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Week in review: Vista off in the distance

Microsoft grabbed headlines this week after announcing it will push back the Windows Vista launch until January.

Microsoft dominated this week's headlines after announcing it will delay the release of its long-awaited Vista operating system until after this year's holiday shopping season.

The software giant said Tuesday that it would push back the consumer version of Windows Vista until January 2007 from a previous target of late 2006.

Microsoft will still wrap up development of the operating system this year and make it available to volume-licensing customers in November. But a delay of a few weeks in Vista's schedule meant that some PC makers would be able to launch this year and others would not. As a result, Windows chief Jim Allchin said, the company is delaying the broad launch of the product.

Fresh on the heels of the Vista delay, Microsoft confirmed later in the week that it is also pushing back the mainstream launch of Office 2007 to next year. As with Vista, the company hopes to finish the code for Office 2007 this year and will make it available to business customers that have signed up for the volume-licensing program.

Microsoft said the Vista launch was delayed for the benefit of computer makers, retailers and other partners. But analysts and others immediately challenged that assessment. Some said missing the holiday season was bad news for the whole industry and PC makers in particular.

Others analysts said Microsoft's pain will likely be Apple Computer's gain, because the Mac maker is already strong in areas where Microsoft has promised to deliver key improvements with Vista: security and features such as video and photo editing and search.

Meanwhile, the news created quite a stir around the virtual water cooler, with Web reaction running the gamut: Some were critical of Microsoft, saying the move is disappointing consumers, partners and stockholders. Others commended the company for taking the extra time to launch a solid product right out of the box.

CNET News.com readers were among the many to voice opinions. Among the 90 Talkback comments on the breaking Vista delay story, one theme was an overall lack of surprise, given Microsoft's track record of delays.

"Boy, didn't see that coming! (insert sarcasm here)," wrote reader Jeffrey J.

Others, like Ej Passeos, commented on the bad timing of the delay, which for "shareholders living with this long-time, non-moving stock," should be the final straw.

"I know many people who have set 'Christmas' time as the approximate time they would purchase a new computer," he wrote. "The timing here is appalling, unacceptable, and worth of heads rolling."

Following the Vista delay, word surfaced of a planned management shakeup at Microsoft. On Thursday, Steve Sinofsky was formally named as head of its Windows division as part of a reorganization to better align its Windows unit and its online MSN operations with its Live strategy. Some are wondering that the move came just a few days after the Vista delay.

The latest Vista delay highlights a mounting challenge for Microsoft--finding a way to update its most important product on any kind of reasonable schedule. With all the setbacks, it will be more than five years between Windows XP and Windows Vista. And for even that delivery schedule, Microsoft had to scale back many of the major advances that were planned for the new operating system.

That said, Microsoft has been playing catch-up with the changing times, readying a full slate of software and hosted services for building Web applications on a range of devices, from desktop PCs to mobile phones. Some of those were showcased this week at Microsoft's Mix '06 conference in Las Vegas.

Following his keynote speech at the gathering, Microsoft Chairman Bill Gates spoke to CNET News.com about the push into hosted services, competition with Google, and mobile computing.

Also at the conference, another Microsoft executive said U.S consumers bought more Windows Media Center-equipped PCs than the standard edition of Windows XP last month, and sales of Media Center will reach 10 million by the end of March.

They've got game

One of the big stories from the in San Jose, Calif., this week was the confirmation of a November release for the PlayStation 3. In a speech Wednesday, Sony Computer Entertainment President Phil Harrison also said the company is committed to a simultaneous worldwide launch of the PS3 in Japan, the rest of Asia, North America, Europe and Australia. Sony will produce about a million PS3s per month and capacity will ramp up quickly, he added.

The question Sony will have to face until November, and for at least a year afterward, is whether the head start Microsoft got with its November 2005 launch of the Xbox 360 console will be too much for Sony to overcome.

Also at the conference, Microsoft announced that it plans to increase its weekly distribution of the Xbox 360 game console by at least twofold.

The software giant said the addition of a new manufacturing partner, Celestica, will allow it to ship "two to three times" more Xbox 360s to retailers each week. Celestica joins Wistron and Flextronics in manufacturing the system and components for Microsoft.

The announcement coincides with Microsoft's release of its new spring line of games. The company also announced additions to its downloadable digital-content zone, Xbox Live Marketplace, which it says is being used by more than 85 percent of connected Xbox users.

Other issues discussed at the conference were mobile gaming and challenges for the little guys to compete with giant publishing houses like Electronic Arts; and the serious-game genre, and what those involved must do to keep it alive and strong.

And in the third-annual Game Design Challenge, three developers presented game concepts that they each believed could win the Nobel Peace Prize. Next up, telecom

Phone companies, cable operators and content providers convened this week at the TelecomNext trade show in Las Vegas, touting strategies for attracting customers, and emphasizing what they say are the dangers of overregulation.

The heads of state in the telecom industry have crowned a new ruler: you. During a two-hour keynote session, CEOs from Verizon Communications, Disney, Time Warner Cable and NTT told a packed audience at the trade show that the future of telecom lies in the hands of consumers who nowadays have more choices when it comes to the content and services they subscribe to and how they use them.

Speaker AT&T CEO Edward Whitacre--whose comments initially ignited the debate over whether new laws were needed to preserve network neutrality--said that fears his company and other big network providers would block traffic on their networks are overblown.

And later in the week, executives from Verizon and AT&T said their companies have no intention of degrading or blocking other companies' traffic that rides over the public Internet. They said they simply want to be able to offer content companies--primarily video providers--virtual pipes that lead directly to consumers and allow smoother delivery, much like the dedicated services they offer businesses to connect offices around the country. Critics, however, remain wary.

Also this week, the Federal Communications Commission acknowledged that it has exempted Verizon Communications from regulation on its business-broadband service. That means prices for the use of the network could rise. Verizon, though, argues the move will lead to more competitive pricing and allow it more flexibility in serving customers.

Threats and scams and flaws, oh my

Among the threats reported this week, Microsoft is investigating a security flaw that could let an attacker gain control over a vulnerable Windows computer.

The flaw was reported to the company earlier this month by Jeffrey van der Stad, a 25-year-old Dutch programmer. The problem is related to the way the browser processes so-called HTA files, Microsoft said in an e-mailed statement. HTA files are associated with Web applications.

In addition, researches said a serious flaw exists in certain versions of the popular Sendmail open-source and commercial e-mail software, but fixes are available.

The vulnerability, which was reported by Mark Dowd at Internet Security Systems, could allow a remote attacker to take control of an e-mail server. To do this, the intruder would send arbitrary code at carefully crafted time intervals to the SMTP mail server, according to alerts from security providers ISS and FrSirt.

In a new twist on distributed denial-of-service attacks, cybercriminals are using DNS servers--the phonebooks of the Internet--to amplify their assaults and disrupt online business.

Also, a laptop with information on almost 200,000 current and former Hewlett-Packard employees was stolen last week, putting them at risk of identity fraud.

A quartet of suspected e-mail scammers--three of them Nigerian citizens--could face scores of years in prison if convicted on fraud and conspiracy charges, the U.S. Justice Department said Thursday.

And Sun Microsystems' Grid, a publicly available computing service, was hit by a denial-of-service network attack on its inaugural day.

Eyes on Google

Google's stock rose nearly 8 percent to $368.93 in after-hours trade on Thursday after Standard & Poor's said the Internet search giant would list on its benchmark S&P 500 Index beginning March 31.

In other Google news, the search giant launched a beta version of Google Finance, a Web site aggregating information about companies and mutual funds that features an interactive chart correlating news and other events with stock price spikes and falls.

Also, Google's news service has after the partnership led Google News to link to a fake item written by a teenager who said he'd been hired by the search giant.

And there were more reports about and people unable to access their mail for hours, if not days.

Also of note
Dell has agreed to purchase gaming PC maker Alienware. Novell shone the spotlight on the new version of its flagship Linux product. Sony released details on several products that will feature Blu-ray high-definition DVD. eBay is getting help from former Attorney General John Ashcroft's lobbying firm on its patent case next week before the U.S. Supreme Court. The FBI squandered $10.1 million on "questionable contractor costs" and another $7.6 million on missing equipment while upgrading its computer systems... Energy efficiency is a dominant theme at the Cleantech Venture Forum, where creations are pushing the limits of clean tech. Ads for major U.S. companies are appearing next to racy and extreme user-submitted content on popular Web sites...A proposed French law that would force Apple to make the songs it sells through its iTunes music store playable on non-Apple devices amounts to "state-sponsored piracy," Apple said... Red Hat released its Fedora Core 5 version of Linux.