XBiz News: 06-19-03

Stephen Yagielowicz

Welcome to the first installment of XBiz' weekly news wrap up, focusing on the issues and events that shape our industry and determine the opportunities, perils, and past-times you need to be aware of...

OECD Fights Fraud
From CNet's "" comes an article on how the "New OECD guidelines target spam, fraud" by suggesting steps that governments can take to protect consumers from international fraud. Based in Paris, the OECD or Organisation for Economic Co-operation and Development, is comprised of 30 countries, including the United States, Japan, Germany and Great Britain.

While not principally aimed at fighting 'spam' per-se, the OECD guidelines focus on using modern technology, including the sharing of online databases and other tools, to combat fraud and deceptive marketing practices in a more timely fashion.

The need for such measures has been brought about by the explosive growth in international fraud, fueled by the Internet, as well as more traditional mass-market mechanisms. The US Federal Trade Commission (FTC) is urging widespread adoption of the OECD guidelines, identifying spam and the World Wide Web as the main sources of fraudulent marketing world-wide, and seeking wide-ranging powers to fight unsolicited commercial e-mail.

According to FTC Commissioner Mozelle W. Thompson, chair of the OECD's consumer policy committee, "Cross-border fraud, perpetrated through telemarketing, Web sites and spam, harms consumers and consumer confidence in the global marketplace... The OECD guidelines reflect an international commitment by consumer protection law enforcement agencies to work together to combat these schemes."

Sex On Your Phone
Stating that "Pornography is the handmaiden of new technology" and "Sex, it seems, is synonymous with new gadgets" The "BBC News" asks the question: "Will porn kick-start the video phone revolution?"

So-called "video phones" or third-generation (3G) mobile phones are now entering the marketplace and many observers assume that porn will be responsible for the new technology's initial growth, especially given the fact some analysts predict that 3G service licensees will be among the first to promote the phone's use as a venue for erotica in hopes that fast profits will help offset the tremendous investment required to bring these systems to market.

David Jarvis, wireless manager for the Private Media Group opined that 3G "Operators want to do porn but do not want to be associated with it - they want the cash and the moral high ground" and that "Erotica lowers your risk because you know it is going to sell" - powerful incentives for mainstream media companies looking to hedge an uncertain technological gamble.

Others are not so certain of porn's effect on the profitability or adoption of 3G services. Philip Taylor, senior analyst at Strategy Analytics, believes that "Given the huge amount of free porn on the internet, I don't believe that wireless porn will prove that compelling." He may be right, since pornographic powerhouses Penthouse and Playboy have only struck basic licensing deals with mobile phone firms, and will likely focus on "3G as a marketing channel to drive consumers to magazines, videos and the net" rather than as the end-point in an adult content delivery system.

The bottom line seems to be that 3G operators will welcome incidental profits from their subscriber's sharing of erotica without becoming involved in the supply of such materials.

The Right to Copy
From Reuters comes the headline "U.S. senator prepares digital-copyright bill" detailing the struggle of Kansas Republican Sen. Sam Brownback to sponsor a bill limiting digital copy-protection efforts, regulating the means by which movie studios and recording companies attempt to prevent unauthorized copying of their products, while making it more difficult to identify peer-to-peer file traders who exchange copyrighted music and videos online, reversing a recent court ruling which required ISPs to reveal customer names and other information when asked to do so by investigators.

This new bill would also require all copy-protected media to be clearly labeled as such, while providing a clause allowing consumers to sell or donate copy-protected media provided they destroy their own copy. As widely expected, the Recording Industry Association of America (RIAA), is already opposing the bill.

Anti-Porn Furniture
From "The Capital Online" out of Annapolis, Maryland, comes the headline "Library hopes new desks keep porn from minors" – bringing to the forefront the issue of how America’s public libraries are striving to cope with their patron’s access of adult materials on the Internet.

While many taxpayers are opposed to public funding of access to pornography – frequently citing the often overblown dangers of child porn and of children being inadvertently exposed to harmful materials – most librarians have resisted the use of heavy-handed filtering software, both on the grounds that it will block a patron’s legal access to adult materials, as well as block access to benign sites.

As a compromise measure, several libraries are now installing special desks with recessed monitor openings, and privacy screens, which virtually eliminate the chance of a passing child to be accidentally exposed to any potentially harmful materials. While these measures will not eliminate the possibility of children viewing porn in our public libraries, they will dramatically reduce the amount of unintentional viewings.

Yahoo! I've Got A Date!
From England’s "Media Guardian" comes the headline "Yahoo! moves into internet dating" The article states that "Internet giant Yahoo! is making its first European foray into paid-for services with an online dating service it hopes will compensate for falling advertising revenues." and that "Online dating is one of the few profitable areas for dot-coms, which have realized single people are willing to pay up to £20 a month to search for partners on the internet."

"Once Yahoo! starts charging, posting details on the site and searching other people's photos and profiles will be free but users will have to pay to contact prospective dates. The service will launch first in the UK, France and Germany and there are plans to expand it to other European countries."

This new move is part of Yahoo! chief executive Terry Semel’s plan to develop a "direct billing relationship" with at least 10 million of Yahoo!'s 218 million world-wide users.

Another Victory for
This week’s final news story, Sex.Com Close to Resolving Domain Dispute, comes from our friends at "The Web Host Industry Review" and involves the latest step in the ongoing legal battle over the Sex.Com domain name – considered to be the most valuable of all domain names – and the recent U.S. Supreme Court decision denying the appeal made by Stephen Michael Cohen, the man who hijacked the domain name from it’s rightful owner, Gary Kremen.

Cohen, who in 1995 sent a forged letter to VeriSign, formerly Network Solutions, requesting the fraudulent transfer of the Sex.Com domain name, was ordered to pay a $65 million judgment for stealing the name – after which he fled the country. Since then, Cohen has made repeated unsuccessful attempts at appealing the judgment against him, both in the Ninth Circuit, as well as in the Supreme Court.

Sex.Com has also filed a lawsuit against VeriSign for taking the domain name away from Kremen and is still awaiting a decision.

I hope that you found this news wrap up useful – stay tuned for next week's issue! ~ Stephen