Issue: "Reaping the whirlwind," July 20, 2002

Man knows not his time

Gene Kan pioneered a file-sharing system considered a step beyond Napster. So why did such a talented guy kill himself? Authorities found the 25-year-old programmer dead at his home near San Francisco; they reported an apparently self-inflicted gunshot wound. Techies mourned him as a genius whose work helped take Internet technology beyond the dot-com crash. "Gene was really good at communicating the technical merits of the peer-to-peer approach," said tech author Cory Doctorow, referring to the system of user-to-user Internet file sharing that eliminates the need for a central computer server. He had noticed that Mr. Kan seemed depressed recently and described him as "dour." Mr. Kan's discovery was called the Gnutella protocol. When Napster was shut down by the courts, Gnutella became a hot commodity-and he was its unofficial spokesman. Since Gnutella was completely decentralized, no one controlled the network. Therefore, no single lawsuit could shut everything down. "There is no head to the Gnutella dragon," Mr. Kan said in 2000. The developer admitted that illegal files circulate on the network, but brushed the issue aside: "How users make use of it, I hate to say it's not our problem, but it really isn't." With his unexplained death, he may be remembered more for his suicide than his technology. -Chris Stamper

But you can't hide

AT&T Wireless now offers a service that lets users find the location of other people with cell phones. This new "Find Friends" feature is the first to be launched, following years of industry hype. Other carriers plan to follow suit. "Find Friends" works something like the way Buddy Lists work on America Online. Users can control their availability: They can make themselves unfindable for a certain period of time or simply turn the phone off for privacy. If both parties agree to exchange locations, it would appear as the intersection of streets closest to the nearest cellular tower. John Zeglis, CEO of AT&T Wireless, explained the system as one that protects privacy while still letting friends and family connect: "My own family is scattered around the country, and it's a comfort for me to know that I can click on a few buttons, see on my phone screen where everyone is, and communicate with them quickly and easily via a phone call or a text message." AT&T Wireless' service is only available in 18 markets right now. It will expand as other areas are upgraded. Eventually, such services are expected to become universal. Location finding is sure to raise some privacy issues, especially as critics fear the potential of stalking, snooping, and harassment. Now that the service is becoming public, we will soon see how people will react to using their cell phones as homing beacons. -Chris Stamper

eBay makes its own trade

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EBay is becoming an empire. The auction giant is about to absorb Internet payment processor PayPal. In dot-com era days, this would be just another merger. In today's climate, though, the $1.3 billion stock deal shows that the combined company may be one of the great Internet survivors. Lots of eBay users already use PayPal because they can easily send and receive money. PayPal acts as an online broker that allows people to move money from one person's bank or credit-card account into another. By making the acquisition, eBay can streamline its own site and can dominate another area of e-commerce. Right now, about 60 percent of PayPal's business comes from eBay users. PayPal boasts that it processed $3.5 billion in online payments last year. This marriage shows something important about e-commerce: While numerous startups are dead and buried, an even bigger stream of small businessmen uses the Internet successfully. An entire industry of entrepreneurs uses sites like eBay and its sister, Half.com, to sell goods from collectibles to machine tools. The online auction site already owns a similar service called Billpoint, which never caught on. PayPal had a critical mass of users, and many said the service was easier to use. The transaction service was also one of the few hot IPOs in recent months on the stock market. Down the road, PayPal will retain its own identity, but Billpoint will be phased out. The merger may also help reduce the online gambling business. Right now, nearly 8 percent of PayPal's business comes from betting. Meg Whitman, eBay CEO, said this would be shut down, out of concern over legal ramifications. -Chris Stamper


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