Google is “almost certain” to face prosecution for collecting data from unsecured wi-fi networks, according to Privacy International (PI).

The search giant has been under scrutiny for collecting wi-fi data as part of its StreetView project.

Google has released an independent audit of the rogue code, which it has claimed was included in the StreetView software by mistake.

But PI is convinced the audit proves “criminal intent”.

“The independent audit of the Google system shows that the system used for the wi-fi collection intentionally separated out unencrypted content (payload data) of communications and systematically wrote this data to hard drives. This is equivalent to placing a hard tap and a digital recorder onto a phone wire without consent or authorisation,” said PI in a statement.

This would put Google at odds with the interception laws of the 30 countries that the system was used in, it added.

Scotland Yard

“The Germans are almost certain to prosecute. Because there was intent, they have no choice but to prosecute,” said Simon Davies, head of PI.

In the UK the ICO has said it is reviewing the audit but that for the time being it had no plans to pursue the matter.

PI however does intend to take the case to the police.

“I don’t see any alternative but for us to go to Scotland Yard,” said Mr Davies.

The revelation that Google had collected such data led the German Information Commissioner to demand it handed over a hard-disk so it could examine exactly what it had collected.

It has not yet received the data and has extended the original deadline for it to be handed over.

The Australian police have also been ordered to investigate Google for possible breach of privacy.

‘Systematic failure’

According to Google, the code which allowed data to be collected was part of an experimental wi-fi project undertaken by an unnamed engineer to improve location-based services and was never intended to be incorporated in the software for StreetView.

“As we have said before, this was a mistake. The report today confirms that Google did indeed collect and store payload data from unencrypted wi-fi networks, but not from networks that were encrypted. We are continuing to work with the relevant authorities to respond to their questions and concerns,” said a Google spokesman.

“This was a failure of communication between and within teams,” he added.

But PI disputes this explanation.

“The idea that this was a work of a lone engineer doesn’t add up. This is complex code and it must have been given a budget and been overseen. Google has asserted that all its projects are rigorously checked,” said Mr Davies.

“It goes to the heart of a systematic failure of management and of duty of care,” he added.

The software basically adds the automatic diagnostics system in Windows 7 to older versions of Microsoft’s operating system.

The software, currently available as a trial or beta version, is intended for users of Windows XP and Vista.

The package also tries to anticipate how security updates will affect a PC before they are installed.

Bug watch

Once installed, the software gets updates about known issues with Windows or any connected devices, and regularly checks to see if a host machine has fallen victim. Once fixes become available it will tell users they are ready or attempt to apply them.

The software has onboard fixes for about 300 of the most widely encountered problems that stop Windows working as it should.

The software also maintains a list of the hardware and software on a machine so if the automatic fix does not solve a problem, it will be able to help users supply detailed information to Microsoft’s support staff about what has gone wrong.

Those signing up and downloading the Fix It software can use it on several different machines.

The free software can be downloaded from Microsoft’s support pages. Windows XP users wanting to use it must have Service Pack 3 for the operating system installed.

The Fix It service began in late 2008, when Microsoft began using the logo to highlight automatic fixes on its support pages that dealt with very common problems.

Anyone clicking on the logo kicked off a download that tried to fix that problem automatically.

Microsoft, like many other software firms, has built a vast database of faults and problems as technology built into Windows reports back about crashes and other bugs that machines encounter.

After Hewlett-Packard bought the computer services company last August for $13.9 billion, it immediately began hacking the work force. Led by a master cost-cutter, Mark V. Hurd, H.P. laid off 25,000 E.D.S. workers, and cut the salaries of some by more than 20 percent. Mr. Hurd even stripped the E.D.S. brass of their plush offices and corralled them into 6-by-6-foot cubicles.

But despite the risk that disgruntled employees and customers would walk out the door, the acquisition has paid off big for H.P. — so well, in fact, that an important rival has decided to strike a similar deal. Dell announced Monday that it was paying $3.9 billion for Perot Systems, the Texas computer services company started by H. Ross Perot after he left E.D.S.

Plenty of employees have complained about H.P.’s tactics, but the company says it has persevered through the turmoil to keep most of E.D.S.’s customers. Last quarter, H.P.’s operating profit margin on services hit 13.8 percent, the highest in a decade. And the combined company’s services division is H.P.’s biggest business in terms of revenue — a remarkable metamorphosis for what has long been viewed as a slow-growth PC and printer maker.

On Wednesday, H.P. will take another big step toward full integration of E.D.S., extinguishing the 47-year-old company’s name. The new name, H.P. Enterprise Services, reflects the union of the services operations at the two companies.

“I acknowledge that we have done a lot of hard stuff, but this is all about getting H.P. in a position where we can compete and win,” said Ann Livermore, an executive vice president at H.P. who heads its services and data center products businesses.

In talks with E.D.S. employees, executives have put it more bluntly. At one meeting in August, Andy W. Mattes, who runs H.P.’s services business in the Americas, said that the deep salary reductions and broad cost cuts were for the good of the remaining employees.

“Just letting things go on will result in much more bleak and horrible scenarios,” Mr. Mattes said, according to an audio recording of the meeting.

The bloodletting pains Mort Meyerson, who served alongside Mr. Perot at E.D.S. and Perot Systems for many years. “It’s sad to see this happen because of the decades of work the men and women of E.D.S. put into the company,” he said. “But that’s what happens in business.”

H.P. executives concede that the company’s aggressive pruning comes with costs, as workers fret about their futures and the overall business endures some disruption.

But they say that tough actions were needed to bring E.D.S. in line with competitors like I.B.M., Infosys and Wipro Technologies.

By common business yardsticks, the Hurd touch on E.D.S. appears to have worked better than investors and analysts had expected.

When H.P. announced its intent to buy E.D.S. in May 2008, H.P.’s share price sank. E.D.S. had developed a reputation as a bloated has-been that had burned investors in the past through bad deals, accounting issues and an overreliance on services contracts with the government and automakers.

And while E.D.S. received high marks from customers for its role in taking over their technology operations, it required far more people than competitors to accomplish the task.

“It was almost, the closer you were to E.D.S., the more concern you had about the acquisition,” said Shannon Cross, an equities analyst with Cross Research.

E.D.S.’s own efforts to lower costs had stalled, particularly since the company lacked the financial resources to undertake a major reorganization, according to Joe Eazor, a former E.D.S. executive who is now a senior vice president and general manager of services at H.P.

Investors were also worried about change-of-control provisions in contracts that would allow customers to renegotiate or cancel long-term deals with E.D.S.

But H.P. has held onto 199 of the top 200 accounts at E.D.S., according to Mr. Eazor. Some of the deals have been reworked, but H.P. points to its improving operating margins in services as evidence that any reductions in revenue have been minor.

Meanwhile, as sales of printers, PCs and data center gear have plummeted during the recession, H.P. has used services to bolster its overall revenue and profits. “The deal has really helped insulate them from the downturn,” said Ben Reitzes, an analyst with Barclays Capital. “Without E.D.S., things could have been a lot worse.”

According to analysts, H.P. may have engineered the deal at just the right time. The down economy gave H.P. time to perform its painful restructuring and primed the company to grow when the good times returned.

Historically, E.D.S. promoted computing gear from H.P. rivals like Sun Microsystems, Xerox and Cisco Systems. But Mr. Eazor says that more of H.P.’s own hardware is slated to go into deals that are currently up for bid.

H.P. has been criticized by some analysts and derided by competitors for declining to detail the value of the services deals it has signed, as is industry practice. During a meeting this week with analysts, H.P. plans to reveal that it recently closed 32 deals valued at more than $100 million and that its customer service scores rose over the past year.

Niall Quinn, the director of commercial management for Aviva, an insurer, said that H.P. had held up well under the pressure of the acquisition. In March, Aviva picked H.P. over I.B.M. for a $1 billion, 10-year outsourcing contract in Britain.

But, while Aviva has committed to H.P. for the long haul, Mr. Quinn said he had short-term concerns.

“Mark Hurd is a bit focused on hitting numbers on a quarterly basis, and some of the things he’s done, people in Europe find quite amazing,” Mr. Quinn said. “The layoffs are a concern because what you’re buying is tremendous expertise.”

H.P.’s critics, including current and former employees, warn that the company has done away with too many high-salaried, veteran executives. Jeff Kelly, who had run the E.D.S. business in the Americas, left the company in March, leaving a gap in the company’s most crucial region. His successor, another E.D.S. veteran, Mike Koehler, left in May. Now Mr. Mattes, who came from the H.P. side, is in charge.

The heads of finance, human resources, sales and software services left E.D.S. earlier this year as well.

Current and former employees, who requested anonymity because they signed nondisparagement agreements with H.P. or are afraid of being fired, complain that H.P.’s tactics work better for a product company. In the services realm, customers depend on their long-standing relationships with executives and sales team leaders.

In addition, morale has dipped, particularly in the United States, where most salary cuts have taken place, these people say.

I.B.M., H.P.’s biggest competitor in services, contends that customers have been complaining about disruption in their H.P. accounts.

“In the services business, if cost-cutting and price are the only levers you have to compete, it’s not sustainable,” said Dave Liederbach, the general manager of I.B.M.’s outsourcing business. “The chaos that results in a client situation will be severe.”

H.P. paints a much different picture, saying that for the first time, it has enough salespeople and services expertise to go up against I.B.M. for some of the largest, most lucrative contracts.

Analysts asked the question time and again after Ms. Bartz delivered Yahoo’s financial results to Wall Street for the first time since becoming chief executive earlier this month.

Time and again, Ms. Bartz said she had not yet made up her mind. If anything, Ms. Bartz suggested that breaking off the search business would not be easy and that any decision would not come soon.

“It is my job to make sure that as a company we look at anything that makes sense long term for the company and creates shareholder value,” Ms. Bartz said in a conference call with analysts on Tuesday. “So yes, everything is on the table.”

But she added: “This is not a company that needs to be pulled apart and left for the chickens.”

While Ms. Bartz delivered Yahoo’s mixed financial results, the fourth quarter was the end of Jerry Yang’s turbulent 18-month tenure as chief executive.

Yahoo swung to a loss during the quarter, as sales declined slightly because of weakness in the online display ad business. The company also recorded a number of one-time charges. But cost-cutting efforts, including sizable layoffs, helped Yahoo top analysts’ expectations for profitability. And the results were in line with forecasts Yahoo had made three months earlier.

“Delivering on profitability expectations is a real achievement in this environment,” Ms. Bartz said.

Yahoo reported a net loss of $303 million, or 22 cents a share, compared with a profit of $206 million, or 15 cents a share, a year ago. Yahoo said it incurred $108 million in charges related to severance of employees and $488 million in write-downs of some of its European assets.

After adjusting for those and other charges, Yahoo said it had a profit of $238 million, or 17 cents a share, up from 13 cents a share a year ago, and above the 12 cents a share expected by analysts.

Yahoo said that its revenue of $1.8 billion was down about 1 percent from $1.83 billion a year ago. Net revenue, which excludes commissions Yahoo pays to advertising partners, was $1.37 billion, down from $1.4 billion a year ago, and in line with analysts’ estimates.

Some investors were bracing for worse, and Yahoo’s shares rose about 5 percent in after-hours trading, after the company’s report, to $11.93. Yahoo shares closed the regular trading session at $11.34, up 17 cents.

“They didn’t bleed as much as the very bearish side feared,” said Martin Pyykkonen, an analyst with Wunderlich Securities. “I don’t think this is a quick fix and the economy is going to add headwinds to that.”

Yahoo’s results reflected the continued shift by marketers toward forms of advertising that deliver immediate and measurable results. Search advertising, which marketers use to attract customers to their sites, grew about 11 percent, while display advertising declined about 2 percent.

Those results suggest that other online publishers that rely heavily on display ads, including AOL, are likely to suffer as well.

“Yahoo’s display business is very indicative of what is going on in the display advertising business,” said Ross Sandler, an analyst with RBC Capital Markets.

Yahoo warned that it would continue to face tough times. Its outlook for the current quarter calls for revenue to fall 5 to 16 percent. The company did not provide forecasts for the full year, saying that the deepening recession made it too difficult to predict demand from advertisers.

“There is so little visibility on the long-term forecast for advertisers,” Blake Jorgensen, Yahoo’s chief financial officer, said in an interview. “We are really being cautious for the rest of the year.”

The persistent questions about Ms. Bartz’s willingness to sell Yahoo’s search business made it clear that investors were likely to continue pressing her to consider more decisive measures to reverse Yahoo’s slide and prop up its depressed share price.

Analysts also asked about her willingness to merge Yahoo with the AOL Internet unit of Time Warner or to sell certain assets. Ms. Bartz declined to answer.

“There may be some investor disappointment that we will not get a quick answer on all the big strategic questions,” said Marianne Wolk, an analyst with the Susquehanna Financial Group. “I think those are all under consideration. If there is any insight at all, it is that it may not be easy to unplug parts of these businesses.”

Ms. Bartz had time for a dig at her would-be partner, Microsoft, whose chief executive, Steven A. Ballmer, has repeatedly said he would like to reach a search deal with Yahoo. She said that Yahoo, while lagging far behind Google in search, had three times as much market share as the “next player,” which is Microsoft.

That was a slight exaggeration. According to comScore, Yahoo accounted for 20.5 percent of all searches in the United States in December, while Microsoft accounted for 8.3 percent. Google leads the market with 63.5 percent of searches.

Last week, Google reported that its net revenue jumped 25 percent in the fourth quarter.

Steven P. Jobs, the chief executive of Apple, at the company's headquarters in October.

Mr. Jobs wrote in a letter to Apple employees, released after markets closed, that he had learned over the past week that his health issues were “more complex” than he originally thought. He said he planned to return to Apple at the end of June and in the meantime would hand day-to-day control of Apple over to Timothy D. Cook, its longtime chief operating officer.

Mr. Jobs, 53, wrote that curiosity over his personal health “continues to be a distraction not only for me and my family, but everyone else at Apple as well.” He said he would maintain the chief executive title and stay involved in major strategic decisions.

Mr. Jobs offered no new details about the cause of his health problems. In a letter last week that was meant to calm fears about his condition, he called it a “hormonal imbalance” that was robbing his body of proteins and causing him to lose weight. Mr. Jobs recovered from pancreatic cancer after surgery in 2004 but has appeared unusually gaunt at recent appearances.

Two people who are familiar with Mr. Jobs’s current medical treatment said he was not suffering from a recurrence of cancer, but a condition that was preventing his body from absorbing food. Doctors have also advised him to cut down on stress, which may be making the problem worse, these people said.

An Apple spokesman, Steve Dowling, said the company had no further comment on the issue beyond Mr. Jobs’s letter.

Apple shares dropped sharply in after-hours trading following the release of the letter, losing $5.63, or 6.6 percent, to $79.70. The stock fell 2.71 percent in regular trading amid a broad market slump.

Charles Wolf, an analyst at Needham & Company who follows Apple, said the stock market would probably fear the worst.

“It is reasonable to expect, given the history of Steve’s illness, that the market is probably going to assume that he is not going to return to Apple,” Mr. Wolf said.

Mr. Jobs’s leave of absence is the latest twist in a saga that has left the company’s shareholders, analysts and ardent fans exasperated and straining to divine the hidden meanings in the company’s vaguely worded communications.

Last June, when Mr. Jobs appeared strikingly thin at a company conference for programmers, an Apple spokeswoman said he was recovering from a “common bug.” Soon afterward, Mr. Jobs acknowledged to The New York Times that he was suffering from digestive difficulties related to a surgical procedure he had as part of his cancer treatment.

Then last week, Mr. Jobs sought to calm speculation about his withdrawal from his regular keynote speech at the annual Macworld conference by acknowledging he had a “hormonal imbalance.”

“The letter last week pretty much tried to reassure people that his health condition was extremely minor, but obviously it is more serious than first thought,” said Ryan Jacob, founder of the Los Angeles-based Jacob Internet Fund, which owns a stake in Apple. “It’s disturbing.”

Some shareholders and analysts have expressed frustration with the trickle of news coming from Apple about Mr. Jobs’s health.

A spokesman for the Securities and Exchange Commission, John Nester, declined to comment on Apple’s situation. But he said that in general, while there were no specific requirements for companies to disclose the health of their officers or directors, companies needed to assess whether health issues could have a material impact on results.

For most companies, such information is not crucial because they are not so closely associated with one person. But Apple may be an exception. Since he co-founded Apple in 1976, and particularly since he returned to it in 1997 after a decade-long absence, Mr. Jobs has been inextricably linked to the company and its brand.

Over the last eight years, he has, seemingly single-handedly, powered Apple back to the forefront of the technology industry. Apple has sold 180 million iPod music players, and over the last year, it has sold more than 20 million units of its slender iPhone.

But Mr. Jobs does not run Apple alone, and now at least one of his deputies will get a moment in the sun. Mr. Cook joined Apple in 1998 from the computer maker Compaq and is responsible for the company’s manufacturing and sales operations.

“I don’t think we know enough about Tim since he has never really been in the limelight,” said Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co. “What we can say is Apple has a complicated business model with enormous seasonality. But it has been exceptionally well run across a number of dimensions for a number of years. I think a lot of that credit goes to Tim.”

By all accounts, Mr. Cook does not have the long-term vision or showmanship of Mr. Jobs, who appears capable of peering around corners into the future of technology, and can whip crowds into a frenzy merely by taking something new out of his pocket.

That is why analysts and shareholders saw so much portent in Mr. Jobs’s 170-word letter.

“These are times where you reflect about what Steve Jobs means for the company,” said Gene Munster, an analyst at Piper Jaffray. “At the end of the day, investors need to come to grips with the reality of a post-Steve Jobs world. This is the most urgent wakeup call they have had.”

LAS VEGAS – Microsoft Corp.’s next version of the Windows operating system is almost ready for prime time.

That’s one message Chief Executive Steve Ballmer delivered on the eve of the official opening of the International Consumer Electronics Show.

Microsoft Corp. CEO Steve Ballmer talks about Windows 7

The world’s largest software maker also disclosed deals to make its Live Search programs the default search engines on more personal computers and mobile phones. And it announced a new version of its Ford Sync in-car technology that folds in the voice-operated directory service TellMe, which Microsoft bought in 2007. For years, the opening keynote at CES belonged to Microsoft Chairman Bill Gates, whose status as industry pioneer justified the sweeping visions of the future he’d build into his speech. Gates passed the mantle on when he stepped down from day-to-day operations at Microsoft last summer, and Wednesday marked Ballmer’s first time making the high-profile address.

“It feels like we’ve entered a period of reduced expectations, a time when we may be tempted to temper our optimism and scale back our ambitions,” Ballmer said, in a nod to the recession. “But no matter what happens with the economy or how long this recession lasts, I believe our digital lives will only continue to get richer.”

Ballmer said Microsoft would continue to invest more in research and development than its technology peers.

The CEO announced that a nearly final “beta” test version of Windows 7 will be available Friday for regular PC users to download and tinker with.

The new operating system — which could be available for purchase on PCs within a year — uses much of the same underlying technology as its predecessor, the much-maligned Vista. But Windows 7 aims to resolve many problems PC users had with Vista. For instance, Microsoft pledges to make it easier to install peripheral devices and to have the software pump out fewer annoying warnings and notifications.

Ballmer also pledged that Windows 7 will boot faster and drain laptop batteries more slowly.

“I believe Windows will remain at the center of people’s technological solar system,” Ballmer said. “We’re putting in all the right ingredients: simplicity, reliability and speed, and we’re working hard to get it right and to get it ready.”

Ballmer is hoping to boost the number of people using Microsoft’s Live Search engine, which ranks well behind Google Inc. and Yahoo Inc. in popularity, through a deal with PC maker Dell Inc. Dell will put a special Live Search browser toolbar and Windows Live programs, including Microsoft’s e-mail and instant-messaging applications, on most of the consumer and small-business PCs that it sells worldwide. That deal replaces a relationship between Dell and Google. The CEO also announced Microsoft has formed a five-year partnership with Verizon Wireless that calls for the Live Search tools to be added to all Verizon cell phones in the U.S. that can access the Internet.

Among the other highlights from Redmond, Wash.-based Microsoft: The company added Flash support — required for watching YouTube videos — to its cell phone version of Internet Explorer. And it created a link between Facebook and its own Windows Live social network, so when people update their status message or upload photos on Facebook, that information appears on the Microsoft site, too.

Philip W. Schiller, Apple's senior vice president of worldwide product marketing, at the Macworld Expo in San Francisco on Tuesday.

Beginning this week, three of the four major music labels — Sony Music Entertainment, Universal Music Group and Warner Music Group — will begin selling music through iTunes without digital rights management software, or D.R.M., which controls the copying and use of digital files. The fourth, EMI, was already doing so.

In return, Apple, whose dominance in online music sales gives it powerful leverage, agreed to a longstanding demand of the music labels and said it would move away from its insistence on pricing all individual song downloads on iTunes at 99 cents.

Instead, the majority of songs will drop to 69 cents beginning in April, while the biggest hits and newest songs will go for $1.29. Others that are moderately popular will remain at 99 cents.

The music companies are hoping that their eagerly awaited compromise with Apple will give a lift to digital downloads. They will be able to make more money on their best-selling songs and increase the appeal of older ones.

And with the copying restrictions removed, people will be able to freely shift the songs they buy on iTunes among computers, phones and other digital devices.

Technologically sophisticated fans of digital music complain that D.R.M. imposes unfair restrictions on what they can do with the tracks they have bought. For example, the protected files from iTunes do not work on portable players made by companies other than Apple.

“I think the writing was on the wall, both for Apple and the labels, that basically consumers were not going to put up with D.R.M. anymore,” said Tim Bajarin, an analyst with Creative Strategies, a market research company.

Music industry watchers widely applauded the move and said it could help digital music sales, which have shown signs of slowing down just five years after Apple introduced iTunes.

In particular, lower prices for some songs could spur consumers “to buy deeper into the catalog, and expand their relationship with digital music,” said Russ Crupnick, an analyst with the NPD Group.

The music industry could use a lift. Sales of CDs fell 20 percent last year from 2007. About 2.4 billion songs were bought on iTunes in the last year, aided by Apple’s expansion into international markets. But that was not nearly enough to make up for losses in traditional retail stores.

Industry pundits have long pointed to D.R.M. as one culprit for the music companies’ woes, saying it alienated some customers while doing little to slow piracy on file-sharing networks.

Apple has been campaigning against D.R.M. at least since February 2007, when the chief executive, Steven P. Jobs, wrote an open letter criticizing the software. Apple reached a deal with EMI that year to offer music without the copying restrictions.

But it could never reach the same agreement with EMI’s larger rivals. Sony, Warner and Universal allowed other online music services, like Amazon’s MP3 Store, to sell unprotected music, but they withheld it from Apple. Their goal, industry analysts say, was to try to strengthen online rivals to iTunes, which they viewed as having a dangerous level of control over their business.

“Apple definitely wanted to remove D.R.M. from music, but the record labels would not allow them to renegotiate their licensing agreements, because they wanted to help competitors succeed against Apple in the market,” said Bill Rosenblatt, president of GiantSteps Media Technology Strategies, a consulting firm.

Apple, for its part, appeared to resist variable pricing, fearing it would amount to a price increase for the most popular tracks on iTunes, which constitute the bulk of sales on the service. It has also said the consistent 99-cent price made things simpler for buyers.

It is not clear what broke the impasse, but the deteriorating economy may have put pressure on music companies.

“For the major labels, it was clearly time for them to accelerate becoming digital music companies in a macroeconomic environment that is downright frightening,” said Greg Scholl, chief executive of The Orchard, a digital distributor of music from independent labels.

The compromise gives the recording industry new leverage over their online music sales, Mr. Scholl added. They can start to sell new tracks at the higher price, then gradually drop prices to keep sales moving. Labels could also experiment with bundled packages of songs and even special editions at higher prices.

Harry Wang, director of mobile product research at the consulting company Parks Associates, said, “They aren’t going to get a huge amount of money from this new arrangement, but in an ailing music industry, anything that can provide more money will be better than the status quo.”

Apple said customers would be able to pay a one-time fee to strip copying restrictions from music they have already bought on iTunes, at 30 cents a song or 30 percent of the album price. ITunes customers can achieve the same effect by burning all of their music to a CD and then reimporting the music into the iTunes software, although this reduces sound quality somewhat.

The company also said that its popular iPhone would be able to download songs from iTunes over wireless data networks like AT&T’s. Previously, iPhone owners had to either attach the phone to a computer or connect to a local Wi-Fi network.

Apple reported the changes in iTunes at its keynote presentation at the annual Macworld conference in San Francisco, given by Philip W. Schiller, Apple’s senior vice president for worldwide marketing.

Mr. Jobs was not at the event, after disclosing this week that he had a treatable hormone problem that had resulted in significant weight loss over the last year.

That passion didn’t change after glaucoma took his eyesight at the age of 14. What changed is the role that technology — and his own innovations — played in helping him pursue his interests.

T. V. Raman of Google is a pioneer in customizing technology for blind users. His own PC reads text aloud at triple normal speed.

A native of India, Mr. Raman went from relying on volunteers to read him textbooks at a top technical university there to leading a largely autonomous life in Silicon Valley, where he is a highly respected computer scientist and an engineer at Google.

Along the way, Mr. Raman built a series of tools to help him take advantage of objects or technologies that were not designed with blind users in mind. They ranged from a Rubik’s Cube covered in Braille to a software program that can take complex mathematical formulas and read them aloud, which became the subject of his Ph.D. dissertation at Cornell. He also built a version of Google’s search service tailored for blind users.

Mr. Raman, 43, is now working to modify the latest technological gadget that he says could make life easier for blind people: a touch-screen phone.

“What Raman does is amazing,” said Paul Schroeder, vice president for programs and policy at the American Foundation for the Blind, which conducts research on technology that can help visually impaired people. “He is a leading thinker on accessibility issues, and his capacity to design and alter technology to meet his needs is unique.”

Some of Mr. Raman’s innovations may help make electronic gadgets and Web services more user-friendly for everyone. Instead of asking how something should work if a person cannot see, he says he prefers to ask, “How should something work when the user is not looking at the screen?”

Such systems could prove useful for drivers or anyone else who could benefit from eyes-free access to a phone. They could also appeal to aging baby boomers with fading vision who want to keep using technology they’ve come to depend on.

Mr. Raman’s approach reflects a recognition that many innovations designed primarily for people with disabilities have benefited the broader public, said Larry Goldberg, who oversees the National Center for Accessible Media at WGBH, the public broadcasting station in Boston. They include curb cuts for wheelchairs, captions for television broadcasts and optical character-recognition technology, which was fine-tuned to create software that could read printed books aloud and is now used in many computer applications, he said.

With no buttons to guide the fingers on its glassy surface, the touch-screen cellphone may seem a particularly daunting challenge. But Mr. Raman said that with the right tweaks, touch-screen phones — many of which already come equipped with GPS technology and a compass — could help blind people navigate the world.

“How much of a leap of faith does it take for you to realize that your phone could say, ‘Walk straight and within 200 feet you’ll get to the intersection of X and Y,’ ” Mr. Raman said. “This is entirely doable.”

ADVOCATES for the blind have long complained that technology companies have done a generally poor job of making their products accessible. The Web, while opening many opportunities for blind people, is still riddled with obstacles. And sophisticated screen-reader software, which turns documents and Web pages into synthesized speech, can cost more than $1,000. Even with a screen reader, many sites are hard to navigate.

Last year, the National Federation of the Blind reached a settlement of a landmark class-action lawsuit against one company whose site advocates found unusable, Target. In the settlement, the retailer agreed to make its Web site accessible to blind people. The federation assesses the usability of Web sites and currently certifies only a handful as being fully accessible.

One challenge is that technology often evolves much faster than the guidelines that ensure Web sites work well with screen readers. In December, the World Wide Web Consortium, an Internet standards group, released Version 2.0 of its accessibility guidelines for Web sites. The previous version dated back to 1999, when the Web consisted largely of static Web pages rather than interactive applications.  Obstacles on the Web take many forms. A common one is the Captcha, a security feature consisting of a string of distorted letters and numbers that users are supposed to read and retype before they register for a new service or send e-mail. Few Web sites offer audio Captchas.

Some pages are just poorly designed, like e-commerce sites where the “checkout” button is an image that isn’t labeled so screen readers can find it.

“The overwhelming percentage of the industry really hasn’t stepped up to the plate to provide the blindness community with equal access to their products,” said Eric Bridges, director of advocacy and governmental affairs at the American Council of the Blind. Mr. Bridges and other advocates argue that accessibility should be built into new technologies, not added as an afterthought.

People with other disabilities face similar challenges on the Internet. “On the deafness side, the frustration is huge because of all of the video out there without captions,” Mr. Goldberg said.

MR. RAMAN, who before joining Google in 2005 worked at Adobe Systems and as a researcher at I.B.M., is intimately familiar with accessibility problems, both personally and professionally. In 2006, he developed a version of Google’s search engine that gives a slight preference to Web sites that work well with screen readers. The system had to test millions of Web pages.

“You wouldn’t have found a single page that fully complied with the accessibility guidelines,” Mr. Raman said. Still, the system could detect which pages worked reasonably well with screen readers.

The service is not being used as widely as he had hoped. Still, it has had an impact. Several Web site operators whose sites weren’t showing up prominently in Google search results asked Mr. Raman how they could fix their sites so they would rank better.

The service includes a screen magnifier that enlarges individual search results. Mr. Raman says the feature is intended to help low-vision users, but it could also prove useful to a much larger population, especially on cellphones and other devices with small screens.

For his own use, he has built a highly customized system that allows him efficient access to much of what he needs on his PC and on the Web, stripping out anything that could slow him down. For instance, the system goes directly to the article text on the news sites he reads regularly, bypassing navigational links and other features found on most Web pages.

On a recent day, Mr. Raman was working on a research paper about the future structure of the Web. A monitor hung above the desk. It is usually turned off, unless he wants to show a colleague or visitor what he is working on. He typed at his keyboard, his head slightly tilted to one side, listening to his screen reader through a pair of wireless headphones.

The screen reader is calibrated to speak at roughly triple the speed of a normal voice. To the untrained ear, the output is incomprehensible, but it allows Mr. Raman to “read” at roughly the same speed as a sighted person.

Processing information quickly is a skill he has developed over the years: a video on YouTube shows him solving his Braille Rubik’s Cube in 23 seconds. When he is not typing, Mr. Raman, who wears large sunglasses, is often folding and unfolding pieces of paper into tiny, origami-like geometrical shapes at prodigious speed.

He shares a work area at Google with Charles Chen, a 25-year-old engineer, and Hubbell, Mr. Raman’s guide dog. (Hubbell has his own Web site.)

Mr. Chen, who is sighted, developed a free screen reader for Web pages that works with the Firefox browser. Working together, the two recently added keyboard shortcuts that help blind and low-vision users navigate quickly through Google’s search results. They’ve also developed tools to make sophisticated Web applications, like e-mail and blog readers, suitable for screen-reading software.

Now, much of their effort is focused on touch-screen phones.

“The thing I am most interested in is all of the stuff moving to the mobile world, because it is a big life-changer,” Mr. Raman said.

To show their progress, Mr. Raman pulled his T-Mobile G1, a touch-screen phone with Google’s Android software, from a pocket of his jeans. He and Mr. Chen have already outfitted it with software that speaks much like a screen reader on a PC. Now they are working on ways to allow blind people, or anyone who is not looking at the screen, to enter text, numbers and commands.

That development would complement voice-recognition systems, which are not always reliable and don’t work well in noisy environments. Since he cannot precisely hit a button on a touch screen, Mr. Raman created a dialer that works based on relative positions. It interprets any place where he first touches the screen as a 5, the center of a regular telephone dial pad. To dial any other number, he simply slides his finger in its direction — up and to the left for 1, down and to the right for 9, and so on. If he makes a mistake, he can erase a digit simply by shaking the phone, which can detect motion.

He and Mr. Chen are testing several other input methods. None of these technologies have been rolled out, but Mr. Raman, who is already using the G1 as his primary cellphone, hopes to make them freely available soon.

(Few screen readers are available for smartphones today, and they can often cost as much as a phone itself.)

What may become the most life-changing mobile technology — a phone that can recognize and read signs through its camera — may still be a few years away, Mr. Raman said. Already, some devices can read text this way. But because blind users don’t know where signs are, they can’t point the camera at them or align it properly, Mr. Raman said. Once chips become powerful enough, they will be able to detect a sign’s location and read skewed type, he said.

“Those things will happen,” he said. When they do, sighted users will benefit, too.

“If you have the technology that can recognize a street sign as you drive by it, that is helpful for everyone,” he said. “In a foreign country, it will translate it.”

Mr. Raman’s innovations have already made their way onto millions of PCs. At Adobe in the 1990s, he helped to adapt the PDF format so it could be read by screen readers. That was required for PDF to be used by the federal government, and it eventually led to the technology’s being embraced as a global standard for electronic documents.

“It was incredibly important to us as a business, and to the blind,” said John Warnock, the chairman and founder of Adobe.

Mr. Raman says he thinks he has the largest impact when he can persuade other engineers to make their products accessible — or, better yet, when he can convince them that there are interesting problems to be solved in this area. “If I can get another 10 engineers motivated to work on accessibility,” he said, “it is a huge win.”

The problem appears restricted to first-generation 30GB Zune players

The company said it was aware of the problem, and offered advice to Zune users on how to solve it.

Customers have reported that their devices refuse to boot up, and freeze when the start-screen appears.

The Zune was launched in 2006 as Microsoft’s contender to Apple’s highly successful iPod player.

Uncertainty

Discussing the cause on some user forums, some owners have said they believe the problems are due it being the first time the Zune will have updated its calendars following a Leap year.

On the Zune Insider website, Microsoft said it had been aware of the problem since early in the morning of December 31.

We expect the internal clock on the Zune 30GB devices will automatically reset tomorrow (Microsoft)

It said its technical team “jumped on the problem immediately and isolated the issue” – a fault in the internal clock driver related to the way the device handles a leap year.

Said Microsoft: “The issue should be resolved over the next 24 hours as the time change moves to January 1, 2009.

“We expect the internal clock on the Zune 30GB devices will automatically reset tomorrow (noon, GMT).

“By tomorrow you should allow the battery to fully run out of power before the unit can restart successfully then simply ensure that your device is recharged, then turn it back on.”

When Microsoft launched the Zune in 2006 the company hoped it could become a serious rival to the iPod player.

But sales of the Zune so far have been a fraction compared to Apple’s best-seller.

The problem appears restricted to 30GB first generation Zune players. Later 80GB and 120GB models appear to be unaffected.

Claire Critelli, 6, and her mother, Marilee, left, with Dr. Edna O. DeVries at the Marshfield Clinic in Wisconsin.

To keep on track, Mr. Calderaro visits his doctor, attends meetings for diabetes patients and gets frequent calls from a health counselor. It is a team effort, orchestrated by the Marshfield Clinic here. And it is animated by technology, starting with Mr. Calderaro’s computerized patient record — a continuously updated document that includes his health history, medications, lab tests, treatment guidelines and doctors’ and nurses’ notes.

To visit the Marshfield Clinic, a longtime innovator in health information technology, is to glimpse medicine’s digital future. Across the national spectrum of health care politics there is broad agreement that moving patient records into the computer age, the way Marshfield and some other health systems have already done, is essential to improving care and curbing costs.

A paper record is a passive, historical document. An electronic health record can be a vibrant tool that reminds and advises doctors. It can hold information on a patient’s visits, treatments and conditions, going back years, even decades. It can be summoned with a mouse click, not hidden in a file drawer in a remote location and thus useless in medical emergencies.

Modern computerized systems have links to online information on best practices, treatment recommendations and harmful drug interactions. The potential benefits include fewer unnecessary tests, reduced medical errors and better care so patients are less likely to require costly treatment in hospitals.

The widespread adoption of electronic health records might also greatly increase evidence-based medicine. Each patient’s records add to a real-time, ever-growing database of evidence showing what works and what does not. The goal is to harness health information from individuals and populations, share it across networks, sift it and analyze it to make the practice of medicine more of a science and less an art.

The Bush administration has left it mainly to advocacy and the private sector to introduce digital medicine. But President-elect Barack Obama apparently plans to make a sizable government commitment. During the campaign, Mr. Obama vowed to spend $50 billion over five years to spur the adoption of electronic health records and said recently that a program to accelerate their use would be part of his stimulus package.

The Marshfield Clinic, a large doctors’ group in Wisconsin, shows that computerized records can indeed improve the quality and efficiency of medicine. Yet the Marshfield experience suggests that the digital record becomes truly useful only when patient information is mined to find patterns and answer questions: What treatments work best for particular categories of patients? What practices or procedures yield the best outcome?

The Marshfield Clinic “understands that it’s a system of improvement that technology makes possible that really matters, and the electronic health record itself is no silver bullet,” said Dr. Carolyn M. Clancy, director of the federal Agency for Healthcare Research and Quality.

For the Obama presidency and the administrations that follow it, the challenge will be to somehow link electronic medical islands into a network that begins to approach on a national scale what organizations like Marshfield have achieved regionally. Ideally, a lone physician in a rural community could tap into the national health information network and be as well informed on treatments and research for patients with certain conditions as a specialist at Marshfield.

Some experts caution that such a broad capacity for record-sharing could take decades to achieve — if it is even possible in the decentralized American marketplace of medical competitors.

Marshfield Clinic, a nonprofit organization founded in 1916, has a long history of using information technology to further research and improve care. In the 1960s, the clinic bought the digital breakthrough of its day — a mainframe computer — and used punched cards to feed it information on diagnoses and procedures. In 1985, the clinic introduced its first basic electronic health records, kept refining them and by 1994 mandated that its doctors all use them. In 2003, it introduced wireless tablet computers, whose screen can written on like digital paper or flipped up, exposing a keyboard, and used as a conventional laptop PC.

Today, Marshfield’s 790 doctors and their support staff at 43 locations in Wisconsin all use the tablet PCs. At the end of last year, the group eliminated paper charts for the more than 365,000 patients its doctors see each year, freeing up storage space the size of a football field at the main clinic in Marshfield. At each step toward a fully digital system, physicians were consulted and involved in the design process.

“It’s been a fabulous journey from physicians being reluctant to now being unable to live without this technology,” observed Dr. Karl J. Ulrich, the clinic’s chief executive. Marshfield is one of a few dozen medical groups across the country that are aggressively embracing information technology. The organizations tend to be big — ranging from providers with thousands of physicians like Kaiser Permanente and the Department of Veterans Affairs to ones with hundreds like Marshfield and Geisinger Health Systems in central Pennsylvania. They are typically responsible for most or all aspects of a patient’s care. They are often insurers, as well.

Those groups, in other words, have the scale and economic incentives to invest in information technology to capture the gains from improved quality and efficiency. In that regard, they lie outside the mainstream of America’s health care economy, a fee-for-service system in which providers are typically paid for doing more, not necessarily doing better. It is a system that encourages more doctor visits, more tests, more surgical procedures, more pills.

For most doctors, who work in small practices, an investment in electronic health records looks simply like a cost for which they will not be reimbursed. That is why policy experts say any government financial incentives to use electronic records — matching grants or other subsidies — should be focused on practices with 10 or fewer doctors, which still account for three-fourths of all doctors in this country. Only about 17 percent of the nation’s physicians are using computerized patient records, according to a government-sponsored survey published in The New England Journal of Medicine. Even for the large doctor groups, there is no crisp, conclusive cost-benefit arithmetic. Marshfield can point to various measurable savings, but has scant proof they outweigh the millions spent in the past and the $50 million-a-year technology budget.

“People ask about return on investment, but that’s the wrong question,” said Dr. John W. Melski, the medical director of clinical informatics at Marshfield. “This requires the usual leap of faith that knowledge will yield good things — better care, doing things smarter and, yes, saving money in the long run.”

Aided by their growing database, Marshfield’s physician-researchers are working on ambitious projects in personalized medicine that use genetic markers to tailor drug dosages. For example, the clinic recently began a clinical test on 250 patients that uses three gene markers to personalize their doses of Coumadin, or warfarin as the generic drug is known. The blood-thinning drug is widely prescribed for heart patients. But it is often difficult to calibrate the right dose for individuals, and the consequences of internal bleeding or blood clots can be life-threatening. In this case, the electronic health record is the starting point for research, feeding information into the database from which the clinic’s scientists appropriate patients. The digital record holds the patient-specific information used in the Coumadin calculation of tailored doses for individuals.

Marshfield is also researching “predictive” medicine that combines genetics, family histories and lab tests to warn patients about looming health risks. It has a voluntary DNA database on nearly 20,000 people, whose health care information goes back 30 years on average — and the electronic record is the vehicle for collecting and conveying that information. The researchers are looking for patterns in family history, lifestyle, environmental factors, lab test results and selected genetic markers that might predict the onset of conditions like diabetes and Alzheimer’s disease years in advance.

“Better health information technology is needed every step of the way,” said Catherine A. McCarty, director of Marshfield’s center for human genetics and principal investigator for its personalized medicine research project. “We could not do this without the electronic health record.”

The more immediate target, though, is harnessing the digital technology to help manage chronic illnesses like diabetes, heart disease, cancer and asthma. Seventy-five percent of America’s health care spending goes to people with one or more chronic conditions. And as the population ages that percentage is rising.

Marshfield’s progress in recent years with its more than 18,000 diabetes patients, including Mr. Calderaro, points to the potential. The gains are a byproduct of being able to constantly measure and manage health outcomes, a process of efficiently gathering and monitoring patient information that is made possible by the electronic health record. Besides the doctor visits, group meetings and monthly calls from a diabetes counselor, Mr. Calderaro has used all the information to take responsibility for controlling his diabetes. He not only monitors his blood sugar and blood pressure readings, but he could recite the carbohydrate grams in each of the foods he ate one day recently. A three-mile walk is often part of his daily regimen. He was never really heavy, but he has a sister with diabetes and had a maternal grandmother who suffered from the disease.

“If I had known when I was 40 years old what I know now, I would have done things differently,” Mr. Calderaro said.

From mid-2004 through the third quarter of this year, the percentage of the clinic’s diabetic patients with blood cholesterol at or below the recommended level rose to 61 percent, from 40 percent earlier. The percentage with satisfactory blood pressure increased to 52 percent, up from 32 percent.

Over the same span, hospital admissions among Marshfield’s diabetic population fell — to 311 per 1,000 patients a year, from 360. Because a hospital stay for a diabetes patient ranges from $8,000 to $22,500, according to national statistics, Marshfield’s results translate into an annual cost saving of $7.3 million to $20.5 million.

More important may be the suffering avoided. Complications from diabetes include kidney failure, blindness and amputations. “Those are the things that really scare you,” Mr. Calderaro, the patient, said. “But it doesn’t have to be. You can manage it.”

Marshfield is striving to help more of its diabetes patients to do as well as Mr. Calderaro, and the federal Medicare agency has recognized Marshfield’s progress.

In a continuing pilot project, Medicare has selected the clinic and nine other large doctor groups and arranged to pay them for the quality of care they deliver. Last year, on the basis of how well diabetes patients had fared, by various measures, Marshfield was one of only two groups that did well enough to earn bonus payments.

The Medicare pilot prompted Marshfield to take a fresh look at how it cares for various chronic conditions, including heart disease and hypertension. That led to a new software tool, called the iList, which has proved a big help, said Dr. Theodore A. Praxel, Marshfield’s medical director of quality improvement and care management.

The iList (for “intervention list”) culls the patient records of a primary care physician, and ranks and flags patients by conditions not met, including uncontrolled blood pressure and cholesterol, overdue lab tests and vaccinations missed. Nurses and medical assistants then “work the iList,” calling patients with reminders and scheduling them for exams and lab work.

In medicine, the computer is to memory what the X-ray machine is to vision — a technology that vastly surpasses human limitations. The benefits of a computer-helper, doctors say, become quickly evident in everyday practice.

When a doctor electronically prescribes a new drug, for example, an on-screen warning appears if the medication is on the patient’s allergy list or could cause a potentially dangerous interaction with another drug the person is taking. In the New England Journal of Medicine survey, 71 percent of physicians using electronic health records with that feature said they had received a computer alert that helped them avoid a harmful prescription mistake.

“It absolutely happens,” said Dr. Edna O. DeVries, a pediatrician at Marshfield. “You’re distracted and talking to the parents. You’re on autopilot.”

Dr. DeVries, who joined the clinic in 1989, was the medical director nearly a decade ago on a database, created by Marshfield, to track early childhood immunizations in central Wisconsin. Over the next two years, the immunization rates for children in the area rose to 93 percent, from 67 percent, as a result of the tracking and follow-up reminders.

“The quality of care goes up dramatically just by having information instantly,” Dr. DeVries said. Yet, as her colleague and veteran of computer medicine Dr. Melski notes, there is no payoff to technology alone — only in people using technology wisely.

“We have to restructure our medical culture,” he said. “We have to promote a culture that believes in the evidence and is trained in analyzing the evidence. It’s the only long-run answer to the challenges we face in health care — evidence-based medicine.”

SAN FRANCISCO — This Christmas, the titans of the personal-computer industry are finding big lumps of coal in their stockings, and a few are grumbling that it’s Intel’s fault.

Of course, it’s been a bad holiday season for just about everyone – the National Retail Federation expects the weakest holiday sales gains in six years – but it’s particularly bad for computers.

Not only has the U.S. economy tumbled into a deep recession, but the rest of the world has fallen in too, ruining the tech industry’s overseas growth story. If U.S. consumers are hesitant to drop a few hundred dollars on a new PC, how do you think buyers in developing economies like Brazil are feeling?

There is one relatively bright spot in this gloomy retail season: the “netbook,” a device resembling a laptop that’s been shot with one of those cartoon miniaturization guns.

The typical netbook weighs 3 pounds, has a 9-inch screen, offers a wireless Internet connection, runs Microsoft (MSFT, Fortune 500) Windows XP and has an Intel chip inside. Oh, and it costs less than $400.

I know what you’re thinking. A laptop for less than $400? What’s wrong with that? If you’re Intel (INTC, Fortune 500), not much.

Intel is the company that probably has the most to gain since the most popular netbooks carry Intel’s new Atom chip. Atom is smaller, cheaper to produce, and more power-efficient than Intel’s mainstream fare, making it an ideal cornerstone for a low-cost laptop.

With this in mind, Intel encouraged the emergence of the netbook segment by selling Atom chips to upstart companies like Acer and ASUS, and allowing the resulting netbooks to be sold in tech-savvy markets in Europe and North America. (Originally, Intel planned to target poorer countries.)

Is Intel worried about cannibalizing sales of higher-end laptops? Not really. Intel executives say that, if anything, Atom-based netbooks seem to be luring buyers who otherwise would have bought laptops with low-cost chips from rival Advanced Micro Devices (AMD, Fortune 500).

But Intel customers like Hewlett-Packard (HPQ, Fortune 500) and Dell (DELL, Fortune 500) aren’t so thrilled. Unlike the Taiwanese companies that are embracing netbooks, HP and Dell are frustrated with the low margins at the low end of the business, and are focused on creating clever designs and software that entice consumers to pay more – a strategy that Apple has successfully executed in the past.

“There’s no money to be made at $400,” one marketing executive said recently. “Consumers might be hungry for a deal, but these are not great machines.”

To the big-name brands, bare-bones Atom-based netbooks are a plague. They may be popular, but they are pushing industry heavyweights toward a price war, something they’ve worked hard to avoid for the last few years.

Silicon Valley executives privately talk about PC price wars as a race to the bottom, where companies vie to put out the cheapest, barely functional product while managing not to lose money. As one CEO described it: “It’s like a crap-eating contest. Who wins: the one who eats the most, or the one who eats the least?”

For now, the big names are trying to eat the least. Apple (AAPL, Fortune 500) is staying away from netbooks entirely; CEO Steve Jobs has said he’s unwilling to compromise quality to satisfy the bargain bin.

Todd Bradley, the chief of Hewlett-Packard’s PC division, has said he’s only interested in profitable growth; rather than push bare-bones netbooks, his team is trying to fast-track a premium model developed with input from designer Vivienne Tam.

Dell is selling its Inspiron Mini 9 netbook direct only, a venue that maximizes profits.

Will that work? The latest numbers released by research firm IDC show peronal-computer unit sales up but revenues down – a sign of the netbook effect. If that continues, PC makers will be tempted to bring bigger appetites to the crap-eating contest.

For a decade, consumers mostly ignored electronic book devices, which were often hard to use and offered few popular items to read. But this year, in part because of the popularity of Amazon.com’s wireless Kindle device, the e-book has started to take hold.

Although Amazon will not disclose sales figures, the Kindle has at least lived up to its name by creating broad interest in electronic books.

The $359 Kindle, which is slim, white and about the size of a trade paperback, was introduced a year ago. Although Amazon will not disclose sales figures, the Kindle has at least lived up to its name by creating broad interest in electronic books. Now it is out of stock and unavailable until February. Analysts credit Oprah Winfrey, who praised the Kindle on her talk show in October.

The shortage is providing an opening for Sony, which embarked on an intense publicity campaign for its Reader device during the gift-buying season. The stepped-up competition may represent a coming of age for the entire idea of reading longer texts on a portable digital device.

“The perception is that e-books have been around for 10 years and haven’t done anything,” said Steve Haber, president of Sony’s digital reading division. “But it’s happening now. This is really starting to take off.”

Sony’s efforts have been overshadowed by Amazon’s. But this month it began a promotional blitz in airports, train stations and bookstores, with the ambitious goal of personally demonstrating the Reader to two million people by the end of the year.

The company’s latest model, the Reader 700, is a $400 device with a light and a touch screen that allows users to annotate what they are reading. Mr. Haber said Sony’s sales had tripled this holiday season over last, in part because the device is now available in the Target, Borders and Sam’s Club chains. He said Sony had sold more than 300,000 devices since the debut of the original Reader in 2006.

It is difficult to quantify the success of the Kindle, since Amazon will not disclose how many it has sold and analysts’ estimates vary widely. Peter Hildick-Smith, president of the Codex Group, a book market research company, said he believed Amazon had sold as many as 260,000 units through the beginning of October, before Ms. Winfrey’s endorsement. Others say the number could be as high as a million.

Many Kindle buyers appear to be outside the usual gadget-hound demographic. Almost as many women as men are buying it, Mr. Hildick-Smith said, and the device is most popular among 55- to 64-year-olds.

So far, publishers like HarperCollins, Random House and Simon & Schuster say that sales of e-books for any device — including simple laptop downloads — constitute less than 1 percent of total book sales. But there are signs of momentum. The publishers say sales of e-books have tripled or quadrupled in the last year.

Amazon’s Kindle version of “The Story of Edgar Sawtelle ” by David Wroblewski, a best seller recommended by Ms. Winfrey’s book club, now represents 23 percent of total Amazon sales of the book, according to Brian Murray, chief executive of HarperCollins Publishers Worldwide.

Even authors who were once wary of selling their work in bits and bytes are coming around. After some initial hesitation, authors like Danielle Steel and John Grisham are soon expected to add their titles to the e-book catalog, their agents say.

“E-books will become the go-to-first format for an ever-expanding group of readers who are newly discovering how much they enjoy reading books on a screen,” said Markus Dohle, chief executive of Random House, the world’s largest publisher of e-books.

Nobody knows how much consumer habits will shift. Some of the most committed bibliophiles maintain an almost fetishistic devotion to the physical book. But the technology may have more appeal for particular kinds of people, like those who are the heaviest readers.

At Harlequin Enterprises, the Toronto-based publisher of bodice-ripping romances, Malle Vallik, director for digital content and interactivity, said she expected sales of digital versions of the company’s books someday to match or potentially outstrip sales in print.

Harlequin, which publishes 120 books a month, makes all of its new titles available digitally, and has even started publishing digital-only short stories that it sells for $2.99 each, including an erotica collection called Spice Briefs.

Perhaps the most overlooked boost to e-books this year — and a challenge to some of the standard thinking about them — came from Apple’s do-it-all gadget, the iPhone. Several software programs for reading e-books have been created for the device, and at least two of them, Stanza from LexCycle and the eReader from Fictionwise, have been downloaded more than 600,000 times.

Both of these companies say they are now tailoring their software for other kinds of smartphones, including BlackBerrys. Another company, Scroll Motion, announced this week that it would begin selling e-books for the iPhone from major publishers like Simon & Schuster and Penguin.

Publishers say these iPhone applications are already starting to generate nearly as many digital book sales as the Sony Reader, though they still trail sales of books in the Kindle format.

Meanwhile, the quest to build the perfect e-book reader continues. Amazon and Sony are expected to introduce new versions of their readers in 2009. Adherents expect the new Kindle will have a sleeker design and a better microprocessor, allowing snappier page-turning.

Mr. Haber of Sony said future versions of the Reader will have wireless capability, a feature that has helped make the Kindle so appealing. This means that the device does not have to be plugged into a computer to download books, newspapers and magazines.

Other competitors are on the way. Investors have put more than $200 million into Plastic Logic, a company in Mountain View, Calif., The company says that next year it will begin testing a flexible 8.5-by-11-inch reading device that is thinner and lighter than existing ones. Plastic Logic plans to begin selling it in 2010.

Along the same lines, Polymer Vision, based in the Netherlands, demonstrated a device the size of a BlackBerry that has a five-inch rolled-up screen that can be unfurled for reading. There are also less ambitious but cheaper readers on the market or expected soon, including the eSlick Reader from Foxit Software, arriving next month at an introductory price of $230.

E Ink, the company in Cambridge, Mass., that has developed the screen technology for many of these companies, says it is testing color screens and hopes to introduce them by 2010.

Many book lovers are quite happy with today’s devices. MaryAnne van Hengel, 51, a graphic designer in Croton-on-Hudson, N.Y., once railed against e-readers at a meeting of her book club. But she embraced the Kindle her husband gave her this fall shortly after Ms. Winfrey endorsed it.

Ms. Van Hengel now has several books on the device, including a Nora Roberts novel and Doris Kearns Goodwin’s “Team of Rivals.” She said the Kindle had spurred her to buy more books than she normally would in print.

“I may be shy bringing the Kindle to the book club because so many of the women were so against the technology, and I said I was too,” Ms. Van Hengel said. “And here I am in love with it.”

A large television screen operated by Focus Media broadcasts advertisements to passing traffic at a shopping mall in Beijing.

The deal, which was announced late Monday in Shanghai, pushes Sina, which controls Sina.com, into the business of outdoor and in-store advertising on liquid-crystal display monitors, diversifying an Internet giant that evolved as a kind of Chinese version of Yahoo, with news, blogs and online entertainment.

The deal also breaks up or substantially alters Focus Media, a company based in Shanghai that just over a year ago was one of China’s high-flying advertising companies, valued then at more than $7 billion, after a successful listing on Nasdaq a few years earlier.

Both companies are now struggling to deal with fierce competition in China and an advertising slowdown that is expected to accelerate further in 2009.

Shares of the two companies, both of which trade on Nasdaq, fell sharply on the news Monday, apparently over worries that Sina was paying a high price for the assets and that Focus Media was going to change its focus because of the sale.

Shares of Sina were down 17 percent, to $24.25, late Monday. And shares of Focus Media, which have fallen from about $60 a year ago, were down 16 percent in late trading Monday, to $9.20.

The companies said that the boards of both companies had already approved the asset sale and that no shareholder vote was necessary. Sina will issue about 47 million shares to Focus Media shareholders to acquire the assets.

According to the deal, Sina is expected to acquire most of the core holdings of Focus Media, including its out-of-home advertising networks, its LCD display network, and its in-store network, which together would amount to more than 100,000 advertising monitors around the country.

Those assets accounted for about 52 percent of Focus Media’s revenue and 73 percent of its profit through the first nine months of this year, the company said.

Focus Media, which is expected to have about $800 million in revenue this year, said it would retain its fast-growing online advertising assets, its movie advertising network, its commercial location networks and its traditional billboard business.

Sina, whose revenues are estimated to be close to $360 million this year, called the deal a merger of great properties.

“The transaction is intended to combine the forces of two of the most powerful new-media advertising platforms in China,” Charles Chao, Sina’s chief executive, said in a statement.

Executives at Sina and Focus Media are familiar with each other. Since 2005, Mr. Chao of Sina has served on the board of Focus Media, alongside that company’s founder and chairman, Jason Jiang.

While Sina.com competes fiercely against other strong Chinese Internet companies, like Baidu, Sohu and Tencent, analysts have considered Focus Media an innovative company because it has grown fast, essentially by acquiring competitors and placing monitors in stores, residential buildings and even on busy commercial streets in some of China’s biggest cities, including Shanghai.

The monitors recycle short television advertising spots produced by a wide variety of brands, including global companies like Nike and Apple.

Focus Media was founded in Shanghai by Mr. Jiang, who has been listed by Forbes for several years as one of China’s wealthiest entrepreneurs.

Christmas With Weezer, a music and tapping game.

Tap Tap Revenge, a free game that challenges players to keep up with catchy tunes by tapping in the right spots on the phone’s screen, was available in Apple’s iPhone application store when it opened in July.

It quickly climbed the store’s charts, and more than three million downloads later, Apple declared it the most popular free iPhone game of the year.

“We went to No. 1 in three days,” said Bart Decrem, co-founder and chief executive of Tapulous. “Within a week, artists reached out to have their music featured in the game.”

Many software companies have jumped on the iPhone bandwagon, seeing promise in the popularity of the phone and the demand for programs for sale or free download through the App Store. They include Smule, a start-up that created a program that turns iPhones into flutes; and giant game publishers like Electronic Arts, which recently released a version of its classic SimCity game for the iPhone.

Tapulous, based in Palo Alto, Calif., was founded in January after Mr. Decrem, a Belgian software executive, and his business partner, Andrew Lacy, came across an iPhone game called Tap Tap Revolution. They sought out its creator, Nate True, and brought him on board as a developer. (A third co-founder, Mike Lee, was forced out in August after the men disagreed over the company’s direction.)

For Mr. Decrem, who earlier helped create a social Web browser called Flock, the low cost and fast pace of making software for the iPhone made it feasible to create a company that focused exclusively on the device.

“It took two years and north of $5 million to bring Flock to market,” he said. “In this case, the longest you spend building an iPhone application is three months, and it takes four or five people. There’s less risk in terms of betting millions and years on something that might not work.”

To keep its game fresh the company created Tap Tap Thursdays, when it releases new music from artists like Michael Franti and the pop singer Katy Perry. Mr. Decrem said those songs regularly inspire a million game plays — and occasionally a lot of music sales, because players can click to buy the song through Apple. In October, Tap Tap Revenge players bought 50,000 copies of the featured track “Hot N Cold” by Ms. Perry.

The popularity of the game led Tapulous to begin introducing paid versions for $4.99 each, aimed at fans of specific artists or genres of music. In late October it released a Nine Inch Nails edition, followed by a holiday version called Christmas With Weezer, for which that band recorded some carols. Tapulous plans to release one of these each month, including a special edition featuring the Dave Matthews Band.

Tap Tap Revenge is patterned after games like Guitar Hero and Rock Band, which test players’ abilities to keep rhythm with popular songs. Those games have been hits on consoles like the Xbox 360, and strong sales of music through the games have given some hope to a beleaguered music industry. Harmonix, the creator of Rock Band, said last week that the game’s players had bought 30 million songs.

“The gravy train of the old days of having CD sales buffer you as an artist are gone,” said James L. McQuivey, a principal analyst specializing in media technology at Forrester Research. “Artists recognize that and are trying to be in more places at once.”

The British music label EMI, seeking a new source of revenue, collaborated with Tapulous on a version called Tap Tap Dance that includes tracks by Moby and Daft Punk.

“We absolutely feel these games could be the next big Rock Band or Guitar Hero,” said Cynthia Sexton, a vice president at EMI Music worldwide.

Ms. Sexton said she viewed the expansion into games and other outlets as a natural evolution of the music industry, though that revelation was not necessarily an easy one. “For a moment, we hid our heads in the sand and thought this was the end,” she said. “But it’s not. It’s really the beginning.”

Mr. Decrem said his company saw the opportunity in music sales. “We’re fortunate to be sitting at the intersection of a couple of powerful forces right now,” he said. “The iPhone is a device that is on fire, and artists are looking for ways to reinvent themselves.”

While he would not discuss specifics, Mr. Decrem said Tapulous was well on its way to being profitable, adding that the paid applications had brought in “hundreds of thousands of dollars” in sales so far. But most of the company’s revenue comes from advertisements that appear alongside the games. Artists who license their songs for use in Tapulous games receive a “good portion” of what is left of the games’ sale price after Apple takes a 30 percent fee, Mr. Decrem said.

The company recently raised $1 million from a group of investors that includes the early Google investors Rajeev Motwani and Andy Bechtolsheim, adding to an earlier $1.8 million raised from the same group.

Other companies have seized upon the growing popularity of the iPhone as a way to play games. Charles Golvin, a principal analyst at Forrester Research, said developers were releasing more games and entertainment applications than any other genre. The trick now for developers is distinguishing their wares from the thousands of applications already available.

Although Tapulous has developed programs that are not games — Twinkle, for example, is a way to use the messaging service Twitter on the iPhone — it is planning to focus exclusively on expanding its collection of tapping games for now.

Tap Tap Revenge recently drew the attention of Alex Rigopulos, the co-creator of Rock Band and Guitar Hero, who reportedly said that he would consider developing a music-themed application for the iPhone to compete with it.

Mr. Decrem said he is not concerned. “Music games are a hot genre, so naturally there will be competition in the space,” he said. “I’m quite confident that we’ll be able to hold our own.”

Subsea cables are often damaged by ships anchors and seismic activity

It is thought the FLAG FEA, SMW4, and SMW3 lines, near the Alexandria cable station in Egypt, have all been cut.

A fault was also reported on the GO submarine cable 130km off Sicily.

Experts warned that it may be days before the fault is fixed and said the knock on effect could have serious repercussions on regional economies. 

For this to happen twice in one year, on the same cable, is a serious cause for concern. (Jonathan Wrigt)

Jonathan Wright – director of wholesale products at Interoute which manages part of the optical fibre network – told the BBC that the effects of the break would be felt for many days.

“This will grind economies to a halt for a short space of time,” he said “If you look at, say, local financial markets who trade with European and US markets, the speed at which they get live data will be compromised.”

“If you think how quickly trades can be placed, if they are suffering from bad latency times, then by the time a trade is placed, the market may well have moved on.”

The cause of the break is as yet unknown, although some seismic activity was reported near Malta shortly before the cut was detected.

A second subsea cable to Malta is currently being laid

In a statement released in relation to one of the breaks, France Telecom said: “The causes of the cut, which is located in the Mediterranean between Sicily and Tunisia, on sections linking Sicily to Egypt, remain unclear.”

The French firm said it was sending a ship out to fix the line between Italy and Egypt, although it could take until 31 December to fully repair the line.

The main damage through is to the four submarine cables running across the Mediterranean and through the Suez Canal.

It is thought that 65% of traffic to India was down, while services to Singapore, Malaysia, Saudi Arabia, Egypt, Taiwan and Pakistan have also been severely affected.

Earlier this year, the same line was damaged in the same area – off the Egyptian coast – although only two lines were snapped then.

“We’ve lost three out of four lines. If the fourth cable breaks, we’re looking at a total blackout in the Middle East,” said Mr Wright.

“These three circuits account for 90% of the traffic and we’re going to see more international phone calls dropping and a huge degradation in the quality of local internet,” he added.

“Normally you would expect to see one major break per cable per year. With four you should have an insurance policy. For this to happen twice in one year, on the same cable, is a serious cause for concern.”

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