Computer Services Industry

While Wall Street was melting down this week, a bunch of friends went on vacation to the Mediterranean island of Cyprus. They enjoyed the sunshine, dined together and uploaded photos and videos, including one of themselves lip-syncing to Journey's "Don't Stop Believing." The group reportedly included several young Turks from the Web 2.0 crowd -- such as Brittany Bohnet of Google, Dave Morin and Aaron Sittig of Facebook and Sam Lessin of Drop.

The U.S. semiconductor industry appears to have worked through an inventory glut that had hurt fourth-quarter earnings and sent shares tumbling. Analysts said they expected shares of companies that make microchips to rise in the coming months as orders increased from customers that were using up inventory in the fourth quarter.

Intel Corp. plans to spend $1 billion to $1.5 billion to overhaul its semiconductor production facility in New Mexico to manufacture computer chips with next-generation technology. The Rio Rancho factory is expected to begin producing 45-nanometer chips -- meaning they will have features as tiny as 45-billionths of a meter -- in the second half of 2008, Intel said Monday. The transistors on such chips are so small that more than 30 million can fit onto the head of a pin.

Search giant Google Inc. put its own twist on the budding online video market Friday, unveiling an Internet bazaar that allows movie studios, TV networks and any amateur with a camera to sell their wares. The Google Video Store, launching with 5,000 titles, is the first major challenge to the early lead that Apple Computer Inc. has in the emerging market for online video.

The bits that make up our digital lives are increasingly spread over a growing number of gadgets, such as cellphones that snap pictures, hand-held computers that play music and a growing number of PCs that do all the above and more. But amid all this connectedness, something has been left out: a seamless way for all the gadgets and all the computers to stay current with all the information captured, created and edited on other devices.

Instant messaging is one of the simple pleasures of the Internet. You just type and send, and your online buddy has your message in an instant. But now, many of the major instant-messaging services are making things more complicated by piling on audio and video chats, games, photo sharing, animated greetings, Internet radio channels and more. Also, some of the latest messaging programs include advertising.

Google Inc. is switching its servers to run on Advanced Micro Devices Inc. chips instead of those made by Intel Corp., according to a Morgan Stanley report. Google, which has more than 200,000 servers, has started to buy Advanced Micro's Opteron processors with almost all new purchases, Morgan Stanley analyst Mark Edelstone said. He raised his earnings estimates for Sunnyvale, Calif.-based Advanced Micro.

U.S. authorities said Wednesday that they had filed a lawsuit against five online companies, including one in California, alleging they had illegally sold confidential phone records. The Federal Trade Commission said it was asking a court to bar the sale of the phone records and force the companies to give up the money they made with their operations. "Trafficking in consumers' confidential telephone records is outrageous," FTC consumer protection chief Lydia Parnes said in a statement.

Chip maker Intel Corp. said Monday that its researchers, along with UC Santa Barbara, had built the world's first electronically powered hybrid silicon laser using standard silicon manufacturing processes. This development, the company said, addresses "one of the last major barriers" to making cheaper, high-bandwidth silicon devices to use with computers and data centers.

Shares of Red Hat Inc., the world's biggest distributor of Linux computer software, took their largest fall in seven years after Oracle Corp. said it would begin offering competing services at a lower price. The stock tumbled 24%, the biggest drop since the company went public in August 1999, on concerns that Oracle's decision to undercut Red Hat prices on support services for the Linux operating system would slice into sales and profit.