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Week in review: Redmond guns for Google

Microsoft is heating up its competition with Google by launching a slew of Web-based tools tied to its Windows and Office products, but what exactly are we being sold?

Microsoft is heating up its competition with Google by launching a slew of Web-based tools tied to its Windows and Office products, but what exactly are we being sold?

Kicking off what he called the "live era" of software, Microsoft Chairman Bill Gates said that the company plans to launch new Internet-based complements to its core products. Microsoft is working on two products, "Windows Live" and "Office Live," that create opportunities for the company to sell online subscriptions and advertising. Both are targeted at smaller businesses and at consumers.

Gates said that Windows Live is a set of Internet-based personal services, such as e-mail, blogging and instant messaging. It will be primarily supported by advertising and be separate from the operating system itself. Office Live will come in both ad-based and subscription versions that augment the popular desktop productivity suite.

While the "live" software push is seen mainly as an effort to compete with rivals such as Google and Yahoo, there are a number of smaller companies that suddenly find themselves in Redmond's competitive crosshairs.

While instant messaging programs have had voice chat for some time, Microsoft's move would be broader by allowing free calling to traditional phone numbers as well. Vonage, Skype Technologies and others have offered such abilities but have done so for a fee.

On the security front, Microsoft went beyond its already announced plans for the subscription OneCare service. In addition to that paid program, Microsoft plans a new Windows Live Safety Center--a free Web-based program that allows on-demand scanning and removal of viruses.

However, of the eight or so services that Microsoft showed off, the vast majority are reincarnations of products that the company had either released or tested under the MSN brand.

The main Live.com Web page is similar to the Start.com page that has been in testing since earlier this year. Windows Live Mail is a long-planned update to Hotmail designed to make the service more like desktop e-mail software. Other existing products, like Microsoft's MSN Spaces and its OneCare security service, are also joining the Windows Live party.

Some CNET News.com readers were unimpressed with Microsoft's announcement. "Sounds remarkably like Apple's .Mac service," wrote Ross Bellette in News.com's TalkBack forum. "Apple's own Address Book will send out updates to one's card when updated. Microsoft are inventing things all over again, let's try something 'new.'"

And while Microsoft has talked about accelerating its business by offering services, some analysts worry that its race to compete with Google and others could leave Microsoft's very profitable business model in the dust.

Analysts say the move is probably necessary to help the company compete with rivals that threaten to offer online equivalents to some of Microsoft's cash cows, like Office. However, depending on how far Microsoft takes the strategy, it could also put the company in competition with its existing--and already lucrative--way of doing business.

For its part, Google appears to be adding reinforcements for the fight. In its most recent quarter, which ended Sept. 30, Google added 800 employees, bringing its global work force to 4,989. That's more than triple the total from just two years ago.

At the moment, Google has at least 1,000 positions available all over the world, according to a count of job openings on the company's Web site. It's difficult to provide an exact tally. Though the openings cover nearly every facet of Google, from advertising sales to human resources, the bulk of the openings are in what the search company's executives hold most dear--engineering.

Tech goes to Washington
All eyes were on Washington this week as politicians and jurists made decisions that rippled through the tech community.

The U.S. Supreme Court will not hear Microsoft's appeal in a lawsuit that has resulted in a preliminary jury verdict of more than $500 million for alleged patent infringement in Internet Explorer. Announced without comment, the court's decision not to hear the case, involving Eolas Technologies, clears the way for proceedings to continue before a federal district judge.

The August 2003 decision from a federal jury in Chicago sent shock waves across the Internet. If Eolas and its business partner, the University of California, eventually prevail, the effects could force a redesign of Web pages that use plug-in applications like Macromedia Flash and Adobe Acrobat that run inside a Web browser.

The Supreme Court also refused to hear the appeal of a Tennessee computer programmer who claimed that New York was violating his constitutional rights by forcing him to pay taxes on income he earned in his home state while telecommuting. The move means that telecommuters employed by a company outside their home state may have to pay extra taxes unless Congress adopts a bill to protect them.

The New York tax provision, called "Convenience of the Employer," allows the state to tax nonresidents who, for their own convenience, choose to telecommute for their New York-based employers, but not if it is at the convenience of the employer.

The Telecommuter Tax Fairness Act, reintroduced in the Senate in May, would protect telecommuters from double taxation. The bill is in committee and not yet scheduled for a vote.

On the other side of Capitol Hill, Democrats managed to defeat a bill aimed at amending U.S. election laws to immunize bloggers from hundreds of pages of federal regulations. The vote tally in the House of Representatives, 225 to 182, was not enough to send the Online Freedom of Speech Act to the Senate.

The reform bill had enjoyed wide support from online activists and Web commentators worried about having to comply with a tangled skein of rules. Opponents of the reform plan mounted a last-minute effort to derail the bill before the vote on Wednesday evening. Liberal advocacy groups circulated letters warning the measure was too broad and would invite "corrupt" activities online.

Pumping up the online music
The online music arena welcomed some new competition, but players may need to retune their instruments.

Sprint Nextel launched a music download service that lets customers store up to 1,000 songs on their cell phones, pitting it against Apple Computer's popular iTunes service. The Sprint Music Store will allow consumers to browse, preview and, for $2.50 each, download files from the Sprint inventory.

Although the cost per song is higher than Apple's rate, Sprint's store enables users to get a copy of each song they buy formatted for their phone and for their PC. Consumers will also be able to burn their music to a disc using Windows Media Player and transfer music stored on their PCs to their phones.

Meanwhile, America Online announced that it has acquired MusicNow. With the technology, the Time Warner Internet company plans to revamp its music customization and personalization features. AOL will gradually upgrade its current MusicNet AOL subscribers to a new service, called AOL Music Now.

Competition among online music providers is becoming increasingly intense. Customers have shown an insatiable appetite for acquiring their music through nontraditional means ranging from cell phones to peer-to-peer networks.

But not all is, as they say, groovy in the music business. The new iMesh, launched last week as the first record-label-approved file-swapping service, has a Led Zeppelin problem.

Like its peers in the digital music business, from Napster to Apple's iTunes, iMesh does not have the legal rights to distribute recordings by the popular 1970s rockers. And yet for those using the company's new service, it requires only a quick point and click of the mouse to download several of Led Zeppelin's biggest hits.

It is far too early to say whether this is a serious flaw that will require major retooling or simply a bug that will be cleaned up in just a few days of frantic code-tweaking. But the continued availability of copyrighted tunes on the iMesh network shows just how high the hurdles remain for this ambitious experiment in legal file swapping.

The Web, meanwhile, is emerging as the main forum for many digital music stores. In the past few weeks, several of the biggest digital music providers said they are moving portions or all of their services onto the Web rather than deliver downloads through a separate software application, as Apple Computer does with its iTunes software. America Online, Napster and RealNetworks have said they are committing to this departure from Apple's distribution strategy, in part to try to reach as many potential customers as possible. Analysts are skeptical, however, that the move will eat significantly into iTunes' customer base, where the iPod music player still reigns supreme.

Fixing a hole
Sony BMG Music Entertainment got some static over a potential security problem in some copy-protected CDs. Security experts said that anticopying technology used by Sony BMG could be adapted by virus writers to hide malicious software on the hard drives of computers that have played one of the CDs. The antipiracy tool is included on many of Sony BMG's latest music releases, from Van Zant to My Morning Jacket.

Sony BMG's technology partner First 4 Internet said it has released a patch to antivirus companies that will eliminate the copy-protection software's ability to hide. Consequently, it also will prevent virus writers from cloaking their work using the copy-protection tools.

In another contentious case, Cisco Systems has patched a flaw in the software used to run its routers and switches, a new twist in the company's dispute with a security researcher that has roiled the security community.

The networking giant released an update to fix a so-called heap-overflow vulnerability in its Internetwork Operating System, or IOS. This type of security flaw is commonly found in software and often allows a remote attacker to gain control of the affected system. In this case, that would mean control over a Cisco router or switch, which make up the infrastructure of many computer networks, including the Internet.

The newly disclosed flaw in IOS was part of a controversial presentation at the Black Hat security confab in July, but Cisco has been able to keep it under wraps until now. At Black Hat, security researcher Michael Lynn demonstrated how he could gain control over a router by exploiting security flaws.

In the meantime, two Microsoft security updates for Internet Explorer can break the functionality of Web sites that use certain custom applications. The problems occur after installing the patches Microsoft delivered with security bulletins MS05-038 and MS05-052, Microsoft said.

Both patches can cause problems with ActiveX controls, small programs designed to perform simple tasks that can make a Web site more interactive. The MS05-038 patch can also hinder Java applications. After the patches are installed, applications that are programmed in specific ways will no longer work in Internet Explorer, Microsoft said.

The issue of broken Web sites is the latest problem with Microsoft patches. One recent fix wreaked havoc on systems of users who had changed certain settings on their PCs to be more secure, while Windows 2000 users had trouble finding the right patch for another security problem.

Also of note
Wal-Mart and Hewlett-Packard will likely celebrate this Thanksgiving season by attempting to crush their competitors with low-price desktops and notebooks, according to a Web site that tracks bargains...Wal-Mart Stores will likely start selling Motorola's Razr cell phone this Thanksgiving shopping season for $88.73...Google plans to hire programmers to improve OpenOffice.org, a demonstration of its affinity for open-source initiatives and one the company believes also makes sound, practical sense.