The top 10 news stories of 2006

Megadeals signalled realignment in the IT industry and foreshadowed the Internet's multimedia future. A much-delayed Vista debuted amid speculation that it would be the last of the old-school, big-bang product launches. As software giants announced support for Linux, and manufacturers switched chip allegiances, the open-source and chip industries were thrown into turmoil. 2006 was a transition year, as IT giants positioned themselves for a new era of global competition in the post-PC era. Here, not necessarily in order of importance, are the IDG News Service's top 10 news stories of the year:

HP spy scandal: Board, and broad, implications

A board feud at HP hit the newspapers in September, leading to the resignation of chairman, Patricia Dunn. The board spat erupted over an investigation to see which board members leaked information -- including arguments about the ouster of former CEO, Carly Fiorina -- to the press. The company used "pretexting", where investigators pretend to be the people being investigated in order to access private information. Criminal charges were filed against Dunn, legal counsel, Kevin Hunsaker, and outside investigators. Users are unfazed: Under CEO and newly appointed chairman, Mark Hurd, HP has overtaken Dell as the leading PC maker and IBM as the biggest IT company in revenue terms. However, the scandal has broad implications. Congress may make pretexting a federal crime. Oversight of corporate governance is a rallying cry.

Microsoft cuts a deal with Novell: Embrace and devour?

Microsoft's November deal with Linux distributor, Novell, created turmoil in the open-source world. Microsoft will offer sales and support for Novell's Suse Linux, work on interoperability and indemnify Suse users and developers from potential Microsoft lawsuits against copyright infringement. Industry insiders say that Microsoft is driving wedges into the open-source community, protecting only some users from legal reprisals. The open-source world had already been rocked in October, when Oracle's move to offer full support for Red Hat Linux had industry insiders worrying Red Hat's business model would suffer. Ultimately though, the software giants' embrace of Linux is a sign that nobody can ignore open source. Microsoft CEO, Steve Ballmer, said the impetus for the agreement came from customers. Though that's an old line, there's no doubt that open source has truly come of age.

Alcatel-Lucent: M&A mania grows

The merger of Alcatel and Lucent Technologies, announced in April, formed a $US24 billion networking giant and signalled trends in global mergers and acquisitions. The hookup was necessary to face down competition in growth areas of the mature enterprise market -- such as VoIP -- while Chinese manufacturers put pressure on the West on the low-end. 2006 is expected to yield 3945 M&A deals, up from 3455 in 2005 and the highest number ever, according to investment firm Innovation Advisors. Globalisation and changing demand are fueling M&A in networking, the Internet, the chip industry and enterprise software. 2006 examples include AMD and ATI Technologies, Cisco Systems and Scientific-Atlanta, Red Hat and JBoss, and EMC and RSA Security.

Google-YouTube: Convergence 2.0

Google's ability to afford the $US1.65 billion price tag for its acquisition of YouTube, announced in October, underscored its status as the Internet's superstar revenue generator. The deal itself confirmed video's importance in the evolution of Web 2.0: the mashing together of user-generated content and multimedia applications. "Anybody who wasn't interested in YouTube was either asleep or not being honest," said Jonathan Miller, who was deposed as AOL chairman after the Google-YouTube deal. Competitors scrambled. Lycos launched a movie-streaming service mixing elements of social networking and online video. Movie studios and TV networks rushed to put video online. Legal issues between Internet sites and content producers need to be worked out but one thing is for sure: convergence of video and the Net has hit prime time.

AOL search data release fans privacy debate

AOL's July release of search log data on 658,000 subscribers, meant for research use, became a cause celebre in the privacy-rights debate. Coming amid reports of corporate data leaks and phishing scams, it was yet another reminder of the general insecurity of data. The AOL records contained sensitive information like Social Security numbers. In September, three people sued the company in what their lawyers claimed was the first such lawsuit seeking national class-action status. They asked the court to instruct AOL not to store users' Web search records. But the request is not likely to be granted. Law enforcement officials want service providers to retain user logs to aid investigations, and new data retention rules may be proposed. The ability of technology to store an ever-increasing amount of data will ensure continuing debate. Jurisdictional issues also come into play as the US and Europe clash over different privacy standards.