The messaging war between Microsoft and America Online got even nastier last week when a Microsoft employee apparently sent phony e-mail accusing AOL of security violations. A Microsoft worker posing as security expert "Phil Bucking of Bucking Consulting" (play around with the syllables and see what comes up), reportedly sent an e-mail to legitimate security expert Richard Smith, President of Phar Lap Software. 'Phil' claimed to have found a security hole in AOL Instant Messenger that helps AOL determine what messaging client is being used, but also risks the privacy of AIM users.
After trying unsuccessfully to find information about Mr. Bucking, Smith determined the sender used a Yahoo! Mail account that had only been set up the previous day. Since Y! Mail includes user IP addresses, it didn't take much work for Smith to trace the message back to Microsoft. When confronted about the discovery, a Microsoft spokesman initially denied it, but then admitted that the e-mail did apparently come from Microsoft's intranet. However, he said it would be impossible to determine which Microsoft employee had sent Smith the message. He also admitted to prior knowledge of the hole inside AIM, but claims that they "had no intention of going public with it."

COURT NOTES: Tuesday August 10, attorneys from Microsoft and the US Department of Justice were back in court to present their summaries of what happened during the 76-day antitrust trial. As expected, lawyers representing the DoJ and 19 US states said that the evidence and testimony presented in the trial showed Microsoft guilty of unlawful conduct aimed at destroying competitors and consumer choice.
Of course Microsoft's attorneys stuck to their claims of innocence, maintaining that the government failed to prove its case and Microsoft never raised prices or excluded competitors to transfer a monopoly on operating systems over to Web browsers and other software. They also accused the government of "using courtroom theatrics and bits of evidence out of context" to influence the media.
On September 10th both sides will hand in more filings amended for arguments presented by their respective opponent. Attorneys for the DoJ and Microsoft will then congregate again on September 21 to argue for their versions of the trial events, after which U.S. District Court Judge Thomas Penfield Jackson will hand down his decision about the events. That will give the opposing sides another chance to settle the case before Jackson issues a final law-based judgment and then - if by some chance Microsoft is found guilty of anything - a punishment.

On August 9 Microsoft introduced a trimmed down version of Windows NT 4.0 intended to be a real-time operating system for embedded systems. Windows NT Embedded 4.0 will reportedly be sold through equipment manufacturers, which will be able to customize the software for specific tasks. There will be four versions of the operating system available, two for "workstation functionality" and two for "server functionality," although we don't see why you'd want an embedded system on your server or workstation, since most ESes are optimized for tasks like traffic signals and lower level machine management.
Microsoft has also been promoting Windows CE as an embedded OS, but primarily for consumer products like cellular phones, television boxes and in-car navigation systems that need a simple OS. NT Embedded is being pushed into the more technical arena of operating switches and routers for large networks - jobs that require more power than CE can provide. That once again puts NT in direct competition with Linux, Sun Microsystems and Novell. But NT Embedded 4 isn't going to change the face of the embedded systems market that much, its just a placeholder to keep those competitors held back until Microsoft ships an OS designed from the start for those tasks - likely a subsystem of Windows 2000 Data Server.

Two weeks after notifying the service's 200 remaining customers, Microsoft shuttered what was left of the old Firefly Network Web site. Microsoft bought Firefly Networks back in 1998, primarily for its Passport software - a system that anonymously collected user profiles to send customers recommendations for buying music, software and other items over the Internet. Since the Microsoft buyout, Firefly technology has been rolled into other Microsoft sites and will be featured prominently in MSN Passport, a central login hub for any Web service requiring registration.

In the latest piece of bad news for Windows CE, one of the larger CE-only software developers has cut back nearly 20% of its workforce. The developer, Eclipse International (no connection to our parent, Eclipse Communications), develops system software for building Wince-based devices. After firing 11 of his employees, Eclipse CEO Ray Grammar was quoted as saying "we're not seeing the sales of CE to be what we had hoped." NewsSource suspects Microsoft is saying the same thing...

AvantGo and Microsoft have teamed up to create a version of MSN's Slate e-zine for handheld computers and portable phones running Windows CE. The handheld version of Slate is now available for free from AvantGo's Web site, but is expected to suffer from the same reader shortage as the regular edition.
Microsoft recently revealed that it has invested $15 million into DSL.net, a high speed Internet access provider. DSL.net, which recently delayed a scheduled initial public offering due to "poor market conditions," produces equipment enabling standard phone lines to be used for broadband Internet services.
Microsoft and the Costco warehouse store chain have made an agreement providing Internet access to Costco members for $12 a month. Rumors have circulated that MSN wants to try European-style free service in the US, and the discounted 'store club member deal' could be Microsoft's way of doing it in a way that dodges US antitrust law.

_{What AOL stands to lose in browser war
Melissa variant pokes fun at Bill Gates
Reach, pay drawing to Java, Linux
WebTV caught between MSN deals, free PCs
Learn English the MS Way
Office giveaway tries to avoid pitfalls}