Neowin.net

President Bush's plan to nix taxes on stock dividends, part of his sweeping $674 billion economic stimulus package outlined yesterday, is not sitting well with a number of tech companies.

Behind public statements supporting the plan lies tech companies' secret desire to kill it. "Privately, however, several industry lobbyists in Washington vowed a congressional fight. They say the measure offers little to stimulate corporate technology spending that is essential for the industry to pull itself out of a deep swoon that is in its third year," Washington Post reporter Jonathan Krim wrote.

Richard Carlson, an economist at Spectrum Economics in Palo Alto, is one critic who doesn't think the plan will stimulate growth for tech companies. "It's just a loser," Carlson told The San Jose Mercury News. The newspaper summed up his critique: "By giving investors incentives to buy the shares of other companies that do pay dividends, the plan could create even more of a drag on Bay Area technology stock prices."

During the dot-com heyday and in the current downturn, top tech companies have hoarded billions of dollars of cash instead of paying dividends, preferring instead to reinvest their cash in company investments and stock purchases.

News source: The Washington Post

The timing of the outage was particularly bad, coming as it did at the opening of business on the East Coast of one of the biggest business days of the year, as people returned from holiday vacations. "It's a time when people are coming back to work. When systems fail, it's a double insult. This was the worst time for something like this to happen," Gardner said. "There might have been a small technical reason for this that will be easily fixed, but the perception among users will be, `I needed tis, and they weren't there for me.'" Moreover, switching to an alternative instant message provider is easy, Gardner said. "The market will be harsh to those that don't perform well, because the cost of switching is so very low," he said.

Surprisingly, Microsoft agreed.

"We agree that a large degree of reliability is necessary," Grothaus said. "We are taking steps to see to it that we don't see outages like this again."

But Michael Sampson, analyst with Ferris Research, said the impact of the outage on Microsoft will not be significant. He said Microsoft's instant message service had a July 2001 outage that lasted eight days.

"It's certainly not good for Microsoft, but those people that are wedded to MSN will keep using it. If they were paying for it, they would be a bit more annoyed," Sampson said.

It's uncertain just how many users were affected. Sampson said he estimates that Microsoft and America Online are the instant message market leaders, with about 30 million to 35 million active users each. AOL claims it has 180 million registered users, and Microsoft says it has 75 million, but many of those accounts are duplicates -- more than one account per person -- and inactive.

Microsoft will likely become market leader because of its instant message technology being included in Windows XP; when users register XP they are strongly urged to sign up for an MSN Messenger and Passport account, Sampson said.