Microsoft News Tracker

MSFTextrememakeover runs the numbers on Microsoft’s Xbox venture in the videogame console business and it isn’t a pretty sight:

So, actual time to recoup the investment, assuming it ever occurs, will likely be measured in decades.

The real question, of course, is what to make of this and other Microsoft emerging business plays that are, to be polite, a bit on the slow side:

All of which raises the question of what MSFT’s broader strategy wrt emerging businesses is, and how success is measured. Are they worthwhile standalone efforts, meant to be profitable in typical industry 3-5 year timeframes (or less), but MSFT just can’t execute properly? Or are they always, at least in part, defensive plays aimed at protecting the existing crown jewels and only justifiable (financially at least) on that basis? I think the answer is a combination of both, which explains why MSFT’s “investments” continue to be viewed by many externally as hopelessly unsuccessful, especially when they weren’t sold to the street or shareholders on that basis.

Perhaps my view is too pessimistic, but I frankly tend to the first explanation and view Microsoft’s Xbox as yet another instance of the odd actions produced during the corporate midlife crisis that afflicts so many business organizations that have achieved great success in their early years. Would Microsoft’s crown jewels (Client PC OS, Office, Servers) really have been endangered if they had not entered the game console business? The only one you can even make a case for would be game consoles somehow endangering the Microsoft’s PC client operating system franchise and it’s pretty thin stuff.

There’s nothing wrong with taking a flyer in an emerging business, but when the executives of a famously successful company use their hard won bankroll to pursue it beyond all reasonable expectation of return, you have to wonder if they have started believing their own press.

Anton Kotov does the honors at Mobile-Review with plenty of screenshots. Excerpts:

Nevertheless, the brand-new operating system could be called “Windows Mobile 5.0 Second Edition” for it lacks tons of all-new features and total system revamp as in the case of Windows Mobile 5.0. The most considerable upgrades are coming up in the next version, being developed under the codename of “Windows Mobile Photon” scheduled for release in two years time at best. Being under the pressure of launches of new products in its software range, including MS Windows Vista, MS Office 2007, MS Exchange 2007, Microsoft had no other choice but release an updated version of Windows Mobile. Most of Windows Mobile 6.0’s new functions are aimed at providing support for what MS Exchange 2007 brings to the table. Here with Crossbow we still have the same division - WM for Pocket PC and WM for Smartphone, which will fade away only in WM Photon. Today we are giving a close-up to the Pocket PC edition, while the operating system for smartphones will be reviewed later.

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The manufacturers are getting RTM version of Windows Mobile Crossbow in November, 2006 – in light of this fact we predict first devices running on WM 6.0 to be released by the end of 2Q, 2007. The list of companies ready to upgrade old devices up to WM 6.0 includes only HP and E-Ten for the time being.

There had been some speculation that Crossbow would end up being Windows Mobile 5.0 Second Edition (or something similar) and Photon would be Windows Mobile 6.0, but that doesn’t seem to be the case. And if you were wondering, Crossbow does have Windows Live Mobile integration.

Antonio Gonsalves at InformationWeek:

U.S. prosecutors say Windows Vista and the latest version of Internet Explorer apparently comply with the requirements of the 2002 antitrust judgment against Microsoft.

In a joint status report filed Tuesday with the U.S. District Court in Washington, D.C., prosecutors said Microsoft appeared to be complying with the judgment, which found Microsoft abused its Windows monopoly and set down rules for the software maker to follow to avoid future anti-competitive behavior. Prosecutors and Microsoft have been submitting joint reports on compliance to the court every six months.

The Justice Department and a court-approved technical committee are monitoring the development of Vista to assure compliance with the court order. The monitoring includes extensive testing of Vista and Internet Explorer 7 betas.

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Since issuing the last report May 12, the Justice Department has received 25 third-party complaints, but none of them raised issues related to Microsoft’s compliance with the court order, prosecutors said.

The prosecutors were also pleased with Microsoft’s progress on documenting client-server protocols which is a longstanding bone of contention in the US (not to mention the European Union).

Occasional Microsoft partner Alcatel is litigating some patent claims against Microsoft that seem related to their recent acquisition of Lucent Technologies:

Alcatel SA, the world’s largest supplier of broadband Internet equipment, sued Microsoft Corp., accusing it of infringing patents for digital video and communication networks.

Alcatel filed two lawsuits Friday in federal court in Tyler, Texas. The complaints don’t spell out how Paris-based Alcatel believes Microsoft is infringing its patents. Alcatel said it is in licensing talks with Microsoft.

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Microsoft spokesman Guy Esnouf said in an e-mailed statement that the company is reviewing the suits.

“Alcatel’s recent filing appears related to long-standing patent litigation between Lucent and Microsoft in U.S. District Court in San Diego, which Alcatel is inheriting as part of its merger with Lucent,” he said in the statement.

The Lucent patents, at least, are related to video technology used in the Xbox. Todd Bishop at the Seattle PI has the court documents here.