Business technology news roundup, April 15

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Controversy was a predominant theme in the business tech sector this week, with several legal battles developing alongside the end of an era for Flip - one the industry’s biggest names.

Controversy was a predominant theme in the business tech sector this week, with several legal battles developing alongside the end of an era for Flip – one the industry’s biggest names.

Cisco on Tuesday announced that it is essentially retreating on the consumer front, apparently focusing solely on its enterprise services. In a statement titled Cisco Restructures Consumer Business, the Silicon Valley staple essentially declared it is killing its Flip line of hand-held digital video recorders, which was the focus of a major consumer-targeted marketing approach earlier this year. The move, which comes two weeks after Cisco acquired enterprise cloud service provider newScale, also involves the termination of 500 employees at the company.

Three days after the announcement, the online business tech community continues to discuss the term “Cisco Flip” frequently, according to Google Realtime results.

While Cisco struggles with internal issues, one of its competitors was making waves on an industry-wide basis. On Monday, Microsoft made bold claims that Google lied about federal approval for its Google Apps for Government suite.

In a blog post, David Howard, Microsoft corporate vice president and deputy general counsel, claimed that he uncovered court documents proving the U.S. Department of Justice has refuted Google’s claims that its government application suite was approved for certification under the Federal Information Security Management Act, otherwise known as FISMA.

Google fired back strongly, with its own blog post that called Microsoft’s accusations “breathless.” Eran Feigenbaum, director of security for Google’s enterprise division, bluntly declared that “these allegations are false,” claiming that the Google Apps Premier Edition suite was given FISMA authorization in July 2010. This is significant because, according to Feigenbaum, “Google Apps for Government is the same technology platform as Google Apps Premier Edition, not a separate system,” and, as such, meets FISMA standards just the same. The only difference between the two is that Google Apps for Government has two additional security features, Feigenbaum said.

The latest debate between Google and Microsoft remains a hot topic in the industry, with a search for “Microsoft Google FISMA” returning 235 results on Google News, four days after the allegations were first made.

This week’s business tech controversy extended beyond Google and Microsoft. Social networking giant Facebook got some closure on its long-running lawsuit with Tyler and Cameron Winklevoss. The case was thrust into the spotlight after a book and movie – Ben Mezrich’s The Accidental Billionaires and David Fincher’s The Social Network, respectively – brought the allegations into national consciousness.

After years of legal battles, the Winklevoss twins’ attempt at appealing the 2008 settlement agreement for $20 million and partial ownership of Facebook was rejected this week. The Winklevosses have long claimed their former Harvard classmate and current CEO of Facebook, Mark Zuckerberg, stole their idea for the site. Their appeal sought a larger settlement under the basis that Zuckerberg withheld information when valuing the site at the time of the settlement. The award granted to the Winklevosses in 2008 is now valued at nearly $160 million.

The controversy didn’t stop there for Zuckerberg. Another lawsuit involving the launch of Facebook was updated this week, this time by another former Harvard classmate named Paul Ceglia. Ceglia added emails Zuckerberg allegedly sent to him at the time of the site’s launch to his lawsuit, which claims that he should rightfully own half of the company. The emails, some of which were obtained by the Business Insider, show Zuckerberg requesting funding from Ceglia to get the site off the ground, then later asking him to sign a waiver that exempted him from any ownership claims. The emails also reference the project the Winklevoss twins were working on at the time.

Meanwhile, the federal government maintained its focus on the business tech industry while it teetered on the edge of a shutdown. First, the Federal Communications Commission began its review of AT&T’s $39 billion acquisition of T-Mobile, which could have wide implications for the mobile sector.

Then, two pieces of legislation emerged that are likely to impact ecommerce. A Data Privacy Law proposed by bi-partisan Senators John Kerry and John McCain has gained support from Intel, Microsoft and eBay. Another upcoming law could impose sales tax on products sold over the internet, based on the state in which they are purchased. Illinois Senator Dick Durbin is working on legislation to force ecommerce companies, such as Amazon, to pay sales tax on items sold in the state, a move that could reverberate on a national level soon.

Looking ahead, keep your ears open as these issues develop further and the online conversation get louder.

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Colin NeagleColin Neagle is a former editor of Brafton's Business Technology section. He studied journalism, writing and mass communications in college, and has experience writing business news for a number of newspapers and online publications.
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