Week in review: Microsoft and the Linux code surprise

It was a big week for Microsoft news, with the software giant reporting disappointing quarterly earnings, announcing the completion of code for Windows 7, and revealing plans to shutter its Soapbox YouTube rival.

But none was as unexpected as Monday'smini-bombshell: Microsoft announced that it's contributing thousands of lines of code for inclusion in Linux. Now don't go thinking the move is helping Linux compete better with Microsoft. The three drivers it's releasing are really geared at making Windows a better host of Linux.

As noted by CNET blogger Matt Asay, Microsoft is releasing three drivers for Linux under the GPL (General Public License) that governs Linux. Although Microsoft has released open-source code in the past, the company has generally favored licenses other than the GPL. That said, the GPL is the way into the Linux kernel and Microsoft wants this code in Linux.

There's another twist to the story. It turns out Microsoft's moveowes a lot to a key programmer at Novell.

Linux veteran--and Novell fellow--Greg Kroah-Hartman suggested to Microsoft about four months ago that the company release the three drivers. Kroah-Hartman, who helps oversee the inclusion of drivers into Linux, said he worked within his company to find the right contacts at Microsoft.

"They reacted well," Kroah-Hartman said in a telephone interview on Tuesday. "They were open to it. It just took awhile to hash out all the details."

CNET blogger Gordon Haff later wrote about a licensing issue with its proprietary Linux drives that appeared to have helped lead to Microsoft's contribution of the GPL code.

Another milestone for Microsoft came Wednesday, when it said it has finalized the code for Windows 7, paving the way for the new operating system to make its way onto retail shelves and new PCs in time for its October 22 launch.

Then, however, a less positive marker for the company was its weaker-than-expected quarterly revenue. For the three months ended June 30, the company earned $3.05 billion, or 34 cents per share, on revenue of $13.1 billion. Those results included legal and other charges, as well as the deferral of revenue related to a Windows 7 upgrade program. In total, those charges cut into per-share earnings by 4 cents.

Analysts had expected per-share earnings of 36 cents, but the revenue figure was notably weaker than the $14.37 billion that analysts expected, even accounting for the Windows revenue deferral.

And although Microsoft may have seen the worst of the economic woes, CFO Christopher Liddell said he expects business to be tough for the remainder of 2009. One news item that did not cross the wires this week, yet at least, is an expected announcement of some sort of search partnership between Microsoft and Yahoo. Stay tuned.

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