Microsoft Corp. today announced that it has withdrawn its proposal to acquire Yahoo! Inc.

We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole. Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees,

said Steve Ballmer, chief executive officer of Microsoft.

Microsoft on Tuesday has slashed the price of its Xbox 360 console in four Asian markets between 5% and 20%, in an effort to expand the console sales in the area. "This price drop is part of Microsoft's ongoing strategy to bring Xbox's high-definition gaming and entertainment experience to an even wider user base," Microsoft said in a statement.

The estimated retail price for the model with a 20-gigabyte hard drive was cut Tuesday 19.5% in Singapore to 499 Singapore dollars ($366), while in Taiwan it was cut 17% to $10,360 Taiwan dollars ($341). The unit price in Hong Kong fell 10.7% to $2,499 Hong Kong dollars ($321), while in South Korea it will be cut 5.1% to 369,000 won ($369) on Thursday. In Singapore, Microsoft also cut the price of its Xbox 360 Arcade model, which lacks a hard drive, by 13.1% to 399 Singapore dollars. The price for the Xbox 360 Elite model, which comes with a 120-gigabyte hard drive, was cut 12.5% to 699 Singapore dollars.

Windows XP Service Pack 3 was supposed to land today for mass download, but I'm afraid this won't happen. Microsoft today explained what's the main reason behind this last moment delay:

In the last few days, we have uncovered a compatibility issue between Microsoft Dynamics Retail Management System (RMS) and both Windows XP SP3 and Windows Vista Service Pack 1 (SP1). In order to make sure customers have the best possible experience, we have decided to delay releasing Windows XP Service Pack 3 (SP3) to the web. To help protect customers, we plan to put filtering in place shortly to prevent Windows Update from offering both service packs to systems running Microsoft Dynamics RMS. Once filtering is in place, we expect to release Windows XP SP3 to the web.

I suppose many of you already know about the leaked Windows XP SP3 download link, but I prefer to post only legit links here. Microsoft is working on fixing the problem and should release Windows XP SP3 to web very soon.

InfoWorld US reports that Dell will continue to sell and support Windows XP to consumers beyond the June 30 date that Microsoft reaffirmed as final sales date for Windows XP Professional. Dell will use a licensing option which Microsoft calls a "downgrade" license that allow buying a Vista Business or Vista Ultimate license and still provide Windows XP. Dell will preinstall XP Professional as a "downgrade" on a variety of desktop PCs and laptops, that include some Dell Latitude, OptiPlex, and Dell Precision systems as well as some Vostro and Dell XPS gaming systems where the downgrade will come for a small fee. The computers available with the XP option will include the Windows Vista installation DVD in the box so users can later install Vista over XP under the same license if they wish. Dell said it will utilize and support this program as long as Microsoft supports it.

Users of Windows Vista who also happen to use Automatic Update service can now receive the first service pack (SP1) for the operating system automatically.
Not all customers will receive SP1 immediately via Automatic Update, however. The company is distributing it in phases to "ensure a seamless download experience," Microsoft said. A timeline for when all customers would receive Vista SP1 via Automatic Update was not immediately available.

By sending an email message to every one of its subscribers, Microsoft today informed that it will add some drastic music restrictions to the MSN Music service. "I am writing to let you know that as of August 31, 2008, Microsoft will change the level of support to be offered for music purchased directly from MSN Music prior to November 14, 2006. As of August 31, 2008, we will no longer be able to support the retrieval of license keys for the songs you purchased from MSN Music or the authorization of additional computers. License keys already obtained as of August 31, 2008 will continue to allow you to listen to songs on all the computers that you previously authorized for service. We wanted to send out this notification well in advance to remind you to backup your music and to provide you sufficient time to confirm license keys for the songs you've purchased from MSN Music." the mail says. The music restrictions do not just apply to authorizing new computers. If you for example upgrade from one Microsoft OS to another, you'll need to reauthorize all tracks once you install the new Windows OS. Microsoft launched the MSN Music Store in September, 2004, in an effort to compete with Apple's iTunes but after two years on November 14, 2006 the company started redirecting MSN Music Store shoppers to the Zune Marketplace. Now Microsoft is taking the next step by deleting its MSN Music license servers.

Microsoft's release manager Chris Keroack posted today the following statement in the TechNet Forums, confirming the information posted by Neowin.net a few days ago:

Today we are happy to announce that Windows XP Service Pack 3 (SP3) has released to manufacturing (RTM). Windows XP SP3 bits are now working their way through our manufacturing channels to be available to OEM and Enterprise customers.

We are also in the final stages of preparing for release to the web (i.e. you!) on April 29th, via Windows Update and the Microsoft Download Center. Online documentation for Windows XP SP3, such as Microsoft Knowledge Base articles and the Microsoft TechNet Windows XP TechCenter, will be updated then. For customers who use Windows XP at home, Windows XP SP3 Automatic Update distribution for users at home will begin in early summer.

The guys over at Neowin.net have managed to get their hands on the internal schedule for the release of Windows XP Service Pack 3.

• April 14, 2008: Support is available for the release version of Service Pack 3 for Windows XP
• April 21, 2008: Original Equipment Manufacturers, Volume License, Connect, and MSDN and TechNet subscribers
• April 29, 2008: Microsoft Update, Windows Update, Download Center
• June 10, 2008: Automatic Updates

Experts are claiming that a business partnership between Google and Yahoo! could be more heavily criticised by US and EU competition regulators than a merger between Microsoft and Yahoo!. Aaron Edlin, who teaches law and economics at the University of California at Berkeley said:

The Justice Department would certainly want to take a serious look at that because it would mean that a firm that would want to take advertisements or to place advertisements (online) would have only one place to go.

Google was the top search engine in February, accounting for 59.2% of US web searches, with Yahoo! and Microsoft lagging behind on 21.6% and 9.6% respectively. Microsoft has proposed a $42 billion takeover bid for Yahoo! in an attempt to combat this dominance, although Yahoo! has so far refused to accept the deal.

Patch Tuesday is here with five critical and there important patches that address multiple vulnerabilities in Microsoft Office, Windows and Internet Explorer. One of the five critical patches is designed to resolve a flaw in Microsoft Office Project, which could allow attackers to take complete control of users' systems if they open a malicious Office Project file. A second critical patch is designed to tackle GDI (Graphics Device Interface) vulnerabilities in Windows. One of the security bulletins is a cumulative patch for IE, and the other is designed to resolve vulnerabilities in ActiveX Kill Bits. Microsoft also issued a critical Windows patch for vulnerabilities in its VBScript and JScript Scripting engines, which could provide attackers with access to users' systems and allow them to install programs, as well as view and change data. Download and find more information here: Microsoft Security Bulletin Summary for April 2008.

Microsoft today said that it would resume automatic distribution of the Servicing Stack Update (SSU) needed for installing Windows Vista Service Pack 1 (SP1). On February 12th, Microsoft first began pushing the Servicing Stack Update (SSU). While several million customers installed the updates successfully, many users reported endless restart problems with their PCs caused by the KB937287 SSU patch. This prevented them from successfully installing the Vista SP1. Microsoft then suspended automatic distribution of the SSU, until now. Starting from tomorrow, the fixed SSU patch will be available for automatic download via the Automatic Update feature on Windows Vista OS. The company also revealed more information today about the root cause of the endless reboots. "SSU has special code to check whether there are any pending reboots or other updates to install, ... If it sees either of these circumstances, it prevents the install from starting.", the Microsoft Update Product Team Blog posted. "During our investigation, we discovered that there were a few unknown and rare events during the middle of the installation of the update that could cause the update to think it needed a reboot to complete the installation. If this happened, the system entered a repeating reboot loop." Continue reading the full post here.

Microsoft is now backing off comments by chairman Bill Gates that the next version of Windows could be available as early as next year. "We are currently in the planning stages for Windows 7 and development is scoped to three years from Windows Vista consumer" general availability, a Microsoft spokesman said in an e-mail Friday to InformationWeek. Windows Vista was released to consumers in late January 2007. That means Windows 7 would not be released until January 2010, regardless of the fact that Bill Gates told Windows 7 may be released "sometime in the next year [2009] or so". Microsoft said Gates may have been referring to trial versions of Windows 7. "As is standard with the release of a new product, we will be releasing early builds of Windows 7 prior to its general availability as a means to gain tester feedback," the spokesman said. "We're not sharing additional information at this time," the spokesman added.

In response to this story, the Board of Directors of Yahoo! Inc. today sent the following letter to Steve Ballmer, Chief Executive Officer of Microsoft Corporation.

It would seem that Microsoft has grown a little impatient over its takeover bid for Yahoo! earlier this year and has now sent a letter to the company persuading it to sit down and negotiate a deal:

It has now been more than two months since we made our proposal to acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.

Read full story

Microsoft Chairman Bill Gates said on Friday that Windows 7, the next major version of Windows, could come within the next year, far ahead of the development schedule indicated by the software maker. In response to a question about Windows Vista, Gates, speaking before the Inter-American Development Bank, said: "Sometime in the next year or so we will have a new version." Referring to Blackcomb or Windows 7, the code names for the next full release of Windows client software, Gates said: "I'm super-enthused about what it will do in lots of ways." Previously it was generally believed that Windows 7 OS would ship sometime in year 2010. The current version of Windows, known as Vista, shipped in January 2007. Microsoft's Windows XP is still widely available though, with no plans to be stopped until Windows 7 is released, Microsoft also announced yesterday.

Microsoft who once extended the life period of its Windows XP operating system is now going to do it again. The company originally planned to suspend the sale of Windows XP on June 30, 2008, but the big success of all low-cost notebook offerings is forcing Microsoft to further extend the life of XP. Microsoft will now make Windows XP Home available for ultra-low-cost PCs (ULPCs) until June 30, 2010 or one year after the release of the next version of Windows. Microsoft goes on to state that it "Heard from partners and customers that they want Windows broadly available for this new class of devices, because they want the familiarity, compatibility and support only available on the Windows platform." Microsoft also acknowledged that Windows XP makes more sense than Windows Vista for these machines adding, "While Windows Vista provides many benefits, including an easier and more secure user experience, Windows XP Home provides an effective solution on these devices from a performance and cost perspective." Unfortunately, only XP Home will get a reprieve from Microsoft.

It was yesterday when I first saw the report from DigiTimes, and I decided to wait on purpose before posting it here. First it was the 1st of April, second it sounded too good to be true: "Lite-On IT is developing built-in Blu-ray Disc-(BD) ROM drives for the Microsoft Xbox 360 game console" that will start shipping in the second half of 2008. Well I was right, the unspecified DigiTimes sources have misled a lot of hardware news sites. Microsoft responded today to the rumour with the following statement: "No. Lite-On is not manufacturing Blu-ray drives for Xbox 360. As we have stated, games are what are driving consumers to purchase game consoles and we remain focused on providing the largest library of blockbuster game available ... For our customers who want a premium movie experience we offer the largest library of on-demand HD content available and the ability to play back DVDs in high definition." This is the second time when a rumour is spreading around the web that Xbox 360 will get Blu-Ray support, but unfortunately that's also the second time when Microsoft crushes all hopes with a single sentence.

AT&T and Microsoft Corp. today announced a collaborative alliance that will transform the way consumers shop for mobile devices. AT&T will become the first company in the world to bring Microsoft Surface to life in a retail environment, giving customers the ability to explore their mobile worlds using touch and device recognition technology. Microsoft Surface is the first commercially available surface computer from Microsoft. Beginning April 17, customers can experience Microsoft Surface in select AT&T retail locations, including stores in New York City, Atlanta, San Antonio and San Francisco. Based on the success and learning from these initial pilot deployments, plans for further expansion across AT&T's 2,200 U.S. retail stores will be determined.

Gamerscore Blog lets all Xbox owners know that the Xbox 360 Live service along with the Xbox.com web site will be down for routine maintenance on Tuesday, April 1, from 2-5 AM PDT (0900-1200 GMT). I don't know if this is true since April 1st is April Fools' Day, but at least be informed just in case.

Data released by Microsoft has revealed that NVIDIA was responsible for 28.8% Windows Vista crashes during an unspecified period in 2007 - more than any other company. Microsoft itself was the next-worst offender, accounting for 17.9% of crashes, whilst AMD and Intel were much lower on 9.3% and 8.8% respectively. The cause of 17% of crashes is listed as being unknown, whilst other companies accounted for a total 18.5% of the crashes. The data was collected by Microsoft, and was ordered to be made public by a Judge regarding the ongoing "Vista Capable" lawsuit.

Xbox Live director of programming Larry "Major Nelson" Hyrb wrote on his blog today, that the Xbox Live Gamertags of confirmed cheaters have been corrected. He explained what his team is doing to the accounts of the most serious offenders:

• Resetting the entire Gamerscore for an account to zero
• The account will be unable to regain all previously obtained achievements and Gamerscore, however, the players will have the ability to gain future Achievements by earning them fairly, like the majority of the Xbox LIVE community does.
• The account will be clearly labeled as a cheater for the community to view on xbox.com. In dash, the personal view of the gamercard will be labeled as well.

"Xbox Live remains committed to keeping the service free of cheating in order to maintain a fair and level playing field for everyone," Hyrb wrote. To find out more about Gamerscore corrections read the FAQ on Xbox.com.

All Windows Vista users encountering problems when they upgrade to Service Pack 1 will be given free support, Microsoft informed today.

We are offering free-of-charge support to anyone who is having issues installing Windows Vista SP1,

Microsoft blogger Brandon Le Blanc said. There are three options available under the free support plan: e-mail support, which will be answered within one business day; online chat, which has a current waiting time of around 40 minutes; and call, available only for users who have a software-assurance agreement, professional contract, TechNet subscription, or MSDN subscription, or for those who come under the Microsoft Partner Program. The free support is available for all users till March 19, 2009. Please proceed here.

Intel Corporation and Microsoft Corp. are partnering with academia to create two Universal Parallel Computing Research Centers (UPCRC), aimed at accelerating developments in mainstream parallel computing, for consumers and businesses in desktop and mobile computing. The new research centers will be located at the University of California, Berkeley (UC Berkeley), and the University of Illinois at Urbana-Champaign (UIUC). Microsoft and Intel have committed a combined $20 million to the Berkeley and UIUC research centers over the next five years. An additional $8 million will come from UIUC, and UC Berkeley has applied for $7 million in funds from a state-supported program to match industry grants. Research will focus on advancing parallel programming applications, architecture and operating systems software.

The final version of Windows Vista Service Pack 1 is here! Microsoft Corp. posted the final SP1 package of updates today, and it's now available free for everyone.

Windows Vista Service Pack 1 (SP1)
32-bit version (434.5 MB) | 64-bit version (726.5 MB)

Adobe Systems Incorporated today announced that Microsoft has licensed Adobe Flash Lite software, Adobe's award-winning Flash Player runtime specifically designed for mobile devices, to enable web browsing of Flash Player compatible content within the Internet Explorer Mobile browser in future versions of Microsoft Windows Mobile phones. Microsoft has also licensed Adobe Reader LE software for viewing Adobe Portable Document Format (PDF) documents including email attachments and web content. Both Adobe products will be made available to Original Equipment Manufacturers (OEMs) worldwide, who license Windows Mobile software.