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Week in review: Microsoft and the Linux code surprise

Among a bevy of Microsoft stories this week, the company is contributing code for inclusion in Linux, thanks to a Novell fellow. Also: Amazon buys Zappos and PayPal gets a new API.

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.

More headlines

PayPal tries rewiring e-commerce with new interface

eBay is trying to keep developers from straying to the Amazon fold with a new payments interface with more flexibility for new types of online purchases.

Yahoo confirms it's scooping up Xoopit

Web pioneer signs agreement to purchase the start-up to add new photo features to Yahoo Mail.
• Yahoo's quarterly profit beats analyst expectations

iPhone, Mac sales continue to propel Apple forward

Apple has another record quarter thanks to cheaper MacBooks and high demand for the new iPhone 3GS. Traditional iPod sales begin to taper off.
•  Apple earnings up 12 percent for the third quarter
• iPhone gives AT&T a boost

E-tailers linked tocontroversial marketers

Consumers hold "Web loyalty" companies responsible for mysterious charges on their credit card statements, but prominent Web retailers are still doing business with them.

Amazon to snap up Zappos

E-commerce giant will be acquiring all of the online retailer's stock and converting it to Amazon stock in a deal worth about $847 million.

Yahoo launching front page open to others' content

After months of testing, the Web pioneer opens up its new home page with the hope of attracting more active users and more lucrative advertising.

Wielding the Xbox 'banhammer'

Stephen Toulouse has gone from squashing bugs to policing the Xbox Live online service. In an interview, Toulouse discussed how his old gig helped prepare him for a new generation of threats.

EU seeks opinions on Google Books

European Commission asks authors and publishers in Europe for opinion on Google plan to digitize and publish out of print books that have copyright protections.
•  Legal advocates push for Google Books privacy

Tech industry Brainstorms

Tech's movers and shakers gather at the Fortune Brainstorm: Tech conference to mull tech topics such as content and capital.
•  AT&T chief: iPhone won't be exclusive forever
• Twitter still doesn't have a head of sales
•  Disney's Iger: Content need not be free

Google building 3D hardware boost into Chrome

By building its O3D plug-in into Chrome, Google is laying more groundwork for faster Web applications in its browser--and later, for Chrome OS.

Also of note
•  Amazon CEO apologizes for Kindle book deletions
•  Intel appeals massive antitrust fine
• Chinese authorities probe iPhone worker's death