Microsoft's Live Search homepage adds background image with clickable spots

While it doesn't add much to the overall function of the search engine itself, Microsoft's latest update to the Windows Live Search homepage adds a background image with "hotspots" that can be clicked.

For example, the first background appearing on Live Search shows a picture of the Okavango Delta in Botswana, with four clickable areas are included on the map. One over the trees in the distance asks "What will you see on your safari in Botswana?" with links to search results on animals on the country. Another link, over the boater's head takes users to an overhead view of the region using Live Search Maps.

Microsoft had already prepped its search portal for the change through a redesign this spring that replaced the Google-like plainness of the front page with a more colorful design, although maintaining simplicity.

The company is making sure that the additional functionality is not going to slow down users who have no need for it. The base page would load first, allowing a search to be initiated quickly, while the imagery and hotspots are loaded later.

Some may question why such a feature should be a priority for a search engine that right now is far behind its competitors Yahoo and Google in terms of market share. The Live Search team's answer for that appears to be differentiation.

"We want the page to be a great place to start a search and also to intrigue and inform as well," the team wrote in its blog. "We think hotspots will help users discover parts of Live Search they might not know while not distracting from the core purpose of the page -- searching."

The new Live Search homepage is live now for most in the United States, and Microsoft says it plans to launch the concept in other markets in the near future.

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Dish first to deliver 1080p HD television programming

Satellite television service Dish will be the first to offer live programming "full HD" 1080p resolution, while the return of an all-HD package hearkens back to the days of Voom.

Dish purchased the assets of Cablevision's Voom in 2005, and much of its content was folded into the satellite provider's offerings. None of the Voom HD channels exist on Dish any longer, as they disappeared in May. Now, however, it seems like the company is ready to try the Voom approach once again: a package of only HD channels.

Such an offering is now much more viable considering the Dish network offers 114 separate high-definition channels, with plans to expand to 150 by the end of the year. At its height, the all-HD package from Voom only included 21.

17 new HD channels will be added on Friday, mostly in Dish's premium lineup, including one new Cinemax channel, Encore, seven new HBO channels, and four Starz networks. Other additions include CBS College Sports HD, Lifetime HD, Lifetime Movie Network HD, and Planet Green HD.

Another difference is the price: the entry level package for what Dish is calling 'TurboHD' would begin at $29.99 USD per month (which includes local channels). Exact details of Dish's HD pricing tiers were not available by press time, and BetaNews is awaiting a response to a request for clarification.

To support the new 1080p programming, Dish is sending out an upgrade to all MPEG-4 HD DVR receivers that would allow the units to display content in that resolution. The company says the update should roll out to all of its subscribers by early August.

As part of the rollout, Dish will offer a 1080p version of I Am Legend for free to those who have the HD boxes through its pay-per-view offering.

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Garmin nuvifone delayed due to 'carrier-specific requirements'

In Garmin's second quarter earnings announcement today, the GPS company said its nuvifone that was anticipated for release this year will be delayed.

The company's iPhone-like hybrid 3G handset and GPS device was originally expected to launch in the third quarter of this year in American markets. It was then gently pushed to a fourth quarter release, which Garmin has now rescheduled for the first half of 2009.

A statement from the company says: "While we had hoped to have carrier launches in the fourth quarter, we have found that meeting some of the carrier-specific requirements will take longer than anticipated."

Garmin has yet to announce which carriers will offer the nuvifone when it is launched, but many are speculating it will be on AT&T in the United States, although T-Mobile is also a candidate. T-Mobile's 3G network is not yet live nationwide, but the coverage could improve by next year.

Which "carrier specific" requirements Garmin could be referring to are currently unclear, but a fully completed nuvifone still has yet to be publicly shown by the company. Early display devices featured an incomplete OS, and more recent prototype devices have completed the interface, but lacked the supremely important GPS and 3G HSDPA data connections.

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Real partially patches 'highly critical' RealPlayer flaws

Security firm Secunia said Tuesday that RealNetworks had fixed most of the security flaws within its RealPlayer software that were first highlighted on Friday.

Four separate issues were discovered within most versions of RealPlayer 10, 10.5, and 11 across the Linux, Mac, and Windows platforms. While the company released the patch on Monday, which Secunia noted in its advisory, the firm said the fix was not complete.

The issue still not fully patched is related to an error in the rmoc3260 ActiveX control "when handling the 'Controls,' 'Console,' or 'WindowName' properties with a specific timing."

Attackers who exploit this flaw could cause a memory corruption, which could be used to expose sensitive information stored on the affected machine.

Secunia seems to indicates that the other three flaws are now fixed. They include: an unspecified error which can be used to reference local resource, an error in how frames are handled in SWF files, and a boundary error in the file rjbdll.dll which can be used to cause a stack buffer overflow.

In all cases, attackers could use the flaws to execute arbitrary code, the firm said. RealPlayers users can update the software by using the "check for update" function in Windows, while Mac and Linux users should download the latest version of Real's software from its Web site.

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Yahoo says DRM issue overblown by media, but will offer refunds

Yahoo told BetaNews that the media was hyping the expiration of the company's DRM certificates and didn't expect a user backlash, but said it has decided to offer refunds to those affected anyway.

Last Week, Yahoo announced in an e-mail to customers that it would remove its DRM keys for authorizing song playback on October 1. This means that although purchased music would continue playing, it cannot be reauthorized, essentially locking it to the current computer. If a user buys a new PC or reinstalls the operating system, the purchased music would no longer be playable.

The move sparked criticism from industry groups and heavy media coverage. The Electronic Frontier Foundation rebuked Yahoo for suggesting users should simply burn all their purchased songs to CDs, saying the company "wants its customers to invest more time, labor and money in order to continue to enjoy the music for which they have already paid."

"What is worse, this suggestion could put customers at legal risk, as they may not have documentation of purchase," the EFF added.

For its part, Yahoo believes the situation is being overblown. The company claims it notified users of change in February, when it first announced it would be closing its Yahoo Music store. But although customers were told they would be migrated to Real's Rhapsody service, BetaNews found no mention of the expiring DRM on songs that were purchased.

Those customers who were merely paying for the subscription rates will simply see their music library converted over to Rhapsody songs, and shouldn't experience any problems. Yahoo said it will refund customers who opt not to switch to Rhapsody but still have time remaining on their subscriptions.

But after September 30, those who actually purchased songs from Yahoo will be left without any options. Yahoo says it is now considering how to make amends with such customers, although it seems they will need to contact the company directly and be dealt with on a case-by-case basis.

A Yahoo spokesperson told BetaNews she could not disclose the procedure for reimbursing customers who purchased songs. Reports have stated the company is looking into providing customers with DRM-free versions of the tracks they bought instead of a refund, but the spokesperson could not confirm this to BetaNews.

Some are questioning why Yahoo isn't following in the footsteps of Microsoft, which shut down its MSN Music store two years ago and had planned to expire its DRM license keys on August 31, 2008. After a large public outcry, Microsoft reconsidered the decision and in June said it would continue to authorize DRM playback for another three years.

Yahoo Music customers should contact the company to find out how they can be reimbursed for their purchases.

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eBay and software group butt heads over stopping piracy

The SIIA wants eBay to squelch short-term software auctions. Since the start of its anti-counterfeiting initiative, eBay seems to be practicing some other curbs on software banditry, to various degrees. If the two sides can't see eye to eye, will the battle actually land in court?

Although a lawsuit against eBay isn't "pending or on the immediate horizon," the Software Information Industry Association (SIIA) has sued other Web sites before, and Keith Kupferschmidt, senior VP of the Software Information Industry Association (SIIA), is very unhappy over what he views as eBay's failure to take real action against software piracy.

"I can't say that eBay is ignoring us, because they keep meeting with us," he acknowledged, in an interview with BetaNews. "But we keep giving them a list of 28 or 30 suggestions -- and then they keep coming back and telling us that most of these things can't be done," Kupferschmidt said, in an interview with BetaNews.

On the other hand, a spokesperson for eBay told BetaNews that the Web site has in fact developed anti-piracy policies, and he e-mailed a link to a Web page containing eBay's Trust and Security Initiatives, instituted in May of 2007.

In the interview with BetaNews, Kupferschmidt characterized some reports that appeared in other publications last week as "overblown." He denied, for instance, that the SIIA is actively considering seeking legislation that would force Web sites to prevent copyright infringement.

But he confirmed to BetaNews that the SIIA has talked internally about the prospect of a lawsuit against eBay, and he added that the industry association is currently in court against another Web site, known as USMLEPRO.com. As previously reported, BetaNews had sought confirmation of any lawsuit plans against eBay on Friday, but an SIIA spokesperson was temporarily unavailable before press time.

In one of the SIIA's current legal actions, USMLEPRO is being sued on allegations of "direct" copyright infringement, according to the SVP.

Yet if eBay does get hauled into court, the charges will probably center instead on "secondary liability," for allegedly "providing the facilities" used by software pirates, BetaNews was told.

Of all the suggestions the SIIA has raised to eBay, the SVP considers two to be most important: eliminating "Buy It Now" -- a type of listing that foregoes the auction process to allow for instant sales -- and getting rid of one-, two-, and three-day auctions on software.

"eBay might say they've done these things. But if you go up there on eBay's site, you'll see plenty of 'Buy It Now' and one- to three-day auctions for software," he charged.

Meanwhile, in an e-mail to BetaNews, the eBaby spokesperson confirmed earlier statements by eBay that the company is preventing volume sales on software and eliminating most short-term software auctions, although he mentioned nothing about "Buy It Now" listings.

In a quick look tonight at about 60 current eBay auctions for Microsoft Office, BetaNews noted that the majority were "Buy It Now' listings, and three of the auctions were one-day events.

On the other hand, no one auction was selling more than 50 copies of the software, most were hawking less than ten copies, and several had only one copy for sale.

"The sale of counterfeits on eBay is illegal, violates our business ethics, and results in negative buying experiences," the eBay spokesperson said, in his e-mail to BetaNews, which also included a link to the full text of eBay's Trust and Security Initiatives.

"Restrictions will be placed on some items that seem to be most favored by counterfeiters," he continued. "Restrictions may include: PayPal verification to list in volume; a minimum number of days as a confirmed registered eBay member to list in volume; one- or three-day durations may be removed as available options for these items; cross-border trade restrictions; delays in these listings appearing in search; [and] the number of listings per seller may be limited."

Yet while these initiatives clearly spell out which restrictions may be applied, they don't really say which restrictions are applied, to whom, or on which specific types of items. At an admittedly cursory glance, it seems that eBay could be paying more attention right now to eliminating volume sales by newer or less known sellers than to abandoning one-day software auctions, for example.

But although the spokesperson didn't highlight this point, eBay's initiatives also include new and strictly enforced regulations around feedback on sellers, which the site seems to see as helpful in combating software piracy and other forms of counterfeiting.

Buyers can now leave "detailed feedback" on sellers, as opposed to just "positive, negative, or neutral" ratings. At the same time, eBay has also eradicated negative feedback on buyers, so sellers can no longer retaliate in this way against buyers who leave negative feedback about them.

Could it be that eBay and the SIIA differ less about the need to curb software piracy than about the most effective ways of accomplishing this?

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Verizon launches 100 HD channels on FiOS in New York City

"Make no mistake about it. This isn't cable," said Virginia Ruesterholz, president of Verizon Telecom, in announcing today the immediate start of FiOS services with 100 high-definition channels in parts of New York City, plus the availability of 150 HD channels by the end of this year in sections of New York City and some other areas of the US.

Because nearly 60 percent of New York City residences and businesses are located in multiple dwelling units (MDUs), Verizon is putting an early focus on apartment buildings. More than 100 MDUs will go live with 100 HD-channel TV today, according to Maura Breen, Verizon's general manager for New York.

"We're in discussions with hundreds of other MDUs," said Breen, during a news conference that was preceded by a publicity march for FiOS TV through Grand Central Station by Verizon workers.

Verizon will also offer 100 HDTV channels throughout 108 neighbborhoods of New York City, as well as among existing FiOS TV customers in some suburbs surrounding the city, including areas north of the city, on Long Island, and in northern New Jersey.

Also today, Verizon announced service packages for FIOS TV that start at $94.99 per month with 54 free HD channels. Other bundles are available with the faster Internet service of 20/20 Mbps.

Breen promised an "aggressive" ad campaign in New York City beginning today, to lure TV customers away from the city's two cable companies: Time Warner and Cablevision. "Neither one can compete," she contended.

As previously reported in BetaNews, however, Verizon won't exactly be blanketing all of New York City with FiOS TV immediately. Plans call for a very gradual rollout, due to the need to replace older wiring with fiber optic cables. Even if all work proceeds according to schedule, some areas of the city won't be FiOS-enabled until 2014.

During a Q&A, Ruesterholz said that Verizon plans to begin offering 150 HD channels by the end of this year will extend to some other parts of the US, as well. "Yes, there's work to do. [But] we do expect [to bring FiOS TV to other cities] by the end of this year."

Right out of the gate, though, Verizon's HDTV programming is slated to include a wide range of existing channels. A partial list includes, for example, news channels such as Fox; a variety of sports programming; 11 new movie channels from Cinemax; 13 new movie channels from HBO; "Fios TV's Movie Package," which bundles HD channels from The Movie Channel, Starz and Showtime; Disney Channel; Animal Planet, TLC; USA; Bravo; TBS; History Channel; Weather Channel, QVC; Science Channel; SCI FI; and the Smithsonian Channel.

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Sirius+XM is official as FCC approves merger

On a 3-2 party-line vote, the Federal Communications Commission approved the merger of Sirius and XM, although the satellite radio companies had to make some key concessions.

The final commissioner to vote on the deal was Deborah Taylor Tate, who held her vote pending XM and Sirius agreeing to certain limitations. The two sides did so late last week, and Tate gave her blessing late Friday.

The Department of Justice had given the merger a green light in March of this year following its own review, already 13 months after XM and Sirius first announced their plans to merge in February 2007.

As part of the deal struck with the FCC, subscription rates will be frozen for a period of three years. In addition, interoperable radios will arrive within a year, and 8 percent of the channel capacity will be set aside for minority and educational programming.

XM and Sirius will also be ordered to pay about $20 million in fines as a result of operating their terrestrial repeaters without licenses. XM was fined $17.5 million, while Sirius would pay the remainder.

In a statement, FCC chairman Kevin Martin gave the deal his blessing. "The merger is in the public interest and will provide consumers with greater flexibility and choices," he said.

Satellite radio may not be completely out of the woods yet, however. With the FCC now free of the merger matters, it will now look into whether it should compel the industry to include technology in its radios to receive so-called "HD Radio" signals.

Commercial radio stations are offering the service in many cities as an alternative to satellite. It is not clear how successful the latest proposal may be, GM and Toyota have both complained to the FCC saying it would dilute the offerings of satellite radio.

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Nearly 7 years after original, a new Windows XP goes gold

On August 24, 2001, Microsoft released to manufacturing the final version of Windows XP. 6 years and 11 months later, a new version of XP has gone gold, this time for the OLPC XO computer, also known as the "$100 laptop."

Originally designed to run Linux, the OLPC (One Laptop Per Child) XO laptop is targeted at developing nations and those too poor to afford proper computers for education. The device, which went on sale publicly in November for $200, features wireless connectivity, a built-in camera and a keyboard designed to change languages.

Initial deployments have begun in Afghanistan, Haiti, Mexico, Mongolia, Peru, Rwanda, and Uruguay, as well as in Birmingham, Ala. However, sales have been much lower than expected, with well under 1 million XOs ordered to date. OLPC hopes to change that with Microsoft's help.

The Redmond company announced it was testing a version of XP on the XO last December, citing a desire to provide a "high-quality Windows experience" on OLPC's devices. But the limited field trial was far from a sure thing until May, when OLPC announced a deal with Microsoft to ship XP.

Microsoft spent a year modifying XP to ensure it would work on the XO laptops without problems. But OLPC had work to do as well, including boosting the memory and making hardware adjustments. The switch from Linux will increase the production costs of the XO from $188 to a little over $200. XP itself will cost $3 per each XO shipped.

One of the reasons for offering the low-cost laptop with a slimmed down edition of XP is that buyers were hesitant to adopt the Linux version running software known as "Sugar." Sugar operates with a special interface that utilizes symbols instead of words, making the ability to read not a requirement for use.

But while Sugar may work well in small African villages, more developed countries and school systems who signed on as early buyers wanted something similar to a full-fledged computing environment. With XP on the XO, students can learn the basics and become familiar with Windows and Office, which will help them later in life.

There are plans to release a dual-boot version of the XO, with both Linux and Windows, although no specific timeframe has been set.

"There seems to be more and more momentum around the idea of getting low cost laptops into the hands of children to transform education, and that is a good thing," remarked Microsoft's James Utzschneider in a blog posting. "Windows on the XO looks like it is on track for availability in these types of national educational PC deals in September."

Existing XO buyers, who took part in the November sale, will not receive Windows. Although Microsoft didn't specify why, it's likely due to the different hardware and additional memory required by XP.

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Video service RedLasso folds under legal pressure from networks

RedLasso, a digital video re-syndication service, has closed its controversial site after threats of copyright lawsuits from NBC Universal and Fox.

The service digitized live audio and video content, which users could edit and re-arrange into embeddable clips.

In May, Fox, CBS, and NBC delivered a cease-and-desist order to the service which threatened a lawsuit if it didn't conform to copyright law. The networks propounded that the content RedLasso broadcasted was not its to distribute, and said the company had never received permission to do so.

Ken Hayward, CEO of RedLasso said "We believe we have always acted within the law and have been respectful of the networks' rights. Unfortunately, they have forced our hand and are denying the blogging community access to the Redlasso platform that beneficially tracks the usage of newsworthy clips across the Web."

In the brief eight months the service existed, RedLasso saw rapid growth among bloggers who used the site to supplement their news, sports, and gossip content. But the growth never led to any content deals with the networks it broadcasted.

RedLasso issued a statement today announcing that it "has no alternative but to suspend blogger access" to the service. Radio to Web, the company's online platform providing the same service for radio stations, will remain open to its clients, which include Greater Media and XM Radio.

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Beta release of Office Outlook Connector adds calendar syncing

A beta release of Office Outlook Connector 12.1 adds syncing between Windows Live Calendar and Microsoft Outlook.

As with previous versions, the connector will sync a user's Hotmail account and contacts with Microsoft's Office productivity suite. The addition of calendar support rounds out the service, and offers functionality akin to Apple's MobileMe (although its more meant for desktops in this case, not mobile phones).

Microsoft Office users could get calendar sync in previous versions, but this required a subscription above and beyond the free Outlook Connector download.

Microsoft said the functionality works with Office Live and Windows Live Custom Domains, in addition to standard Windows Live accounts. When changes are made to one calendar, it is synced to Windows Live Calendar and any other machine running the Connector and Outlook.

Once synced, calendars from Windows Live can be viewed on Outlook when offline, the company said.

Watchers of Microsoft's moves say this is a good example of the company's commitment to a "software plus services" concept. While many companies are joining the rush to take their applications online, Microsoft believes that Web applications will work with, and never fully replace, the desktop.

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After pirate lands in prison, software group hints at eBay lawsuit

After convicted software pirate Jeremiah Mondello pulled a 48-month federal prison stretch on Wednesday, an industry anti-piracy group announced six more lawsuits against individual piracy suspects -- also reportedly hinting that eBay could be the next one to get hauled into court.

"Mondello is a whiz-kid who used his smarts and savvy to rip off software makers and consumers. We are fortunate that he has been stopped, but there are hundreds more like him running illegal operations on eBay and other sites," according to Keith Kupferschmid, SVP of intellectal property policy and enforcement for the Software Industry Information Association (SIAA).

"The Mondello case demonstrates that these pirates won't simply get a slap on the wrist when caught. They very well may end up doing serious time in federal prison," Kupferschmid said in a statement.

The six new lawsuits announced this week bring the total number initiated by the SIIA to 32 in 2008 alone.

At BetaNews' press time this evening, an SIIA spokesperson was temporarily unvailable to confirm published reports that SIIA members are now talking about either suing eBay or seeking laws to make eBay and other Web sites take "proactive steps" around copyright infringement.

Although anti-counterfeiting lawsuits against eBay have shown mixed results, cases claiming copyright infringement by various parties against various defendents seem to have fared better, particularly around music copyrights.

While eBay lost a counterfeiting battle versus Louis Vuitton in France, a US court recently ruled against Tiffany in a similar case, finding that eBay had taken "reasonable action" to prevent counterfeit items from being sold on its site.

In venues outside of court, eBay has reportedly claimed that it is taking actions against software counterfeiting, too, such as placing volume restrictions on software sellers and curbing most short-term software auctions.

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Verizon to announce FiOS rollout in New York City

Verizon has scheduled a webcast for Monday, where it will officially announce rollout plans and pricing for FiOS in New York City, which has over 8.2 million residents, providing a huge boost for the service that counts only 1.8 million customers.

Thus far, Verizon's FiOS television and Internet service has been largely relegated to the suburbs, where the company could more easily dig down to install fiber optic lines. Major metropolitan areas have seen only spotty FiOS coverage, making the New York City launch an important milestone for Verizon. The company was granted approval from the city last week to offer its television service. Verizon also plans to host an event at Grand Central Terminal.

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China now counts more Internet users than the US

Even though the government places heavy restrictions on the Internet with censorship and routine crackdowns on cyber dissidents, China has finally surpassed the United States for the most online users in the world.

The China Internet Network Information Center compiled the numbers that indicate China now has 253 million total Web surfers, with the United States coming in at an estimated 223 million users. China has a total population of more than 1.3 billion people, compared to the United States' 301 million.

So while China still has a higher number of overall Internet users, just 19.1 percent of citizens have a connection to the Web, while 71 percent of homes in the US are wired, the Pew Internet and American Life Project recently discovered. The global average of Internet connections is 21 percent.

Still, Internet usage in China is up 56 percent from just one year ago, with online music, instant messaging and news updates the three most popular applications. Furthermore, Chinese users under the age of 30 make up nearly 69 percent of the country's Internet users.

Not surprisingly, natural disasters that ravaged certain parts of China -- for example, the snow storms and the Sichuan province earthquake -- were popular search queries by Chinese users, along with news regarding the summer Olympics, which start in a couple of weeks.

The vast difference in percentage of Internet users may look like a disadvantage to China, but the country's Internet growth will only continue to increase -- and its Internet user lead with it. According to the BDA China research firm, Web usage is expected to grow up to 18 percent per year, and the number of Internet users in the country is estimated to be 490 million by 2012.

This Internet explosion has also enabled a number of Chinese-based Web services to compete against foreign companies. Although domestic Internet services are still growing, foreign corporations, largely from the United States and western Europe, continue to try and get their slice of the pie.

Much to the delight of phone manufacturers, wireless carriers and software companies such as Sun Microsystems, which creates Java software for mobile devices, 29 percent of all Chinese Internet users accessed the Internet through their phones. More than 601 million people worldwide now use their phone to view the Internet.

Mobile browsing is especially popular in developing regions where phone infrastructure exists, but Internet connectivity to homes is sparse. China has at least 500 million mobile phone users, and carriers in the country are beginning to roll out high-speed 3G coverage throughout heavily populated regions.

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Creative adds to music player lineup with Zen Mozaic

Creative expanded its music player lineup Thursday, releasing new models designed to be fashionable with a mosaic design where the buttons are located.

The Creative Zen Mozaic comes in four sizes -- 2GB, 4GB, 8GB and 16GB -- with a stronger emphasis on the music player's looks than functionality.

All models are able to play music and video files, along with display photos and CD cover art. The Mozaic has a 1.8-inch screen, built-in speaker, FM radio, microphone, and supports MP3, WMA, WMA-DRM 10, and JPEG file formats. The device measures 79.5mm x 40mm x 12.8mm.

The specifications of the Zen Mozaic are rather ordinary when compared to other digital audio players, but Creative seems to be banking device's mosaic design that will likely be met with varied levels of enthusiasm from the market.

Creative continues to launch music players, but it has largely been overshadowed by market leader Apple and SanDisk, which has overtaken Creative in market share. Each company has worked not only to pack more storage space into their players, but also to make them more visually appealing for consumers.

The 2GB Zen Mozaic is available for $99, the 4GB model is available for $129, 8GB $169, and 16GB for $249. The 2GB and 4GB models are available now, with the 8GB and 16GB models expected to be released next month.

Creative's Zen lineup now has 12 different models available to consumers. The company has had a busy July, also announcing the Zen X-Fi and Zen X-Fi with Wi-Fi, which have a 2.5-inch displays and ship with Creative software aimed at cleaning up poorly compressed sound files.

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Microsoft reorganizes and rethinks, chief architect of Yahoo bid exits

With Microsoft's stock prices down 20 percent since February, CEO Steve Ballmer is reorganizing and rethinking the company, and the chief architect of Microsoft's abandoned attempt to acquire Yahoo, Kevin Johnson, is leaving to head up communications equipment maker Juniper Networks.

In a concerted effort to catch up to Google in the online space, Microsoft is now carving up its Platform and Systems Division (PSD), formerly headed by Johnson, into two divisions: "Windows/Windows Live" and "Online."

The breakdown is slightly odd, since Windows Live was designed to be the online segment of Microsoft's primary businesses. Windows Live Seach and Live Spaces won't fall under the purview Windows Live now, but rather the Online division. Instead, the Windows Live division will focus on the software aspect (like Live Messenger and Live Desktop Mail), which links up to Microsoft's online services.

"Effective immediately, Steven Sinofsky, Jon DeVaan, and Bill Veghte will report directly to me to lead Windows/Windows Live," Ballmer said in a memo to employees yesterday in which he also addressed Microsoft's competitive strategies versus Google, Yahoo, and Apple.

"In the Online Services Business, we will create a new senior leadership position and conduct a search that will span internal and external candidates. In the meantime, Satya Nadella will continue to lead Microsoft's search, ad platform, and MSN engineering efforts, and Brian McAndrews will continue to lead the Advertiser and Publisher Solutions Group," according to Ballmer.

Also announcing Johnson's departure in the memo, Ballmer said, "Since 1992, Kevin has been a key contributor to many of this company's most important achievements."

Coinciding with Microsoft's announcements of the reorg and his own departure, Johnson said in an e-mail to Microsoft employees that he is about to become CEO at another company. Juniper has since announced that Johnson will come on board there in September.

"Being a CEO will be a new experience for me and it is the right time for me to pursue this change. I will be here partnering with Steve [Ballmer] and the PSD leadership team to ensure a thoughtful and well managed transition. I am absolutely confident in the PSD leadership team and know they will continue to drive hard on the Windows and Online Services priorities as we kick off FY09," Johnson said in his e-mail.

Johnson served as one of the key members of a team at Microsoft that launched a bid to buy Yahoo, the consistent runner-up to Google in online search and advertising, last February. When Yahoo CEO Jerry Yang kept fighting the acquisition, even after Ballmer raised the stakes to $47.5 billion, Microsoft withdrew its offer in March.

After joining Microsoft from IBM in 1992, Johnson worked his way up to become head of worldwide sales. When Johnson was named president of PSD in 2005, Ballmer reportedly gave him marching orders to beef up Microsoft's online business.

Meanwhile, signs are emerging meanwhile that Yahoo's resistance could be softening to some sort of deal with Microsoft. On Monday, Yahoo made a major concession to activist shareholder Carl Icahn -- who favors such a deal -- by expanding its board of directors to include Icahn and two additional board members nominated by iCahn.

On Tuesday, Yahoo announced mixed financial results for the second quarter of 2008, covering March through June. Although profits were down 19 percent from the same quarter last year, Yahoo's revenues rose by 6 percent.

Also in his memo to Microsoft employees yesterday, Ballmer briefly outlined Microsoft's plans in the areas of Windows, "software and services," and "business and enterprise," in addition to its competitive strategies against Google, Yahoo, and Apple.

"We continue to compete with Google on two fronts--in the enterprise, where we lead; and in search, where we trail," according to Ballmer.

"In the coming years, we'll make progress against Google in search first by upping the ante in R&D through organic innovation and strategic acquisitions. Second, we will out-innovate Google in key areas--we're already seeing this in our maps and news search. Third, we are going to reinvent the search category through user experience and business model innovation. We'll introduce new approaches that move beyond a white page with 10 blue links to provide customers with a customized view of their world. This is a long-term battle for our company--and it's one we'll continue to fight with persistence and tenacity," he told Microsoft's staff.

In his remarks about Yahoo, however, Ballmer wasn't really all that clear about whether or not Microsoft will renew its attempt at a business deal.

"Related to Google and our search strategy are the discussions we had with Yahoo. I want to emphasize the point I've been making all along--Yahoo was a tactic, not a strategy. We want to accelerate our share of search queries and create a bigger pool of advertisers, and Yahoo would have helped us get there faster. But we will get there with or without Yahoo. We have the right people, we've made incredible progress in our technology, and we'll continue to make smart investments that will enable us to build an industry-leading business," Ballmer said.

As for Apple, Ballmer noted that, "In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience. Today, we're changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We'll do the same with phones -- providing choice as we work to create great end-to-end experiences."

More details on the retooling of Microsoft's business plans are likely to emerge in a meeting between Microsoft and analysts later today.

AOL talks with Microsoft, Yahoo heat up: source

Yahoo may revisit News Corp if AOL dims: source

Fahrenheit 451: Microsoft burns its Live Search Books effort

Microsoft drops $50 billion bid to acquire Yahoo

Thirteen record labels ask judge for ruling against LimeWire

Thirteen record labels have filed for a summary judgement to their two-year old case against peer-to-peer file swapping service LimeWire, seeking to bring a swift end to the drawn-out conflict.

In 2006, the Recording Industry Association of America sued LimeWire seeking $150,000 per occurrence of illicit music sharing, claiming the service participated in "inducement of copyright infringement, contributatory copyright infringement, and with respect to pre-1972 recordings, common law copyright infringement and state law unfair competition."

LimeWire countersued shortly thereafter with claims of unfair business practices by the RIAA, which thwarted LimeWire's attempts at setting up a legal download service, but the courts dismissed the suit.

Friday's request for a summary judgement was filed in the US District Court of New York's Southern District, asserting that LimeWire has taken no steps to prevent copyright infringement through illegal file sharing.

A summary judgement is a verdict without a full trial, and the movement for one is, in lay terms, the record labels' assertion that LimeWire's infringement is a fact beyond any doubt that requires no trial.

SCO chief testifies: ‘Linux is a copy of Unix’

Yahoo may revisit News Corp if AOL dims: source

‘Making available’ theory takes center stage in RIAA v. Thomas

Judge reverses himself, finds placing MP3s in a public folder isn’t ’sharing’

Details emerge on Psystar suit, Apple wants recall

Microsoft makes Games for Windows Live free, will sell game downloads

Microsoft announced late Tuesday that it would no longer charge Windows gamers to connect to one another for multiplayer gaming, and this fall will launch an online store for downloading PC games.

All users will be able to access the Games for Windows Live, which is similar to Microsoft's Xbox Live -- service at no cost. Microsoft said that the decision to remove the pay tier came after discussions with developers and fans led it to believe that multiplayer gaming should be free.

Gamers had to pay $7.99 monthly in order to gain full multiplayer support for their purchased games. That business model was criticized by many gamers, and developers worried that it would affect sales of multiplayer games.

The company did not say if slow uptake for the service played a role in the strategy shift, although Microsoft currently offers Xbox Live "Silver" to all console owners, and competitor Sony similarly offers free multiplayer gaming on the PlayStation 3.

However, the decision to make the Windows side of Live free will not affect Microsoft's Xbox Live business, which would still retain a "Gold" pay tier. The company said it will continue to build on the current system, adding more functionality that will deliver added value to subscribers.

While Microsoft says its Games for Windows Live service will still differ from Xbox Live, one area where they will become more similar is the addition of a Marketplace. Starting this fall, PC gamers will gain access to both free and pay content.

The company is so far staying mum on any content deals it has signed for the new Marketplace, promising further announcements closer to the launch date. Microsoft plans to provide a standalone software client that users can download to browse the Marketplace, which will also be accessible via the Web.

Like its Xbox sibling, the Games for Windows Live Marketplace will offer downloadable game content, videos, demos, trailers, and even sell full titles. Microsoft will be competing with already-established players in the market, including Valve's Steam and Stardock's Impulse.

Microsoft turns to users for new wave of Xbox games

Xbox 360 update canceled while Microsoft works on game portability

Nokia updates Sun’s Java gaming SDK for its cell phones

Microsoft prepares to auto-deliver Windows Search 4.0 to Vista users

If you notice your hard drive crunching later this month while performing a menial task, fear not: it's just the new Windows Search software creating an index of your files. Microsoft plans to automatically deliver version 4.0 of the software, formerly Windows Desktop Search, to Vista users.

Windows Search 4.0 was released in June and Microsoft says it has "seen a good number of downloads, and a number of positive responses from customers." The advantage over Vista's built-in search function is one of performance, the company claims. The structure of the search index was completely redesigned to speed up locating items on the hard drive and networked PCs.

But not all changes will happen behind the scenes. Version 4.0 will place a new "Deskbar" next to the system tray that makes it possible to perform searches directly from the Windows Taskbar. A pop-up lets users select whether to search locally or on the Web, and choose filtering options.

In BetaNews tests of Windows Search 4.0, we found the software doesn't try to replace the default search engine selected by the user, a good move considering it may soon be on over 100 million PCs. Microsoft has also attempted to make the transition fairly painless, promising, "the indexing process doesn't take too long and won't lock your PC."

Responses from users have been generally positive, although Windows Search 4.0 isn't without its quirks. You have to manually change between searching between files and e-mail, and networked drives aren't indexed by default because it requires Windows Search to be installed on each system. A lack of results can also bring up strange error messages, one BetaNews reader reported.

So who gets Windows Search 4.0 and the Deskbar later this month? Windows XP users will find it as an optional update that must be installed manually. It will be delivered to Windows Vista users as a "Recommended" update, which are installed by default on Vista systems. In order to opt-out of receiving the replacement search, users must uncheck the box in the settings for Automatic Updates.

Because of the huge number of computer running Vista, Microsoft says "the automatic update may not come to your machine for some time. The update will go to a small percentage of Windows users each day, the percentage increasing gradually."

Microsoft has published a support article detailing how organizations can block the installation of Windows Search 4.0, although it involves creating a batch script that inserts a key into the registry -- not a simple process. Those utilizing WSUS for updates don't need to worry just yet, as they won't see the new search until later this year, when Microsoft will provide more details about delivery.

Google Gadgets for Linux appears

Vista users greeted with an unexpected surprise: MobileMe

Next Patch Tuesday has few security updates, big Vista reliability fix

Details on DNS flaw inadvertently leaked; researcher says patch now

The cat is out of the bag before Black Hat. That isn't a passage from a Dr. Seuss children's book, but a description of what happened on Monday when a Web site accidentally posted details about a DNS flaw uncovered by security researcher Dan Kaminsky earlier this month.

Kaminsky, who plans to discuss the flaw at the forthcoming Black Hat security conference in Las Vegas next month, had wanted to keep the details private until then, in hopes of preventing the flaw from being used for malicously redirecting Internet traffic to phony Web sites for large-scale phishing exploits.

But on Monday, Matasano Security, which knew the ins and outs of how the flaw could be used for DNS cache poisoning, inadvertently publicized the details by confirming a complex speculative theory raised in a blog entry by Halvar Flake, a specialist in reverse engineering and the CEO of Zynamics.

"The cat is out of the bag. Yes, Halvar Flake figured out the flaw Dan Kaminsky will announce at Black Hat," responded a post on the Matasano site, since taken down but still residing in Google's cache, at the time of this writing.

Matasono has since apologized for the glitch. "Earlier today, a security researcher posted [a] hypothesis regarding Dan Kaminsky's DNS finding. Shortly afterwards, when the story began getting traction, a post appeared on our blog about that hypothesis. It was posted in error," wrote Thomas Ptacek, principal of Matasano security, on the company's site.

"We regret that it ran. We removed it from the blog as soon as we saw it. Unfortunately, it takes only seconds for Internet publications to spread," according to Ptacek.

"Dan told me about his finding personally, in order to help ensure widespread patching before further details were announced at the upcoming Black Hat conference. We chose to have a story locked and loaded for that presentation, or for any other confirmed public disclosure. On a personal level, I regret this as well."

"Patch. Today. Now. Yes, stay late," Kaminsky warned on his own Web site after the Matasano post.

Kaminsky has added a "DNS checker" to his site, for use in determining whether a server has been patched for the flaw.

"Recently, a significant threat to DNS, the system that translates names you can remember (such as www.doxpara.com) to numbers the Internet can route (66.240.226.139) was discovered, that would allow malicious people to impersonate almost any website on the Internet. Software companies across the industry have quietly collaborated to simultaneously release fixes for all affected name servers," according to a blurb on the site about the tool.

Torvalds attacks IT industry ’security circus’

Robot lawn mower

Adobe Acrobat JavaScript flaw exploit in the wild

Next round of Microsoft ‘Patch Tuesday’ addresses Bluetooth problem

Next Patch Tuesday has few security updates, big Vista reliability fix

Mobile phone video streaming service Qik opens public beta

Mobile phone video broadcast site Qik, which launched in private testing this spring, has opened today as a public beta.

Qik is a live video streaming site that turns the user's mobile phone camera into something of a remote webcam. Users are encouraged to stream events and other happenings, which can be viewed live and later as video clips, to the Qik Web site.

Thanks to a committed stable of users providing unique content to the service and support from notable bloggers, Qik has rapidly gained widespread attention. It's not clear whether the company has paid or otherwise rewarded these individuals -- such as Robert Scoble, Michael Arrington and XM Radio's Robert Eklund -- for using Qik, but the service has quickly outpaced rival Flixwagon as a result.

Though it has been repeatedly inaccessible throughout the morning, Qik is now allowing anyone to sign up, even if they do not have a compatible handset. A data plan, however, is required, as users must enter their mobile number and click on the link in a text message sent from Qik.

John Culbertson talks to Congressman Kevin McCarthy in his Qik stream.

Of the more than 30 compatible devices, only four that run Windows Mobile are supported: the Motorola Q9c and Q9h, Samsung's Blackjack II and SGH-1600. The list of Symbian OS-powered devices, such as Nokia's N95, is considerably longer.

Despite showing off iPhone video capability in the beginning of June, Apple's device is not yet supported by Qik.

The Qik Site, according to founder Bhaskar Roy, is not meant to be the destination for users. Videos and feeds are rather meant to be linked to from other sites such as Twitter, Facebook, MySpace, and others. Venturebeat notes that 57 percent of views actually come from third party sites.

Mobile phone battery dead? Try dancing

BlackBerry Pearl users can test voice input for Google Maps

Analysts: Ad-supported mobile games are on the way

Nokia updates Sun’s Java gaming SDK for its cell phones

Facebook sues over copied design, launches redesigned interface

Social network giant Facebook entered litigation with German site Studivz on Friday for closely copying its design, just in time for Facebook to launch its totally redesigned interface on Monday.

German site StudiVZ took more than a few design cues from Facebook. According to reports, early versions of the site even featured filenames such as fbook.css and poke.php, as the two companies were reportedly "in talks."

StudiVZ's founder Ehssan Dariani has frequently been quoted in his acknowledgment of the two sites' similarity: "We may have oriented ourselves along the lines of the Facebook layout, but it was also clear that we would strongly distinguish ourselves by other things, that we wanted to be original."

On Friday, Facebook sued StudiVZ for copyright infringement in a California federal court. StudiVZ denied these allegations and asked for a declaratory judgement at the district court level in Stuttgart, Germany.

Facebook claims that, "As with any counterfeit product, Studivz's uncontrolled quality standards for service, features and privacy negatively impact the genuine article."

Any negative impact felt from StudiVZ's alleged infringement, however, will be significantly decreased after a sweeping update to Facebook's interface.

Rolled out today, the new Facebook has reduced its emphasis on personal profiles and made the news feed the primary fixture. When users log into new.facebook.com, they are taken to a redesigned homepage centered around the News Feed and friends' status updates. A navigation bar along the top gives access to profile data, friends list, applications, and the user's inbox.

In the profile editor, the Status update bar has moved from a small window in the right hand margin to the main item in the window. Popularized by "micro-blogging" site Twitter, the Status bar gives the user 160 characters with which to post quick updates.

By relegating profile information to a supplementary page, this renewed layout addresses the current trend in social networking of instant and frequent updates popularized by services like Twitter and FriendFeed.

Facebook overtakes MySpace globally

Facing pressure from Facebook, MySpace regroups

Google goes out of its way to make Facebook roadblock obvious

Has Google's relentless growth finally stopped?

The fuel that brought Google from a laboratory experiment to one of the world's industrial giants, may at last be burning itself out. That leaves Google one player among many, in a questionable economic environment. What now?

When a cartel of oil-producing nations wants to tweak demand for its product upwards, along with its per-barrel prices, one tool it has at its disposal is tightening its pipelines and reducing supply. In the online advertising space, in terms of reach and supply, you don't actually need a cartel to approach the power of Google.

But in a startling admission yesterday during Google's second-quarter earnings call yesterday, the company's senior vice president for product management, Jonathan Rosenberg, admitted to a Banc of America Securities analyst that his company was doing something very similar, and for much the same reasons. Specifically, it reduced its own available inventory through its search and other hosted pages, in a maneuver to drive up the value of what it does sell.

The term for that available inventory is "coverage." "You know, coverage, I think, from a quarter-to-quarter basis, has been going down," Rosenberg said (with our thanks once again to Seeking Alpha for the transcript). "It's pretty much at an all-time low relative to the last few quarters. That's basically our continued focus on quality. I don't really see that changing significantly. Larry [Page, Google's president,] often says that we'd be best off if we just showed one ad, the perfect ad. So I really don't think that coverage is going to change much."

Reflecting the company's notorious transparency, co-President Sergey Brin weighed in on that topic later, effectively countermanding what Rosenberg had just stated. "There is some evidence that I think we've been probably a little bit more aggressive in decreasing coverage than we ought to have been," Brin said. "Historically we've had this 50/50 rough notion that when we have an improvement in advertising targeting, we try to split the benefit, if you will. We try to reduce our coverage at the same time as improving the monetization. But clearly that's not the ideal strategy indefinitely, because we don't want to end up with no ads.

"And in fact from a quality point of view," he continued, "we now find our ads are a significant addition quality-wise to our page. They are just a very important source of information. We've been actually re-examining some of that. There was some evidence internally that perhaps we were a little overly aggressive in decreasing coverage in this past quarter."

You'd think we could begin and end a story on Google's quarterly gains its net earnings overall were up 35% over the previous year's second quarter, to just about one and a quarter billion dollars. But the fact not only that Google's making these tweaks, but that it's tweaking its tweaks, is raising concern among analysts -- especially those who were expecting those 35% gains to have actually been higher.

What's going on? One more clue came today from Web traffic analysis firm comScore: Google's share of search queries placed from US-based households and universities (i.e., non-commercial) dropped last month, ever so slightly. Google served 61.5% of the nation's individuals searches in June 2008, by comScore's estimate, compared to 61.8% in May. The surge that comScore reported last month, stopped.

With online advertising manageable like a free-flowing commodity -- like oil, electricity, and in Starbucks' case, coffee -- the way to increase the value of what flows through the pipeline is to restrict the flow. That's what Google has been doing: reducing the quantity of AdSense ads on its own pages, to help justify its sales value of what it does sell.

But part of Brin's concern has to do with the fact that, at least for the time being, Google isn't the only supplier of advertising. When it restricts the flow, consumers can go elsewhere. Remember, AdSense ads actually have consumer value as well -- they're among the items that appear in response to users' queries. It's strange to think of consumers wanting ads; but when you're selling contextual ads, relevance is determined by applicability to users' wants.

So the other part of comScore's numbers today could not be interpreted as good news: Yahoo and Microsoft actually gained all of those searches that Google lost, with Google's US search share rising 0.3% and Microsoft's 0.7% on the month. Yes, that's Microsoft rising by close to one point.

Exactly how is Google making its adjustments? As CEO Eric Schmidt indicated, his company keeps a close watch on the economic conditions in the US and the rest of the world, preferably by reading the newspaper.

"There is obviously evidence of a slowdown in the US and Europe; you read it in the paper every day," Schmidt told one analyst. "We continue to believe that we are very, very well-positioned in such a slowdown and especially if it gets worse. The reason is there's a flight to quality and in particular a flight to measurability. So our economics are more driven by, for example, if people stop searching for something we might not be able to do ads against it."

Say again? The "flight to quality" is Schmidt's term for shifting Google's measure of sales from a quantitative to a qualitative basis -- restricting the flow, and tightening content around richness. But what's rich to the user? That's a harder question to answer in a tough economy, because the consumer is going to be tightening her spending.

Of course, that could mean that same consumer could spend more time online, as Google's Chief Economist Hal Varian then pointed out. Again, gently countermanding the person who spoke before him, Varian said, "I think part of what is happening is that as times get a little uncertain price-sensitive consumers are going to shop more carefully to try to make every dollar count. That means they are going to be doing research online and they are going to be doing shopping online."

Then comparing Google to another of the world's major suppliers that has recently had the luxury of being able to tighten supply to drive value, Varian added, "I think we have a little bit of the Wal-Mart Effect going on that as times get tough, people are going to watch their dollars. In many cases that means doing more shopping online."

Start-up sues Google over e-mail switching tool

Silverlight to star in NBC’s online Olympics coverage

Fahrenheit 451: Microsoft burns its Live Search Books effort

Google adds privacy link, avoids trouble

Google looks to be more up front on its search algorithms

Japanese, Korean researchers may extend the lifespan of NAND flash

Scientists from the University of Tokyo and Japan's National Institute of Advanced Industrial Science and Technology (AIST) claim they have successfully created a new flash NAND memory that can operate for hundreds of years.

In an e-mail correspondence with BetaNews, AIST confirmed it had created the new NAND memory, and said it hopes to have it out the door soon.

The NAND flash memory used today in such products as smartphones (including the Apple iPhone), UMPCs and other small notebooks, video game consoles, digital cameras, and solid-state drives (SSDs) are able to function for about ten years on average. However, that lifespan can be dramatically reduced when it's responsible for virtual memory or other similarly demanding tasks.

The new memory, its creators claim, can be programmed or erased more than 100 million times, with current flash memory only able to support around 10,000 total writes.

The lithography templates used to fabricate most NAND chips used today are as low as 30 nanometers, with the latest generation expected to be 20 nm. But some fabricators have stuck with 30 due to the stress the process places on the templates. The ferroelectric NAND flash memory AIST and University of Tokyo researchers are working on is 10 nm, and could likely be smaller after they are further along in development.

Japanese researchers hope to have their flash memory available on the market in the next few years.

Meanwhile, Sun Microsystems and Samsung are working together to create a new NAND flash memory device designed specifically for solid-state drives to be used for server applications. According to Samsung white papers, the single-level-cell (SLC) NAND flash is able to offer a 100x increase over traditional hard drives used today, when comparing number of data transfers per watt.

Although flash chips that are SLC-based tend to be faster than competing multilevel cell (MLC) devices, MLC can offer more storage at a lower price than SLC, which makes them ideal for notebooks and UMPCs.

Sun and Samsung hope to see their new "ultra-endurance" server memory make servers better suitable for video streaming, high-transaction data processing and similar tasks. Sun will implement the new NAND flash memory into select server and storage lines, but did not say when it plans to do so.

The demand for solid-state drives, especially in the enterprise, has increased due in part to the declining price of the technology. Research firm IDC estimates the global need for SSDs in the enterprise will reach 2.24 million units over the next four years.

Nanotube memory

HP develops new type of memory circuit

Samsung: Consumers, businesses to spark NAND flash rebound

Toshiba’s SSD-based notebooks double their capacity

How cool is that IBM supercomputer?

Slowing PC market, another online reinvestment ahead for Microsoft

With half of 2008 having already gone by, Microsoft's online services situation today is pretty much the same: Without a Yahoo partnership, the division is still bleeding. It's a good thing Microsoft's also a software company.

If the recent economic downturn can be characterized as a "storm" for those industries in which America has a major stake, the PC industry is certainly weathering this storm very well. Analysts had expected shipment growth to rise to only 12% annually; but from Microsoft's perspective, the number is more like 15%.

That rising tide may not stay risen for very long, however, and as Microsoft Chief Financial Officer Chris Liddell warned analysts yesterday afternoon during the company's fiscal fourth-quarter earnings call, there will probably be a leveling off of PC industry growth. That could be reflected in its earnings numbers for fiscal 2009, but even that tapering won't be catastrophic, paring growth to somewhere between 7% and 9% annually.

When PC shipments grow, the need for newly installed operating systems grow in turn; and that's what butters Microsoft's proverbial bread. The Client division of the company saw 14.6% higher revenue for the quarter ending in June, than for its fiscal fourth quarter of 2007, to about $4.37 billion. That's a direct reflection of brisk hardware sales.

In previous years, when demand for PCs had been dampened, the OEMs -- those resellers in the channel who package their hardware with Windows pre-installed -- felt the pain most directly. This last quarter, they're feeling the benefit of the sales surge. Shipments of Microsoft software to OEMs skyrocketed 22% over this time last year, the company's investor relations manager, Colleen Healy, reported yesterday.

"When taken together with reported revenue, total bookings for the company grew 23%, driven by over 20% bookings growth for our core businesses of server and tools, client, and the Microsoft business division," stated Healy (with our thanks as always, on these busy weeks, to Seeking Alpha for its transcript of yesterday's call).

There are two company divisions not covered in that list. One is Entertainment and Devices, which saw a loss for the quarter of $188 million. Lower sales? Not at all; as Healy reported, the company sold 88% more Xbox 360 consoles than during the same quarter last year: 1.8 million, by her estimate. But the company absorbed a $1.1 billion charge in this quarter, as a result of having extended its warranty program for Xbox 360 to three years.

The other division Healy didn't mention in that list is the one that's the subject of so much attention these days: online services. Revenue from that division actually rose $161 million over the prior quarter. But that's a pretty marginal amount, and after you account for all the money Microsoft's been pouring into the division to shore it up, it still lost $488 million.

Yesterday, one of CFO Chris Liddell's unhappy duties was to warn analysts that this problem won't get better soon, especially with regard to the company's guidance for the four quarters to come. Operating margins for all the other company divisions should remain flat next year, which isn't so bad since they're at healthy points right now.

It helps to separate the good from the bad rather than mix it all together. "Taken together, our businesses representing over 90% of our revenue will grow double-digits next year with the margin structure intact," Liddell told analysts. "Clearly the online services business has a totally different dynamic and is in a period of significant investment. We do not make these investments lightly, as the loss in this division will be a drag on an otherwise exceptionally good performance."

It only makes sense to continue investing in online services, Liddell went on, as the industry as a whole is expected to be evaluated at $80 by 2012. And with Yahoo having answered Microsoft's offers by partnering with Google instead, Liddell is making plans to combat both players without any acquisitions taking place.

"Given that [online advertising] environment, we made some decisions to accelerate our online services' organic growth strategy," the CFO said. "Mainly we decided to increase our investment in the high-margin scalable areas of search and ad platforms. So about two-thirds of the incremental spend that we are planning is related to investments to drive usage of our search offering."

This "drag," as Liddell puts it, will offset what he forecast as continuing gains in the company's core business segments, though not at the same levels as Microsoft has been seeing. With PC unit growth believed to go back down to as low as 12% annually for fiscal year 2009, and 10% for the first quarter of that year, growth in client software revenues could taper down to 7% for Q1 and 10% for the full year.

While Liddell declined to comment much about the attempt at a Yahoo deal, what he did not say -- and the volume he chose to use in not saying it -- spoke volumes. His expenditure plans and his guidance for the year also omitted Yahoo, an indicator that his company is making preparations for a "no-go."

Gates: Yahoo deal unlikely

Yahoo creates three new teams to report to Decker

Napster turns its business around with a narrower loss

Novell credits Microsoft, SAP, and HP for Linux sales leap

Major Yahoo shareholder backs Yang in anti-Icahn campaign

12:03 pm EDT July 18, 2008 - Apparently after having read and assessed the text of Yahoo's new anti-Icahn Web site, as well as its latest filing with the US Securities and Exchange Commission (detailed below), Yahoo's third largest shareholder, capital management firm Legg Mason, announced this morning that it would be backing Yahoo's current management in its efforts to retain its existing board structure and management.

"After consideration of the relevant facts and circumstances and our fiduciary duty to our clients, it is our intention to vote in favor of the slate of directors proposed by the current Board," reads this morning's statement from Legg Mason's chief investment officer, Bill Miller. "We have met with representatives of the current Board and management, including founder Jerry Yang, several times. We believe the current Board acted with care and diligence when evaluating Microsoft's offers. We believe the Board is independent and focused on value creation for long-term shareholders."

Miller goes on to say he would prefer if Yahoo executives met with Icahn to determine the future governance of the company, before a proxy fight is waged at the August shareholders' meeting.

Legg Mason's stake in Yahoo is much larger than Icahn's, which was only recently acquired. Since shareholder votes scale in proportion to the number of shares held, Legg Mason's vote represents a tremendous obstacle to Icahn's proxy plan -- one that independent analysts are already saying cannot be overcome.

Earlier this week, the capital investment firm indicated it would be interested in a Microsoft takeover of Yahoo as a whole -- not in part -- at $33 per share. It then told Reuters on Monday that it wasn't interested at the time in a partial buyout, saying, "the latest developments to sell Yahoo search to Microsoft [are] unappealing."

Bugs Bunny had a saying: "Of course you know this means wa-ar!" and you knew the fun was only just starting. Yahoo's launch this morning of an all-out lambasting of Carl Icahn shows the rabbit may have a few tricks after all.

As its August 1 shareholders' meeting approaches, Yahoo's case for maintaining its current board of directors and its current growth strategy has transformed in one week's time into a full-scale media campaign, moving entirely from defense to offense. This morning, the company launched its own microsite, in an offensive counter-punch designed to make financier Carl Icahn -- the man currently trying to broker a search business deal between Yahoo and Microsoft -- look like an opportunist and a fool.

The "Proxy Facts" page launches by quoting Icahn's own words, uttered only last month during a CNBC interview, in which he characterized Microsoft buying only Yahoo's search assets as foolish: "It's crazy for this company now to do this alternative deal and give the store away, because obviously, an alternative deal is a poison pill because once you've done an alternative deal and given the search to Microsoft, you don't need Microsoft to buy you anymore."

CNBC's own transcript of the June 4 interview on its early evening "Fast Money" program (compiled from its closed-captioning, so it's a little rough) reveals the part of Icahn's comment that Yahoo did not excerpt, in which he compared this "poison pill" to another: the executive severance package that Yahoo's board hastily put in place, giving themselves massive payouts estimated at $1.60 per Yahoo share held, for leaving the company in the event of a takeover.

"So that would be a poison pill, as bad as this -- in quotes -- 'ingenious contraption' that Jerry Yang put together and called it a severance package, which is nothing more than an impediment," reads CNBC's transcript. "And he [Yang] neglected to say that Microsoft even put aside $1.5 billion for the employees."

During that interview, Icahn definitely showed his continued support for an all-out Microsoft buyout, but did compare a partial business sell-off to what he also called Yahoo's "incomprehensible" employee severance program, which he said was put in place mainly to "entrench" the board and senior executives. So Yahoo is now using that comparison as an illustration of Icahn not exactly knowing what he wants, or at least wanting something one moment and something else the next.

If you're thinking of the term "flip-flop" -- which is now irrevocably linked with 2004 Democratic presidential candidate John Kerry, thanks to a largely successful campaign against him -- that's exactly the term Yahoo used when it launched this media campaign just yesterday.

The company's anti-Icahn microsite today also shows a list of 15 companies for which Icahn sought to gain board membership through share purchases since 2004, revealing that only three of those companies gained in share value between the time one day before Icahn announced his intentions, and July 14. One of those gainers, BEA Systems, was by virtue of Oracle's acquisition of that company, which was completed last April.

"The choice for Yahoo stockholders is clear: Re-elect your experienced and dedicated Board with a clear strategy and a demonstrated commitment to create value for Yahoo stockholders, or turn your Company and its uniquely valuable combination of assets over to Carl Icahn and his nominees and allow Microsoft and Mr. Icahn to dismantle the Company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo stockholders," Yahoo's microsite reads.

In a filing with the US Securities and Exchange Commission yesterday, Yahoo showed its amended shareholders' presentation (complete document available here), which takes a much harder-line approach to combating Icahn's proposed alternative proxy slate than the original version of the presentation unveiled last month.

In fact, the shift of Yahoo's focus for that presentation has shifted, away from Microsoft, which it had earlier characterized as insincere and inexperienced in the online field, and onto Icahn and his alternative slate. Pre-emptively, the new presentation now introduces the key members of Icahn's "dream team," listing the businesses they're involved in on a daily basis, apparently to demonstrate that few of them are particularly skilled with the online world either.

The new presentation also devotes one slide to an evaluation of Yahoo's key online assets in China, Japan, and Korea, where the company is doing very well and, in many cases, has dominant market share according to independent assessments. Yahoo's Asian assets, we learned earlier this week, were the sweetener for Icahn's latest proposed deal, and perhaps what he and Microsoft were truly aiming for in their partial bid for the company the previous weekend.

As the SEC filing also revealed, Yahoo continues to point to the rollout of its revamped display advertising platform -- once touted as irrevocably tied to its search assets -- as still scheduled for the third quarter.

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Vista users greeted with an unexpected surprise: MobileMe

While they may have no intention of ever signing up for the service, Windows users are finding an unexpected addition to their Control Panels.

A link for "MobileMe Preferences" has begun appearing at the bottom of the Control Panel screens of those who have installed the latest Apple iTunes software -- according to one user, without any notification at all.

The MobileMe preference panel has also been reported to be showing up in Windows XP as well.

MobileMe does feature Vista compatibility, and the most recent update to iTunes, version 7.7, added functionality necessary for iTunes to work with the service -- although it is not necessary to sync information.

It is through iTunes 7.7 where Apple added the MobileMe functionality to Windows computers. The tutorial for setting up MobileMe on a PC confirms this. As Step 1 clearly reads, "Download and install the latest version of iTunes. iTunes includes the software required to set up MobileMe on your PC."

Some may take issue with this: Apple never explicitly said that MobileMe software would come as part of the new version of the software.

However, Apple distributing software like this is nothing new. For example with QuickTime, the company has used its player software to also deliver its iTunes music service, which some users have found to be intrusive. And last March, Apple used iTunes' Software Update service for Windows as a way of pushing its Safari browser. Other companies have adopted similar approaches in an effort to promote a new product on the back of an already established one.

Users have not yet revealed whether they've discovered a method to remove the MobileMe icon without uninstalling iTunes 7.7 altogether.

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Sony to offer 'Graphic Splash' for select Vaio FW notebooks

Sony's upcoming Graphic Splash notebooks will be based on the Vaio FW multimedia PC introduced this week, and they'll be available for sale online for a limited time this fall, BetaNews has learned.

In announcing a "new line-up" of Graphic Splash notebooks on Wednesday -- plus a related contest -- Sony didn't specify whether the decoratively cased PCs will use any of the four Vaio models unveiled on Wednesday as its underpinnings, or whether they'll constitute a separate model. Photos accompanying the announcement appeared to show the new designs on the company's existing FZ series notebooks.

But a Sony spokesperson told BetaNews today that, beneath its graphical cover, the Graphic Splash will be the same as the Vaio FW, a multimedia PC that features an unusually sized 16.4-inch LCD display aimed at optimized viewing of Blu-ray movies.

If you'd like to try to get a Graphic Splash PC for free, you can submit your ideas for a notebook cover to a contest co-sponsored by Sony and Microsoft. Ten finalists will each win a Graphic Splash.

Sony also plans to sell Graphic Splash FW notebooks online some time this fall. "We haven't decided yet on the exact dates of availability or the pricing, but the Graphic Splash will be an FW, and it will probably be a mid-end model," according to the Sony spokesperson.

One of Sony's 'Graphic Splash' designs for its FW-series notebooks, this one called "Grow."

But if -- like a lot of people -- you don't really care what the cover of your notebook PC looks like, the FW is slated for availability during the first week in August in conventional gray or white. Although orders won't be filled until then, end users can see the FW -- in addition to other new Vaio models -- at "Sony Style" stores, BetaNews was told.

At entry level pricing of $1,000, the FW will actually cost less than either the fashion-oriented SR, which starts at $1,400, or the Z model, an ultra-mobile PC which will be priced beginning at $1,800, without its options for a solid state drive (SSD) or readable/writable Blu-ray drive. Pricing for the FW, though, can go as high as $1,700, depending on configuration.

The business-oriented BZ model also starts at $1,000, but that one will only be available through VARs and direct marketers.

This particular design is called "Never Stop."

In an interview with BetaNews at a Sony press event on Monday, Nobuyasu Nozawa, senior product manager, explained Sony's reasoning for choosing a 16.4-inch display for the FW, instead of a more typical 15.4- inch screen or 17-inch widescreen. A lot of Blu-ray movies are shot using a 16:9 aspect ratio, and the FW's screen is constructed with the same dimensions so as to minimize black lines, Nozawa said.

Weighing in at 6.4 pounds including battery, the FW ships with a 250 GB hard drive, up to 4 GB DDR2 SDRAM, and a choice of either the built-in Mobile Intel Graphics Media Accelerator or an optional ATI Mobility Radeon HD 3470 or processor, according to spec sheets obtained by BetaNews.

Units also come with HDMI connectors for hooking up to HDTVs and DLNA-enabled Vaio Media software for streaming video to other devices on home networks. Other features include a built-in 1.3 megapixel camera; integrated Bluetooth and 802.11n Wi-Fi; standard card slots; and an optical drive supporting more than a dozen CD and DVD formats.

Sony also produced a Graphic Splash limited edition earlier this year, based on its VA notebook. The 1,200 notebooks in the limited edition VA series used designs by visual artist Maya Hayuk, who will be one of the judges in the FW contest.

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Latest Winamp adds access to CBS Radio stations

Who still uses Winamp? There's at least one guy at BetaNews whose desktop clutter contains the venerable music player, and today there's actually a new reason for it to stay right where it is.

Download Winamp Full 5.54 from FileForum now.

Though it's been BetaNews itself that sounded the death knell for Winamp as much as four years ago, the product itself lives on, albeit without the innovative spirit that characterized its Nullsoft developers at the turn of the decade. Today's release of version 5.54 might not merit mention were it not for the addition of at least one compelling new feature: the new and rebuilt AOL Radio, which now provides direct access to CBS owned and affiliated radio stations throughout the US.

CBS Radio (previously known as Infinity Broadcasting) has been streaming its owned and operated stations over the Web for several years, though up until recently, you've had to dial up each station through its Web page. Then CBS Radio launched its own online player, followed last March by an agreement to merge that player with the troubled AOL Radio -- at one time, the Internet's leading streaming music service.

There's been a multitude of services available through Winamp over the years that have gone by the name "AOL Radio" (earlier builds appeared to intentionally confuse AOL Radio with Shoutcast streams). Today, AOL Radio for all intents and purposes is CBS Radio, with all of its selections being stations from CBS' roster of 150 streaming broadcasters. But not every CBS stream is featured there yet, especially including several of the "HD2" channels that appear on new digital "HD" FM consoles.

Still, the mere fact that Winamp 5.54 provides direct and unimpeded access, without popup ads, to KRTH-101 Los Angeles could be the media player's raison d'etre, at least for this not-so-golden oldie. You'll also find access to KMOX 1120 St. Louis, KCBS News Radio 740 in San Francisco, KOOL 105 in Denver, and CBS College Sports radio from New York.

Sound quality is excellent at 64 Kbps, especially when compared to Shoutcast or Surfer Network stations (KOMA Oklahoma City comes to mind) that stream at 31 Kbps or less, which often sound like they're being sent to you from an orbital space station.

You'll also get access to quite a few advertisements, the sheer volume of which is often astounding. Thanks to the magic of synchronization, certain ads that are exclusive to AOL Radio will pre-empt local stations' broadcast ads, often for 60 or 90 seconds at a time. For now, many of these are public service ads. But when these spots have concluded, there may often be as much as 60 seconds more of local advertising, followed by 30 seconds of station promos. And there may be four of these breaks per hour.

With AOL Radio paying multiple tiers of royalties, including for categories that CBS' broadcast stations are currently exempt from paying, these ads won't be going away any time soon.

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Sony plans $500 'Blu-ray player for audiophiles' for fall

At a press event in New York this week, Sony presented a prototype of a new "Blu-ray player for audiophiles" -- the BDP-S550 -- slated for release next fall.

NEW YORK (BetaNews) -- "The S550 will provide features like some additional decoding of high definition audio streams," said Christopher Fawcett, Sony's VP of home video product management, in a meeting with BetaNews at a Sony press event here on Wednesday.

Details around the audiophiles' Blu-ray player are still being finalized, according to Fawcett. But the BDP-S550 -- which will sell for around $500 -- is also expected to add 7.1 channel analog audio output and a 1 GB flash drive to the functionality of the lower-end, BDP-S350 Blu-ray player that shipped this week for $400.

Fawcett told BetaNews that key features of both will definitely include support for BD-Live and BonusView (picture-in-picture); an Ethernet port for accessing firmware updates and interactive content; and a new "Home" key for the remote control unit, which works in conjunction with a simplified LCD menu for managing system and network set-up plus movie, music, and camera settings.

In another demo last night, Rich Marty, VP of product development for Sony Pictures/Home Entertainment, showed reporters some of the capabilities of BD-Live, including live online opinion polls of users and viewing of extra content like outtakes and interviews, which film studios are now adding to their Blu-ray titles.

As previously reported in BetaNews, however, although Sony's PlayStation 3 already supports BD-Live, a firmware update is still in the pipeline for enabling BD-Live in the BDP-S350.

According to spec sheets supplied to BetaNews, other features common to both players will include an external USB port for local storage; 7.1-channel Dolby TrueHD and Dolby Digital Plus decoding and bit-stream output; DTS-HD High Resolution Audio and Master Audio bit-stream output; 1080/60p and 24p True Cinema output; and Bravia Sync technology for quick resume of connected devices.

Marty told BetaNews that, like the BDP-S350, the BDP-S550 will also be smaller and lighter than its own predecessor. But the form factor differences will be a little less noticeable between the BDP-S550 and BDP-S500 than between the BDP-S350 and BDP-S300, he elaborated.

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Australia tweaks its code of conduct for Internet and mobile

Today, the Australian Communications and Media Authority approved the Content Services Code, a set of guidelines for ISPs and mobile carriers, which include directives for ISPs to hire so-called "trained content assessors."

The Content Services Code is a code of practices developed by the Internet Industry Association for online and mobile content providers. Within it are guidelines for "self-regulation of content" from commercial ISPs and mobile operators, which include the mandatory hiring of in-house censors, called "trained content assessors."

These censors will be trained to classify content according to ratings established by the Classifications Board, which rates film, computer games, magazines, music, and other media. Content which is likely to be rated MA15+ and above must be "assessed and classified" with the service provider, so users can either obtain information or filters for that content.

The guidelines also include best practices for how to manage customer complaints of inappropriate content, and discuss the inclusion of the "Family Friendly ISP" seal program that the IIA launched in 2002. The seal featuring a ladybug would only be given to ISPs and mobile service providers who have complied with IIA guidelines.

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Details emerge on Psystar suit, Apple wants recall

Apple is not only suing Psystar to stop them from selling Mac clones, but is asking the courts to order that the Florida-based company recall all of the systems sold to customers.

The 16-page complaint argues that Psystar's actions were meant to damage Apple, as well as confuse the public. In addition, the continued sales of Open Computers would financially hurt the company.

Altogether, Apple is accusing Psystar of ten counts: copyright infringement, contributory and induced copyright infringement, breach of contract, inducing breach of contract, two claims of trademark infringement, "trade dress" infringement, trademark dilution, unfair competition under California law, and unfair competition under common law.

"Apple has suffered and will continue to suffer lost sales and profits in an amount not yet fully ascertained in an amount to be proven at trial," an excerpt reads. "In addition, Apple has suffered and continues to suffer injury to its business reputation and goodwill for which no adequate remedy exists at law and for which Apple is entitled to injunctive relief."

Apple cited its licensing agreement, which specifically prohibits use of Mac OS on anything but Apple related hardware. "Apple has never authorized Psystar to install, use, or sell the Mac OS software on any non-Apple labeled hardware."

In petitioning for relief, Apple is asking the court to recover unspecified damages as a result of Psystar's infringement, as well as any profits it may have made from the sale of the Open Computer.

The company also left the door open to demand the maximum statutory damages for willful copyright infringement, and said it would make a decision before the court rules on the case. An injunction would also be requested to prevent further infringement.

Apple is also asking for a recall of Psystar machines. As part of the overall injunction banning the company from selling or installing Mac OS X, Psystar would also be ordered to recall any computer it had sold to consumers with Apple's Mac OS X software installed.

The specifics of how Apple wants the recall to take place were not specified in the complaint.

FOR MORE:

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Sony, HP get behind an open format for digital audio

Hewlett-Packard and Sony announced they will work together to develop a new generation of Digital Audio Tapes, called DAT 320, which will be built on an open standard so that other companies are able to contribute.

Although the two companies are collaborating to create the Digital Data Storage (DDS) standard, they both have plans to offer DAT 320 tape drives and cartridges that will eventually compete against one another. The Sony and HP products will have the same speed and capacity, though it's likely their firmware will be different, even though the drives will be interchangeable.

The DAT 320 will be able to back up data at a rate of 86 gigabytes per hour using a 2:1 data compression, and can provide 320 GB of storage on a single tape cartridge. Today's standard, DAT 160, can only support 160 GB of data storage on a single cartridge. DAT 320 will be backwards compatible with DAT 160.

DAT 320 should be available sometime in 2009, both companies estimate.

Even though HDDs are dropping in price while at the same time increasing in capacity, tape drives continue to be a valuable commodity for many small and medium businesses. But HDDs and tape-based storage devices will coexist well into the future, while the tape backup industry is predicted to be a $1.5 billion market in 2009. More than 18 million tape drives and 400 million tape cartridges have been shipped over the past 20 years, and analysts expect the demand for tape drives to increase over the next two years.

Businesses considering a move away from DAT/DDS may now think twice before switching. DAT 320 may enable companies with space constraints to increase data storage without having to buy additional hardware.

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YouTube agrees to share viewer data, without IDs and IPs

Litigants trying to get data on what the video site's users were watching have backed off somewhat, although YouTube will still have to share some data with Viacom.

Plaintiffs Viacom and a class-action group led by the Football Association of England agreed to accept a watered-down version of YouTube's viewer logs. That version will not include the IP addresses nor the YouTube usernames of the viewers.

Earlier this month, a judge ordered Google to turn over this information to Viacom. The media conglomerate had specifically requested information that would have also tied the viewer data to a specific YouTube user.

Viacom has been at the forefront of the copyright fracas involving YouTube: It sued the site for $1 billion in 2007. The Football Association of England followed not soon after, claiming it had identified about 160,000 unauthorized clips of European football programs -- viewed more than 1.5 billion times.

Privacy advocates and users alike almost immediately slammed Viacom for what they saw as an overreach. The Electronic Frontier Foundation called it a "setback to privacy rights," while users threatened a boycott of Viacom programming.

However, as the criticism deepened, the media company seemed to back off its original request, saying in a statement that "the personally identifiable information that YouTube collects from its users will be stripped from the data before it is transferred to Viacom."

Yet Viacom still seemed to want to gain access to users' private videos, Google's search technology on YouTube, and specifics on how YouTube identifies videos that may infringe on copyrighted material.

In a post to its company blog, YouTube officials boasted that the judge in the case had sided with the video sharing site.

"We remain committed to protecting your privacy and we'll continue to fight for your right to share and broadcast your work on YouTube," it said.

Regardless of Monday's developments, a resolution in the matter could be a far ways off. Neither case is expected to come to trial until 2009 or 2010, say legal analysts.

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First Look: MobileMe promising, but limps out of the gate

In my three plus years of covering Apple, its MobileMe product is probably the most exciting concept, in my opinion.

I've often longed for a viable "push" solution that wouldn't break the bank, and would operate much like Exchange does. In concept, MobileMe does everything I need it to do, pushing information from my PC and Mac to my phone and vice versa.

So testing it out for BetaNews wasn't a problem at all for me. I can say, however, with confidence that this is the worst release I have seen from Apple in quite some time. The system took nearly two days to get right, and at times still isn't working 100 percent.

Combined with what can be described as a mess of a launch for the iPhone 3G, it hasn't been a good day in Cupertino.

MobileMe finally became stable enough around 2:30 pm ET for us to actually take screenshots of anything other than error messages -- and what I've seen so far is promising, albeit frustrating to wait for Apple to work out the bugs.

Through Apple's trouble today, here's hoping they learn that keeping things under wraps so much maybe isn't such a good idea. Beta testing does work, you know.

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New Creative sound systems promise to compensate for poor MP3 quality

Creative introduced two new consumer-grade media players that claim to be capable of identifying different parts of an MP3 track that have lower sound quality, and remastering them to restore sound quality as much as possible.

The Creative Zen X-Fi and Zen X-Fi with Wi-Fi both offer a 2.5-in. TFT display, built-in FM radio, built-in microphone, a video converter, and SD card expansion slot for additional storage. All of the devices measure 83mm x 55mm x 12.8mm and weigh in at 69 grams.

Most notably, the new Zen X-Fi ships with X-Fi Crystalizer, a new music standard created by Creative that uses the X-Fi Crystalizer and X-Fi CMSS-3D to convert audio at the best quality available when transferring it from the PC to a Zen X-Fi. Traditionally, audio ripped to be put on a CD loses sound quality, then compressing and ripping music from a CD to a PC also makes sound quality diminish.

Some audio enthusiasts are not fully convinced of the overall effectiveness of the X-Fi Crystalizer and CMSS-3D. Many of these complaints are centered around tracks that feature low frequency sound, saying the bass quality isn't good with speakers or headphones. Another common complaint is that Crystalizer only partially helps clear up poorly ripped music files, while on the other end of the scale, may be useless for songs that only have partial sound loss.

After listening to the Crystalizer for myself at a local Fry's Electronics store, I decided the difference in sound quality in higher-end speakers was not noticeable. Its effectiveness with cheaper speakers is slightly noticeable, but still isn't worth the hassle of installing and setting up the Crystalizer.

The CMSS-3D technology will then ensure all music or video played through the Zen X-Fi's built-in speakers is played with the clearest audio and video. But as with the other Creative products, most computer users are unlikely to notice a difference.

The Zen X-Fi with Wi-Fi also allows users to stream files wirelessly via instant messaging using either Microsoft Windows Live! Messenger or Yahoo Messenger.

Rumors about a new Creative Wi-Fi-enabled device last week on enthusiast forums, though Creative remained quiet about any new product announcements.

The Zen X-Fi 8 GB without Wi-Fi support will be available before the end of July for $149.99. The Zen X-Fi 16 GB with Wi-Fi costs $199.99, with the 32 GB model selling for $299.99. Both of those models are available immediately.

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Activision adds Line6 amp modeling to Guitar Hero: World Tour

The next in Activision's popular line of rhythm-based music simulation games is scheduled for release in Fall 2008, and is single-handedly changing the style of the game with the addition of many new features.

World Tour will follow in the footsteps of Rock Band, offering a drum kit and vocal microphone in addition to the expected guitar controllers, which have reportedly also been upgraded. An eight-player "Battle of the Bands" mode, extended character customization, and online career mode, as well as "the largest on-disc set list in a music-rhythm game to date," have been added. A complete set list, however, has not yet been released.

But one of the most notable additions is also by far the biggest departure from the Guitar Hero norm: GH: World Tour adds the Music Studio music creator which will allow gamers to create music from scratch using just their controllers. An announcement from Activision came today saying that Music Studio will now feature the full Line6 POD feature set.

Line6 is well-known among musicians for having created the immensely successful POD digital guitar amplifier modeling unit. The first of its kind, the POD took line-level guitar signals and digitally reproduced the sound of various classic amplifier and speaker combinations. Now a technology over ten years old, the same effects can be created through software plug-ins.

This adds a legitimate musical creation tool to what has until now been only a game.

Rock Band improved upon what the Guitar Hero series had created, and now Guitar Hero is improving upon Rock Band and taking it even further. Fans of the series, however, are already complaining that it's too bloated. The latest version is expected to have a $180 price tag, which will soon be over half the cost of a new Xbox 360 Pro. Though the new controllers promise to be high quality, those Guitar Hero fans who also purchased Rock Band will have to clutter up their closets with even more peripherals.

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Phoenix BIOS with hypervisor to premiere Monday in NEC laptops

BetaNews has learned that, on Monday, NEC will roll out plans to include remotely manageable anti-virus technology in PC notebooks, running outside of the Windows OS in Linux-based HyperSpace firmware from Phoenix Technologies.

NEW YORK CITY (BetaNews) - Shauli Chaudhuri, vice president of marketing at Phoenix Technologies, told BetaNews this week that NEC will be among the first PC manufacturers to use its HyperSpace technology.

Use of the Phoenix firmware will allow security applications to operate before, during, and after Vista boots up and shuts down, securing the NEC notebooks before malware can get downloaded by Windows applications, according to Chaudhuri.

"HyperSpace is a result of our PC 3.0(tm) vision that is all about making a PC user's life much easier by making the PC experience rewarding," Chaudhuri elaborated, in an e-mail sent on Friday evening to BetaNews. "We believe PCs should be always on, and as simple and easy to use and maintain [as] a smartphone."

In a meeting with BetaNews on Thursday at this week's Digital Life press preview, the VP said that the HyperSpace platform allows software tools to run on Fedora Linux firmware, even though Windows is installed on the same system.

HyperSpace works with a hypervisor from Phoenix known as HyperCore, which is embedded within the core system firmware, or BIOS. As previously reported in BetaNews, the key idea behind HyperSpace is to be able to run software and remote support services even when Windows is down or otherwise disabled.

HyperSpace is designed to take advantage of capabilities such as Intel Virtualization Technology and Intel Trusted Execution, which are included in Intel's vPro business platform, which encompasses Core 2 Duo processors and Centrino Pro mobile technology.

For its part, HyperCore is a lightweight Zoned Virtual Machine Monitor (ZVMM) capable of running specialized core services side-by-side with Windows.

Specifically, NEC will be using a part of HyperSpace known as ManageSpace, which is capable of updating virus definition files while preventing Windows from accessing the network, according to the Phoenix executive.

NEC's emerging Linux-based firmware environment also includes AppSpace, which is geared to running instant-on software applications on Linux.

"On Monday, we'll be announcing that NEC will be using HyperSpace to run anti-virus software outside of Windows. NEC, though, will not be using AppSpace at this time," Chaudhuri noted, following up with BetaNews on Friday.

"We are implementing PC 3.0 by taking advantage of the virtualization hardware built into most new laptops and desktops, adding an enhanced Linux and key embedded applications that comprise 80 percent of a user's day -- like an e-mail client and a Web browser," she told BetaNews.

"In addition to embedded commonly used applications, we have added a management layer that enables remote service bots and technicians to install, tune, and repair the software on a user's PC. Virus checking software will run in this space called ManageSpace, outside of Windows."

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West Coast lines grow longer as iPhone 3G buyers are told to wait

Just a few blocks away from the Moscone Center, where Steve Jobs and company host Macworld and WWDC every year, the enthusiasm for Apple's latest product launch was apparent.

SAN FRANCISCO (BetaNews) - Purchasing products in the Apple Store here typically can be an interesting experience, as it's quite common to exit a Jobs keynote and head to the store just a few blocks away, with Apple employees still unaware of what was announced.

This morning, BetaNews visited the Apple Store along with three local AT&T retail locations around the Union Square/downtown area, and found lines outside of all three locations. Although the lines were more subdued due to the fanfare at the Apple Store, the people waiting in line were just as anxious to get their hands on the iPhone 3G.

When I arrived outside of the San Francisco Apple store at 7:55 a.m. PST, at least 150 people were in line patiently waiting for the Apple Store to open.

Shortly after the store opened its doors at 8:00 a.m., in keeping with problems faced across the country, the Apple computer network went down, and customers were forced to patiently wait longer before being able to make purchases. Each customer who purchased a new iPhone must go home and activate it through the Apple iTunes service, as Apple's computer infrastructure is being slammed by the launch of the iPhone 3G in 22 countries.

But customers scrambling home to activate their phones are also facing server issues, due to continued high pressure on the iTunes servers.

At 10:15 a.m. PST, the activation system was fully operational, and customers were able to leave the store with a fully functioning iPhone. But with only a handful of people allowed into the store at a time, and purchasing and activating a new iPhone was happening at a snail's pace.

At 10:30 a.m. PST, the line only continues to grow, with the line stretching down Stockton Street, around O'Farrell, and almost all the way down to Powell Street.

I randomly selected 50 people in line, and discovered that a whopping 38 of them already had an iPhone, and were eagerly ready to purchase the iPhone 3G. Thirty-five of the people in line said they were going to purchase the 16 GB model, though the number was evenly split at 25 people purchasing the white iPhone and 25 purchasing the black model.

The lines outside the Apple Store on Stockton Street in downtown San Francisco.

"Yeah, I already have an iPhone," a bleary eyed San Francisco State University student told me. "But I figured I would roll by and pick up the new one anyway, because I want the increased speed from 3G."

The local news media and online hacks are hovering outside like vultures, though the press corps seems a lot smaller than the first iPhone launch at the same location.

"It has been rather uneventful considering how chaotic the original launch was," said James Mitchell, 27, San Francisco. "I woke up and took a bus over here and have just been hanging out, drinking coffee and making small talk with people in line."

The lines outside an AT&T store in downtown San Francisco.

11:00 am PDT July 11, 2008 - Reports from several local AT&T retail outlets indicate they are selling out of iPhones, with 150 or less in stock. Customers who didn't get one are able to fill out a voucher and come back later once more phones arrive. There still appear to be phones inside the Apple store, but Apple employees patrolling outside are not saying how many units are still available inside.

The continued chaos of a hectic iPhone 3G launch in one of the country's most tech-friendly regions will continue for the next couple of hours, or until the store runs out of iPhones for customers, which is very possible before the end of the day.

12:25 pm PDT July 11, 2008 - The line at the Apple Store here continues to stretch around the corner, as its ability to activate customers' phones remains...iffy.

Gadget buyers more assertive, even arrogant

iPhone 3G poses barriers to business adoption

Eager iPhone 3G buyers begin all-night wait outside stores

Apple stops selling current iPhone, as 3G speculation grows

T-Mobile to offer iPhone in Germany for as little as one euro

New York Attorney General's child porn crusade expands

After an investigation of newsgroups that uncovered large amounts of underage pornography, New York Attorney General Andrew Cuomo began a large-scale expulsion of the material at the ISP level. Now there's an official Web site for the effort.

Last month, a statement from the Attorney General's office announced that agreements with Verizon, Time Warner Cable, and Sprint had been made to "purge their servers" of sites and Usenet groups that were found to contain child pornography.

Yesterday, Cuomo announced that the nation's first and third largest ISPs, AT&T and AOL, had joined in the endeavor, and will likewise block those same sites.

Furthermore, he has launched a site called nystopchildporn.com, which lists all participating ISPs, ranked according to national size: #1. AT&T, #3. AOL, #4. Verizon, #5. Time Warner, and #6. Sprint Nextel. Though it's listed as "email your ISP," the link actually serves as a list of all ISPs that have not yet joined in support for his cause. Number two US ISP Comcast, however, is missing both from the list of supporters and from the list of not-yet-supporters.

Comcast itself is under investigation by the FCC for blocking of a different kind: file sharing.

FCC wants no-porn, free broadband wireless auction

Will Verizon’s FiOS TV in NY dent US cable monopolies?

Outcry over BitTorrent blocking stretches to Canada

Eager iPhone 3G buyers begin all-night wait outside stores

The second-generation iPhone won't go on sale for another 9 hours, but some intrepid souls are already lining up outside AT&T and Apple stores to be among the first to use the device. We spoke with two as they began their night-long wait.

At an AT&T store in downtown Baltimore, which saw early morning lines form before last year's nighttime iPhone launch, was preparing for big crowds. Shortly after the close of the store at 8pm, plastic posts and chains were being setup to guide the expected line.

Inside the store, iPhone 3G posters and displays were put into place as employees asked passersby if they wanted to become the first person in line; nobody seemed interested in waiting 12 hours. Employees at AT&T stores across the country will receive training this evening to prepare for the morning's onslaught.

BetaNews asked if AT&T expected the same size crowd as last year, and the answer was a definitive yes despite the 8am launch. Although current iPhone owners may not be tempted to upgrade just yet, AT&T expects huge numbers of switchers from other carriers who waited for more enticing features, like 3G broadband and GPS.

Setup begins at an AT&T store in Baltimore, Maryland

It may be right. By 9pm, the first buyers had lined up at the two AT&T locations visited by BetaNews, in Baltimore and Reston, Virginia.

A 41-year-old Verizon customer decided it was worth the long wait because he really wanted the iPhone 3G. He was originally planning to arrive at the Reston AT&T store by 3am, but didn't want to potentially miss his chance, since limited numbers of the device will be available in each location. Last year, most AT&T stores sold out with customers still in line.

In Baltimore, the story was one of love. A 50-year-old flight attendant agreed to wait all night to make sure her husband would receive the iPhone 3G before he went to work. She said it was his birthday, and although he's a huge Apple fan, he required the faster Internet and GPS functionality that is finally arriving in the upgrade. He's also switching carriers from Verizon.

Both individuals were expecting some friends to show up to help pass the time, and were a little embarrassed to admit they were waiting all night for a phone. Still, the flight attendant seemed happy to wait, saying she's frequently up for 20 hours at a time, and even brought along a map of the stars to study while she sits on the sidewalk looking up in the sky.

A flight attendant waits in Baltimore to buy her husband an iPhone 3G

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T-Mobile to offer iPhone in Germany for as little as one euro

Apple stops selling current iPhone, as 3G speculation grows

AT&T CFO says no pricing set yet for 3G iPhone

Now you can find your cell phone...when it screams, 'I'm lost!'

The next time you lose your cell phone, you might hear it scream something like "I'm stolen!" or "I'm lost - take me home," through new location-based technology now under development by a company called Yougetitback.com.

NEW YORK CITY (BetaNews) - From its Web site, the start-up already offers software dubbed Cellphone Superhero, aimed at letting users lock misplaced cell phones remotely, in addition to storing photos, e-mails, and contact information of friends and co-workers securely in a private online vault.

Industry statistics show that, even without technology like Superhero, lost cell phones eventually find their way back to their owners about 80 percent of the time, contended Ciaran O'Sullivan, VP of sales. "Most people are honest," he told BetaNews, during a Digital Life press preview last night in New York City.

On the other hand, if you don't get your cell phone back after you've left it in a restaurant or the back seat of a taxi, reassembling your contact info can be a nightmare, Sullivan noted.

Meanwhile, while you're waiting to find out where your phone might be hiding, using Superhero to lock it down will make the phone just about useless to potential thieves, since outgoing calls will only be allowed to Yougetitback.com.

If the sim is removed, the phone will still be locked down, anyway, and the Yougetitback.com Web site can track the new sim. To track the phone, the company uses GPS with carriers that support this feature. Otherwise, the Web site employs a technology known as cell tower triangulation.

Sullivan also told BetaNews that through an upcoming feature called "Client Screaming," users will be able to configure their phones with special custom ringtones, with vibration as another option. "So if you think your phone's been stolen," he said, "you can call it, and it will scream, 'I'm stolen!' -- or anything else you want it to say."

A free three-month trial copy of Cellphone Superhero is now available from the company's Web site. Right now, the software is designed to work with about 60 different cell phone models, including BlackBerry Pearl, Curve, and 8800 models from Research in Motion (RIM), dozens of Nokia phones, and some Samsung and Panasonic models.

Yougetitback.com -- a company that began life as a provider of hard copy security tags -- is also now beta testing a new edition of its Superhero software, tailored to PC laptops, Sullivan said. Laptop Superhero -- a product with capabilities that will include PC hard drive encryption -- is expected to be ready for release by the end of this year.

California to drivers: Drop the cell phone, dude

Nokia to buy Symbian

BlackBerry Pearl users can test voice input for Google Maps

Nokia updates Sun’s Java gaming SDK for its cell phones

Sneak preview: Polarid PoGo printer for instant digital photo printouts

VMware CEO ousted for former Microsoft exec

Diane Greene, CEO of industry leading virtualization firm VMware, has lost her job to Paul Martiz, a former Microsoft executive who arrived at EMC -- VMware's owner since 2004 -- with its buyout of Pi Corp. last year.

In issuing an announcement that stunned the software industry, EMC Chairman Joe Tucci applauded Greene -- who co-founded the $1.3 billion virtualization software company 10 years ago -- for guiding "the creation and development of a company that is changing the way that people think about computing."

According to some analysts, though, Greene and Tucci have been at odds with each other ever since EMC's acquisition of VMware four years ago. Issues have apparently included Greene's management style, which has been described as private and detail-oriented.

But although VMware remains the top seller in the virtualization software market, the field is becoming increasingly crowded, particularly with Microsoft's arrival earlier this year.

But while existing virtualization players such as Parallels have been advancing their technologies, VMware hasn't been known for all that much innovation lately.

When VMware recently reported that its anticipated revenues for 2008 would be "modestly below" an initial forecast of a 50 percent increase, the company's shares took a tumble in the stock market.

Maritz, Greene's new replacement, is someone who must know a lot about Microsoft. As previously reported in BetaNews, upon EMC's acquisition of the somewhat mysterious Pi Corp., -- the developer of a novel type of personal information management software -- Maritz immediately took over the reins of EMC's emerging cloud computing division, an entity which is competing with Microsoft.

Before that, Maritz spent 14 years with Microsoft, serving as a member of the Executive Committee which manages that company. During various stints, he was in charge of developing and marketing Microsoft's Systems Software (such as Windows 95, Windows NT, and Windows 2000), Development and Database Products, and Office and Exchange line-ups.

An MIT-educated engineer and computer scientist, Greene co-founded VMware with her husband, Mendel Rosenblum, and three other engineers. Her husband remains at VMware as chief scientist.

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Wyse brings server-based virtualization to more thin client PCs

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OpenSUSE improves its deployment system for various distributions

In an effort to improve the open source contribution and distribution processes, the openSUSE project released Build Service 1.0, a new code repository service with several key improvements.

Although many Linux distributions have code repositories and libraries open to the community, they can sometimes be difficult to navigate, especially when trying to view older code samples. Matters become even more complicated when multiple teams are working on the same project, sometimes updating the same package, resulting in multiple simultaneous versions within a given repository.

The latest openSUSE Build Service offers a streamlined package search with the ability to let contributors submit package changes against the working copy, so that the official packaging team can take note and implement the changes.

There also is a custom submission handling and notification system that makes it easier for code contributors to merge changes to a project once they are discovered. Furthermore, branch handling has been improved -- branches build in a similar manner as a package -- but is able to be modified.

Ideally, a team can configure a package once, reproduce it, and test it automatically through the openSUSE code repository, with several different Linux distributions supported. Build Service 1.0 allows developers to create Linux packages for openSUSE, SUSE Linux Enterprise, Debian, Fedor, Mandriva, Red Hat, Ubuntu and CentOS. All other build services are based around one Linux OS, so having an ability to upstream projects for eight different popular Linux distributions should be popular among developers.

Interested developers can access the Web site through build.opensuse.org. Although it's officially out of beta now, the openSUSE team still requests developers offer feedback and report any bugs.

The ability to offer online code repositories for the community is important for an open source software provider to continue to gain popularity among its users. Such providers typically also offer repositories for users to have access to software suites, as well as different GUI configurations and command line configurations. Google has several configurations online through its Linux software repositories, which is available to the community for free.

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Facebook releases its open source platform

Expression Studio 2 released to retail

PayPal, Google team in anti-phishing initiative

With phishing attacks and fraudulent e-mails still slipping through Google Gmail's security walls, the Mountain View-based company plans to work with eBay and its PayPal unit in an effort to protect e-mail users.

In an agreement announced today, Google and eBay will use DomainKeys and DomainKeys Identified Mail e-mail authentication technology to help stop fraudulent e-mails enter the Gmail inboxes. The DomainKey helps an ISP to determine whether or not a specific e-mail is authentic, and if it should be delivered. Developed by Yahoo, any e-mail sent with a DKIM will have a type of cryptographic signature that must be accepted by an e-mail server -- this case Gmail.com -- before being accepted.

Every e-mail from ebay.com or paypal.com will now be authenticated beforehand, and e-mails that are rejected will automatically be deleted.

As the largest auction house in the world, eBay is a popular target among phishers hoping to steal account information from customers, which could lead to false bids and loss of payment information. E-mail security teams have been entrenched in a long-term battle not just against spammers, but more and more against phishers. Earlier this year, the University of Puerto Rico's Information Security Research Team (INSERT) discovered in a proof of concept (PoC) test attack, it could send a bulk e-mail to 4,000 people using a single Gmail account.

And in February, the Computers and Humans Apart (CAPTCHA) test, designed to stop spam bots from signing up on a Web site and sending out e-mails, was compromised for the first time.

Today's partnership comes as Google revamps Gmail's security features, including enabling Gmail users to view the number of simultaneous logins to their accounts, and to remotely log out.

Start-up sues Google over e-mail switching tool

EBay to cut fraud risk, but only for PayPal payments

Google Analytics will finally integrate blog tracking

Google gets social with new iGoogle

Standards board execs recommend ISO 29500 appeals be rejected

It's looking more likely now that Open XML will overcome perhaps its last hurdle on the road to publication as an international standard, as the leaders of both ISO and IEC have systematically disassembled four member countries' appeals.

The secretaries general of the International Organization for Standardization and the International Engineering Consortium, in a report to the technical and standards management boards of both organizations, recommends that those boards reject the appeals of representatives of Brazil, India, South Africa, and Venezuela against the publication of the Open XML document format suite created by Microsoft, as ISO/IEC 29500.

The document was first made public by Groklaw's Pamela Jones, who has published its PDF file here.

"The processing of the ISO/IEC DIS 29500 project has been conducted in conformity with the ISO/IEC JTC 1 Directives, with decisions determined by the votes expressed by the relevant ISO and IEC national bodies under their own responsibility," the executives wrote, "and consequently, for the reasons mentioned above, the appeals should not be processed further."

Each of the four countries' appeals are faulted for different reasons. India's appeal was apparently for an extension of time for countries to read the final text of the draft standard, as well as time for them to appeal its publication during that time. That appeal was out of line, the chief executives determined, because it did not specify a "remedial action" for a specific problem.

Brazil, meanwhile, did propose a remedial action: cancelling the result of the ISO's ballot resolution meeting (BRM), and reviewing nearly 800 proposed changed that Brazil apparently did not believe were properly addressed, or enough time was given to be addressed. Those edits would then be reconsidered on a non-fast-track schedule.

"At the BRM, the Brazilian delegation was not allowed to present an important proposal regarding the legacy binary mapping," reads Brazil's appeal, which was attached to the report. "This proposal was a complementary part of USA delegation proposal regarding the new organization of the ISO/IEC DIS 29500. It also shall complement the scope change proposal approved at the BRM."

But the executives concluded that Brazil's not having gotten time to get its point across, did not represent a problem with the voting procedure. They wrote, "These actions, reversing decisions reached in accordance with due process by the members of ISO and IEC, would require demonstration of serious procedural problems in the voting," the executives decided.

South Africa and Venezuela proposed setting back the process as well, followed by opening a new round of voting where members are given revised sets of consideration instructions.

"The replies from Brazil, Venezuela and South Africa contain much material which is not relevant to completing their existing appeals with the addition of remedial action(s)," states the report.

South Africa's appeal, which appears in a document attached to the report, contains the following: "South Africa wishes to register its deep concern over the increasing tendency of international organizations to use the JTC 1 processes to circumvent the consensus-building process that is the cornerstone to the success and international acceptance of ISO and IEC standards. The ability of large multi-national organizations to influence many national bodies, with the resultant block-voting overriding legitimate issues raised by other countries, is also of concern."

But as the ISO and IEC executives concluded, "That [appeal] from South Africa in particular is a wide-ranging discussion of standardizing such a specification, makes many valid points and recommendations for the future while also containing errors of fact, and in these respects does not concern the appeal sent in May."

Venezuela's appeal included a statement that a re-do of the process was necessary in order to restore the organizations' prestige.

"The result of DIS 29500 has harmed the reputations of both ISO and the IEC," representative Maria Teresa Saccucci wrote, "as well as all they member bodies [sic], and has generated a terrible precedent in which the interest of large multi-national organization, both in favor or against an specific proposal, may dominate the debate instead of the technical discussions necessary to produce the optimal solution on every specific problem."

None of the four countries' appeals directly involved the efficacy of the proposed standard itself, but rather that the procedure used for fast-tracking such a detailed standard may have been inadequate. Had any of the countries' appeals been sanctioned, it's quite possible that at some point in time, ISO/IEC 29500 may still have been published, perhaps next year or in 2010.

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ISO calls for end to Open XML ‘personal attacks’

India, Brazil next to take issue with Open XML

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Sony re-releases its problematic PS3 firmware update

Last week, Sony pulled its PlayStation 3 firmware upgrade (v2.40) after users began to report that it "bricked" their consoles. An updated update has been made available.

First promising that a fix was coming some time "midweek," in Playstation.blog, the new firmware upgrade is reportedly available worldwide already.

Though Sony has issued no official statement addressing problems caused by the upgrade, or even what percentage of downloaders were affected by it, the company said earlier that incidents were low in number. Of course, the numbers must have been substantial enough to warrant such a delay. Complaints on official PlayStation message boards were not in overwhelming quantity, but were nonetheless common.

Systems not under warranty face a flat repair fee of $150 from Sony, and the company has not said if it will waive the fee for users who lost total functionality due to the update. An inquiry with SCEA was outstanding as of press time.

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Sony PS3 moves toward an online community, gradually

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Microsoft to host 'Deskless Worker' entry-level Web services

When Microsoft announced in March it would be marketing its own hosting services for Exchange and SharePoint, some wondered how the company could successfully compete with itself? Today, it provided the answer.

One under-appreciated facet of Microsoft's business is the amount of software that it sells to registered partners, who then resell that software to their clients. We're not talking about the Office suite or Visual Studio, but rather Windows installations, along with the services installed on Windows-based servers that can be licensed per user. Businesses that keep their employees connected through SharePoint sites and Exchange services often get their software through these partners.

Historically, SharePoint and Exchange have been sold to businesses through a mix of licensing schemes that involve both per-server seating and per-user client access licenses (CAL). That mix can easily become a maze, as Microsoft's own licensing page illustrates. For instance, with SharePoint Server 2007, you have the standard server license, plus one class of CAL for using the server's "standard" features, and another class for the "enterprise" features -- for two, or perhaps more, CALs per user.

Last March, Microsoft announced what it's calling its Business Productivity Online Suite (BPOS); and though that's not a very descriptive brand, what it truly represents is Microsoft hosting Exchange and SharePoint services on its own servers -- in "the cloud" -- on behalf of business clients. But the problem with this product has to do with selling it, because Microsoft's partners make a substantial share of their revenue from reselling server software suites -- the very class of products which BPOS would render unnecessary.

At its Worldwide Partner Conference in Houston this morning, Microsoft addressed this problem by attempting to build some kind of incentive whereby partners can profitably resell its BPOS online hosting services.

The new plan works like this: First, Microsoft builds a new brand around an entry-level tier of its online services. For now, the company calls this brand Deskless Worker (in the vein of "paperless office"). This tier will include what it currently calls Exchange Online Deskless Worker and SharePoint Online Deskless Worker, and can be resold at a price of $3 per month per user for both components, or $2 per month for each component separately.

"What the Deskless Worker suite is designed for, is a class of user in an organization that today doesn't enjoy the benefits of communication and collaboration technology," Microsoft's online services director Eron Kelly told reporters this morning. "Based on some of our research, we found that almost 50% of employees in the world today are considered 'deskless workers' who don't have access to a PC on a regular basis. Yet companies are increasingly interested in using e-mail and other Web-based technologies to communicate and collaborate with these types of employees."

Next, the company will build an enterprise-class tier of services that are essentially on par with what its licensed server software already provides -- direct counterparts of Exchange, SharePoint, and other services, only hosted by Microsoft. Partners can resell this tier on a subscription basis for $15 per user per month as a suite, or on an a la carte scale. Office Communications Online, Dynamics CRM Online, and Live Meeting 2007 are also part of this suite.

The functionality differences between the two tiers could be considerable. From the user's vantage point, Kelly told reporters today, the Exchange e-mail hosting feature will appear as something he described as "Outlook Web Access Lite."

"The version that most information workers use is the full-featured version of Outlook Web Access that really mirrors Outlook. It has the reading pane, and a lot of flexibility on how you view e-mail -- conversation view, subject view, time view. It allows you to look at your calendar across multiple days and weeks...Outlook Web Access Lite is a very simplified view of e-mail; it just creates e-mail in a simple list. Your calendar is a one day-at-a-time calendar, and the experience is very simplified, which is exactly what a deskless worker really needs. They're not going through hundreds of e-mails a day; they're going through a couple. This is your factory floor worker, or a nurse in a hospital -- someone who's going to use e-mail to just get simple communications from the corporation, not a core tool that they'll use every day."

Similarly, he added, the SharePoint service for the Deskless Worker suite will be read-only access to SharePoint intranet sites, rather than the two-way collaboration that the enterprise class provides.

As Kelly pointed out, partners may also be able to pick up some extra revenue by capitalizing on the fact that their clients will need to migrate to these BPOS services. "Now partners can help customers do mailbox migrations, synchronizing the Active Directory with the customer's environment into our environment, and then building out SharePoint sites and doing SharePoint customization -- much like many of our partners do today. When they're doing all those tasks, they're able to charge customers for professional services, much like they do today. So really what happens with this move to online services, is partners have a new tool in their toolbox where we will be compensating them for driving business, and they will be able to continue to make money on top of those engagements, like they do today in a very traditional fashion."

How much will partners be able to earn? "Partners will make 12% of the Year 1 subscription value, as well as 6% of the ongoing subscription value -- which translates into 18% of the Year 1 value, and 6% ongoing...It means that partners are creating an ongoing, recurring revenue foundation that they can use to build a business on top of."

A precise, time-specific agenda for the rollout of these services was not laid out, although existing and prospective partners were invited today to sign up for what Microsoft is describing as a beta of "Online Services Momentum." In this campaign, partners distribute betas of BPOS (though it's notable that the beta site itself refers to the product as "Microsoft Online Services (MOS)" ) to their clients, some of which may be given promotional consideration by Microsoft.

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Report: Third-generation Toyota Prius to sport solar panels

When Toyota's popular hybrid gets a makeover in 2010, the car will now harness the power of the sun to operate its own air conditioning.

The first Priuses shipped in 1997 in Japan, and worldwide in 2000. Toyota last redesigned the car in 2003 to make it quicker and more efficient, and automotive analysts have widely expected another revision to come soon with additional enhancements.

Reports from Reuters and Japanese business news service Nikkei indicate that one of these new features would be solar panels from Kyocera. As solar panels small enough to fit on a car's roof cannot produce a great deal of energy, only the air conditioning would be partially powered by the technology.

Toyota is not commenting on these reports, although a company source told the Associated Press that details of the third-generation Prius would be revealed next May.

Solar panels would appear on higher-end models. If true, the Prius would be the first vehicle to include the technology commercially. While scientists have been building solar cars for awhile, the designs are nowhere near practical or fast enough to operate on highways.

Powering the air conditioning with solar energy does have an environmental benefit. No doubt you've already noticed, whenever you run your AC in your vehicle, there's a significant drop in fuel efficiency. In this day of $4-per gallon-gas in the US, any way to save fuel can be seen as a good thing.

Those same gas prices are also contributing to a surge in hybrid sales. Toyota expects to sell a million hybrids per year by 2010, and have a hybrid version of every model in its lineup by 2020. Other companies such as Nissan, Honda, and Ford are also all working towards expanding their hybrid lines.

Toyota is not the first to experiment with solar powering a Prius: Solar technology entrepreneur Greg Johanson is already offering an upgrade to model years from 2004 to 2006 that is said to increase fuel efficiency by up to 29%.

Take charge

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Google adds privacy link, avoids trouble

On Google's main page, one of the few places on the Internet where a dearth of content is beneficial, it's easy to notice when a single word changes, especially when it's one as hot as "privacy."

Where it once said "©2008 Google" at the bottom of the page, it now says "©2008 - Privacy." The change was announced on Thursday before the Independence day holiday as a word-for-word identical passage in blogs by Marissa Mayer Search Products and User Experience Vice President and Pablo Chavez, Senior Policy Council.

"So, today we're making a homepage change by adding a link to our privacy overview and policies. Google values our users' privacy first and foremost. Trust is the basis of everything we do, so we want you to be familiar and comfortable with the integrity and care we give your personal data. We added this link both to our homepage and to our results page to make it easier for you to find information about our privacy principles. The new "Privacy" link goes to our Privacy Center, which was revamped earlier this year to be more straightforward and approachable, with videos and a non-legalese overview to make sure you understand in basic terms what Google does, does not, will, and won't, do in regard to your personal information."

The change appears to have been motivated by recent reports and subsequent advocacy concerns of Google's adherence to the California Online Privacy Protection Act of 2003, which requires commercial Web sites that collect user data to conspicuously post their privacy policy on either their first "significant" page.

On June 3, following a New York Times report on the subject by Saul Hansell, several privacy groups contacted Google, demanding the privacy policy be shown as per the California law.

The change also occurred conspicuously closely to today's Senate Commerce Committee hearings regarding "Privacy Implications of Online Advertising."

On the "privacy center" page, it provides links to all the privacy sub-policies, including YouTube, iGoogle, Orkut, Goog-411, as well as AdSense, AdWords, and Google Analytics.

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'Metal Gear Solid 4' gives PS3 a sales boost in Japan

It's good to be on top of the heap, Sony discovered for perhaps a brief moment, and today gaming analysts are giving the PS3 a ray of hope for Japan. But that depends on just how carefully you slice the pie, as the market leader remains Nintendo.

Widely circulated reports attributed to Reuters, though not attributed to the Nikkei service, state that the relative ratio of sales of Sony's PlayStation 3 to Nintendo's Wii console, tightened to 1.7 : 1, during a five-week period that ended last week. In that period, the highly anticipated Konami game title Metal Gear Solid 4: Guns of the Patriots was released in Japan exclusively for the PS3, evidently contributing to sales.

The source of that data, according to Reuters, was Japanese publisher Enterbrain which not only produces video game magazines there, but also manages the Famitsu industry analysis service for retailers.

But a week-by-week check of Japan game console sales on VGChartz.com, whose source is the exact same data from Famitsu, presents a very different picture: Indeed, PS3 console sales for the week of June 15 did eclipse Wii sales ever so briefly: 311,836 versus 296,712, during a low sales week for the Wii.

That breakthrough, however, was a momentary blip on the radar, as Wii console sales climbed right back up to 502,764 for Wii versus 158,971 for PS3, during the week of June 29 -- a ratio of 3.16 : 1. Throughout last year, Enterbrain reported sales ratios in the Wii's favor as high as 6:1.

Microsoft's Xbox 360 has never really caught on in Japan, with console sales for the June 29 week at 130,926 and remaining relatively stable.

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Do-it-yourself phone manufacturer declares its independence tomorrow

While many of us will be enjoying fireworks and barbeques tomorrow to help celebrate the Fourth of July, a Taiwan-based device manufacturer, Openmoko, plans to launch a new open source Linux handset that begs to be customized.

While there's no evidence yet that Openmoko's Neo Freerunner will be available through any major US carrier on a subsidized plan, the phone can be used on AT&T, T-Mobile, Verizon Wireless and other mobile phone services in the United States, with customers apparently able to select which network they wish to use.

The Neo FreeRunner has a 2.8" touch screen display, 400 MHz processor, 128 MB RAM, a microSD slot, Wi-Fi, Bluetooth 2.0, and GPS external connector. It measures 4.75" x 2.44" x 0.73" and weighs 6.5 ounces. To help complement different frequencies in countries, the phone will be available both in 850 MHz and 900 MHz tri-band GSM.

Interested designers also can utilize Openmoko's CAD files available in Pro Engineer format with a Creative Commons license, meaning it can be altered to a different person's choosing. Even though the hardware and phone designs are open source, all of the software also is available under an Openmoko GNU/Linux distribution, with 100 percent of the phone's software available to coders to modify.

Specific instructions on how to get designs and CAD files are available on the Openmoko Web site.

The new phone will be available tomorrow for $399 MSRP, and will begin shipping to customers on Monday in the United States, Europe and India. Openmoko plans to show off the phone and other technology during the LinuxWorld Conference & Expo next month in San Francisco.

Free and open source software (FOSS) has become increasingly important in the mobile phone market, where developers now have the ability to openly modify mobile platforms for their own benefit. Along with Openmoko, Nokia, Google, ACCESS, and similar companies have open source mobile platforms. Furthermore, Google has helped band together more than 30 companies in the Open Handset Alliance, with the aim of designing open source mobile devices using Google's Android mobile platform.

A similar organization, the LiMo Foundation, has Verizon Wireless, Motorola, NTT DoCoMo, NEC, Samsung, Vodafone and others as its partners while promoting open source. Nokia, Symbian, Sony Ericsson, Motorola, AT&T, Vodafone and several others are in the process of banding together to form the Symbian Foundation, in an effort to create a single open source platform based on the Symbian mobile OS.

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New Google Talk gives iPhone users a free messaging alternative

Google has pushed out a new version of its Google Talk service for Apple iPhone and iPod Touch owners designed the service to work solely through Safari, so there are no software downloads that need to be installed.

According to a blog post late yesterday from Google mobile team software engineer Adam Connors, interested iPhone users simply head to www.google.com/talk, sign in, start chatting with friends.

"We've tried to keep the design as faithful to the desktop experience as possible, so it should be familiar to you," Connors wrote. "You can select from a quicklist of the people you contact most, search your contacts, and manage multiple conversations."

Users must keep the service running using Safari, and if they open another application or Internet browser, their Google Talk status will be changed to "unavailable" until the user reopens Safari. Aside from the "unavailable" setting when a user closes the Safari browser, all of the new version's features are identical to the original desktop version.

AT&T subscribers looking to save a few extra dollars per month could combine GTalk and the integrated free AOL Instant Messenger client to chat with friends rather than pay for the AT&T SMS plan. AT&T will offer iPhone users SMS messaging plans at $5 for 200 messages per month, $15 for 1,500 messages per month, and $20 per month for unlimited texting. Other new IM programs will be released next week through the iPhone Apps Store. Meanwhile, Google Talk is free.

Google Gadgets for Linux appears

Google gets social with new iGoogle

Google goes out of its way to make Facebook roadblock obvious

BlackBerry Pearl users can test voice input for Google Maps

Nokia and InterDigital start to disassemble their running feud

You dream of seeing outcomes like this: One side asks the other, "What were we fighting about again?" The other side responds, "I don't remember." And the two shake hands and start picking up their mess. This may actually be happening.

It is perhaps the most bizarre patent licensing foray in the history of telecommunications -- so unusual that a third layer of lawsuits, filed beginning in July 2005 and extending into 2006, was literally convened to settle in court the question of what it was that the second layer of lawsuits was supposed to be about.

Specifically, could patent holding company InterDigital sue Nokia over whether it should sublicense certain 3G telecommunications patents to its own customers, if those patents were deemed to be unrelated to a series of other patents on which both sides thought they had already settled?

Yesterday, the question and its counter-questions became so confusing that both sides in the dispute literally said, to heck with it. In what may be the beginning of the most unlikely amicable end to an intellectual property dispute ever seen, InterDigital and the wireless technology manufacturer agreed to toss out their suit and countersuit in English High Court.

That unravels just one layer of a much deeper and still unresolved tangle, including litigation in a New York district court judge last March literally lost interest in adjudicating, ordering both sides to submit the matter before binding arbitration. At issue there remains the unbelievable matter of whether both sides actually settled their dispute in 2003; both sides apparently now believe they did not, but contend that differing issues were left unresolved.

The remaining questions in the US case, some of which were tossed out in the UK case, are these:

Are certain InterDigital patents that it claims are related to the 3G Universal Mobile Telecommunications System (UMTS) standard, actually relevant to that standard? InterDigital says yes, meaning that if Nokia sublicenses them, InterDigital should get a cut; and if Nokia uses them itself -- or more accurately, if it builds anything calling itself UMTS -- it should pay the agreed upon fee.

Are certain Nokia patents that it claims are related to UMTS actually relevant; and if Nokia licenses them to its customers as part of a UMTS intellectual property package, along with sublicensed InterDigital patents, then are Nokia's customers being charged unjustifiably high rates for technology they won't actually use? This was part of InterDigital's counterclaim, brought against Nokia in December 2006.

An InterDigital statement yesterday claims the details of this latest round of discussions, which resulted in this agreement, would be confidential to both sides. Perhaps it's best, this time around, if we don't ask too many more questions.

WiMAX patent pool

Apple, AT&T settle visual voicemail patent claims

HP and Acer end their patent litigation

Nokia: Mobile phone leader or ‘Internet company?’

Next Patch Tuesday has few security updates, big Vista reliability fix

In its monthly advance notice the weekend before the second Tuesday of the month, Microsoft said it will only be addressing four security issues this time around, two dealing with Windows. But a surprisingly big Vista bug fix is under way.

If you think about it, the relative security of Windows Vista hasn't been the subject of much debate recently. If there's any problem consumers have with it, whether it's born out of market perception or real-world experience, it's a feeling that it's not all that reliable.

So perhaps it's not such a bad thing that next week's Patch Tuesday round of fixes from Microsoft will focus less on security -- with only four issues in that category to be addressed there -- and more on Vista's overall reliability. A single performance update announced by Microsoft on June 24 will tackle some real-world problems that Vista users have been facing, according to automated feedback the company's servers receive when Internet-connected Vista users crash.

Here's a little annoyance: Have you ever tried to delete a user account from Vista's Control Panel, only to be responded to by your system sitting there in an endless loop, doing nothing? Then when you reboot, the account's not gone? That's one of the issues this performance update will address.

And what is it about Vista, after you leave your computer on for an "extended period of time" (A day? Two days?) makes it decide that Excel is no longer a valid application for you to run? How many times has this happened to you, to paraphrase a TV infomercial? That's another bug Vista users should find gone, hopefully.

There's also interesting little problems such as certain builds of NVidia drivers that cause high-definition audio streams to sound like they've been fed through a chipper-shredder, and Windows Mail (the replacement for Outlook Express) triggering a crash when traffic monitoring is enabled through Windows, and e-mail security through ZoneAlarm is active at the same time. These are the little, everyday affairs that some people really look forward to seeing gone. Quite possibly, they impact more users than the average newly discovered vulnerability.

It'll be nice to see how well this latest round of patches addresses these and a host of other Vista-related issues.

Microsoft finally launches Hyper-V

Microhoo talks on again–or not

Next round of Microsoft ‘Patch Tuesday’ addresses Bluetooth problem

Microsoft re-issues one security fix for a Bluetooth hole

Windows XP SP3 official release delayed, but download still available

BlackBerry Pearl users can test voice input for Google Maps

As Google expands its product line for mobile services, the Mountain View-based company announced BlackBerry Pearl users now have the ability to use voice search.

Specifically, users will be able to use Google Maps, getting directions or locations by voice instead of text searching.

Pearl owners can go to m.google.com/maps, press 0 to center the view of the map, press a side key and say a business name or location, and then release the button so the voice recognition software can begin to pull in results.

Google designed the software for use when typing is not possible, a user isn't sure of the exact spelling of a name, or the name is too long.

For now, the service is available only for the BlackBerry Pearl -- models 8110, 8210, and 8120 -- but could be expanded to other BlackBerry devices, including the Curve. It's currently described as "experimental," which means the results will not always be flawless.

"Like many of Google's experimental features, we released this on a subset of phones in order to learn more about usage patterns and optimize the technology," a Google spokesperson told BetaNews Thursday. "We chose the Blackberry Pearl as it does not have a full QWERTY keyboard, making voice an even more appealing feature for users. We are always looking for ways to expand our offerings to more devices and to more users, but have nothing to announce at this time."

Several new phones have Google Maps integrated, though similar direction services are available from mobile phone providers. AT&T and Verizon Wireless both have GPS-based services available for a few dollars per month, but voice with Google Maps is free.

Nielsen research indicates mobile phone owners use Google Mobile for 9 searches per month on average, and Yahoo for 6.7, but mobile answers service ChaCha receives more than 40 searches per month. Utilizing a voice-in, text-out platform, ChaCha users are able to search for something by voice and get a response via text.

Google already uses speech recognition with its free Goog 411 service.

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Google now offers real estate listings through Google Maps

Sprint’s new pact with Google stresses openness

The ‘Watch Video’ link in Google Search is conspicuously missing

European tech leaders reject calls for ISP vigilance as 'scaremongering'

European ISP organizations are concerned that the cost of implementing proposals intended to reduce cybercrime could put them out of business, but a leading security vendor said the cost of not doing anything could be even higher.

As we reported yesterday, a report for the European Parliament suggests that ISPs pool together to conduct pro-active measures against systems that maliciously impact IP traffic, and that ISPs be held responsible if they fail to do so. That proposal garnered comments from European organizations and from states' government representatives.

Generally, the written comments -- 15 of them from a wide variety of European countries, most of whom wrote individual responses rather than using the response form provided -- were supportive of the proposals, but were concerned about some of them. In particular, the ISP organizations are concerned about a proposal that Internet exchange points, or connections between two ISPs, be more closely regulated.

A number of them seemed to take offense at the recommendations, citing their many years of robust operation. "We do not believe that scaremongering about network resilience is a helpful activity," seethed Euro-IX, the European association for the operators of IXPs.

ISP organizations also expressed concern about the practical business realities of implementing some of the suggestions, particularly ones that could affect a commercial business' confidentiality. "To define [security standards for network-connected computers] should not be difficult, but to implement and enforce them could be a nightmare," responded the Ministry of Foreign Affairs in Poland.

"[A]t any one time there are millions upon millions of compromised hosts on the Internet," the Malta Communications Authority chimed in. "Establishing real-time monitoring mechanisms to monitor this huge number of hosts is a real challenge."

In addition, a special interest group made up of 28 vendors expressed concern that vendors had not been consulted. "We believe that imposing further liability on vendors will have a stifling effect on the industry," FIRST Vendor SIG said. "This effect would be especially devastating to open source vendors and small vendors in general."

Other suggestions from a number of ISP organizations included more incentives and fewer penalties.

But ISPs may not have a choice, said John Maddison, vice president of core technology solutions for Trend Micro, in Cupertino, Calif. ISPs need to become both more proactive and more reactive now, he said, particularly as bandwidth increases. "Once you have that bandwidth, botnets can cause some pretty substantial damage," he told BetaNews. "More bandwidth is like providing more powerful guns to the bad guys."

Part of the problem is that users cannot be counted on to implement security patches and programs correctly, Maddison acknowledged. And while some of that could be done remotely by the ISP, that gets into privacy issues. Instead, he suggested that ISPs should look for ways to implement them on the ISP network itself rather than on the endpoints.

Broadband speed clarified

Outcry over BitTorrent blocking stretches to Canada

EU agency is ‘confident’ Google Maps will alter Street View

Microsoft the latest to sponsor the Open Source Census

It's official: Mozilla's Firefox sets Guinness World Record

From 18:16 UTC on June 17, 2008 to 18:16 UTC on June 18, 2008, Mozilla indeed reached its goal of setting the record for "the single most downloaded piece of software in a single day."

"Mozilla set a new Guinness World Record for the largest number of software downloads in 24 hours for the 8,002,530 downloads of Firefox 3!" a Mozilla spokesperson told BetaNews yesterday.

As previously reported in BetaNews, Mozilla needed to keep careful watch over its servers in handling millions of requests for Firefox 3.0, the latest iteration of its browser.

Given the final build's file size, just the completed downloads (never mind the incomplete ones) constitute about 54.56 TB of data during that period. The actual data transfer has been estimated at something closer to 59.53 TB.

Meanwhile, Mozilla has also posted a breakout of total Firefox 3.0 downloads by countries throughout the world at http://www.spreadfirefox.com. Congrats to Mozilla from the BetaNews team!

Mozilla warns of Flash and Silverlight ‘agenda’

Mozilla aims for record downloads with Firefox 3

Facebook releases its open source platform

Windows XP will be sold to some OEMs after all, says Microsoft

BetaNews has confirmed that, although most of Microsoft's shipments of Windows XP did end on June 30 as scheduled, it is still making XP available to both makers of low-end Netbooks and 'systems builders,' large and small.

Monday of this week didn't exactly spell the end of Windows XP, after all. In line with its "end of life" plans, Microsoft did stop selling XP to OEMs and retailers on Monday -- but with some notable "exceptions" which Microsoft acknowledged to BetaNews Tuesday evening.

As of late Tuesday, although some supplies were starting to dwindle, plenty of XP was still for sale across the Web and in stores.

Where is all of this XP coming from, anyway? "[Monday] was the deadline for Microsoft to stop selling XP to retailers and OEMs, other than a few exceptions," a Microsoft spokesperson said, in an e-mail to BetaNews last night.

As exceptions to the general 'end of life' rule, the spokesperson mentioned both makers of low-end Netbooks and so-called "systems builders." Also in the exceptions category, he included shipment by Microsoft of "downgrade rights media."

For elaboration, the spokesperson pointed to a letter addressed to Microsoft customers by Bill Veghte, senior vice president of Microsoft's Online Services & Windows Business Group.

"It's true that [on June 30] we will stop selling Windows XP as a retail packaged product and stop licensing it directly to major PC manufacturers. But customers who still need Windows XP will be able to get it," Veghte wrote in his letter, which was supplied to BetaNews by Microsoft.

"For customers interested in buying a low-end personal computer (often referred to as a 'NetBook' or 'NetTop'), we are making Windows XP Home and Windows XP Starter available for use on these budget systems," according to Veghte. "Additionally, System Builders (sometimes referred to as 'local OEMs') may continue to purchase Windows XP through Authorized Distributors through January 31, 2009. All OEMs, including major OEMs, have this option."

In his e-mail to BetaNews last night, the Microsoft spokesperson also said that, even outside of the 'exceptions,' retailers and OEMs will still be able to sell "whatever [XP] stock they have on hand" as long as it lasts.

"They just can't purchase more from Microsoft other than for the exceptions noted," BetaNews was told.

In any event, a quick check by BetaNews on Tuesday afternoon had turned up nearly 3,000 Windows XP listings on eBay alone -- although by Tuesday night, that number had dropped to around 2,500.

Other Web venues with XP in stock on Tuesday -- generally still at customary XP pricing, but sometimes on sale -- ranged from Amazon.com to Cheap Discount Software for You (cdsfu).

A lot of the XP available on the Web consisted of Home Edition. However, SoftwareMedia.com and many others continued to sell the retail version of Professional Edition.

Best Buy's Web site was already sold out of the retail version of Professional Edition. But a blurb posted on the site said the product remained available in most Best Buy retail stores.

E-tailers such as Royal Discount and Vio Software had the OEM version of XP Professional in stock for sale over the Web. So, too, did CompUSA's Web site, together with OEM versions of Vista Home, Professional, Media Center, Premium, and Ultimate editions.

Customarily available to system builders as well as individual users, OEM versions of Windows cost less than regular versions but also levy more restrictive licensing terms. An OEM version can't be copied from one PC to another, and responsibility for OS support is transferred from Microsoft to the system builder or user.

Meanwhile, earlier in June, Dell -- which certainly qualifies as a "major OEM" -- had pledged to keep selling PCs running XP until at least 2009.

Then, on June 30, Dell leveraged its channel blog to tell systems integrators and other resellers about the loophole in the Vista license that lets business customers "downgrade" from Vista to XP.

"The short version is that Dell can sell what we've branded 'Windows Vista Bonus,' which allows us to pre-install XP Professional with a Vista license (on select system categories). This lets customers upgrade to the Vista platform when they've ready. And yes, Dell will support both OSs," according to the blog.

Even after XP's "end of life," Dell is also continuing to offer XP as an image to resellers who use Dell's Custom Factory Integration (CFI) service.

Microsoft woos hobbyist developers

Windows XP SP3 official release delayed, but download still available

Microsoft re-issues one security fix for a Bluetooth hole

Sirius predicts post-merger strength

Responding to an unfavorable analyst outlook for post-merger Sirius and XM, satellite radio network Sirius this week published its guidance for 2009, predicting a full year of profitability if the merger is completed.

Just under two weeks ago, Goldman Sachs analyst Mark Wienkes wrote, "While the FCC draft circulation signaling the merger's likely ultimate conditioned approval generated a short-term lift to the stocks, we think any imminent merger-related strength has passed." He went on to add, "With core demand for satellite radio falling amongst the younger demographics, versus rapid increases for MP3 players and other new technologies, and declining core ARPU, we see long-term risk to the outlook."

Subsequently, shares in both XM and Sirius fell dramatically under selling pressure.

On Monday, however, Sirius posted its earnings forecast, anticipating a strong beginning for the combined company, assuming the merger gets approved. Currently unresolved, Sirius and XM have the joint honor of being the subject of the longest merger review in history. This is thanks in large part to opposition from lobbying groups and related legislators. Earlier this week, a group of democratic senators petitioned the FCC to enforce stricter policies regarding Sirius and XM interoperable radios, an issue which opposition has sedulously pushed.

Though no developments in interoperable radios were specifically mentioned, Sirius' CEO Mel Karmazin announced that if the merger takes place in the third quarter of this year, Sirius and XM together can expect positive cash flow for the entirety of 2009, something neither company has done individually.

Karmazin will be the CEO of the combined entity, of which Sirius will be the parent and XM the subsidiary. Net synergies -- or the increase in revenue and reduction in costs due to the merger -- have been projected at a total of $400 million. Similarly, adjusted 2009 earnings (EBITDA) are expected to be in the neighborhood of $300 million.

Nokia to buy Symbian

Top Democrats ask for restrictions on XM + Sirius

Sirius + XM merger still under fire from broadcasters, legislators

Xobni gets cold feet over Microsoft acquisition

DOJ silence to HP means EDS merger can proceed

The house that Ross Perot built, after he left IBM in 1962, will apparently face no opposition in being absorbed into Hewlett-Packard's services division, as the DOJ's silence can be interpreted as acquiescence.

No news is good news: Hewlett-Packard Co. said yesterday that it had not received any requests for additional information from the US Department of Justice or the Federal Trade Commission regarding its May 13 acquisition of Electronic Data Systems Corp., which clears the way for the acquisition to proceed.

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, with mergers and acquisitions over a certain size, both companies are required to file a "Notification and Report Form" describing the transaction with the Federal Trade Commission and the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice. This is typically followed by a 30-day waiting period, though the companies involved may request "early termination," or a shortening of that period -- which neither HP nor EDS appeared to do -- and regulators may also request additional time -- which also did not appear to happen.

During that time, the regulatory agencies may request further information to help them determine whether the proposed transaction violates antitrust laws in the United States.

Because no regulatory agency either requested additional information or additional time, the companies can proceed with the transaction, which still requires EDS stockholder approval and regulatory clearance from the European Commission, HP said. Neither agency issued an opinion on the acquisition. HP had said on May 13 that it planned to buy technology services giant EDS for $13.9 billion, or $25 per share, doubling its services business to $38 billion and putting it in a better position to compete with IBM in the services space.

EDS of Plano, Texas, was founded in 1962 by Ross Perot. General Motors acquired the company in 1984, and spun it off again as an independent company in 1996. It is considered to be the seminal company in the outsourcing business.

NXP to acquire BMP business

Top Democrats ask for restrictions on XM + Sirius

Yahoo chairman’s response to Icahn leaves possibilities open

Fake Vuittons cost eBay real money

Online auction service eBay has been ordered by a French court to pay $63 million to French fashion company Moet Hennessy Louis Vuitton (LVMH), the company responsible for making Louis Vuitton and Dior branded handbags and perfume.

A two-pronged legal attack saw LVMH accuse eBay of "guilty negligence" claiming it didn't do enough to stop fake LVMH merchandise from being sold through the site. And any sale whatsoever of LVMH-branded perfume, fake or not, was considered illicit by LVMH since only approved distribution networks are allowed to sell the perfume to customers.

The San Jose-based auction site said LVMH filed the lawsuit out of spite, since the middleman is cut out of the deal when people buy LVMH products through eBay.

LVMH reportedly discovered up to 90 percent of all Louis Vuitton and Dior watches, handbags and perfumes sold through eBay were counterfeit. Although it's very difficult to police possible counterfeit items, this independent reviewer's warning indicates the service and its customers were both aware of the existence of counterfeit sales.

Companies have requested eBay stop selling their products -- even legitimate ones -- over possible trademark infringement, as well as the service's perceived slow pace in reporting fraudulent transactions.

"Today's ruling is about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers every day," eBay said in a statement. "We will fight this ruling on their behalf."

The service previously stated has a team of 2,000 employees worldwide working in a $20 million annual operation to crack down on the sale of counterfeit goods through the site.

Elsewhere in France, eBay has faced similar legal issues, with Hermes International receiving 20,000 euro after the auction site did not stop the sale of fake handbags. In US courts, the jewelry maker Tiffany has a multi-million dollar pending legal suit against eBay over claims that shoppers are purchasing counterfeit Tiffany jewelry. Merchandisers claim the sale of counterfeit items cost them as much as $30 billion per year.

FCC wants no-porn, free broadband wireless auction

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EBay to cut fraud risk, but only for PayPal payments