Week in review: Try to read Microsoft's hips

On the eve of announcing a change in Vista that people have clamored for, the company reverses course and then clams up.

Microsoft almost made a change to its Vista operating system that people have been clamoring for. It was virtually a done deal.

On the eve of making the announcement, however, the company changed its mind and now doesn't want to talk about it.

Microsoft planned this week to announce that it was broadening the virtualization rights for Windows Vista, but decided at the last minute to reverse course and stick with existing limits. The software maker had briefed reporters and analysts on plans to allow the Home versions of Vista to run in virtual machines, addressing criticisms from virtualization enthusiasts and Mac users who had chafed at having to buy one of the two priciest versions of Windows in order to run Vista in a virtual machine.

The technology, which allows multiple operating systems to run simultaneously on one computer, has become particularly important for Mac users who want to run Windows programs side by side with the Mac OS.

The company had said in interviews that it was still concerned about the security risks that the change might introduce but that it was going to make the change and leave the choice up to consumers.

Analysts had questioned the tie between security and the licensing restriction. The security risks apply to all versions of Vista. Similar risks might even be present if someone were running another operating system in a virtual machine, whether that is Linux or Windows XP, properly licensed in all its major versions to run inside a virtual machine.

Given all the feedback Microsoft had been getting, and apparently was keen to accommodate, it's not clear what prompted the last minute flip-flop. Even Microsoft's partners have gotten little explanation.

As part of its planned announcement, Microsoft had spoken with Parallels, securing a quote from one of its executives praising the deal. Like the rest of the industry, virtualization specialist Parallels was left scratching its head over the about-face.

"We haven't received any more information either," said Benjamin Rudolph, Parallels' director of corporate communications. "It's a little odd."

However, CNET News.com readers had their own ideas what prompted the flip-flop.

"Microsoft's real reason for not wanting users to run Vista in a 'virtual machine' is they are worried that someone dishonest will buy one copy of Vista and install it on multiple Macs via 'virtual machine software,'" wrote one reader to the News.com's TalkBack forum.

Meanwhile, in an effort to assuage Google and head off a further antitrust battle with U.S. regulators, Microsoft agreed to make changes to the desktop search feature in Vista. In a filing made jointly with the Justice Department, Microsoft said it would change the search feature as part of the first service pack to Vista.

Under the agreement, Microsoft will create a mechanism whereby computer makers and individuals will be able to choose a default desktop search program, much as they can choose a rival browser or media player, even though those technologies are built into Windows.

Yahoo CEO googled
After six years on the job, Yahoo Chief Executive Terry Semel stepped down and handed the reins of the struggling search company to co-founder Jerry Yang. The shakeup came nearly one week after a somewhat contentious shareholder meeting in which stockholders criticized Semel's pay in light of the company's lackluster stock price and failure to mount any serious challenge to Google on search advertising.

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