Week in review: iPhone answers business calls

Apple opens up the iPhone to developers and challenges BlackBerry, while Yahoo opens up its takeover defense strategy. Also: Microsoft shows off IE 8.

After months of strict control, Apple welcomed software developers to build applications for the iPhone and also challenged BlackBerry for the hearts of corporate America.

Apple CEO Steve Jobs unveiled enterprise-friendly features and a roadmap for third-party developers to create applications for Apple's iPhone.

Apple has licensed the Microsoft ActiveSync protocol, which will make it much easier to do push e-mail and contacts with Exchange servers. Until now, iPhone users who wanted to get e-mail on their iPhones had to jump through a series of technical hoops. And as a result, a lot of business users, who would have otherwise bought the iPhone right away, have stood on the sidelines with their BlackBerrys or Windows Mobile phones drooling at the iPhone.

The announcement is a huge deal for Apple, because it eliminates one of the barriers the company faced in addressing the business market. It also made the iPhone more appealing to a group known as prosumers, people who buy their own cell phones for personal use, but also access some business applications, such as corporate e-mail, on their phones.

Other new features include Cisco Systems' IPSec virtual private network technology (IPSec is an encryption standard), "remote wipe" technology that can erase sensitive data if an iPhone is lost or stolen, and better wireless security with 802.1x support. (For complete information on all the new features, read News.com's roundup.)

Developers will get access to the iPhone for $99 a year, as part of Apple's iPhone Developer Program. The program, however, will only be available to U.S. developers at first, and only "a limited number" of developers at that. Apple declined to elaborate on the exact definition of "limited." A separate $299 "enterprise" developer program will be available for corporations creating in-house applications.

CNET News.com readers debated the value of Apple's move; at least one reader wanted to revisit issues on the minds of many iPhone users.

"It's fairly certain that whatever Apple's plan is, it isn't going to be enough to satisfy the thousands of homebrew iPhone application users," wrote one News.com reader. "Will Apple continue to release updates that attempt to prevent these users from utilizing their iPhones as they wish?"

Kleiner Perkins Caufield & Byers jumped into the fray by creating a so-called developing applications for the iPhone and the iPod Touch. The $100 million will fund several new companies that develop software or services on the Apple platform.

In search of search dominance
Yahoo's resolve in fending off Microsoft's unsolicited buyout bid may to be softening. Early Monday, Microsoft Chief Financial Officer Chris Liddell told attendees at Morgan Stanley's Technology Conference that Yahoo had not formally responded to its buyout bid and the software giant was keeping an eye out for other acquisitions.

That same day, Yahoo's board of directors voted to extend the deadline to nominate opposition candidates to its board of directors, a move that will likely delay a hostile proxy fight with Microsoft. The deadline had previously been set for March 14, but now will be extended to a new deadline of 10 days after Yahoo announces the date for its shareholders meeting.

"As the company has not yet announced the date of this year's annual meeting, the amendment will give stockholders who want to nominate one or more directors, including Microsoft Corporation, more time to do so. The amendment does not preclude any party from nominating one or more directors at any time prior to the new deadline," the company said in a statement.

The take-away from this action, says News.com's Dawn Kawamoto, is that Yahoo still wants to keep Microsoft close, and friendly. Yahoo finds it wise to give Microsoft more time before it has to present its hostile slate of directors. The move also gives the Internet search pioneer more time to consider its options and other suitors, without putting undue pressure on Microsoft to go hostile.

Yahoo has rejected Microsoft's acquisition bid, saying it undervalues the company. The $31-a-share price at the time of the bid is now worth $28.62 because of a drop in Microsoft's share price.

Yahoo also may be talking to Time Warner on a deal designed to thwart Microsoft's bid. Under a possible deal, Yahoo would acquire Time Warner's AOL in exchange for the media conglomerate taking a large minority stake in the combined company, unidentified sources told The Wall Street Journal.

Yahoo and News Corp. continue to talk as well, discussing a deal under which News Corp. would sell its MySpace.com social network to Yahoo in exchange for a stake in the company, the report said.

However, Microsoft may be considering changing the way the deal is valued to 100 percent cash. Under its current offer, Microsoft is valuing the deal using a formula based on 50 percent cash and 50 percent Microsoft stock. As a result, the value of Microsoft's offer rises and falls based on the performance of its own stock price.

Meanwhile, Ask.com is cutting 40 jobs--8 percent of its workforce--as part of a restructuring to refocus the search company toward providing answers to women searching on entertainment, health, and reference topics.

In the Mix '08
Yahoo is certainly on Microsoft's mind. Microsoft Chief Software Architect Ray Ozzie opened his speech at Mix '08, the company's Web-focused confab in Las Vegas, with a talk about all of the things Microsoft has done in the online arena over the past year.

"And then there's Yahoo," Ozzie said, adding that there isn't much he can say about Microsoft's pending bid. "I can say it's already added some interesting twists to what promises to be a really, really exciting year."

He also justified spending Yahoo-size dollars by talking about the potential of the online advertising market.

Ozzie said he hoped in his speech to connect some of the dots between Microsoft's online services, which he acknowledged can seem from the outside to be somewhat haphazard.

The stars of the confab were a new version of Internet Explorer 8 and the Silverlight Web technology.

Although anyone can now download the IE 8 browser, Microsoft is gearing this release for Web developers. However, a second beta, slated to arrive this summer, is aimed at a wider audience, Microsoft's top browser executive told CNET News.com.

"It's public," general manager Dean Hachamovitch said of the Beta 1 released Wednesday. "It's out on Microsoft.com somewhere. Anyone can download it."

One of the new features, WebSlices, allows users to break a Web site into parts and only get updates from the part they want.

"In IE 8 users can subscribe to parts of a Web page," Hachamovitch said. He showed an example in IE 8 where users can use Web slices to subscribe to a single eBay auction.

Want to know how well IE 8 works? CNET's Robert Vamosi poked and prodded at the test version of the Microsoft browser, and found it's still very much a work in progress. Read his review here.

Microsoft also said it is making available a beta version of Silverlight 2, which will move the technology further beyond delivering video and into creating rich Internet applications. Among the features of Silverlight 2 is what Microsoft calls adaptive streaming: the ability of the client PC to decide how large a streaming file it can handle at any given moment based on its CPU and network resources.

Microsoft is looking to position its Silverlight Web technology as the coolest kid in school--one that is both popular and gets along with everyone.

Also of note
Facebook announced that it has hired veteran Google employee Sheryl Sandberg to be its new chief operating officer, replacing the outgoing Owen Van Natta...Hewlett-Packard unveiled a new plan for its research arm, HP Labs, saying it will sharpen its focus into fewer specific projects and promising a greater emphasis on exploratory research...Travelers using Denver International Airport's free Wi-Fi service may be shocked to learn that officials have blocked access to content they deem provocative on the airport's free Wi-Fi service...The U.S. Air Force accidentally sent e-mails that were meant to go to its base in Mildenhall, England, to a tourism Web site with a similar address.

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