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Week in review: War over the workers

HP wants to ax 14,500 jobs, Microsoft and Google tussle over an employee, and a 9-year-old aces a grown-up test.

Hewlett-Packard this week announced plans to ax 14,500 jobs, and Microsoft and Google tussled over a worker.

As part of a strategy to reinvent itself, HP announced that it will lay off about 10 percent of its staff under a restructuring plan designed to bring the company's costs in line with those of competitors such as Dell and IBM.

HP said the broad changes will save the company about $1.9 billion each year starting in the summer of 2006. Though the job cuts will be felt throughout the company, the majority of staff reductions will come from sales and from support functions, such as IT, human resources and finance.

A striking fact about HP's latest staff-slashing news is that the company has already returned to its mid-2002 size, despite reported job cuts in the past few years totaling more than 22,000. What's behind the bulge? Some analysts suggest bureaucratic bloat and a growing presence offshore are factors.

Trying to retain employees has touched off a new chapter in the rivalry between Google and Microsoft, as the software giant sued the search giant and a former Microsoft executive who has been tapped by Google to run its China operations.

Kai-Fu Lee
Source: Microsoft
Kai-Fu Lee

The suit names Kai-Fu Lee, who until Monday was the corporate vice president of Microsoft's Interactive Services Division. Google said Tuesday that Lee was joining the company and would head up a new research effort in China.

In the suit, Microsoft seeks monetary damages as well as an injunction upholding the noncompete clause and other provisions of Lee's contract, including terms barring him from sharing Microsoft trade secrets.

The suit against Lee garnered a variety of reactions from CNET News.com readers. Betty Roper wrote that "corporate noncompetes are serious business, and this guy knew exactly what he was getting into when he signed his. I'm guessing his career at Google will be...brief."

Thomas Carley, on the other hand, wrote that Microsoft has done its share of aggressive hiring from rivals. "I think it's a hoot that Google has used Microsoft's own tactics on them," he wrote. "Turnabout is fair play." (Click here to join the discussion.)

Meanwhile, at Microsoft's annual gathering with university researchers, executives bemoaned the lack of computer scientists, both globally and in the United States. Part of the problem, say both academics and Microsoft executives, is that the technology field just hasn't done a good job of positioning itself as hip and exciting.

There needs to be more of a sense of romance and magic, said Kevin Schofield, general manager of Microsoft Research communications and strategy. "You don't have to go to Hogwarts to learn magic," Schofield said in an interview with CNET News.com, referring to the fictional school in the Harry Potter series.

Maybe getting a little more Harry Potter into Microsoft's Redmond, Wash., headquarters would be an employee recruitment incentive. The company recently qualified a 9-year-old Pakistani girl as a Microsoft Certified Professional.

Arfa Karim of Multan, a city in northeast Pakistan, has officially become the youngest Microsoft Certified Professional in that country, and one of the youngest in the world.

Arfa, now 10, met with Microsoft Chairman Bill Gates last week--an experience she later described as second only to visiting Disneyland.

To attain the credential, a person has to display technical proficiency in areas such as .Net, Visual Studio 6.0 and Windows Server 2003.

Regardless, some CNET News.com readers were unimpressed. Greg Klebart wrote: "OK, so a 9-year-old can answer some multiple choice questions correctly. Dumb luck."

Reader Roy Stewart, however, congratulated Arfa in News.com's TalkBack forum. "You have achieved a very significant accomplishment," he wrote. "Ignore any detractors to your prowess." (Click here to join the discussion.)

Far from flawless
A security flaw that could let an attacker remotely crash computers running Windows exists in several versions of the operating system, not just Windows XP. Windows 2000, Windows XP and Windows Server 2003 are vulnerable to a denial-of-service attack that exploits a problem in the Remote Desktop Protocol.

RDP is a protocol that enables remote access to Windows systems. Because of a flaw in the way Windows handles remote desktop requests, an attacker could crash a PC by sending a malformed remote request, Microsoft said.

Microsoft is also investigating reports that a flaw in Internet Explorer's image-rendering capabilities may allow attackers to execute code remotely. A security consultant said he has found a number of possible flaws in the way the Web browser software handles JPEG images. The consultant said one of the flaws could be exploited for remote arbitrary code execution, a type of attack generally categorized as "critical" by security vendors.

Four proof-of-concept images that aim to exploit these flaws have been posted on the Web by the consultant. Each of these has the potential to crash IE 6, the latest version of Microsoft's browser, even if it has been patched with Service Pack 2.

An IM worm is also attracting Redmond's attention. MSN Messenger and America Online's Instant Messenger services are being targeted by malicious messages containing links that could infect a computer with a Trojan horse or dangerous worm.

The latest threat is a Trojan called Kirvo, which arrives in the form of an instant message from someone on the user's "friends" list. The message contains a link to a Web site, which, if clicked, loads a copy of Kirvo onto the computer.

Built for speed
Voters in Lafayette, La., approved a bond offering to fund a citywide fiber-optic project, an issue that was the source of considerable friction during the past year. Residents approved the measure 12,290 to 7,507.

The city of 116,000 residents has been planning to build its own fiber-optic network for more than a year. But local phone company BellSouth and cable operator Cox Communications challenged the project.

As Lafayette goes the fiber-optic route, Cingular Wireless plans to have wireless broadband networks up and running in 15 to 20 cities by year's end, as it tries to catch rival Verizon Wireless.

Cingular's commitment to having high-speed Internet available to 40 million Americans by January 2006 pressures No. 2 operator Verizon and No. 3 operator Sprint, which are rolling out similar networks to support new revenue-generating services such as video-on-demand.

Though they were relatively slow to catch on, wireless data services are finally being embraced in the United States--a promising sign given that each operator is spending billions of dollars to build faster networks.

At the same time, consumers are reaping the benefits of a growing discount war among phone and cable companies.

Last month, SBC Communications announced a promotional offer that lets customers get one year of DSL service for $14.95 per month. And earlier this year, Verizon increased speeds and kept its price of $29.95. "Cable prices are too high when you look at what you're getting in terms of megabits per dollar," said one cable user who plans to switch to a new service called Fios, which extends a high-speed fiber network directly to consumers' homes.

Raised on video
Apple Computer may be getting ready to take its iTunes Music Store to the movies. Since May, the iTunes software has allowed users to play videos, movie trailers and even home movies. The store itself has begun selling a handful of music videos, with more being added each week.

Now record label sources say Apple has been in talks to start selling a much wider range of music videos through the store, probably as soon as this fall. The company also has indicated to media executives that an iPod that plays video could be unveiled as early as September. That leads some industry insiders to believe that Apple is working on an online movie store and a video playback device that does for movies what iTunes and the iPod have done for music.

For Net phone operator Skype, the impact of video is clear: The company has tens of millions of users but envisions attracting billions with the help of video phones, says the man who co-founded the company. The company's CEO demonstrated a beta video version of Skype during his keynote at the AlwaysOn conference at Stanford University.

The application is a plug-in based on Skype's core telecommunications technology and is being tested internally. Speaking from his office in Estonia, the executive did not say when the product would be ready for release.

DVD-swapping site Peerflix is talking with retailers about attracting more customers as well: The company is negotiating with retailers in an attempt to get them to offer a few free Peerflix trades with new DVDs. The company runs a site through which participants can sell DVDs to one another for 99 cents.

"You get rid of 'Caddyshack' or 'Rambo,' and pick up 'The Aviator,'" is how CEO Billy McNair described the process during an interview at the AlwaysOn Conference. "We have a guy in Florida that trades 60 movies a month."

Also of note
The open-source Firefox browser and Thunderbird e-mail client will be updated for the second time in a week because of code changes that unintentionally stopped some third-party extensions from functioning correctly...Meanwhile, the next version of Firefox has been delayed for a few months...Following a scandal over sexual content, "Grand Theft Auto: San Andreas" will now bear an Adults Only rating...A new instant-messaging worm making the rounds masquerades as Apple's iTunes application and drops adware on infected Windows PCs.