Not yet reviewed by Pith; the record is open.

Direct and resolved photon interactions are shown to be intimately related through the factorization mechanism. It is argued that in theoretically consistent analysis of jet production in $\gamma$p and ep collisions the LO resolved $\gamma$ contribution must be considered together with the NLO direct $\gamma$ component. Recent data from HERA therefore do not provide a direct evidence for the former component, but should rather be interpreted as a manifestation of the $O(\alpha\alpha_s^2)$ term in $\gamma$p and, via the Weizs\"acker-Williams approximation, in ep interactions.