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April 25th, 2008

Morgan Stanley exec named new Google CIO

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Google has found its new chief information officer, CNET News.com has learned: Benjamin Fried, a programmer who rose through the ranks to run much of Morgan Stanley’s computing infrastructure.
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Fried, a managing director who led Morgan Stanley’s Application Infrastructure group, will take the new post in May, Google spokesman Matt Furman confirmed Thursday.

According to an internal Morgan Stanley memo seen by News.com, Fried will leave Morgan Stanley at the end of the month “to pursue opportunities outside the firm.”

The memo also indicated that Fried is no stranger to Google. While at Morgan Stanley, one of his projects was working on Google’s initial public offering in 2004, the memo said.

Google’s last CIO, Douglas Merrill, left earlier in April to become president of EMI’s digital unit. Earlier this month, rumors surfaced that Fried would be Google’s new CIO.

Running Google’s computing infrastructure is a daunting challenge on which the company’s success hinges. Google not only has thousands of servers housed in at least 36 data centers scattered around the globe, but also a build-it-yourself culture that means the company is responsible for maintaining much of its own technology.

Fried, who worked for Morgan Stanley computing operations for nearly 14 years, has experience in the area, though. According to the memo, he worked on Morgan Stanley’s first Web site, its workstation software, and its intranet.

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April 25th, 2008

Ballmer: You want XP, we’ll keep XP

Microsoft CEO Steve Ballmer said the company could re-evaluate its plans to phase out Windows XP by June 30, if customers demand that it stick around. So far, they have not.

“XP will hit an end-of-life. We have announced one. If customer feedback varies, we can always wake up smarter, but right now, we have a plan for end-of-life for new XP shipments,” Ballmer said during a Thursday news conference in Belgium, according to Reuters.

Big-name computer makers are still scheduled to have to stop selling models with Windows XP installed by the end of June. Mainstream technical support will continue to be available for Windows XP through April 2009, and more limited support will continue through April 2014.

Microsoft does plan to continue selling Windows XP for a limited class of PCs it calls “ultralow-cost PCs.” It’s a category that covers machines with slower processors, smaller screens and, in many cases, flash memory, rather than a traditional hard drive, for storage.

Ballmer said most consumers are choosing to buy the current version of Windows, Vista. Many acquire Vista by default, however, since most new PCs ship with the operating system. Businesses have been slower to catch on, as many have clung to Windows XP and older versions of Windows.

While Microsoft ponders yet another stay of execution for Windows XP, it’s readying a new version of Windows, being developed under the code name “Windows 7.”

Earlier this month, Microsoft Chairman Bill Gates indicated that Windows 7 could come within the next year–in some form, possibly a developer-oriented version–far ahead of the development schedule previously indicated by the software maker.

Ballmer on Thursday also reiterated Microsoft’s intention of appealing directly to Yahoo shareholders, if the company rejects Microsoft’s offer of $43.6 billion for the company.

“We’ve sent them a letter that says, ‘it’s a good price; please let us know. If you don’t let us know, maybe your shareholders will think it’s a good price,’” Reuters reported.

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April 25th, 2008

Weak Cellphone Sales Plague Motorola

The struggling cellphone maker Motorola posted a wider first-quarter loss on Thursday and failed to meet revenue forecasts, disappointing investors and sending its shares down.

The company, which is in the midst of a splitting itself into two publicly traded companies, said it lost $194 million, or 9 cents a share, for the quarter that ended March 31.

That is 7 percent more than in the period a year earlier, when it lost $181 million, or 8 cents a share. Excluding one-time charges related to extensive job cuts, the company would have lost 5 cents a share.

Sales fell about 21 percent, to $7.45 billion, down from $9.43 billion a year ago.

Analysts surveyed by Thomson Financial predicted, on average, a loss of 7 cents a share on sales of $7.75 billion. Analyst estimates typically exclude one-time charges.

The company’s poor performance continued to be driven by weak first-quarter cellphone sales, which slid 39 percent compared with the period a year earlier, continuing a two-year slump.

Motorola said on Thursday that the mobile phone division lost $418 million during the quarter, nearly 80 percent more than the $233 million it lost during the same period last year. The company shipped about 27 million handsets during the quarter, and its share of the global market fell below 10 percent, down from 22 percent in 2006.

But Gregory Q. Brown, who became president and chief executive this year, said he expected the company’s cellphone lineup to improve in the second half of 2008 and in 2009.

Operating profit at the company’s home and networks division, which sells TV set-top boxes and modems, shrank 8 percent, to $153 million.

The lone bright spot in the company’s financial performance continued to be its enterprise mobility solutions division, which sells computing and communication equipment to businesses. That unit’s operating profits grew 9 percent.

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April 25th, 2008

Microsoft Shows Gains, but Also Weaknesses

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Microsoft’s pursuit of Yahoo may have run into some bumps, but its big software business is humming along smoothly.

The company reported quarterly earnings Thursday that slightly surpassed Wall Street’s expectations, and it provided an optimistic outlook for its 2009 fiscal year, which begins in July.

The faltering American economy, Microsoft executives said, has not had a big impact on the company. Two-thirds of Microsoft’s revenue now comes from overseas sales, and demand for many of its products remained healthy in the United States.

“We have not seen any significant spillover to our business,” Christopher P. Liddell, Microsoft’s chief financial officer, said of the broader economy’s problems in a conference call with analysts.

During the call, Mr. Liddell spoke briefly about Microsoft’s unsolicited offer for Yahoo, mainly echoing the tone of comments this week by Steven A. Ballmer, the company’s chief executive. Mr. Liddell said he did not favor raising Microsoft’s bid, which was worth $44.6 billion when it was announced in February and $44.1 billion at the close of trading on Thursday.

“The strongest argument I have heard for increasing our bid — simply that we can afford to — is not one that I favor,” Mr. Liddell said.

Speaking in Milan on Wednesday, Mr. Ballmer held out the possibility that Microsoft might drop its efforts to take over Yahoo if its management continued to spurn the offer.

“We are prepared to go forward without a merger,” Mr. Ballmer said.

His comment, most analysts say, was probably a gesture intended to put more pressure on Yahoo’s board.

A proxy battle for control of Yahoo, analysts say, is a more likely alternative. On April 5, Mr. Ballmer sent a letter to Yahoo’s directors, threatening to oust the board and lower the cash-and-stock offer unless Yahoo started negotiations within three weeks. That deadline is Saturday. Mr. Liddell said the company would decide how to proceed next week.

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April 24th, 2008

Apple posts profit of $1.05B, ships nearly 2.3 million Macs

Apple said Wednesday that second-quarter profits rose over 36 percent to $1.05 billion, or $1.16 per diluted share, on sales of $7.51 billion for the three-month period ended March 29, 2008.

These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter, and international sales accounted for 44 percent of the quarter’s revenue.

Apple shipped 2,289,000 Macintosh computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. The company also sold 10,644,000 iPods during the quarter, representing one percent unit growth and eight percent revenue growth over the year-ago quarter.

Quarterly iPhone sales were 1,703,000.

“We’re delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple’s history,” said Apple chief executive Steve Jobs. “With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters.”

“We’re thrilled to have generated $4 billion in cash flow from operations in the first half of fiscal 2008, yielding an ending cash balance of $19.4 billion,” added Apple chief financial officer Peter Oppenheimer. “Looking ahead to the third quarter of fiscal 2008, we expect revenue of about $7.2 billion and earnings per diluted share of about $1.00.”

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April 24th, 2008

SlideShare Slammed with DDOS Attacks from China

SlideShare, a Mountain View-based startup that lets you upload and embed PowerPoint presentations on the web, appears to have stirred the red dragon last week.

About ten days ago the company began receiving anonymous requests to delete slideshows that were deemed “illegal” by the requesters. The SlideShare staff checked out these slideshows and discovered them to be quite innocent. While some described ways to fight corruption in China, none of them violated the company’s terms of service, and so SlideShow did nothing to fulfill the requests.

SlideShare soon began receiving a different type of request from the same people, who could now be identified by their email addresses. This time they were pretending to be users who had lost their passwords. Once again doing nothing, the company got a very demanding, and almost threatening, call to its Indian office on Wednesday, one that insisted that the company grant access to an account.

After these three failed attempts, SlideShare experienced a massive distributed denial of service attack starting at 10pm on Thursday, one day before the CNN website was attacked by Chinese instigators in apparent backlash to its coverage of the Tibetan protests. We’ve been told that the attack reached a peak of 2.5GB/sec and consisted entirely of packets sent from China.

Not long after the first attack subsided, SlideShare was hit a second time on Friday and the site went down again until Saturday morning. Since then there have been no more attacks, but the company continues to receive fake password recovery and illegitimate takedown requests at a rate of about 5-10 per day (it has accumulated about 50-60 total).

There’s a lot of speculation around just what has happened here since no one knows for sure who is behind the requests and attacks. However, it seems likely that they were from the same hacker groups - possibly linked to the Chinese government - that attacked the CNN site (and later called their attack off after getting too much publicity). Some of the slideshows with takedown requests have been viewed many times recently, so their popularity seems to have landed them on the Chinese government’s radar.

SlideShare insists that it will do everything it can to protect its users’ freedom of speech. As such, it has no plans to remove any of the content in question.

The Sports Network was also recently taken over by Chinese hackers who mistook it for CNN sports.

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April 23rd, 2008

DRM sucks redux: Microsoft to nuke MSN Music DRM keys

Customers who have purchased music from Microsoft’s now-defunct MSN Music store are now facing a decision they never anticipated making: commit to which computers (and OS) they want to authorize forever, or give up access to the music they paid for. Why? Because Microsoft has decided that it’s done supporting the service and will be turning off the MSN Music license servers by the end of this summer.

MSN Entertainment and Video Services general manager Rob Bennett sent out an e-mail this afternoon to customers, advising them to make any and all authorizations or deauthorizations before August 31. “As of August 31, 2008, we will no longer be able to support the retrieval of license keys for the songs you purchased from MSN Music or the authorization of additional computers,” reads the e-mail seen by Ars. “You will need to obtain a license key for each of your songs downloaded from MSN Music on any new computer, and you must do so before August 31, 2008. If you attempt to transfer your songs to additional computers after August 31, 2008, those songs will not successfully play.”

This doesn’t just apply to the five different computers that PlaysForSure allows users to authorize, it also applies to operating systems on the same machine (users need to reauthorize a machine after they upgrade from Windows XP to Windows Vista, for example). Once September rolls around, users are committed to whatever five machines they may have authorized—along with whatever OS they are running.

The news will likely upset a number of Microsoft’s customers, who bought music from MSN Music before the company launched the Zune Marketplace and decided to ditch the old store. Microsoft’s decision to turn off the MSN Music authorization servers serves as a painful reminder that DRM ultimately severely limits your rights. Companies that control various DRM schemes, as well as the content providers themselves, can yank your ability to play the content which you lawfully purchased (and now, videos) at any moment—no matter what your expectation was when you bought it. Some Major League Baseball fans learned this the hard way last fall.

Bennett insists that MSN Music keys are, in fact, not yet expiring. Technically speaking, that’s true—if I authorize one of my PCs, never get rid of it for the rest of my life, and never upgrade its OS, I will be able to play my tracks forever. But as some of our readers note, this technicality is not rooted in reality—the authorizations will now expire when the computer does, for whatever reason. DRM-free music may be the new hotness these days, but people who bought music before the record industry began to see the light are still stuck with their DRMed music.

Of course, MSN Music customers do have one other option: burning all of their music to audio CD and then re-ripping them back to the computer as MP3s, sans DRM. But that’s a lossy, lousy solution.

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