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LAS VEGAS--Sun Microsystems co-founder and Chairman Scott McNealy wants to help phone companies become "destinations," he said during a speech at the NXTcomm trade show here Wednesday.

Specifically, he wants to help these companies develop their businesses around services and content rather than simply providing connectivity to other Web sites on the Net. Sun provides the server technology and data center management services necessary to distribute content on the Web.

As part of its ongoing effort to help phone companies evolve their businesses in the next generation of the Internet, Sun announced on Wednesday a new version of its MySQL Cluster product that is specifically designed for the telecom market.

In a discussion with a handful of reporters after his speech, McNealy elaborated on what he meant by making phone companies "destinations."

"Why aren't the big carriers doing what BlackBerry is doing with e-mail?" he asked. "I can get my e-mail in one click. Why don't they provide chat, public data storage, video sharing, or social networking? It's not hard to do."

McNealy said he doesn't expect phone companies to develop these services themselves, but he said as long as they can brand new services so that consumers want to use them instead of going off on other Web sites to find them, they can compete with the likes of companies such as Google, Amazon, and Yahoo.

Amazon in particular has become a potential competitive threat to cell phone companies with its new wireless e-reader product, the Kindle, McNealy noted. This device allows people to download books, newspapers, and magazines using Sprint Nextel's wireless network. Amazon has bought wholesale capacity on Sprint's network, which makes the online retailer look and act like a mobile virtual network operator, which competes directly with cell phone operators.

Of course, the notion of network service providers creating a portal or destination site for consumers is nothing new. That was AOL's strategy in the dial-up market. And cable operators have all tried to do this for their broadband services. Verizon and AT&T have each separately partnered with Yahoo to create portals for their broadband services highlighting special content and other services. But for the most part, these strategies have largely failed as savvy Internet users often bypass these portals for sites like Google to find what they need on the Web.

Still, McNealy believes that carriers must do something if they hope to compete and ultimately win the battle for users both on traditional broadband as well as in the emerging wireless Internet market.

"They don't have to out-YouTube YouTube," he said. "They just have to out last them. But the real question is do (the phone companies) have the attention span to make it work."

He said Verizon, which is one of Sun's largest customers, could leverage its huge retail presence to market services directly to its consumers much more easily than some of these Web-based companies.

While he acknowledged that most of the large phone companies have already been working toward becoming "destinations," he singled out Australia's Telstra as one in particular that has executed well on this concept.

"It's not like they've been sitting around doing nothing," he said. "But Sol (Trujillo, Telstra's CEO) gets it."

Telstra's BigPond Web site acts as the public face for Telstra's broadband and wireless service offering subscribers content and services directly from the Web site. Subscribers can rent or buy movies online and download music. They can read news or download other video content as well as access games or shop online.

BigPond has been a big success, Truijillo said during his keynote speech on Tuesday at NXTcomm. Specifically, he noted that in 2007 BigPond sports had a bigger audience than its next three biggest competitors in sports content.

"When you have the right content, and it's customized for customers, you get the usage," he said. "And you get it in ways that most people are not used to getting it."

Sun Microsystems has released the first beta for OpenOffice.org 3 for Windows and Mac. The new version of OpenOffice, which is a popular open-source competitor to Microsoft Office, looks to offer users improvements on every component from interface to features to behavior.

OpenOffice now natively supports OS X, so Mac users won't have to install the X11 module before running the suite. Full Vista support is also included in the beta, and didn't cause any problems during light testing. Notably, OpenOffice 3 includes filters for the new Microsoft Office document formats such as DOCX and XLSX as well as continuing support for standard Microsoft formats. Support for Microsoft Office 2007 for Windows and Office 2008 for Mac has been lacking until now.

The user interface doesn't look to have undergone many changes, besides getting a slightly snazzier gradated background and slightly larger icons. However, the new features more than make up for this. Enhancements include support for OpenDocument Format 1.2, a Solver feature, spreadsheet sharing to facilitate collaboration, improved PDF creation and importation, and improvements to the Notes feature in Writer.

The new Start Center should appeal to users who like having a landing page or only want to have one link on their desktop. It opens up a window that highlights all of the OpenOffice tools with big icons. Another of the more exciting OpenOffice extensions also being released is a Wiki Publisher tool that should make uploading wiki information from the program to a MediaWiki server a snap.

In-depth details of the changes planned for OpenOffice 3 can be found at the OpenOffice.org feature list and release notes.

SAN FRANCISCO--Sun Microsystems gave developers a gift at the CommunityOne developer conference on Monday--a packaged version of OpenSolaris with a new logo. Now, Sun is hoping developers will return the favor by creating applications to run on the open-source version of its Solaris operating system and thus drive more demand for its servers and software.

The move is the latest in Sun's effort in the better part of a decade to regain relevance in a post-dot-com bust world by transforming into an open source player. Borrowing a trick from Microsoft and its own early successes with Java, Sun has learned that fostering a vibrant developer community, means more apps for your platform, and that theoretically translates into more hardware sales and service contracts, even if the software is free.

During the keynote at CommunityOne, Ian Murdock, who heads up Sun's operating system platform strategy, summed it up: "Sun's goal is to get the technology into as many developer hands as possible. He added, "When you need help scaling ...that's when we make our money."

Sun generally doesn't explicitly target Linux as OpenSolaris' competitive target, but in practice, it's the chief alternative, and the company hired Linux entrepreneur Murdock to spearhead its OpenSolaris effort, called Project Indiana. With OpenSolaris, Sun hopes to reproduce the success Linux had sneaking into corporate usage through developers' free downloads.

Already Intel is on board. David Stewart, an engineering manager at Intel, said his company is working with OpenSolaris on projects involving the Xeon chip, wireless, creating server functionality on a laptop, and power optimization.

AMD announced Monday it's working with Sun to make sure OpenSolaris, as well as Sun's xVM variant of the Xen virtualization software, can take advantage of features in its processors.

Over the past few years, Sun has opened up its operating system and Java Web development software, as well as begun to embrace other technologies like Java Script, PHP, Linux, and Perl. And with its CommunityOne conference, Sun is reaching out to the developer community like never before.

The conference opened with remarks from Murdock, a brief appearance by Sun CEO Jonathan Schwartz, and a panel of open-source experts from Sun and elsewhere discussing the notion of community. Asked what role corporations should play in open-source projects, panel members said paying developers to work on open-source software benefits the larger community, but companies should tread carefully.

"Software projects fail when the company name becomes associated with the project and not the software behind it," said Jeremy Allison, who who leads SAMBA file-server software work at Google. He also complained about companies that "try and capture a project or start a project and never release it."

Meanwhile, Marten Mickos, senior vice president of Sun's database group and former chief executive of MySQL, assured the crowd that MySQL will remain open source indefinitely, despite speculation to the contrary.

But now that developers finally have a full-featured open-source operating system package to play with, will they move away from Linux, which is independent and more mature and established?

"That's the $64 billion question," said Jonathan Eunice, founder and principal IT advisor at Illuminata.

"Sun doesn't need it to be thought of as a commercial success. The trick is is it large enough to be economically interesting and viable and...self-propagating," he said. "Sun has a pretty good shot at it."

(CNET News.com's Stephen Shankland contributed to this report.)

Sun Microsystems on Monday said it has released OpenSolaris, an open source version of its Solaris operating system, and announced a deal with Amazon.com.

The OpenSolaris project has been under development for . Sun hopes to popularize the operating system with developers, students and other traditional Linux users.

In addition, Sun said it has partnered with Amazon.com to release OpenSolaris as an on-demand service as part of Amazon.com's Elastic Compute Cloud (EC2). OpenSolaris will be available for operating system and storage services as part of the overall EC2 service, which starts at 10 cents per CPU-hour, the company said. Sun touts OpenSolaris as the most robust Unix-flavored operating system.

OpenSolaris will offer some interesting features intended to appeal to the curious, such as the ability to run the operating system from CD and a system for easily rolling-back installations.

Update 4:02 p.m. PT: I corrected the revenue Sun reported for the quarter. It was $3.266 billion. Update 3:11 p.m. PT: I added more detail on Sun's employee total and after-hours trading.

IBM, Intel, and Google have been immune to the economic slowdown, but Sun Microsystems wasn't.

The server and software company on Thursday announced grim results for its fiscal third quarter, which ended March 30, that showed declining revenue and a swing to a net loss.

Sun Chief Financial Officer Mike Lehman also said the company will cut 1,500 to 2,500 jobs. The company had 34,400 employees at the end of the quarter.

"The U.S. economy presented Sun with significant challenges in the third quarter, masking our progress in developing nations and economies across the world," said Chief Executive Jonathan Schwartz in a statement.

Sun reported a net loss of $34 million, or 4 cents per share, a decline from net income of $67 million in the year-earlier quarter; the figure includes charges of about 4 cents per share from the acquisition of open-source database company MySQL. Revenue decreased $17 million to $3.266 billion, a notch below the $3.4 billion expected by analysts surveyed by Thomson Financial.

In after-hours trading, Sun's stock dropped $2.48, or 15 percent, to $13.85.

In addition, Lehman stepped back from a financial goal it set in 2007 after declaring Sun had "turned the corner." The company then had aimed for operating margin, a measure of profitability, of 10 percent for fiscal 2009, but Lehman said on Thursday that Sun now is aiming for "at least 7 percent." Lehman blamed the economy, but the figure also was reduced because of MySQL operational costs.

"It's fair to say we're disappointed we're not able to go after the operating margin targets we set two years ago," Lehman said. "It would be damaging to the long-term health of the company to hit an arbitrary number."

SAN FRANCISCO--Sun Chief Executive Jonathan Schwartz rightly gets credit for pioneering the corporate blog as a tool to reach customers, employees, and others. But pretty soon the novelty of his methods will wear off, he predicted.

"At some point the word 'blogging' will be anachronistic," Schwartz said at the Web 2.0 Expo here in San Francisco. "I communicate."

And he predicted, in effect, that the rest of the executive world will catch up. "Historically, communication took place by being a celebrity CEO who met with heads of state, and got the local media to cover it," he said in an on-stage interview with O'Reily Media chief Tim O'Reilly. "You got the message out in an inefficient and environmentally irresponsible way. Then the Internet came round and gave you a way to reach the entire planet."

In Sun's effort to recover some of the glory and profitability it had in the first Internet bubble, the company has embraced open-source software, adopted servers based on Intel and AMD's x86 processors, and switched CEOs.

One thing hasn't changed, though, from the Scott McNealy era to the Schwartz era: the company tries to be provocative. It's cheaper than advertising, and blogs are just a new way to accomplish the goal.

"If you say undifferentiated things that are expected, then you shouldn't expect anyone to care," Schwartz said, asked about what he meant when he said, "Controversy was...not a byproduct of the strategy--it was the strategy," on his blog earlier this month when discussing his company's open-source processor strategy.

Blogs and open-source software are complementary, Schwartz added.

"Sun makes money by selling the innovations in data centers," but that's a hard market to reach, he said. "Free software and free ideas are the best way to reach the marketplace."

Sun Microsystems has confirmed it bought Montalvo Systems, but probably for a lot less than venture capitalists plunked into the company.

"Montalvo's assets will be integrated into Sun's Microelectronics business unit. We believe acquiring these assets will enhance the current and future products we are developing and expect them to contribute to future generations of Sun's microprocessor technology which will in turn drive additional differentiation for Sun's Systems products, a company representative wrote in an e-mail.

"We are not disclosing the terms of the deal as it is not material with respect to earnings per share," the representative continued.

Sun sealed the deal on April 21, but the company did not put out a press release then, according to its Web site. Earlier today, news sites were reporting that the deal was close to being signed. Sun later coughed up the confirmation.

Montalvo designed, but never quite produced, an energy-efficient multicore chip that runs the same software as processors from Intel and Advanced Micro Devices. Venture capitalists put more than $73 million into the company. Montalvo, however, burned through that and has been looking for more money. Subsequent investors balked. Negotiations between Sun and Montalvo were reported on News.com earlier this month.

The Register has reported that Sun bought Montalvo for close to $5 million. Montalvo has had trouble producing chips, but it has some interesting patents.

Sun is likely interested in the patents and the engineering team. Montalvo employs noted chip designers like Greg Favor. It is less likely that Sun will produce a chip that competes with Intel and AMD. Sun uses Intel and AMD processors in its servers and doesn't own its own chip factories, like the other companies. Owning your own factory is often a strategic advantage in the chip world. Companies that have tried to break into this market without their own factories have mostly failed.

Talk about a week for crazy chip acquisitions. Apple bought PA Semi, which makes an energy-efficient chip for servers, earlier this week. While Sun continues to make and design its own chips, Apple does very little of that work. So it might be that Apple is trying to build up a patent portfolio.

Sun is putting the finishing touches on its purchase of stealthy chip start-up Montalvo Systems.

As first reported by CNET News.com, Sun started conducting serious negotiations with Montalvo at the beginning of the month. The formal announcement is expected soon.

Montalvo has designed a low-power, multiple core chip for portable computers. The chip can run the same software as processors from Intel and Advanced Micro Devices, but consume less power. The trick is that the cores on the chip are asymmetrical: some are high-powered for complex problems while others that handle basic tasks consume little power.

The market for Intel-compatible chips is immense, but breaking into it isn't easy. Intel has a huge manufacturing division and a top-flight design team. Many companies have tried and most have failed. Montalvo has had problems even getting samples of its chips to work. (Fujitsu makes the chips for Montalvo.) Even AMD, no slouch in those departments, chronically goes through periods of unprofitability.

The company has also burned through an incredible amount of money. It has raised more than $73 million in VC funds but has been making the rounds looking for more. VCs contacted by News.com earlier this year said they passed: the company was burning way too much cash and success looked daunting.

Still, the company has an interesting patent portfolio, some have said. Sun is likely buying the company for the intellectual property and the engineering talent.

Sun Microsystems is launching a program to help software makers convert their existing, on-premise applications into software-as-a-service offerings.

The Solaris On Demand program, announced on Wednesday, is targeted at independent software vendors. Sun offers the software, hosting and services to convert applications. Sun says it is partnering with NaviSite. AT&T's USi Communications, and NTT Europe to provide hosting services.

Sun, along with partners, will offer a 90-day proof-of-concept trial to give independent software vendors access to hosting, hardware managed services, and backup services. The company guarantees a service level agreement of 99.5 percent uptime.

The service price varies by ISV, based on the scope of work needed, according to Sun. The price "can vary from a thousand dollars to hundreds of thousands of dollars based on how many seats are required," according to Vince Vasquez, a business development manager at Sun.