Microsoft and Yahoo Revisited?

He's baaack! I was so certain that Microsoft wouldn't come back to the table, but what do I know? CEO Steve Ballmer is back with an alternative deal for Yahoo -- one that doesn't involve an acquisition of the entire company.

It may be a partnership on ad-based search, or it could be something entirely new and different. No one is talking specifics yet (though our news site RedmondReport.com already has a couple of articles offering their analyses).

Is it possible that Microsoft is going back to the negotiating table because it needs to keep Yahoo from striking some sort of similar partnership with Google? Tell me why you think Microsoft is back at pvarhol@redmondmag.com.

Microsoft Joins One Laptop Per Child
When Intel bailed out of Nicholas Negroponte's One Laptop Per Child (OLPC) initiative last year and built its own low-cost laptop, it looked like curtains for this high-minded and altruistic project. Rather than the millions it was expected to sell -- at around $200 apiece, rather than the projected $100 -- the organization has orders for only about 600,000 laptops thus far.

But technology makes for strange bedfellows, and it looks like OLPC will be rescued by none other than Microsoft. The company is providing Windows for use on the laptop, in addition to the default Linux. In an even more surprising turn of events, Microsoft has agreed to dual-boot with Linux.

Is this deal the result of a kinder, gentler Microsoft, or an attempt to seed Windows to developing nations? Tell me what you think at pvarhol@redmondmag.com.

Microsoft Blocks Auto-Update of SP3 on AMD
It seems that every time Microsoft releases a significant patch or service pack, something doesn't go right. As we mentioned in yesterday's Redmond Report, the problem this time is that XP Service Pack 3 causes an endless reboot of systems using an AMD processor.

According to this Microsoft blog post, the problem apparently applies to an OEM image that was created on an Intel box, and the OS tries to load a driver that causes the reboot problem. Microsoft has responded by blocking SP3 updates for systems with AMD processors, according to the blog.

It seems to me that Windows is so complex and the combinations of OS, processor, drivers and applications are so close to infinite, that making a successful launch of any new software is just another opportunity for disaster.

Is it time to go back to square one with an entirely new and simplified OS? Send me your thoughts at pvarhol@redmondmag.com.

Mailbag: Microsoft in the Third World
As promised, here are more of your thoughts on Microsoft's low-end XP computers for Third World countries:

I have to respectfully disagree with your assertion that the OEM requirements for XP on a low-cost machine equate a third-rate technology score for the target countries. A machine packing a punch of 1GHz processing power, 1GB RAM, 80GB hard drive and running Windows XP is a more-than-capable machine for almost all desktop tasks the "average" user needs to get by. How does that make it third-rate? Unless you're a gamer or have some other requirements that demand a stalwart machine, a faster processor, more RAM and more hard disk space are merely non-needed extras.

If I read the gist of the target areas correctly, the idea is that low-cost machines can reach developing countries to better get them into the current times. These machines would really be targeted for beginner and novice computer users (I used "average" up above). What kind of stuff does a beginner or novice do on a computer that these low-cost XP machines won't be able to do? I know MySpace and YouTube work just fine. Where they will be limited is their actual Internet connection and speed, not the processing power.
-Kris

If I recall correctly, IBM was trying to do the same with mainframe sales in the late '60s and early '70s. IBM was only allowing older mainframes (that had just come off lease) to be sold to India. India wanted to buy the latest powerful mainframes but was rebuffed. India complained about this treatment, to no avail, and so banned the sale of IBM products in India for 20 years.
-Garry

The required max specs will allow XP to run OK on these machines. Most importantly (to MS), low-end XP "starter systems" make the Microsoft brand imprint for future sales of any MS product, in the brain cells of potentially decamillions of future consumers and workers. That says it all.
-Eric

This is not about what's fair. It's about Microsoft competing with Linux in emerging markets. Though technically Vista-capable, these LCPC specifications are robust enough for XP as well as for Linux -- though XP Home is somewhat crippled for anyone but users with minimal needs. As for these LCPCs being "too lame," that's up to the buyers of these systems to determine. A lame computer is better than no computer at all. From what we've seen so far, interest in these $200 systems (a la OLPC) has been lukewarm at best -- and no one is telling Third World governments that they cannot buy more robust Vista systems. Or that they cannot downgrade those systems to XP Pro themselves. Further, you cannot tell me that for the right quantity, Microsoft wouldn't permit an OEM to make a deal with a Third World government for XP Pro on any box they sell at any price point.

The point is, it makes no sense for anyone with a Vista Premium-ready system not to run Vista. It's in the user's best interest, it's in the OEM's best interest and it's in Microsoft's best interest. Microsoft must also look out for its OEMs, who cannot make any money on LCPCs except in very large quantities. For OEMs, $500 is pretty much the lowest they can afford to sell a single PC. By prohibiting their OEMs form selling XP, they are really protecting their OEMs by limiting their support costs to a single platform. Keep in mind that there is also a Vista Starter Edition tailored to these LCPC specifications. Keeping XP Home around for these Vista-capable LCPC devices is no more than Microsoft offering a bone to XP zealots to keep them busy.
-Marc

It looks like those same folks who control Microsoft absolutely loved the 1975 cult movie "Rollerball." James Caan is XP, if you know what I mean. As far as fairness goes, the fact is, the Third World is third-rate for a reason. They can't cut it for economic, political or infrastructure reasons. At least they won't have Vista shoved down their throats unless they actually want it.

We can all say it would be nice if Microsoft would let us have what we want, but the simple fact of the matter is you (and I) don't matter -- not to Microsoft. Soon, I will eliminate having a computer at home. No more viruses, no more unsolicited e-mail, no more "you have to buy our new stuff or else what you have won't work anymore" and, finally, much more money in my pocket and not theirs.
-Tired of the Game

Microsoft's push to Vista is the best reason why Microsoft should have been broken up years ago. Many of us use regulated software that cannot run on Vista and the inability to obtain new PCs with XP having any power is going to cripple many critical operations, including many in health care.

I am not a proponent of legislation to regulate industries, but in this case, Congress needs to mandate that Microsoft continue to produce and distribute XP with no strings attached. Then the mistake that was made in not breaking up Microsoft needs to be undone. Regulation only occurs when there is abuse of a dominant condition. There is no question that Microsoft has the ability to adversely affect the public good.
-Stephen

Thoughts? Comments? Let us have 'em! Leave a comment below or send an e-mail to pvarhol@redmondmag.com.

About the Author

Peter Varhol is the executive editor, reviews of Redmond magazine and has more than 20 years of experience as a software developer, software product manager and technology writer. He has graduate degrees in computer science and mathematics, and has taught both subjects at the university level.

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