In a user alert a few weeks ago, Microsoft confirmed the existence of a new bug in Windows 95 and 98 that causes those systems to crash after 49.7 days of continual operation. The problem is caused by a timer, which rolls over after a certain number of seconds and locks down the operating system. Microsoft has posted a fix for the latest bug, but cautions that it has not yet been completely tested and should only be installed by users affected by the problem. However, it's highly unlikely that anyone outside of a testing lab has ever had Windows 9X running more than three days without a reboot anyway.

Less than a week later, Phar Lap Software president Richard Smith told the New York Times that Microsoft is keeping a database on Windows 98 users. According to Smith, the regwiz ActiveX control present in Windows 98 to assist with product registration creates a unique 32-digit identification number for every computer. That number is based on the MAC address in an Ethernet network card or a number randomly generated to represent the computer's modem, plus another number representing other hardware information. The registration program then sends that number, plus the owner's name, address, and phone number to Microsoft after setting it in the Windows registry.
Microsoft defended the invasion of privacy, saying that it was set up as an option so tech support would be able to diagnose problems more accurately. A spokesman insisted that the "feature" was never intended to be used as a marketing tool or a way to prevent software piracy, and promised that company engineers would comb through a central database and remove any unauthorized information. He also vowed that a fix for the regwiz program would be part of Windows 98 SP1, and that the program would be totally eliminated from Windows 2000.
But the ID number's usage apparently goes beyond just a Microsoft database. That number is also apparently used by Microsoft Office to identify individual documents. Smith said that he discovered the same identifier imbedded in documents created by Excel, Word and Powerpoint. Upon further investigation, Phar Lap Software also found the numbers present in browser cookies generated by both Internet Explorer and Netscape Communicator, meaning it would be possible for someone to track Internet usage, files you create and what hardware you used to create it, then link them all back to your name. Smith said that he intends to continue researching the ID numbers, particularly checking to see if they come up in e-mail messages or programs from other software vendors.
However, Microsoft's vice president of Office Steven Sinofsky dismissed the possible privacy risks: "I would say most people don't quite get how computers work, and they're suspicious of computers in general. That's probably why a lot of these privacy concerns are happening."

Later in the same week yet another Windows problem was discovered. This bug, affecting NT4 and both of the Windows 2000 betas, allows someone sitting at a server to elevate his permissions to administrator level during screensaver mode. Once someone gains administrator access, they could easily access any files on the server or block other users from accessing the network. Microsoft said that the hole was no big deal since it would require a lot of skill to pull off and only affects servers, which are usually located where only administrators can operate them. Product security manager Scott Culp added that the final version of Windows 2000 (still 11 months away and counting) will have corrected the access bug.

But not to worry, Microsoft already has a fifth service pack for NT4 in development. NT4 Service Pack 5 will include one year-2000 fix, plus patches for NT's Dial-Up Networking utility and some installation routines. The Y2K patch will be made available separately online "very shortly" after SP5's release, which is expected by July. No word if a patch for the problem mentioned above will be included.

Less than a week after the Microsoft trial went into its 6 week recess [see NewsSource, Mar. 01], rumors began surfacing that the two sides had entered settlement talks. Those stories were given some weight by news the previous day that Intel had settled its own antitrust suit, but Tuesday sources close to Microsoft said that there had been no talks between Microsoft and the Department of Justice. A government informant confirmed what the Microsoft sources said, and also noted that the DOJ expected any offers made by Microsoft would be small.
Then The Wall Street Journal reported that Microsoft has already asked part of its legal team to develop an appeals strategy, meaning that the company not only has no plans to settle, but that it also expects to lose the current case. The Journal reported that an appeal is likely to focus on the issue of computer assemblers changing Microsoft settings, as well as a 1984 ruling concerning the Sherman antitrust laws.
There was also a lot of speculation last week that Microsoft's latest reorganization [see NewsSource, Feb 15] is intended less to make the company more efficient than to make it more difficult to split apart. An 'integrated' Microsoft so intertwined that it would be impossible to separate? Or perhaps, as some rumors said, the reorganization would make it easier for Microsoft to voluntarily split itself apart to avoid an antitrust decision and make a buffer against any forthcoming Y2K lawsuits.
Meanwhile back in Washington DC, Washington state senator Slade Gorton proposed cutting the Department of Justice antitrust division's budget. Later in the week nine senators sent a letter to Gorton's budget committee attacking his proposal, saying that it would interfere with a pending trial. The senator from Microsoft's home state then took the senate floor and suggested that the trial's six-week recess should be "made permanent."

The previous owner of Linux.com, Fred van Kempen, said earlier this month that several unexpected companies bid on the rights to his domain when it was put up for sale in 1998. Not only did Linux vendor Red Hat make an offer, but so did Novell, IBM, Digital (before the Compaq buyout), Hewlett-Packard, Dell and, curiously, Microsoft. According to van Kempen the top offer was in excess of $8 million, but he refused to disclose which companies had bid what. A Microsoft spokesman denied making a bid for Linux.com, suggesting that perhaps the bid was a forgery since buying Linux.com would "be a silly thing for Microsoft to try to do."

But it doesn't seem nearly as silly considering this next bit of news. According to certain sources, there are plans for a Linux version of Office. When asked last week whether anyone at Microsoft is currently involved in porting Office to Linux, Microsoft's vice president in charge of Office Steve Sinofsky said that he's not allowed to talk about it, but developers outside the company claim that it's more than just an idea, and in fact Microsoft is already in the process of creating a Linux port of Office. This lead some to speculate that perhaps Microsoft is planning to trade its operating system monopoly for an office suite monopoly, possibly after a voluntary breakup [see story above]. Others have taken the stance that Microsoft is once again pre-announcing a nonexistant product in order to delay sales of competitors' software. But that's the beauty of Linux - most of the office suites produced for that operating system so far are free, making it much harder for Microsoft to have any impact on their sales.

Microsoft stock took a slight hit Friday after the company admitted that its earnings for this quarter will be well below expected due to the delays in shipping Office 2000. Office2k was originally scheduled to be available by this month, but Microsoft conceded late last year that June or July is a more likely target date. The delay makes such an impact on Microsoft's earnings because Office 97 and 98 get credit for almost one third of Microsoft's total revenue of $14.5 billion in fiscal 1998.

Late last month Microsoft quietly reopened a store on its web site. The store, originally named Nitro, was started in late 1997 to sell Microsoft products over the Internet and show off the e-commerce capabilities of Windows NT and SQL Server. At that time Microsoft allowed customers to purchase products directly from the company or click through to other retailers and purchase the products there. But that plan fell apart when the participating online retailers protested the way Microsoft handled their commissions and customer information. Four e-stores - Beyond.com, CompUSA, CDW and Insight - have now returned to the project after Microsoft agreed to keep its own prices 10 to 30 percent higher than theirs.

In a move aimed at sites like Amazon.com's Junglee, The Behemoth announced last week that it has purchased comparison-shopping service CompareNet to beef up MSN's retailing operations. The company said it will merge CompareNet with the MSN Sidewalk city guides, which already have localized shopping centers. Details of the buyout were not revealed, but we do know that CompareNet will be swallowed up by The Behemoth, closing offices and moving what remains of its 40 employees to Redmond. No word on what happens to the deals CompareNet already has with Excite, MindSpring and Netcenter.

While in China last week, Bill Gates announced several new plans designed to increase Internet access and reduce pirated software in that country. Gates first unwrapped the Venus project, a television-top box based on a version of Windows CE designed for the Chinese market. Microsoft's goal with Venus is to tap into China's 1 billion citizens, of which only 2.1 million currently have Internet access.
Gates also signed several agreements with the Chinese government, helping state-owned companies use the Internet. Part of the agreement would set up an information system based around Windows NT and SQL server, making the Chinese government more efficient in areas like information sharing and citizen persecution.

It was released Monday that Microsoft has taken a $15 million stake in Rights Exchange, a developer of copy protection for Internet content. Microsoft officials weren't forthcoming about what they intend to do with Rights Exchange - now called Reciprocal - and its technology, but the company is currently working on "end-to-end" digital-rights management solutions for content providers, allowing users to use and purchase different types of music and images online.

It was also announced Thursday that Microsoft has invested an undisclosed sum in ThingWorld.com, a 3-year-old company that produces streaming media used in animations for screen savers, digital trading, cards, and Web graphics. ThingWorld will begin working more closely with Microsoft to integrate Windows technology into its products. In return, Microsoft plans to show off its technology through ThingWorld's sports and entertainment partners like the NFL, the World Wrestling Federation, Comedy Central and Major League Soccer.

Thursday Microsoft and 3Com announced that they will begin co-producing equipment for home networks. The two companies, who entered a development pact in January [see NewsSource, Jan. 25], said the co-branded network kits will automatically configure computers without complicated instructions.
Microsoft, Cisco and Compaq have joined with two Brazillian companies to grab a chunk of that country's surging e-commerce market. The partnership - dubbed Value Chain Alliance - will primarily help service-oriented businesses like insurance, retail and food. The venture will face stiff competition from Sun and IBM's e-business unit.
Last Tuesday Microsoft said that it has taken a $24.2 million equity investment in Dialogic, a telephone equipment and software vendor. Microsoft will also pay Dialogic some $20 million over the next four years for the right to integrate Dialogic software into future versions of Windows.
As expected [see NewsSource, Feb. 15], IBM announced at LinuxWorld earlier this month that it has teamed up with four major Linux distributors to deliver hardware, software, and middleware products for the open source operating system. Most notably, the company announced intentions to release Linux versions of its WebSphere application servers and create a version of Linux for RS/6000 computers.

_{Advocate Issues Windows Warning
Silverberg walks away from Microsoft
Microsoft in the dock
Microsoft-Bristol trial taking shape
Windows 2000, or Whenever
Fortress Microsoft
Trade group talks of Microsoft breakup
MS Promises E-Commerce Nirvana}