If there is one ray of hope amid the gloom that has cloaked the digital economy, it could be summed up with one word: wireless.

What began as a pet project for technophiles has become a multibillion-dollar industry, with uses ranging from untethered computers in the home to major networking connections for telecommunications giants. More than 35 million wireless networks are in operation today, according to industry estimates, and the number is growing daily.

Starbucks offers overpriced Wi-Fi to go with its overpriced coffee, while Auckland, New Zealand has city-wide high-speed wireless network.

Microsoft pays $750 million to settle an anti-trust lawsuit filed by the Netscape division of AOL.

Hard disk storage drops below $1 per gigabyte, while the 1998 price was $43.

File sharing tool Kazaa, becomes the most downloaded software in history. Hoping to identify and sue some 900 alleged file-traders, the RIAA subpoenas Internet sharing providers. Meanwhile, Steve Jobs of Apple sees the market and launches iTunes music store which offers tunes for 99 cents.

Bay Area unemployment triples compared with three years ago, reaching 6.9 percent.

Mobile phones go crazy, logging a record year with 520 million units sold.

In other news:

• From Apple Computer: the browser Safari.
• Flash mobs, organized on the Net, start in New York, spread worldwide.
• Popularity of blogs increases sharply.
• Amazon.com scans texts of 120,000 books for Internet users.
• International piracy of films is rampant.
• Estmated 5 trillion unwanted messages set on the Internet.
• Internet becomes integral part of political campaigning.