THE BROWSER: Truth and rumors from the tech world
Apple drops iPod chip supplier
PortalPlayer will no longer outfit the iPod Nano with processors. Plus: Google starts charging search-ad managers.
By Owen Thomas, Business 2.0 Magazine online editor and Oliver Ryan, Fortune reporter

SAN FRANCISCO (Business 2.0 Magazine) - PortalPlayer built its business supplying chips for Apple's iPod -- but now, Apple has informed PortalPlayer that its newest chip isn't going into new models of the iPod Nano. Shares plummeted 42 percent on Thursday and continued to drop Friday morning.

Venture capitalist Paul Kedrosky notes that PortalPlayer (Research) currently gets 90 percent of its sales from Apple's music players. His comment: "Live by the iPod, die by the iPod." What caused the breach? Apple (Research) wouldn't say, and PortalPlayer executives said they didn't know why Apple dropped the new chip. Two possible reasons suggested on blogs: a six-week delay in the introduction of the new chip, or PortalPlayer's attempts to diversify by supplying chips for Microsoft gear.

AOL to launch MySpace killer
The online service wants to turn its instant-message software into a social-networking website. Plus: Is Microsoft hiding security flaws? (more)

Google starts charging search-ad managers

You'd think Google (Research) would be happy with its online-advertising business, which grew 79 percent last year by charging advertisers when users click on an ad. But starting in July, Google will add a new revenue stream: It will charge advertisers and agencies a small fee every time they place or change bids on ads using automated software tools that hook directly into Google's servers. (Advertisers who log into Google's Web site to place bids won't be charged the new fee.)

"Bid management firms will be dramatically impacted by the change," says Adotas, an online-advertising news site. For companies like aQuantive (Research) and Efficient Frontier, which manage real-time campaigns involving millions of keywords every day, the charges could rapidly add up. For now, Google says its change is meant to "level the playing field" for advertisers and to prompt "developers to design more efficient applications." It may well boost revenues, too.

Claim: Skype calls hard to detect

Networking expert Art Reisman says that it's nearly impossible to block Skype calls. While most VOIP connections follow a standard set-up protocol that's easy to detect, Skype (which was acquired by eBay (Research) for $2.6 billion in 2005) uses a decentralized, nonstandard method of connecting callers that's indistinguishable from other network traffic like an MP3 download. Reisman, the chief technology officer at APConnections, which makes hardware that blocks or slows undesirable data traffic on a network, can't tell whether the stealthy method is intentional, or just an effect of Skype's use of peer-to-peer technology.

However, telecom blogger Aswath Rao points out that a Chinese company has been using a product that claims to block Skype traffic since November.

Hating movies, the French way

The French arguably lead the world in the art of criticism. And so it is perhaps not a surprise to learn from the Alarm:Clock blog that Criteo, a French Internet startup, has raised 3 million euros in venture capital to bring its online DVD recommendation service to market.

Using "predictive algorithms," Criteo differentiates itself in part by giving more "weight to negative choices." How French. Founded by ex-Microsoft employees and a veteran of Philips and Lucent, the service is billed as an improvement on's vaunted recommendation engine. Watch out, Jeff Bezos: nobody does criticism better than an angry Frenchman who's just watched Hollywood's remake of "Les Liaisons Dangereuses." Top of page

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