By DANIEL EISENBERG, MICHAEL KRANTZ AND NOAH ROBISCHON

DOLPHIN-SAFE COMPUTING

Here's one way to spend $30 million: Fujitsu, rolling in cash from its profitable semiconductor and computer business, is investing that healthy sum to create an "artificial life" program for personal computers. The flashy new technology will one day let real-world humans breed E-world "creatures" that will help out with mundane computer tasks. Possible examples include byte-based Rottweilers that will fetch your electronic newspaper and virtual vultures that can nibble away at electronic "trash."

The first product to incorporate the technology is Fin-Fin, an animated dolphin/bird that bounces happily around your computer screen in response to whistles and hand signals. Due in stores this fall, the phantasmagoric Flipper was designed to make the electronic world more friendly for 6- to 12-year-old girls. Fin-Fin is a long way from a truly smart disk-based mammal--she can't swim out to the Internet and grab an image, for instance--but Fujitsu hopes she and her electronic cousins will help demystify (and sell) computers.

THE NEXT BIG THING?

"Larry didn't get it," explains Farzad Dibachi. Larry is Larry Ellison, CEO of Silicon Valley powerhouse Oracle Corp., which has been struggling to sell the world on its vision of a $500 computer. "It" is the idea underlying Diba, the Valley start-up Dibachi launched last winter after quitting his job at Oracle. And the idea is IDEA, the Interactive Digital Electronic Appliance, a line of cheap devices that do just one thing instead of the limitless tasks expected of a PC. For example, the Diba Kitchen Idea, above, holds thousands of recipes on a CD-ROM. Diba wants to build application-specific computers to populate the whole house and hopes to deliver its first product by Christmas. Though Larry may not get it, Dibachi thinks millions of Americans will.

CELLULAR WONDERS: BEAM 'EM UP

Star Trek "communicators" have always been the model for cell phones, but thick batteries and bulky electronics have made truly slim, light portables a distant dream. No more. Below, two new phones that would please Captain Kirk.

Sony CM-RX100 Dimensions: 3.6" X 2.5" X 1.1" Weight: 6.9 oz. Price: $499.95 Phone: 800-578-7669

Motorola StarTAC Dimensions: 3.6" X 2" X .75" Weight: 3.1 oz. Price: as low as $1,000 Phone: 800-331-6456

REVENGE OF THE NERDS?

When Louis Gerstner arrived as CEO of IBM nearly three years ago, industry insiders saw the company's also-ran computer-operating system, called OS/2 Warp, as a likely target for the corporate ax. With just 13 million users, far behind Microsoft Windows' 120 million, OS/2 seemed doomed. But instead of killing the project, Gerstner beatified it, assigning the company's top engineers to it and giving V.P. Wally Casey a blank check for development. The results of the effort, code-named Merlin, will begin shipping to beta testers in the next month.

TIME's test drive last week revealed a fast, easy-to-use operating system that hints at what may be Gerstner's real ambition: an operating system designed and optimized for the Internet. IBM's thinking seems to be that the Net could be its best weapon yet in the war against Microsoft. Herewith, an exclusive look inside the Net-friendly program:

VOICETYPE: No one likes clicking and dragging around computer screens, and IBM thinks it has a better solution: just talk to the computer. Speech-recognition software embedded in the new Warp lets users surf the Net with voice commands like "Go to Pathfinder" or "Save this file." During our demo the system was impressive, though not yet easier than using a mouse.

JAVA APPLICATIONS: In the frantic race to be the most Java-friendly system around, IBM may have a slight head start. Merlin is the the first Intel-based operating system capable of running programs written in Java, Sun Microsystems' Net-based programming language. The slick crossconnect means Java programs can run on the desktop instead of across the molasses-slow Internet.

NEW INTERFACE: IBM has equipped Merlin with a redesigned graphical interface, with the help of Windows and Mac design guru Susan Kare. The interface uses a wide range of new, 3-D icons and some 250 colors that make it, in the words of an IBM executive, "easy to talk to and beautiful to look at." The system is pretty, but that may not be enough to chip away at Microsoft's less beautiful but more entrenched Windows 95.

--By Daniel Eisenberg, Michael Krantz and Noah Robischon