books, music videos or movies.

Although Napster remains a shell of its former self, Bertelsmann executives think the service still has cachet among Net users. The hard part will be convincing them to return with their wallets.

Napster's revenue potential is cloudy even under the best circumstances, given that its brand name has been built on music-swapping services that don't cost a dime.

The company hasn't yet said how much it will charge for its monthly service or what features it will include. Previously, executives have laid out a vision of tiered services, with an entry-level fee of about $4.95 a month and an advanced service offering unlimited downloads for $7.95 to $9.95 a month.

But the landscape has changed somewhat since that time. Napster has cut a considerable number of deals with prominent independent labels in Europe and the United States and appears likely to offer the largest authorised array of popular independent artists of any of the planned subscription services.

Its grasp on major label music is more tenuous, however. It has a tentative deal with MusicNet, which includes Warner Music Group, BMG Entertainment and EMI Recorded Music, to offer those labels' songs once it proves it no longer allows copyright violations. The MusicNet content is expected to be part of a separate tier, with a fee over and above what Napster charges for basic service.

The cost structure for Napster's service is beginning to mount as well. As a part of the deal announced Monday, Napster agreed to pay music publishers a third of whatever it pays for content licenses. The company has not said how much money this is likely to be or what percentage of its overall revenues this might represent.

Analysts say this agreement could make negotiating with record labels, which continue to pursue their lawsuit against Napster, more difficult. Labels have traditionally taken well over two-thirds of the total revenue dedicated to content licenses.

The cost of all of these licensing fees is likely to leave room for only a small margin of profit, analysts say.

Napster Chief Executive Konrad Hilbers said Monday that profits were part of the business plan, however.

"I don't envision any Internet business (settling for) less than a 20 percent margin over the long run," he told reporters. "There's nobody here who's willing to lose money over the long run."