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Week in review: Peeking at Vista

Just days after announcing the name for the next version of Windows, Microsoft offered a glimpse of what to expect.

Just days after announcing the name for the next version of Windows, Microsoft offered a glimpse of what to expect.

The software giant passed a major milestone with the release of its first full test version of Windows Vista, the next generation of its flagship operating system. The beta was released Wednesday--a week ahead of the Aug. 3 target Microsoft had announced last week.

The operating system, previously code-named Longhorn, is being offered to about 10,000 testers and will be available shortly to about 500,000 people who are members of Microsoft's MSDN developer program or its Technet program for corporate technology workers. General availability of Vista is scheduled for next year.

Though Microsoft has included a more complete version than past developer preview releases, a company executive stressed that Beta 1 is not aimed at the masses.

"Beta 1 is not what I would call deeply interesting, unless you are a real bithead," Windows chief Jim Allchin said in an interview with CNET "This beta isn't really for even tech enthusiasts. This beta is to test out some of the capabilities that we've got, if you will, in the plumbing."

However, some CNET readers seemed dubious about the beta.

"Looks a lot like XP to me," reader William Squire wrote in's TalkBack forum. "I was hoping for something a bit more dramatic. Every time an interface picks up new features I feel the need for a bigger monitor to maintain the same screen real estate for my application of focus."

Others cautioned against getting one's hopes up: "Do not expect real innovation from (Microsoft), and you won't be disappointed," wrote reader "Keith J."

"In fact, maybe we should begin to look at (Microsoft) as merely providing a computing foundation. Look to others--start-ups; open source; small, hungry companies--for real innovation, real value add." Poll

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In addition to Vista, Microsoft revealed other tricks up its sleeve this week.

CEO Steve Ballmer announced that Microsoft is planning new, higher-priced versions of both Windows and Office in the coming years as part of its effort to expand sales. Ballmer said the company will add high-end desktop editions and new server options with the next versions of the operating system and productivity suite. He noted that the existing premium Windows XP Professional version has brought the company billions of dollars in extra revenue.

At the other end of the spectrum, the software giant noted that its low-end version of Windows is growing in popularity. The company has sold 100,000 copies of its Windows XP Starter Edition. The release of the sales figure marks the first time the company has indicated how many people are buying Starter Edition, which is available in developing areas, includings Brazil, India, Indonesia, Malaysia, Mexico and Thailand.

Microsoft also demonstrated a more powerful version of its Hotmail Web-based e-mail program. This version of Hotmail, still in a test phase, works a lot more like desktop e-mail programs such as Outlook and Outlook Express, offering options such as a preview of incoming e-mails, antiphishing features and the capability of blocking and unblocking specific senders. The company's move comes amid a renewed battle over Web-based e-mail, which has Google, Yahoo and others competing to offer more storage and other features in an attempt to win consumers.

Meanwhile, Microsoft has enlisted some outside help for one of the most anticipated new features of its updated Web browser: the ability to alert people that they may be about to enter a fraudulent Web site.

The company tapped WholeSecurity, a maker of computer security programs in Austin, Texas, to help Internet Explorer 7 identify sites designed to trick people into disclosing personal data to identity thieves, the companies said. These "phishing" sites mimic legitimate sites, such as those of eBay and Citibank, and have contributed to a national identity theft epidemic.

Worker war
Microsoft was a regular visitor to the tech spotlight this week, in part because a judge temporarily barred a former Microsoft executive hired by Google from performing any duties for the search giant similar to those he performed at Microsoft.

Specifically, the Washington state judge granted Microsoft's request for a temporary restraining order to prevent Kai-Fu Lee from violating his noncompete agreement. The judge prohibited Kai-Fu Lee from working on search technologies, business strategies, planning or development related to the computer search market in China, as well as any other areas he worked in while employed at Microsoft.

Kai-Fu Lee
Source: Microsoft
Kai-Fu Lee

Google and Lee were also barred from disclosing or misappropriating any trade secrets or proprietary information obtained while Lee worked at Microsoft and from destroying any documents or data that relate to Lee's employment at the companies.

Microsoft sued Google and Lee last week, claiming Lee was breaking a noncompete promise in his employment agreement by joining Google as head of its new office in China. In court papers this week, Google and Lee condemned Microsoft's lawsuit.

"This lawsuit is a charade," Google and Lee said in court documents. "Indeed, Microsoft executives admitted to Lee that their real intent is to scare other Microsoft employees into remaining at the company."

In another filing this week, Lee claims that Microsoft Chairman Bill Gates told him in a July 15 meeting: "Kai-Fu, (CEO) Steve (Ballmer) is definitely going to sue you and Google over this. He has been looking for something just like this, someone at a VP level to go to Google. We need to do this to stop Google."

The ongoing legal spat is a reminder that "poaching" of top employees is alive and well. But it's risky business in an era of employment agreements with noncompete clauses and other restrictions, experts say.

Tim Farrelly, president of San Francisco-based recruiting firm Coit Staffing, said that compared with the late 1990s, the practice has decreased, with companies becoming more selective. "They're not just taking anybody anymore," he said. "You really have to come to the table with a solid skill set."

There are signs--including a revived start-up scene--that competition for employees in the tech world is heating up. But it's difficult to find hard numbers on the practice of actively tempting workers at rival companies.

Security fight
Companies are pretty defensive about what they view as proprietary information. Cisco Systems on Wednesday threatened legal action to keep a researcher from further discussing a hack into its router software.

The request for a temporary restraining order, filed jointly by Cisco and Internet Security Systems, targeted former ISS researcher Michael Lynn and the organizers of the Black Hat security conference. The companies took action after Lynn showed in a presentation how attackers could take over Cisco routers--a problem that he said could bring the Internet to its knees. Specifically, Lynn outlined how to run attack code on Cisco's Internetwork Operating System by exploiting a known security flaw in IOS. The software runs on Cisco routers, which make up the infrastructure of the Internet.

Lynn told the audience that he had quit his job as a researcher at ISS to deliver the presentation, after ISS had decided to pull the session.

The dispute, however, was settled a day later, when all parties agreed to a permanent injunction barring them from further discussing the presentation Lynn gave. The injunction also requires Lynn to return any materials and disassembled code related to Cisco.

Lynn on Thursday said that despite all the legal wranglings he faced this week, demonstrating an attack on Cisco's router software was the right call.

"I think I did the right thing. It was pretty scary, but the real important thing was: There was the potential of (a) serious problem," Lynn said.

Finding vulnerabilities is big business, and new tools could help bug hunters find vulnerabilities in popular file formats, such as the JPEG and GIF image formats.

Some of those bugs can be serious: A victim's PC could be hijacked by simply viewing an image on a Web site or in an e-mail. Microsoft issued three "critical" security bulletins earlier this month, two related to file format flaws.

There could be a significant increase in the discovery of such flaws. iDefense, a security intelligence company, is making available tools that let researchers automate the discovery of file format vulnerabilities. The company released the tools Thursday in conjunction with the Black Hat security conference.

Coming gadget attractions
A prototype gadget from start-up Promise TV can record and index an entire week's worth of British digital-television programming. The device is a test version of a digital video recorder slated to be unveiled next month.

The project was commissioned by the BBC. It uses commodity PC hardware, including a bank of hard drives that can store 3.2 terabytes. At week's end, new programming overwrites previous programs, although those recordings can be archived on separate storage devices.

For the active set, Motorola announced new wireless products that range from a BlackBerry-like keyboard phone to a pair of sunglasses with a phone built into the stems. Still missing, however, was the iTunes-compatible phone that the company first announced along with Apple Computer a year ago.

In a nod to the eager speculation around that device, Motorola Chief Executive Officer Ed Zander said the product would be sold by major operators by the end of the current quarter. The iTunes phone has been the subject of intense speculation for months, as delays led analysts to speculate that Motorola and Apple had misread the potential demand for the device.

This year's holiday season may be a bit happier for people pining for a liquid-crystal display TV. That's because the prices of LCD panels, the most expensive part of LCD TVs, have slipped. The price of a panel between 40 inches and 42 inches dropped to $950 this month, research company iSuppli said. This is the first time such devices have cost less than $1,000.

The shift could bring the price of 40- to 42-inch TV sets down to $2,500 by the end of the year, iSuppli predicted. The most popular size for large, flat-screen sets is 42 inches, according to makers of the generally cheaper plasma version.

Also of note
Apple unveiled updates to its iBook laptop and Mac Mini lines, including increased memory and built-in wireless technology...The founder of the Chuck E. Cheese's restaurant chain and Atari wants to create a playland for twentysomethings...Congress remains reluctant to rewrite copyright law in the wake of the U.S. Supreme Court's landmark decision on file swapping--but Internet pornography on peer-to-peer networks is likely to be a legislative target this fall.