In 2006, geek culture went mainstream, for better or for worse.
Video-game consoles became front-page news, Internet video clips affected politics and big business, millions of people joined social-networking sites and bought flat-screen TVs — and everyone feared hackers and online identity thieves.
Still, a few things didn't take off as had been expected. High-definition DVD players failed to excite consumers, biometric ID systems creeped them out and, once again, Apple's Macintosh computers failed to take over the world — even as iPods continued to rule it.
• Click here for FOXNews.com's Year in Review Content Center.
Here are the top half-dozen or so tech issues of the year:
SOMEBODY'S WATCHING ME:
Cybersecurity was never far from the headlines, as the warm and fuzzy One Laptop Per Child initiative was overshadowed by the One Laptop Lost Per Week by corporations, universities and government agencies.
The list of butterfingered organizations included the Veterans Administration, Hotels.com, Ameriprise Financial, Equifax, the Agriculture Department, the District of Columbia, the Department of Transportation, the University of Minnesota and Boeing.
Top prize went to the Commerce Department, which lost track of no fewer than 1,137 notebook computers over five years. Still, despite the millions of Social Security numbers and other sensitive personal data thus exposed to possible criminals, not one instance of resultant identity theft was reported. Yet.
As happens every year, major security holes were found in systems and applications, including the ubiquitous Wi-Fi wireless networking protocol, a top-ranked PC security program and, last but not least, Microsoft's brand-new Windows Vista operating system — surprising no one except the programmers who'd written the software.
From the other side, cybercriminals and spammers stayed one step ahead of the law, exploiting social-networking sites, crafting viruses that encrypted a victim's data and held it for ransom, and devising image-based spam e-mail that got around text-based filters, resulting in a huge spike in spam in the final quarter of the year.
Radio-frequency identification chips found their way into credit cards and passports, even as evidence of security weaknesses mounted. Their more organic cousins, biometric identification systems, met resistance from shoppers who didn't find it prudent to give their fingerprints to supermarket cashiers.
Most troubling to many readers were stories involving e-mail — America Online had to back down from a plan to charge fees to mass e-mailers, even though it wouldn't have affected the average user. And many were taken aback by new federal regulations that required large companies to retain all employee e-mail — even though many of them already did so on their own.
There was also some grim humor. The massive AOL user-data breach provided a fascinating look into what people searched for — "how to kill your wife," for example — and was a bonanza to Internet researchers who'd never before had access to such data.
Topping the irony list was the tale of a popular virus-scanning application that went amok, flagging hundreds of innocuous pieces of software, including Microsoft Excel, Adobe Flash Player and Google Toolbar, as malware — and in many cases deleting them.
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I THOUGHT OF IT FIRST:
Patent lawsuits made some people very rich in 2006. Leading the list was a small firm called NTP, whose only product was massive litigation against companies that use wireless e-mail.
Thanks in part to vague patent law that granted its deceased founder a monopoly on the concept, NTP forced Research In Motion, maker of the ubiquitous BlackBerry devices, to settle for $612.5 million in March.
By November, NTP's lawyers, having already bankrolled the college educations of their great-grandchildren, had turned their sights toward personal-digital-assistant pioneer and smartphone maker Palm.
Digital-video-recording innovator TiVo had a somewhat stronger case against EchoStar, operator of the DISH satellite-television network; the court agreed that EchoStar had hired TiVo to develop a DVR, then fired TiVo and built the device anyway. TiVo won a $74 million judgment.
In other fun patent-litigation news, Apple settled a lawsuit brought by Singapore-based Creative Labs regarding the iPod navigation menu for $100 million, Japan's Pioneer sued two of South Korea's Samsung companies over plasma-TV patents and IBM sued Amazon over Web site data-retention patents — prompting Amazon to sue right back on similar grounds.
The Supreme Court got into the act, giving eBay the green light in May to continue doing business while a patent-infringement lawsuit filed by a smaller company over the "buy it now" option wound its way through lower courts.
Still, the real news was pushed ahead to 2007. In November of this year, the Supreme Court heard arguments in a case — between two truck-part makers over an adjustable brake pedal — that generated some surprising friend-of-the-court briefs. Microsoft, Intel and Cisco filed on behalf of the defendant, while Old Economy stalwarts General Electric, Johnson and Johnson and DuPont lined up behind the plaintiff.
A ruling, expected early next year, in favor of the defendant could redefine what constitutes a patent, and put "patent trolls," who garnered considerable attention in 2006, out of business for good.
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THIS COMPUTER WILL SELF-DESTRUCT IN FIVE SECONDS:
It all began in June with a terrifying photo of an exploding Dell laptop on an obscure blog. Then more reports started coming in of excessive heat, sparks, flames coming out of Dell notebook computers. Dell admitted it had a problem and issued a recall, but the real blame lay with Sony, which had made millions of defective lithium-ion batteries that could short-circuit in rare instances.
With that news, the list of tech companies issuing battery recalls in August and September became a Who's Who of the laptop business — Apple, IBM and its successor Lenovo, Sharp, Fujitsu, Toshiba, Hitachi and, of course, Sony itself. In the meantime, more stories came in — about a truck that had exploded due to a sparky laptop, a near-fire on an airliner after a notebook started smoldering, a man's hand being burned as he was showing a technician where to install the replacement battery.
By the end of it all, Sony, which was already having a rough year thanks to manufacturing problems with its Blu-ray Disc players and PlayStation 3 video-game consoles, was looking at a hit of about half a billion dollars due to the recall of nearly 10 million batteries, although it resolved to stay in the business.
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Americans bought up millions of flat-panel, high-definition digital television sets as prices finally fell through the $1,000 ceiling in 2006. LCD screens, once seen as the inferior option, gained on plasmas, gigantic DLP sets found homes with sports nuts and old-fashioned cathode-ray tubes, alas, began to disappear from retailers' shelves for good.
Yet few of those high-def TV buyers saw any need to upgrade to a high-definition DVD player as well. The possibly suicidal format war between Sony's Blu-ray Disc and Toshiba's HD DVD, which both debuted living-room players priced between $500 and $1,000, didn't help; it pretty much guarantees that some early adopters' new toys will be reduced to very expensive digital clocks.
Executives and marketers on both sides of the issue might have been avoiding the obvious: Many consumers seemed happy with their regular old DVD players, especially when mid-range "upconverting" models could generate decent high-definition pictures for a fraction of the price of an HD DVD or Blu-ray machine.
At first glance, 2006 was a very good year for Apple. Its iPods continued to dominate the portable-music-player market, the addition of movies to its iTunes Store instantly pushed Apple ahead of long-established sites such as Movielink and CinemaNow, the store sold its billionth iTune and Apple's stock surged on stellar profit reports.
French parliamentary legislation that would have forced iPods to play songs from other music stores was defanged, and Apple's own investigation into reports that its music players were made in Chinese sweatshops found nothing.
Microsoft finally launched its own Zune media player, but it seemed to have little effect on iPod sales, at least in the short term. Apple even beat the Beatles in a British court over the "Apple" name.
The conversion of Apple's Macintosh personal-computer line from PowerPC to Intel chips was completed, and as first geeks, then Apple itself, enabled Windows installation, users found that the consistently well-made Macs could hold their own, performance-wise, against long-established "Wintel" machines.
Disney bought Steve Jobs' other company, Pixar, making him beyond rich and landing him a seat on the Disney board of directors. Rumors of an Apple-branded cell phone mounted, with most of the money betting on a January 2007 launch. And on Christmas Day 2006, so many new iPod owners tried to purchase songs, TV shows and movies from the iTunes Store that the servers nearly crashed.
Yet there were signs of trouble ahead. Sales of "Mactel" machines increased Apple's share of the PC market — but only from 2 percent to 3 percent — as the hoped-for corporate re-adoption of Macintoshes failed to materialize. A report late in the year said that iTunes music sales had actually plummeted in the first half of 2006.
More ominous was a steadily widening stock-options scandal which threatened Apple's very future. Federal regulators found that Apple, along with dozens of other companies, had "backdated" stock options, jiggering the "buy-in" dates so that executives — including Steve Jobs — could maximize their potential selling profits.
Apple's own internal probe laid the blame at the feet of two former executives, and said Jobs, widely seen as having saved the company from mediocrity and oblivion, was blameless. But just after Christmas, reports came that relevant documents had been forged, that the full Apple board had not been notified of Jobs' options grant, and that Jobs had hired his own legal team. Shares tumbled as investors worried if Jobs' days at the helm were numbered, and who, if anyone, could replace him.
IT'S ALL ABOUT US:
Pity poor Friendster. The social-networking pioneer first went online in 2002 and quickly became the leader in its field, with millions of people, most young adults in the happy interlude between college and marriage, signing up and, frankly, hooking up.
But Friendster could never expand its core demographic beyond the post-collegiate crowd, which left open to rivals two groups with even more time on their hands: actual college students and teenagers.
The first group was snapped up by Facebook.com, which was basically a private Friendster for large organizations. Founded by Harvard undergrads in early 2004, it quickly spread to most other colleges in North America and parts of Europe.
Large companies and institutions launched their own Facebook areas, and in late 2006, the site was thrown open to all users, regardless of affiliation, even as talks of acquisition by Yahoo fell through and it recovered from a public-relations stumble over user privacy.
All that, though, was nothing compared to the media and social juggernaut that was MySpace.com. Drawing from a seemingly endless reserve of hypertalkative teenagers, and allowing them, unlike Friendster, to design their own pages (usually badly) and upload music, photos and video clips, the site's membership skyrocketed, with the 100 millionth account created in August.
And it was everywhere. Parents fretted that their kids spent too much time on the site. Police worried that sexual predators were using it to target teens, prompting MySpace's parent company to hire a cybersafety guru. Hackers tried to extort money from it. Young men planned rumbles on it. The Marines used it to attract new recruits. Young women of questionable judgment fell in love, released recorded music, became stars. A college student used it to threaten to kill his professor's dog .
By the end of the year, MySpace was beating Yahoo's panoply of sites in Web traffic, and News Corporation's decision to pay $580 million for it the year before, widely derided as a waste of money, no longer seemed like a mistake.
2006 was the year in which video games went mainstream — and video-game fans went nuts.
Spurred by massive shortages on the Nov. 17 launch date of the long-delayed, super-powered and super-expensive Sony PlayStation 3, gameboys lined up for days outside Best Buys and Circuit Citys across America. Muggers saw easy targets, and one fan was shot and wounded in Connecticut.
A few weeks later, an alleged PlayStation theft led South Carolina sheriff's deputies to the apartment of a local college student, who made the mistake of having a controller in hand as the officers kicked down his door. He was promptly shot dead. The deputies were themselves arrested, and their colleagues began a raffle for their legal defense featuring — of course — a PlayStation 3 as the grand prize.
There was another console that launched around the same time — the small, low-powered Wii offered by third-place Nintendo. Its fans camped out too, but possibly owing to Nintendo's family-friendly image, no one was shot and the biggest dork was first in line.
The Wii's claim to fame was its innovative motion-sensitive wireless controller, which users swung like a bat, sword or tennis racket. Players and parents loved the idea, and the Wii sold out every day through the end of the year, even as reports of "Wiinjuries" mounted due to flung controllers and sore elbows and Nintendo sent out sturdier controller wrist straps to the first set of buyers.
Chronic shortages of the new consoles ironically meant even greater sales for two older machines, Sony's PlayStation 2 — still the top seller — and Microsoft's Xbox 360, the first "seventh-generation" console to come to market in Nov. 2005.
The Xbox 360 also benefited from its exclusive ability to play two of what critics called the best games of the year: Bethesda Softworks' "The Elder Scrolls IV: Oblivion" and Microsoft's own "Gears of War," which was so gory it was effectively banned in Germany, yet featured one of the most haunting TV ads ever.
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SOMEBODY'S WATCHING ME, PART 2:
But by far the biggest story of the year involved a little Silicon Valley video-sharing operation that's still less than two years old.
NBC was the first entertainment powerhouse to go into a tizzy over copyrighted material uploaded by site visitors. It demanded that YouTube take down the "Lazy Sunday" clip, then discreetly allowed it to be put back up.
As other media companies reached agreements with YouTube, NBC did as well, but by the end of the year had joined the other major networks (except for Disney's ABC) in mulling over a YouTube rival.
Universal Music Group head Doug Morris even threatened to sue YouTube (and did sue MySpace.com) over posted music videos while other record companies signed deals with it. Soon afterward, UMG caved too.
Random people became YouTube stars — the fake video blogger Lonelygirl15, who turned out to be an actress in a scripted drama; the real Geriatric1927, an elderly Englishman whose technical ineptitude won him millions of fans; the pop-punk band OK Go, who made dancing on treadmills briefly fashionable.
Meanwhile, budding petty criminals found a wealth of clips on how to pick locks and hot-wire cars, police fought back by busting people seen on YouTube committing crimes, and a small Ohio tube-making machinery company found that its Web site — http://www.utube.com — had crashed thanks to orthographically challenged YouTube fans.
But YouTube's biggest impact may have been on politics, thanks to the infamous "Macaca" video clip, in which Sen. George Allen, R-Va., was taped calling his rival's campaign worker a possible ethnic slur. It made the incumbent senator and former governor, then seen as a strong presidential contender, a household name in the worst way.
Other questionable allegations about Allen subsequently came out, and his shoo-in re-election turned into a narrow defeat on Election Day — throwing the Senate to the Democrats.
As Allen's political career slowly evaporated, YouTube's star kept rising, until the company suddenly announced in October that it was being purchased by Google for $1.65 billion in stock. Not bad for a recently shoestring outfit that tech loudmouth Mark Cuban had just declared only a "moron" would buy.
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