America Online said today that its AOL and CompuServe online brands are on track to post record membership growth for the first quarter of 2000.

AOL said it expects its flagship online service to exceed last year's growth, but it did not provide details. In the fourth quarter of 1999, ended in June, AOL added 685,000 new U.S. members, up from 523,000 in the same quarter of 1998. AOL's flagship service has more than 18 million members worldwide.

So far this quarter, AOL's other Internet service, CompuServe, with a new software version, has added more than 300,000 new subscribers in North America. CompuServe provides Internet access for more than 2 million members worldwide.

Scientists at the University of California, Berkeley, have developed the first stage of a mechanical computer. But they are not sure what they are going to do with it.

Professor Kris Pister and doctoral student Zeke Kruglick have made a micro-mechanical logic gate. Logic gates are the smallest components of computer chips, and modern chips have millions of them, but they're electronic.

Electronic components can suffer in high temperatures and radioactive environments, Pister said in an interview. So there could be applications for more robust mechanical relay-based chips in certain industrial processes, nuclear power plants, or in space.

Web sites that offer desktop applications over the Net are revving up to challenge traditional software makers through new products and appeals to software developers.

The sites offer a variety of applications such as electronic calendars and address books, file storage, and email management tools. Web-based email sites like Hotmail, now owned by Microsoft, led the charge, attracting users with a free service that users could access from any computer with Internet access.

Now the trend is to offer an entire suite of applications to lure users to the site as their first and most frequent point of reference on the Web, much the way search and content aggregation sites such as Yahoo and Lycos have amassed some of the Web's largest audiences.

As the wireless industry trots out the first Internet-ready ``smart phones,'' an even smarter breed lurks over the horizon: mobile phones that can add features and functions in the blink of an eye.

These models, which aren't likely to be sold before 2001, will be able to adapt instantly to the different frequencies and transmission standards used around the globe. One San Jose company wants to go even further, creating chameleon-like cell phones that can change into portable Internet radios, game machines or pocket-size video players.

The new approach, known as ``software-defined radio,'' could help consumers keep up with evolving wireless networks without having to swap phones. Instead of dropping $100 or $200 for a new handset, users could add new features on impulse through a phone call.

The massive earthquake that rocked Taiwan overnight was expected to push world chip prices higher, at least in the short term, analysts said Tuesday.

They generally shrugged off statements by Taiwan's major chipmakers, Taiwan Semiconductor Manufacturing Co and United Microelectronics Corp, that the quake had caused electricity outages but no damage to their production lines.

``The exact damage there has not yet been disclosed but chip production lines are very sensitive to tremors and I think this will lead to another rise in chip prices,'' said Jon Chong-hwa, an analyst at Salomon Smith Barney KEB Securities in Seoul.

Amazon.com Corp. and Home Depot are considering a partnership that would give the home improvement giant access to Amazon's 10.7 million customers.

Home Depot spokesman Jerry Shields told TheStreet.com the two companies are talking, but he refused to detail what kind of alliance might be under consideration. Amazon.com refused to comment.

The deal marks the latest in a new trend, dubbed "click and mortar" that represents the combining of the Internet's efficiencies with the much-needed assets of traditional retailers, including an established distribution chain.

A disturbing new trend is emerging in the world of online finance. Crackers (naughty hackers) are holding banks to ransom, threatening to cripple their systems or make public sensitive information, demanding huge sums of money.

In Germany last week, Noris Verbraucherbank offered a DM10,000 (£3,000) reward to catch a cracker who was demanding a ransom of £300,000 not to reveal the bank's customers' private access codes. An ATM machine is thought to have captured the man on camera. The picture appeared in the German press.

But Germany is not alone. City investigators in London have confirmed two separate cases where financial institutions have paid out ransom totalling more than £1 million. Around 30 international banks said that they had been victims of serious cracker attacks in the last year.