WinInfo Daily UPDATE, July 23, 2004

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Short Takes - 20 Years of Growth: Microsoft Shines (Again) in Quarterly, Yearly Earnings - Gates to Donate Stock Windfall to Charity - Hotmail Customers Get 2GB Storage Allotments - Microsoft Puts Phishing Money Where Its Mouth Is ... Or Something - Windows CE Gets a Virus - Microsoft Settled with Lindows; What About the Windows Trademark? - Microsoft Opens Windows Source Code to All MVPs - Microsoft Delays Virtual PC 7 for Mac, Cites XP SP2 as Reason - MP3 Creator Drums Up 3-D Sound - AT&T Bails on Consumer Telephone Business as Verizon Launches VoIP Service ==== Short Takes ==== An often-irreverent look at some of the week's other stories, by Paul Thurrott, [email protected] 20 Years of Growth: Microsoft Shines (Again) in Quarterly, Yearly Earnings Late yesterday, Microsoft announced that it earned $3.13 billion on sales of $9.29 billion in the company's fourth quarter, a 15 percent increase over the same quarter a year ago. For the year, the company earned $8.17 billion on sales of $36.84 billion. Such announcements are hardly news these days, and we've grown used to the Microsoft dreadnought pulling in incredible financial numbers on a regular basis. But this quarter's earnings mark an interesting milestone: Microsoft has now grown, year over year, for 20 straight years, which helps explain how the company was able to cobble together an amazing cash hoard worth almost $60 billion. That growth led to this week's $75 billion, 4-year plan to return money to shareholders. Another interesting statistic comes courtesy of Microsoft Senior Vice President and Chief Financial Officer (CFO) John Connors, who is apparently trying to assuage concerns that Microsoft is slowing down. "In this year, we grew by nearly $4.7 billion, or almost the equivalent of two eBays or two Yahoos," he said. "In our books, that's considered a growth company." Gates to Donate Stock Windfall to Charity Speaking of the Microsoft plan to distribute $75 billion to shareholders, the chief beneficiary of that plan is none other than Microsoft Chairman and Chief Software Architect Bill Gates, who will collect a tidy $3.3 billion in December if the plan is executed as announced. But have no fear; the cash-strapped Gates will put the money to good use. He plans to donate all of it to the Bill and Melinda Gates Foundation, which will use the funds to fight education, health, and literary crises around the world. The donation will make the foundation one of the largest such entities in the world, although it's already pretty big, having paid out more than $7.2 billion since 2000. The foundation has donated money to such causes as AIDS research and childhood vaccinations and has done so in some of the world's poorest countries, including Africa and Southeast Asia. Hotmail Customers Get 2GB Storage Allotments This week, MSN Hotmail started to roll out its upgraded Hotmail Plus service, a "premium subscription Web service for customers who want to get the most out of their Hotmail accounts," a Microsoft representative told me. The upgrade gives subscribers 2GB of storage, the ability to send 20MB attachments, and--perhaps best of all--no graphical advertisements and worries about account expirations. The service, which went live yesterday in 30 markets worldwide, costs $19.95 a year. Microsoft Puts Phishing Money Where Its Mouth Is ... Or Something In a bid to help deter so-called phishing scams, in which attackers deceive Web users into browsing to sites, such as eBay, that appear to be major e-commerce sites, then steal their credit card information, Microsoft has donated $50,000 in software to an anticrime agency. The National Cyber-Forensics and Training Alliance (NCFTA) will use the software donation and an analyst from Microsoft's Internet Safety Enforcement group to combat online con artists, Microsoft said. Maybe I'm just jaded but in light of Microsoft's massive cash resources, $50,000 doesn't seem like a huge investment. Windows CE Gets a Virus And you thought Windows CE wasn't a full-featured software platform. This week--a full 8 years after Microsoft rolled out Windows CE to first-generation handheld PC devices--Windows CE received its first-ever virus. Windows CE now powers Pocket PCs, Windows Mobile-based Smartphones, Portable Media Centers, and a host of other devices. The virus, dubbed WinCE4.Duts.A (or Dust), infects ARM-based Pocket PC devices and displays a dialog box that says, "Dear User, am I allowed to spread?" If the user clicks Yes, the virus spreads to every executable file in the user's current directory but doesn't cause any real damage to the system. Most interesting, perhaps, is the fact that the authors of the virus didn't unleash it in the wild but instead sent it to antivirus vendors to prove that Windows CE could succumb to such an attack. Did anyone really doubt that possibility? Microsoft Settled with Lindows; What About the Windows Trademark? Is anyone else curious about why Microsoft sued Lindows ... and then paid Lindows $20 million to settle the suit? The settlement might be just another cog in the legal machinations of the world's largest software company but it leaves some unanswered questions, the biggest of which concerns Microsoft's controversial trademark for the name Windows. So what happens now? My guess is that Microsoft will continue to protect its Windows trademark and that, eventually, some other company will use the trademark-validity defense, raising the question yet again. In some ways, violating Microsoft's Windows trademark might be a sure-fire way to make money, if you don't mind spending a couple of years in court. Any takers? Microsoft Opens Windows Source Code to All MVPs Microsoft expanded its Share Source program this week so that all the company's 2700 Most Valuable Professionals (MVPs) will have access to the Windows Server 2003, Windows XP, and Windows 2000 source code if they want it. Earlier, only Windows-oriented MVPs were eligible to view the code. MVPs are individuals who, on their own, assist other Microsoft customers, usually through Usenet News groups or Web sites. (Full disclosure: Like several other Windows & .NET Magazine authors, I'm a Microsoft MVP.) I'm not sure how long Microsoft can continue to open up its source code to larger and larger groups of people, however. Eventually, the code is going to leak to the public and in full, and what happens then? Will the company simply release the code as an open-source project? The practice seems pointlessly risky to me. Microsoft Delays Virtual PC 7 for Mac, Cites XP SP2 as Reason Microsoft alerted me this week that the company is delaying until October its release of Microsoft Virtual PC 7 for the Macintosh, a fact that usually wouldn't warrant much attention in WinInfo Daily UPDATE except for one little detail: The company is delaying the product because of the ever-delayed XP Service Pack 2 (SP2). Why is that, you ask? Well, it turns out that Microsoft ships certain Virtual PC packages with bundled versions of XP so that Mac users can purchase a complete virtual-machine solution. Microsoft doesn't want to ship the current (insecure) version of XP, so the company is waiting until the newer (presumably more secure) version of XP with SP2 is available. Goodness. MP3 Creator Drums Up 3-D Sound Karlheinz Brandenburg, director of the Fraunhofer Institute for Digital Media Technology (IDMT) and a cocreator of the infamous MP3 audio format, has banded together with a group of engineers to develop a new 3-D audio format called losono. Described as "true 3-D sound," losono apparently will go well beyond the positional sound used in even the most impressive home speaker systems and will provide a level of depth and direction that simply isn't possible today. Brandenburg recently visited the United States, where he showed off the technology to executives at Disney and other Hollywood giants. People who've heard losono are reportedly quite impressed. But don't toss your current speaker set up in the trash can quite yet. Like most new technologies, losono will be expensive at first and will likely filter down through theme parks and similar places, then to movie theatres, and finally to high-end home stereo equipment. AT&T Bails on Consumer Telephone Business as Verizon Launches VoIP Service AT&T surprised analysts this week by announcing its intention to abandon the consumer telephone market, even as one of the most successful Baby Bells, Verizon Communications, announced a new low-cost Voice over IP (VoIP) service that will let customers make unlimited local and long-distance telephone calls over broadband Internet connections for as little as $30 a month. The contrast between the two corporations' plans is enormous: Just before the AT&T breakup almost 25 years ago, $30 got you about 30 minutes of cross-country phone time. Today, you can get a month of virtually unlimited calls for the same price. 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