Microsoft

Peter Klein, Microsoft's new CFO

(Credit: Microsoft)

Microsoft Chief Financial Officer Chris Liddell is leaving the company at the end of the year, the company announced Tuesday.

Liddell has been Microsoft's CFO since 2005, but the past 18 months have been especially long, as Microsoft debated whether to acquire Yahoo and navigated the choppy waters of the recession with its first-ever companywide layoffs. He will be replaced by Peter Klein, who had been serving as CFO of the company's Business Division, which develops and sells Microsoft Office.

In a statement, Liddell said he was looking to do something with his career beyond serving in the chief finance role.

"Chris and his finance team have accomplished a great deal over the past four and a half years. The team is deep and strong, and has an excellent record of building value for our shareholders," CEO Steve Ballmer said in prepared remarks distributed by Microsoft.

As of the close of Tuesday's stock market, the value of Microsoft's stock had increased by 18 percent since Liddell made his debut as CFO.

This story was clarified on Wednesday to reflect that the layoffs referenced above were Microsoft's first companywide layoffs. In the past, the company has cut jobs in specific units.

Windows 7 isn't just getting good reviews, it's also selling well, CEO Steve Ballmer told shareholders Thursday.

Delivering opening remarks at Microsoft's shareholder meeting, Ballmer said that Windows 7 was off to a "fantastic start."

"We've already sold twice as many units as any OS in a comparable time frame," Ballmer said. "Windows 7 is simply the best PC operating system that we or anyone else has ever built."

Microsoft CEO Steve Ballmer delivers a point at the company's Worldwide Partner Conference in July.

(Credit: Microsoft )

By last week, Windows 7 accounted for 4 percent of Web-accessing devices, according to Net Applications; it took Vista more than seven months to reach that level.

Addressing the overall economy, Ballmer reiterated that things seem to have stabilized.

"The economy has, at least for now, leveled off," he said.

The meeting is still going on and has just entered the question-and-answer session and I'll update this post if anything interesting comes up. So far, though, it's been mostly about local and legislative matters, rather than technological issues.

Microsoft vs. Apple
There was one fun one from a shareholder who noted that young people tend to gravitate toward Macs and that Apple seems to be outmarketing Microsoft.

"You've got a real bad image out there," the shareholder said. "You sure don't have that younger generation."

Ballmer acknowledged that there are "certainly always opportunities for improvement."

"We all watch television," he said.

That said, Ballmer noted that "96 times out of 100, worldwide, people choose a PC with Windows."

He added that even in the toughest market--the high end of the U.S. consumer market--Windows is chosen 83 times out of 100.

"That doesn't let us rest on our laurels," Ballmer said. "Apple has picked up a couple tenths of a percent of market share."

But those couple tenths matter, he agreed. He said the downturn in the economy has actually bolstered Windows' competitive position. "People understand that Macintoshes are quite a bit more expensive."

Another questioner asked why Microsoft can't better compete against Apple's iPhone and other smartphones.

"Certainly our objective is to have the leading position," Ballmer said. "I think we have a lot of opportunity to improve...Undoubtedly we've got our work cut out for us."

He did say that Microsoft has put a lot of smart people on the task.

"We've got our heads down to do our best," Ballmer said.

Microsoft and a former employee have settled litigation involving allegations of patent infringement and trade secret theft.

Microsoft sued a former employee earlier this year for allegedly stealing trade secrets that were later used in a patent lawsuit against Microsoft partners, in which Microsoft later intervened as a party-defendant.

All parties deny any liability in the settlement, the terms of which were not disclosed, Miki Mullor, founder of Ancora Technologies, said in a statement.

Microsoft's lawsuit alleged that Mullor took a job at Microsoft in 2005 while he was still chief executive at Ancora. While working on the Windows team, Mullor allegedly downloaded confidential documents, according to the suit. Shortly thereafter, Ancora sued Dell, HP, and Toshiba claiming that their use of Microsoft technology violated a patent held by Ancora. Microsoft fired Mullor last year.

"I am pleased with this resolution and wish my friends at Microsoft's Windows division nothing but success with Windows 7 launch," Mullor said in the statement.

A Microsoft spokesman confirmed the settlement but said the company had no further comment.

A tour of Bill Gates' mansion in Medina is going for a hefty price tag. The bid to tour his house (and have him guide you around) is up to $35,000. Last year, the tour sold for $8,600, the Seattle PI is reporting.

But before you run out to start bidding, it's only available to those who work at Microsoft as part of its annual charitable giving campaign. According to the Seattle PI, word slipped that the bidding was on the rise this year from Microsoft CIO Tony Scott at the Society for Information Management's SIMposium on Tuesday.

The Seattle PI is saying that employees can also bid to go on a run with CEO Steve Ballmer and the opportunity to buy the "World's Best Bologna Sandwich." But it's the tour of Gates' house that receives top billing every year. And for good reason--that thing is huge.

But all this talk of going on a tour of Bill Gates' house begs an important question: how much would you pay to talk a walk around Bill's house? Let us know in the comments below.

And just to start things off: $500. That's my limit.

Microsoft has halted distribution of its Windows 7 USB/DVD Download tool after questions were raised as to whether the software utility makes improper use of open-source code. The tool is designed to help owners of Windows XP-based Netbooks get Windows 7 onto their machines.

(Credit: Microsoft)

Microsoft has halted distribution of a tool aimed at making it easier to put Windows 7 on Netbooks amid allegations that the utility makes improper use of open-source code.

The software maker said on Tuesday that it has pulled down the Windows USB/DVD Tool while it investigates the issue, which was raised last week by Windows blogger Rafael Rivera on his Within Windows blog.

In his blog post, Rivera said Microsoft appears to use code from a tool called ImageMaster that is licensed under the GPLv2 open-source license. The General Public License, like other open-source licenses, allows code to be freely used by others, but has its own set of terms and conditions, such as sharing any modifications made to the code.

Microsoft confirmed it has launched a review of the matter and taken the utility off its online Microsoft Store until that inquiry has been completed.

"Microsoft is looking into this issue and is taking down the (Windows 7 updating) tool from the Microsoft Store site until its review is complete," the company said in a statement. "We apologize to our customers for any inconvenience."

Though somewhat arcane, the utility is important because it solves a technical challenge in upgrading the operating system on Netbooks and other PCs without an optical drive.

Microsoft had been exploring for months different ways of trying to help users of Windows XP-based Netbooks move to Windows 7. The tool, which was released last month alongside Windows 7, allows users to take a downloadable copy of the operating system and create a bootable drive.

The issue is also a thorn in Microsoft's efforts to show that it can play nice with the open-source community. As ZDNet blogger Mary Jo Foley notes, this isn't the first time Microsoft has been accused of misusing GPL code.

The latest dust-up comes as Microsoft is celebrating the third anniversary of its deal with Novell, one of Microsoft's biggest--and most controversial--efforts to blend its world with the open-source world.

Under that deal, Microsoft agreed not to sue Novell customers for their use of its Linux distributions.

Microsoft has also released a number of products under various open-source licenses itself, though typically not under the GPL, which it sees as one of the more restrictive licenses. Redmond has been particularly critical of terms in version 3 of the GPL.

The software maker did release a few Linux drivers under GPLv2, although it appears its hand may have been forced there. Some have suggested the drivers contained GPL code, meaning that they would have necessarily needed to be released back under the GPL.

Microsoft has taken a number of different approaches to open-source software, particularly Linux. The software maker has at times accepted the notion of a heterogeneous world where Linux and Windows co-exist, pledging to do better to make sure IT administrators can manage mixed environments.

At other times, Microsoft executives have lashed out, painting open-source software as violating hundreds of Microsoft patents. In its lawsuit against TomTom earlier this year, Microsoft for the first time made those accusations in court, alleging that TomTom's implementation of Linux in its GPS systems infringed on Microsoft patents. The two companies quickly settled the matter, although terms were not disclosed.

Judging by its initial sales, Windows 7 is certainly proving more popular than Vista.

Credit: Microsoft

Microsoft sold 234 percent more boxed editions of Windows 7 than it did Vista in the initial releases of both products, according to research released Thursday by NPD Group.

In actual dollars, Windows 7 has also been more successful than Vista. However, early discounts on pre-sales copies and a lack of a promotional boost behind Windows 7 Ultimate led to revenues only 82 percent greater than those of Vista.

"Ultimate was a much bigger part of what Microsoft did with Vista, whereas this time I think they not only kept the price very high, but really kept the focus on the Premium product and the Premium three-pack," explained the author of the report, NPD's Stephen Baker, to CNET News. "Most of the promotional fire that they've put out there has been focused on those, for example, 'Buy a computer, get a $50 copy of Home Premium.' The pre-sales were all pretty much focused on Home Premium."

The numbers provided by NPD include both the initial sales of Windows 7 following its release on October 22 and pre-sales data from the discount program that Microsoft launched in July.

NPD declined to release actual sales figures for Windows 7, but the percentages help tell the story.

Web statistics firm Net Applications also found early adoption of Windows 7 to be strong.

(Credit: NPD Group)

Sales of PC hardware running the new OS didn't fare quite as well. Though growth in PC sales for the Windows 7 launch was at its highest level for the entire third quarter, it wasn't as strong as during the Vista launch, showing a 6 percent decrease from Vista's initial days.

A mixture of different factors affected the sales of Windows 7 PCs, notes Baker. Vista was launched in January, which traditionally offers a better sales environment than October. Also, the new OS was hurt by sales of PCs with older operating systems, which made up 20 percent of all sales during Windows 7 launch week. In contrast, PCs with older operating systems made up just 6 percent of all sales when Vista hit the market.

Baker doesn't think the current recession had a bearing on the lower PC sales for Windows 7's launch. "We've seen pretty strong sales growth on computers all year regardless of the recession," he said. "People have been buying more units of PCs all year than they had in 2008. At least from a unit perspective, we haven't really seen much impact on the consumer PC market from the recession."

Microsoft said on Wednesday that it is notifying approximately 800 workers that their jobs are being eliminated as the software giant completes the layoffs it announced earlier this year.

In January, Microsoft said it would cut approximately 5,000 positions before the end of the next fiscal year, which ends in June. With the latest cuts, Microsoft said it has essentially completed those layoffs. Microsoft CEO Steve Ballmer said in May that it was mostly, but not entirely, done with the job eliminations.

Actually, though, the latest cuts will push Microsoft past that 5,000 number. Once these cuts are made, it will have eliminated approximately 5,800 jobs since January, said Microsoft spokesman Lou Gellos.

Wednesday's job cuts were spread across multiple businesses and around the globe, Gellos said. Microsoft didn't announce any specific products that are getting the axe as a a result of Wednesday's cuts, although it has cut a variety of products in recent months, including Microsoft Money, Windows Live OneCare and, just this past week, its small business accounting product line.

There could also be additional cuts, even as Microsoft does some hiring in key areas. Although January's layoffs were the company's first across-the-board cuts, it regularly reviews its businesses and makes adjustments as necessary, Gellos said.

"We'll manage our businesses closely and do the things that we need to do," Gellos said.

Update 12:05 p.m. PT: As noted by TechCrunch and others, among those let go on Wednesday was Don Dodge--one of Microsoft's key voices in Silicon Valley and a director on the company's emerging business team. Dodge wrote about the turn of events on his personal blog Wednesday.

Aiming to stay relevant, Microsoft is introducing a new look for its MSN.com home page.

Although MSN gets far less attention than the company's Bing or Windows Live efforts, the home page remains an important economic engine for Microsoft's online business, as well as a significant source of search traffic for Bing.

Along with redesigning the MSN home page, Microsoft also gave the site's butterfly logo a new look.

(Credit: Microsoft)

"We believe it's an important asset for Microsoft," said MSN general manager Bob Visse.

The site is still the top portal in about 25 of the 46 markets, with about 600 million unique users globally and 100 million in the U.S, where it trails Yahoo in popularity.

The redesign, which has been in the works for months, bears quite a bit of resemblance to the one that Microsoft had been testing in France.

Microsoft late Tuesday began rolling out the new MSN home page (click for preview), which it says will become widely available in the U.S. early in 2010.

With its new look, the home page has about half as many links as the previous incarnation, focusing instead on a few categories, such as video, news, shopping, and search.

The old site had dozens of text links at the top and bottom of the page for everything from horoscopes to white pages to a free trial of MSN's dial-up Internet service.

"It doesn't take a rocket scientist to see this is a very cluttered and busy site," Visse said of the existing page.

Images: MSN through the years

View the full gallery

The company has, in the past, tried to make changes that its users saw as too radical, such as a 2007 overhaul of Hotmail that the company was forced to significantly scale back. Visse said he isn't as worried about that, given that users were already complaining that the site was both dated and overstuffed with links.

"We were, frankly, at a point where customers are complaining about the clutter," he said.

Microsoft is also trying to tap into the popularity of social networks, adding a column on the right-hand side that lets users peek at their Windows Live, Twitter, and Facebook feeds, and even update their status or post a tweet. As before, users can also see a preview of their Hotmail in-box.

But it will take its time in jumping on the Web apps bandwagon, with plans to offer several Silverlight-based apps on the right-hand side of the redesigned page at a later date. In the past, MSN users have not customized their pages to a large degree, and so Microsoft is going to take a wait-and-see approach before it decides whether it will roll out more apps than the Windows Live, Twitter, and Facebook apps available at launch.

By contrast, Yahoo, perhaps MSN's largest competitor, has bet the farm on the popularity of Web apps on the home page, redesigning the entire Yahoo experience with that in mind. It's still early, but since the redesign went live Yahoo has seen a 20 percent increase in the amount of time spent on the home page, it said last week.

The company has decided to scrap altogether a more radical overhaul that it tested in Brazil. That site, geared towards Brazil's highly social online population, allowed people to share videos by dragging the video screen onto a contact in one's social network.

"It was too radical, even for that audience," Visse said. "It's not going to ship for a final release."

MSN was among the Microsoft units hit by companywide layoffs earlier this year, but things have stabilized, Visse said.

"I wouldn't say we are growing headcount, but we aren't reducing," he said.

The 2009 redesign of MSN features a new logo and new look with fewer links and more videos and images.

(Credit: Microsoft)

Correction, 6:35 a.m. PDT: This story initially gave an incorrect launch date for the new MSN home page.

The "Microsoft Signature" PCs that are being sold at Microsoft's retail and online stores contain a bunch of extra Windows Live software, but also feature something rarely found on a PC--a clean desktop.

(Credit: Microsoft)

Although Microsoft isn't making its own PCs, the software maker is taking an active role in customizing just what goes on the computers it sells through its online and retail stores.

In its new role as PC retailer, Microsoft is loading computers with what it's calling its Microsoft Signature experience--a collection of Microsoft products, including the complete Windows Live suite, Security Essentials antivirus product, Zune jukebox, and Bing 3D Maps software, as well as Adobe's Flash and Acrobat Reader products. Internet Explorer 8 is the browser, with Bing as its default search provider.

(Credit: Graphic by Ina Fried/CNET News)

The computers are being sold at Microsoft's two retail stores--the Scottsdale, Ariz., store that opened last week and the Mission Viejo, Calif., outlet that is opening later on Thursday. The software giant is also selling PCs throughout the U.S. via its online Microsoft Store.

The goal of the Signature effort is to give customers what Microsoft feels is the best software experience they can have on a PC.

"Signature gives them a PC that is ready to run," Microsoft retail unit chief technology strategist Kevin Eagan said in an interview. "We think we're really unlocking the potential of Windows 7."

Microsoft isn't completely deciding what goes on the system. Computer makers can also add software that takes advantage of particular hardware features, but it's not allowing any trialware or "crapware."

"Much like other retailers would define (what goes on their PCs), we do the same working closely with our (computer maker) partners," Eagan said.

As part of the in-store experience, Microsoft staffers will also help customers install other software they might want--even competitor's products, such as Apple's iTunes. They can also change their browser or default search provider before they leave the store, Eagan said.

"We want to give customers what they are asking for, so they leave store 100 percent satisfied," Eagan said.

Eagan said Microsoft is just taking advantage of the customization options that other retailers also have available to them and said the company doesn't anticipate any regulatory concerns.

"We're absolutely confident that what we've done is added another choice for customers," he said. "We think expanded choice is good for customers."

Those who already have a PC, but live near one of Microsoft's stores, can bring in their PC and have the Microsoft Security Essentials software added at no charge.