Microsoft News Tracker

Foster Klug for the AP:

Four U.S. high-tech companies on Wednesday found themselves branded collaborators with the Chinese government in suppressing dissent in return for access to a booming Internet market.

House members contended that Microsoft Corp., Yahoo Inc., Cisco Systems Inc. and Google Inc. sought to explain their business practices in China only after a recent crush of negative media and government attention.

“Your abhorrent actions in China are a disgrace,” said Rep. Tom Lantos, the top Democrat on the House International Relations Committee. “I simply don’t understand how your corporate leadership sleeps at night.”
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Microsoft’s associate general counsel, Jack Krumholtz, said his company was committed to staying in China because of the Internet’s potential for eventually allowing free access to information. “We think the benefits far outweigh the downside, in terms of promoting freedom of expression,” he said.

Ben Elgin at BusinessWeek online suggests that the politicians aren’t the only ones doing some posturing:

Execs at these companies, which include Google, Yahoo!, and Microsoft, will likely respond to criticisms much as they have in recent weeks and months: by painting their China conundrum in the starkest black-and-white terms. They must toe the party line of the repressive regime, say the companies, or be banished — robbing the Chinese people of the rich array of Internet services that they provide

Trouble is, this is a vastly oversimplified argument, shielding the much more subtle and debatable tradeoffs being made by these companies.
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In December, the company (Microsoft) sparked a storm of protest when it removed a Chinese blogger at the government’s demand. Trouble is, Microsoft removed the blog for all viewers, not just inside China. And it offered no notification to readers as to what had happened. Since the incident, the company has revised its policies, promising to be more transparent.

But Microsoft has yet to answer other pressing questions. The blog it removed at the Chinese government’s request was actually hosted on a computer inside the U.S. Microsoft says it doesn’t go by location of servers when determining a government’s jurisdiction, but rather how a user sets his or her profile on its MSN sites.

Does this mean that a blogger inside China can set their nationality and residence as something other than China and operate completely beyond the reach of China’s censors? On the flip side, if Chinese authorities can order a blogger off of a U.S. server, how far can their tentacles reach when it comes to more sensitive areas, such as e-mail info?

Microsoft officials say they’re currently working on these issues and point to their recently released guidelines for how they will handle censorship requests for its blogging service. That, however, should be the type of thing an Internet company in China has completely thought through and disclosed to users before diving headlong into this market.

You’d certainly think so, and like it or not, it looks like they are going to get some help as Joel Rothstein and Paul Eckert report at Reuters:

The Republican chairman of the subcommittee, Chris Smith of New Jersey, held the hearing to ask the companies about their procedures in China and demands from the Chinese government.
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Smith said he planned to introduce a bill this week to formalize the goals of a new State Department task force to help American technology companies protect freedom of expression in countries that censor online content.

The bill will include export controls on certain types of hardware and software and prohibit putting e-mail servers and other assets in countries that lack U.S.-style due process laws, Smith said.

“If a company allows itself — in its filtering capability — to filter terms such as ‘democracy’ and ‘religious freedom,’ they will be in violation of U.S. law,” Smith told Reuters regarding the proposed legislation.

I get the feeling that this issue is just getting started. More on the prospsed legislation here.

That’s the buzz going around based on an article by Dean Takahashi at the Mercury News:

The shortage of Xbox 360 video game consoles that left many holiday shoppers in angst was due in part to Microsoft’s decision to use a new kind of memory chip from a German company, Infineon Technologies, according to people who are familiar with the game box’s design.
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One of two companies supplying the Xbox 360’s storage memory chips, Infineon, has had trouble making enough of the chips at the right speed for the game console that debuted last November, according to the sources. As a result Microsoft has not been able to meet the demand for the console.

Peter Moore, head of Microsoft’s game division, declined to comment on whether there was a memory chip shortage. He blamed the scarcity of 360s on “component shortages”‘ but refused to pinpoint the problem.

More details on the problem by following the link, but it required hand sorting of memory chips to weed out those not up to spec.

Whatever the reason, there’s good news on the way according to Moore:

Regarding shortages, he said, “Within the next four to six weeks, anybody will be able to walk into a store and buy an Xbox 360.”

Press release:

Points International Ltd., owner and operator of Points.com, the world’s leading reward management portal, is pleased to announce an agreement with Microsoft for Microsoft® Points to join the Points.com portal.

Microsoft Points is a system that enables consumers to store value in their account and then redeem for digital goods or exchange via Points.com. Microsoft Points launched in November 2005 with Xbox Live® allowing users to purchase premium content from Xbox Live Marketplace with Microsoft Points.
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By joining with Points.com, Microsoft will be allowing its users to gain access to a broad range of valuable redemption opportunities in areas such as travel and brand named retail goods.

Microsoft Points are the “currency of Xbox Live Marketplace” which we’ve mentioned previously here and here as an attractive way to enable purchasing for the varied Xbox audience. But you have to buy them at a retail store or via credit card online, so it’s not clear what the advantage is in taking them over to Points.com and redeeming them for non-Xbox merchandise. Could it be that Microsoft has additional plans for Microsoft Points?

In an uncharacteristic burst of speed, the European Commission has already rejected one of Microsoft’s arguments in the response filed earlier today. Reuters:

The European Commission immediately rejected one of Microsoft Corp’s defences against a possible 2 million euro daily antitrust fine and said on Wednesday it was analysing other aspects of the statement.

The Commission claims that materials which Microsoft contends the Commission ignored, were received on Dec. 26 after the Commission had already issued its ruling.

Update: More details here:

The Commission flatly rejected Microsoft’s contention, saying documents were available only at the company’s headquarters in Redmond, Wash.

Microsoft’s obligation was to present the Commission in Brussels with evidence that it had complied and that was not done until Dec. 26, the Commission said.

In any event, the Commission said the revised documentation was essentially the same as the earlier, problematic version.

Microsoft’s mysterious acquisition of Seadragon Software has apparently closed according to Kim Peterson in the Seattle Times:

Microsoft closed its acquisition of Seattle-based Seadragon Software on Monday — a rare example of the software giant buying a company in its own backyard.

Two people involved in the deal confirmed the acquisition, but Microsoft would not comment. Financial terms were not disclosed.

Seadragon was founded in 2003 and has developed technology that can quickly display large images on computers and handheld devices. The company has 10 employees, but as early as last summer it began attracting interest from Samsung and other tech giants.

Seadragon initially talked to Microsoft about licensing its technology, but Microsoft decided that a marriage was in order, according to Tom Alberg, a managing director at Madrona Venture Group. Seattle-based Madrona invested $2 million in Seadragon’s Series B round last summer and was deeply involved with the company.

More by following the link and also from Microsoft’s Don Dodge who provides a temperature reading on the acquisitions arena.