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Week in review: Gates on his way

Microsoft's co-founder and public face for three decades plans to step away from daily work at the company.

Bill Gates, Microsoft's co-founder and its public face throughout its three decades of existence, plans to step away from daily work at the company. Special coverage: The end of the Gates era

Gates said he will gradually relinquish his current role, ceding the chief software architect title immediately, while remaining a full-time employee for the next two years. In July 2008, he will remain as a part-time employee and chairman.

Microsoft's chief technical officer, Ray Ozzie, will immediately assume the title of chief software architect, Gates said. In addition, Craig Mundie, CTO for advanced strategies and policy, will immediately take the new title of chief research and strategy officer and will assume Gates' responsibilities for the company's research and incubation efforts.

Gates' announcement comes as his company battles pressures on all fronts: a sagging stock price, competition from Google and nagging delays in the rollout of the Vista operating system.

Analysts and observers couldn't help but offer their thoughts on the legacy left by Gates.

"This is probably a once-in-a-generation guy," said John Reimer, an analyst with Forrester Research. Said Umesh Ramakrishnan, vice chairman of executive search firm Christian and Timbers, "Bill Gates is bigger than life. He has led what for this generation has been the most storied technology firm."

Gates said he is a man with no regrets. After 30 years of leading Microsoft's software strategy, he said there is little he would do differently. Following the big news, Gates and CEO Steve Ballmer spoke to News.com about the past and future plans for both Gates and the company he founded.

CNET News.com readers greeted the news with a mix of adoration and relief, with some criticizing his professional track record and the value of his philanthropy. And some came to his defense.

"You can hate the man for his company's business practices, but he gives back big-time," to News.com's TalkBack forum. "Keep that in mind when vilifying him."

Turning up the heat
Microsoft and Apple Computer were both in the hot seat this week, but they will soon be working side by side.

Millions of Windows users may unwittingly be test subjects for an unfinished Microsoft antipiracy tool. The software maker has been delivering a prerelease version of Windows Genuine Advantage Notifications software to PCs as a "high priority" item in the built-in update feature in Windows. The tool, also known as WGA Notifications, is used to validate the authenticity of Windows software installed on a PC.

The move is a first for the software maker. Microsoft normally asks people to join test programs before it initiates the download of any such trial software. But some security experts are troubled by Microsoft's decision to deliver prerelease software to millions of Windows users without clearly notifying them. People may not realize they are participating in a trial and have in essence become unsuspecting guinea pigs, they said.

Apple's battle with Creative Technology ramped up when Creative announced that the U.S. International Trade Commission plans to launch an investigation into Apple's popular iPod digital music player for possible patent infringement. The independent federal agency's decision to review the matter follows two lawsuits filed last month by Singapore-based Creative and its U.S. subsidiary, Creative Labs.

Creative, maker of the rival Zen portable digital media player, alleges that Apple's iPod, iPod Nano and iPod Mini infringe on its patents and is seeking a permanent cease-and-desist order.

Meanwhile, Parallels, a start-up whose software enables Macs to run Microsoft Windows and the Mac OS at the same time, said it is ready with a final version of its product.

Unlike past software that allowed Windows programs to run on a Mac, Parallels Desktop does not need to emulate the hardware that's inside a PC. That's because Macs and PCs now use the same Intel-based chips. As a result, the speed of Parallels is far better than past efforts at bringing together the two operating systems, the software start-up said. In fact, Parallels said Windows programs can run nearly as fast through its virtualization as they would running natively on a Windows PC.

Fixing a hole
Microsoft was also busy on the security front.

The software maker issued patches for 21 flaws in its software, saying all but two of them could let an intruder run malicious code on a compromised computer. The number of vulnerabilities means this is Microsoft's largest clutch of patches to date, security experts said.

The company sent out a dozen security bulletins on Tuesday as part of its regular monthly patch cycle. Eight of the bulletins are labeled "critical," which is Microsoft's highest risk rating. They cover problems with Windows, Internet Explorer, Word, PowerPoint and Exchange Server.

Just a day after those patches were released, code designed to take advantage of those weaknesses appeared on the Internet. Most of the patches that Microsoft issued were for flaws that were widely known.

But at least two flaws were made public for the first time on Tuesday as part of the company's monthly security update. The exploit code for previously unknown flaws means hackers could use the code to pounce on computer systems with managers who are slow to apply patches.

However, for the fourth straight year, the financial losses incurred by businesses due to incidents such as computer break-ins have fallen, according to the 2006 annual survey by the Computer Security Institute and the FBI.

Respondents in the 2005 survey reported an average of $204,000 in cybercrime losses. This year, that's down to $168,000, about an 18 percent drop. Compared with 2004, the average loss is down 68 percent.

Also of note
A federal judge rejected a request for an injunction preventing Google from distributing its popular 3D Earth-mapping and visualization program...Many Windows PCs have been turned into zombies, but rootkits are not yet widespread, according to a Microsoft security report...Two services run by two people in Australia are giving people new ways to access and use video content from sites like YouTube and Google Video, and copyright holders may well find themselves up in arms about it.