Would buying Yahoo be a mistake for Microsoft?, Feb 11, 2008

Analysts and money managers have a suggestion for Yahoo shareholders mulling over the $44.6 billion buyout bid from Microsoft: Take the money and run.

Mahesh Veerina, the founder and chief executive of Celunite, which makes cellphone software based on Linux, said Google's offering was likely to be attractive to small carriers, which may see it as a competitive weapon.

As the open-source movement completes its first decade, the fast-growing industry is at a crossroads, experts say, having advanced from nerdy novelty to recognized market niche while attracting the double-edged attention of its biggest rivals.

Red Hat Inc. posted a profit decline of 25 percent and failed to meet analyst expectations for revenue Thursday, compounding earlier fears that larger competitors may bully the budding Linux provider.

President Luiz Inacio Lula da Silva on Friday received a version of a US$100 (€76) laptop to be distributed nationwide, and 50 were expected to be tested in Brazilian schools beginning next week.

"If Microsoft were doing this for altruistic reasons, it would be a first," [Free Software Foundation Europe president Georg] Greve said. "I think they are probably trying to get more machines on the Windows platform, and they may also be trying to improve relations in Brussels."

The EU antitrust office refused to back Microsoft's optimism that European concerns had been met. "The jury is out," said EU spokesman Jonathan Todd on Friday. "It is up to Microsoft to shoulder its own responsibility to ensure full compliance with competition rules."

Microsoft certainly understands the problem, the need to change and the potential long-term threat to its business from rivals like Apple and the free Linux operating system, and from companies distributing software as a service over the Internet like Google.

"We aren't looking to compete with the mainstream PC brands such as Lenovo and Apple as we are in a different class altogether," Zhang [Fuxin] said. The laptop uses Linux software and does not support Microsoft's Windows program, he said.

Speaking at a private dinner with select captains of German industry on Wednesday, Steven Ballmer, chief executive of Microsoft, may have felt a small sense of triumph in his company's battle against open source software.

International Business Machines presented the Spanish government on Friday with what it called the most powerful computer in Europe, saying it would open a new era in scientific research in Spain.

The open-source computer system known as Linux won a tough battle over Microsoft earlier this year when the city of Munich decided to change the operating software of 14,000 government computers, despite the personal intervention of Steve Ballmer, Microsoft's chief executive.

Now, it is the city of Paris that is in the sights of the open-source software camp, which has emerged as the only serious competitive threat against Microsoft's 90-plus percent hold on the world market for computer operating systems.

Hewlett-Packard is including the Linux operating system in its fastest servers for the first time, to court large companies that are trying to cut computing costs.

Hewlett-Packard began running Linux, which is gaining as a cheaper alternative to Microsoft's Windows, on its full line of servers a year earlier than planned, said Martin Fink, vice president of Linux at Hewlett-Packard. Servers run Web sites and data networks.

Red Hat, a U.S. rival to Microsoft in computer operating systems, was expected to outline on Tuesday in London a new push into the market for desktop software.

The company repackages and sells the Linux system, which has a growing following among companies and government agencies that want an alternative to Microsoft's dominant Windows software.

Bill Gates, the chairman of Microsoft, won praise in January when he trumpeted a company agreement to give $1 billion in software and cash to the United Nations as part of a job-training program for the developing world.

But Microsoft did not seek any attention for a much smaller contribution earlier that paid some travel expenses for a UN business-standards group. That payment, critics say, had a more opportunistic motive than the donation.

A months-long backroom battle led by Brazil, with support from India, South Africa and China, against the United States over open-source software took center stage Wednesday at the UN information summit meeting here.

Samuel Guimarăes, executive secretary in Brazil's foreign ministry, told government representatives at the summit meeting's opening sessions that free-to-share software is crucial for the developing world because it enables poorer countries to develop their own technology instead of having to import it.

It is unclear just how many Xbox hackers there are. Officials of the Interactive Digital Software Association, a trade group of video game publishers, said that Xbox hacking appeared more prevalent in parts of Asia than in North America. Michael Steil, a 24-year-old German who is project leader of a group that calls itself the Xbox Linux Project, said by e-mail that a full version of Linux software for the Xbox had been downloaded more than 220,000 times.

The memorandum, which focused on system software for desktop computers, specifically targeted Linux, a small but emerging competitor. "Under NO circumstances lose against Linux," Ayala said.

Citing cost savings, open standards and enhanced security, the German government in June reached a Linux deal with International Business Machines Corp. and SuSE Linux AG of Germany for its local, state and federal computer infrastructure.

AOL Time Warner Inc. is in talks to buy Red Hat Inc., a prominent distributor of a computer operating system, an acquisition that would position the media giant to challenge its archrival, Microsoft Corp., according to executives familiar with the matter.