Snapshots Have Red Eyes? Make Them Blue Digitally

TWO of the nation's biggest companies are hyping this week as the dawning of the Digital Age.

International Business Machines Corporation and Eastman Kodak Company held elaborate and expensive press conferences this week to discuss how they hope to boost revenues by integrating new electronic image scanning, storage, and search technologies into their marketing plans.

For IBM, the showcase was their work on ''digital libraries,'' an electronic version of a bookcase that can be accessed by a personal computer.

At New York's 42nd Street Public Library, IBM demonstrated that it is in the process of creating a visual computer database of some of the 150,000 manuscripts in the Vatican Library.

Scholars at Princeton University in New Jersey, for example, can now electronically examine copies of rare manuscripts and books instead of flying to Rome.

Other IBM clients digitizing archives include the Los Angeles Public Library and Indiana University's School of Music.

Eastman Kodak sees the digital arena as a way to breathe fresh life into its imaging technology. For example, the Rochester, N.Y., company worked with IBM to develop a way to encode a photo into the magnetic stripe on the back of a credit card. With new software, a store can fight fraud by making a visual check that the customer in the check-out line is the same person depicted in the credit card's magnetic stripe.

For both companies, the technology promises new and growing markets. ''It [digital imaging] is growing at double digit rates,'' says Steve Mills, general manager of IBM Software Solutions, based in Armonk, N.Y.

Kodak has developed software that will allow consumers at photo kiosks, or on their home computer, to quickly and inexpensively electronically scan and edit snapshots. For example, its software allows consumers to eliminate from portraits the ''red eyes'' -- the reflection of the flash as it bounces off the back of the human eye.

''There are 150 billion photos waiting to be reexcited,'' says George Fisher, Kodak's chief executive officer.

For both companies, analysts say, the press conferences were more than a showcase for their digital wares.

Kodak, which broadcast the San Francisco press conference to 20 other cities via satellite, hopes the attention helps to change the image of the company as a sleepy giant watching Japanese competitors steal its customers. It announced it has entered into product agreements and alliances with Sega, Sprint, Hewlett-Packard, Kinko's, Adobe, Microsoft, and Wang.

IN the past, Kodak often developed products that could only be used on its own machines.

''We used to try to do it by ourselves,'' Mr. Fisher says. Now, Kodak says it will shift to an ''open architecture'' that will allow its products to be used on virtually any machine. The main emphasis will be on linking its skills in image reproduction with digital technologies.

In the case of IBM, security analysts say the press conference delivered a subtle message. ''In the past, many of the larger companies waited until an industry showed some critical mass before using its muscle and expertise to overwhelm competitors,'' says Laura Conigliaro of Prudential Securities in New York. Today, she states, ''companies know they have to be pioneers in an industry and help feed it.''

Computer industry analyst Sam Albert of Sam Albert Inc. in Scarsdale, N.Y., views the IBM effort as an attempt to send a message about its role on the information highway. ''IBM has never been a leader in this field, but this show said forget about Time-Warner, Disney, and others. We can do it now from end-to-end, and any company that wants to deal with us should.''

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