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San Francisco - Sun and the OpenSolaris community are launching Monday the official first version of the open-source OpenSolaris operating system, which has only been available in pre-release versions for developers until now.

Also arriving from Sun Monday is the NetBeans 6.1 open source IDE and a pre-release version of NetBeans for PHP (Hypertext Preprocessor) developers.

Being launched at the CommunityOne conference in San Francisco, OpenSolaris 2008.05 features packaging capabilities intended to make it more attractive to users of the rival Linux platform. Linux binary release capabilities in OpenSolaris are derived from an effort known as Project Indiana. These capabilities now are referred to as the OpenSolaris Image Packaging System. The packaging system simplifies installation and integration with third party applications.

“It's a major milestone where we're putting [the OS] out there for end-users fully supported,” said Jim McHugh, vice president of Solaris marketing.

Based on the Solaris kernel, OpenSolaris incorporates features such as ZFS (Zettabyte File System), offering instant rollback and check-summing, which makes sure data does not get corrupted. ZFS is the default file system, linking to the basic components of the OS. Another capability, Dynamic Tracing (DTrace), provides predictive self-healing capabilities.

Solaris Containers within OpenSolaris enable building of virtualization-aware applications that can be deployed on more than 1,000 systems ranging from single machines to multi-CPU and multi-core systems.

Other capabilities in OpenSolaris include the Gnome 2.20 desktop look and feel and Compiz open-source window application.

OpenSolaris upgrades are to be released every six months.

OpenSolaris.org began as an open-source project started by Sun in 2005 to build a developer community around Solaris. The OpenSolaris OS serves as a platform for developing features to be rolled into Sun's own commercial version of Solaris.

Asked about redundancies in Solaris and OpenSolaris and why there needs to be two similar products, McHugh said there are companies running their database on Solaris who are likely to continue to do that.

“I think there's a case where they're happy on Solaris 10,” said McHugh.

As part of the OpenSolaris announcement, Amazon and the OpenSolaris community are announcing that OpenSolaris will be available in a hosted fashion via Amazon EC2 (Elastic Compute Cloud). Customers can access the product without having to purchase the hardware to run it.

“It's a flexible model for developers who are looking for a quick [place] to run apps,” without having to leverage their own datacenter, said Juan Carlos Soto, Sun vice president of global market development and engineering.

Developers could, for example, build Web 2.0 applications requiring a Web presence and serving many users. OpenSolaris on Amazon EC2 will be available Monday in a limited beta form.

Sun and the NetBeans community are announcing availability Monday of an early access release of a NetBeans IDE to work with PHP. The NetBeans IDE Early Access for PHP offers intelligent editing capabilities, such as prioritized code completion and dynamic code templates.

Support for PHP follows a path of expanding NetBeans to work with more languages than Java, said Greg Sporar, Sun technology evangelist for NetBeans. C, C++, and Ruby support have been added in previous releases.

“It's not just a Java IDE anymore. It hasn't been for a long time,” Sporar said. The general release of the PHP IDE is planned for this fall.

With the NetBeans 6.1 IDE release, Sun adds capabilities for developing AJAX (Asynchronous JavaScript and XML) applications using JavaScript. Tighter integration with the MySQL database also is highlighted. JavaScript code can be written to run in such browsers as Mozilla Firefox, Opera, Safari, and Internet Explorer.

“We also have added some nice features for people doing Web services development in Java,” via new REST (Representational State Transfer) support, Sporar said. Developers can access REST-style APIs, such as those offered by Google and Yahoo.

Also featured in version 6.1 are faster startup and code completion, a new Ruby platform manager and support for IBM's Rational ClearCase version control system.

NetBeans improvements also are being revealed at CommunityOne, a precursor to the JavaOne conference.

BAGHDAD - Forget the rocket attacks, concrete blast walls and lack of a sewer system. Now try to imagine luxury hotels, a shopping center and even condos in the heart of Baghdad.

That’s all part of a five-year development “dream list” — or what some dub an improbable fantasy — to transform the U.S.-protected Green Zone from a walled fortress into a centerpiece for Baghdad’s future.

But the $5 billion plan has the backing of the Pentagon and apparently the interest of some deep pockets in the world of international hotels and development, the lead military liaison for the project told The Associated Press.

For Washington, the driving motivation is to create a “zone of influence” around the new $700 million U.S. Embassy to serve as a kind of high-end buffer for the compound, whose total price tag will reach about $1 billion after all the workers and offices are relocated over the next year.

“When you have $1 billion hanging out there and 1,000 employees lying around, you kind of want to know who your neighbors are. You want to influence what happens in your neighborhood over time,” said Navy Capt. Thomas Karnowski, who led the team that created the development plan.

Karnowski said a deal already has been completed for Marriott International Inc. to build a hotel in the Green Zone. He also said a possible $1 billion investment could come from MBI International, a conglomerate that focuses on hotels and resorts and is led by Saudi Sheikh Mohamed Bin Issa Al Jaber.

Elizabeth Caminiti, a Marriott spokeswoman, declined to comment. Phone calls and e-mails sent to London-based MBI were not returned.

For the moment, however, it’s mortars and rockets — not investment money — pouring into the Green Zone, which includes the U.S. and British embassies, key Iraqi government offices and other international compounds. Militants have escalated their shelling of the enclave since Iraqi forces began a crackdown on Shiite militias in late March.

But developers are clearly looking many years ahead and gambling that Baghdad could one day join the list of former war zones such as Sarajevo and Beirut that have rebounded and earned big paydays for early investors.

Even now — with violence in Baghdad again creeping up — the faint hints of the development plan have driven up the Green Zone’s already sky-high real estate prices.

Land that a few years ago was going for $60 a square meter on 50-year leases in the zone is now going for up to $1,000 a square meter, American officials say.

Last week, a Los Angeles-based holding company for equity firms, C3, confirmed it was starting a $500 million project to build an amusement park on the outskirts of the Green Zone in an area encompassing the Baghdad Zoo. The first phase, a skateboard park, is scheduled to open this summer.

But any Green Zone project is literally starting from the ground up.

“There is no sewer system, no working power system. Everything here is done on generators. No road system repair work. There are no city services other than the minimal amount we provide to get by,” Karnowski said.

He noted that of 500 development projects carried out in Baghdad last year, not one was done in the Green Zone — with the exception of the building of the new American embassy.

The plan also envisions significantly reducing the non-Iraqi footprint in the Green Zone, a five-square-mile area crisscrossed by 15-foot-high blast walls and checkpoints.

About 50 percent of the area is now occupied by coalition forces, the U.S. State Department or private foreign companies. If all were to go according to Karnowski’s plan, only 5 percent of land in the Green Zone will be in foreigners’ hands in five years.

Privately, American diplomats say the plan is, at best, wishful thinking.

Security is nowhere near the level needed for major development projects. Then there is the question of whether the Iraqi government even wants U.S. involvement in developing the center of their capital.

One diplomat, who asked not to be named because of no authorization to speak to the media, said they did not think Iraqis would want Washington to “turn this area into downtown Kansas City.”

But Both Karnowski and Iraqi officials said the government of Iraqi Prime Minister Nouri al-Maliki is interested in hearing U.S. ideas in developing the Green Zone, though many Iraqi leaders have expressed worries and words of caution.

“The Iraqi government wants to limit U.S. power in the Green Zone,” a top adviser to al-Maliki said on condition of anonymity as he was not authorized to speak to the press.

Iraqis also complain that the Americans — because they control security in the Green Zone — essentially hold a veto over the investors.

Karnowski acknowledged that American officials would vet potential investors because of a “vested interest.”

Some Iraqi leaders even have drawn parallels to the U.S.-backed development plan and what Saddam Hussein did in the area — known by its Iraqi name of Tashri during his regime.

Hussein stocked the neighborhood with family and tribal allies, political loyalists and members of his elite Republican Guard. Karnowski called the accusation “partially true.”

“Why do people build fences around their house? The intent is until such time as it’s much safer around here, you want to be able to influence what goes on,” he said.

The biggest hurdle to the plan is sorting out the true owners of property in the Green Zone, where “eminent domain by gun” was employed during the Saddam era, Karnowski said.

The chaos after Saddam’s fall also added the murkiness.

“It’s a jungle here,” said Hussein, a 28-year-old from Lebanon who started a contracting company about a year ago in Baghdad and rents out living space in the Green Zone on the side. “It used to be like the Wild West — you grabbed some property and said, ‘this is mine.”

Air Force Lt. Col. Monte Harner leads the effort to discover who owns the titles and consolidate the areas held by the U.S. military.

He said the Army plans to move a military hospital in the zone — now located in a former private medical facility — to a base nearby, freeing it up for Iraqi use. Also in the works is the consolidation of Green Zone housing used by American troops.

Sadiq al-Rikabi, a top adviser to al-Maliki, said there are also plans for development projects at the Baghdad airport west of the city, including a hotel.

American officials confirmed some projects would be carried out near the airport.

According to Karnowski, the United States will spend $120 million to demolish buildings damaged by air strikes during the opening days of the war.

Both Karnowski and Harner are aware their Green Zone plan is viewed as unrealistic by many, primarily U.S. Embassy officials.

“If you talk to people at the State Department, they still believe a hotel isn’t going up. But it is a done deal,” Karnowski said of the Marriott project.

Harner also believes even having a blueprint is important.

“You have to stake a goal in the sand before you can begin to move toward it,” he said. “Without a vision of what could be, you’re just treading water.”

DENVER (Billboard) - The emerging effort to use videogames as a channel for selling music is entering its next phase with the recent release of “Grand Theft Auto IV.”

Phase I has proved a phenomenal success, with “Rock Band” and “Guitar Hero III” selling millions of songs through their respective platforms. But it has been a limited victory.

Both are music-based rhythm games that use master recordings and cover songs to let gamers “play” along to the tunes using special controllers shaped like musical instruments. Purchased songs can be used only as elements of the game itself. They can't be transferred to an MP3 player or stored in users' digital music libraries.

But “Grand Theft Auto IV” includes a feature that lets players tag any song in the soundtrack in order to receive more information about the title and artist, as well as store tagged tracks in a custom playlist on the Amazon digital music store for later purchase.

“GTA IV” is not a rhythm game. It's a story-driven interactive “film” with plenty of side missions that add up to 100 hours of gameplay and features a soundtrack of more than 200 songs — the largest in videogame history.

PRESS “BUY”

It's been well established how TV shows, ads and videogames are growing areas of music discovery and promotion. But until “GTA IV,” there's been no construct that allows for the immediate identification and purchase of those songs from videogames. “GTA IV” has added that “buy” button, and record labels welcome the innovation.

“It's a very big deal for us,” says Cynthia Sexton, senior vice president of marketing and licensing for EMI Music North America. “We're continually looking for new ways to sell our music. There are millions of people buying 'Grand Theft Auto,' and we hope they will enjoy the music and in turn buy those tracks.”

With this in mind, the music industry could have no better ally than Rockstar. The outfit is one of the few game developers that actually creates and licenses its own soundtracks — a task often left to the game publisher — and the company approaches it with a passion close to music-geek-like obsession.

Consider the back story on how the 1979 cult classic “Walk the Night” by the Skatt Bros. came to appear on the soundtrack. Skatt Bros. member Sean Delaney — also known as the “fifth member of Kiss” for his writing and production work with the rock band — died in 2003, leaving his publishing share to a brother, a sister and a nephew living somewhere in Utah. They proved so hard to find that Rockstar went through the trouble of hiring a private investigator who flew to Orum, Utah, to locate them.

“It was just one of those songs we just couldn't let go of,” Rockstar music supervisor Ivan Pavlovich says. “It fit the game perfectly, so we were obviously determined to track them down.”

INSPIRING LOYALTY

It is this resolve to create the best entertainment experience for its fans — postponing the game's release by almost six months because of quality concerns, weathering persistent criticism from politicians over the game's violent content and fighting a hostile takeover bid for parent company Take-Two Interactive from Electronic Arts — that has earned Rockstar and the “GTA” franchise a rabidly loyal following within the gaming community. As a result, the company may be the ultimate tastemaker for the hardcore gamer set.

“The 'GTA' developers have gotten a really good reputation for having really good taste because of the choices they've made,” GameSpot editor Ricardo Torres says. “They're really focused on the quality of the experience for the player … (so) there's a lot of anticipation to see what they've deemed as cool enough to include in the new 'GTA.' “

The soundtrack is dominated by the kind of obscure tracks only the hippest DJs know to spin, many of which may find new sales life as a result of Rockstar's partnership with Amazon. According to Pavlovich, the Amazon music service didn't even have 40 percent of the soundtrack in its inventory when the deal was made. Rockstar gathered the product from its many licensees so the store could be fully stocked by launch. This separates “GTA IV” from other videogame franchises like the “Madden” football series or “Guitar Hero” and “Rock Band.” These are more casual games generally featuring mainstream hits with the occasional emerging act thrown in.

“That's fine for the masses,” Torres says. “But when you're dealing with a finicky crowd like gamers, it has to be really cool and really different.”

Reuters/Billboard

LOS ANGELES (Reuters) - Amazon.com Inc has sued the state of New York, challenging a new statute requiring Internet retailers based elsewhere to collect New York sales taxes.

Amazon, the world's largest Internet retailer, said in a complaint filed in the Supreme Court of the State of New York on April 25 that the new law, passed by the state legislature in early April, was unconstitutional, vague and overly broad.

Through its “Associates Program,” the company pays unaffiliated Web site operators around the country a commission if they advertise Amazon on their sites. Those ads often allow consumers to click through from the advertiser's Web site to Amazon.com.

The new law presumes that this amounts to solicitation of business in the state, a claim Amazon denies. Amazon has no “substantial” physical presence in the state, and independent advertisers are not authorized to act as Amazon's agents, according to the company's complaint.

Furthermore, Amazon claims the lawsuit unfairly singles out the company.

Seattle-based Amazon wants the law be declared invalid and to be awarded costs of the legal proceedings.

Besides newly appointed New York Governor David Paterson, Amazon also named the commissioner of New York's state department of taxation and finance as a defendant in the case.

Amazon.com said it had no further comment on the case.

(Reporting by Alexandria Sage; Editing by Braden Reddall)

REDMOND, Wash. - As Yahoo continued to resist Microsoft’s $42 billion takeover offer, a key question was just how far Microsoft’s excitable CEO, Steve Ballmer, was willing to go in hopes of defeating online advertising and search leader Google.

For now, it seems Ballmer has kept his passionate side in check in choosing to walk away from a deal over the weekend rather than raise the bid amount or launch a hostile takeover.

But some see Microsoft Corp.’s decision as simply one more step in the dance and expect Ballmer to reprise his pursuit later this year if Yahoo Inc. is unable to turn around its business.

If the CEO commandeers Microsoft’s coffers for another run at Yahoo, he could face increased pressure to justify the move: Is he motivated by fear, or competitive zeal? Or is chasing Yahoo a product of rational calculation?

Ballmer has exhibited both tendencies in nearly 30 years at Microsoft.

A marketing guru in a company full of software programmers, Ballmer is known as an aggressive Microsoft partisan, who once allegedly screamed that he would “(expletive) kill Google.”

He has strained his vocal cords exhorting Microsoft employees at sales meetings. A preposterous dance he did in front of one audience earned him the lasting nickname Monkey Boy. Video of it is widely available on the user-contribution site YouTube — owned by Google Inc.

“I’m well known not to be the world’s best negotiator,” Ballmer told a tech conference this year after the Yahoo deal was first put on the table.

Yet behind his jovial presence and booming voice, Ballmer reveals a deep understanding of technology and a sharp mind. Ballmer is pragmatic and realistic even if animated. At Harvard University, where he met Bill Gates in the early 1970s, he beat Microsoft’s founder on a national math test.

Rob Horwitz, chief executive of the independent research group Directions on Microsoft, landed a job at Microsoft in the mid-1980s after interviewing with Ballmer, whom Horwitz described as intense but likable, and blessed with an uncanny memory for people.

Once, when Horwitz was one of about 650 employees in the company, Ballmer greeted him by name and told him he’d hit Horwitz’s car in the parking lot a month earlier. Horwitz’s old beater was undamaged, but Ballmer told him he had to shell out $1,500 to get his own car repaired.

Lots of things about Ballmer, 52, belie his outsized reputation and his outsized wealth of $15 billion, which makes him America’s 16th-richest person, according to Forbes magazine.

He has lived with his family in the same suburban house for years. Like many CEOs, he has 13-hour days glad-handling customers. But unlike many of his workaholic counterparts, he gets back home often and boasts he gets seven or eight hours of sleep a night.

Ballmer grew up in the Detroit area, where his father was a manager at Ford Motor Co. At Harvard, where he was equipment manager for the football team, Ballmer lived in the same residence hall as Gates, who famously dropped out to launch Microsoft in 1975 with Paul Allen.

After Ballmer graduated with a degree in mathematics and economics, he got his first job at Procter & Gamble Co., handling marketing for Duncan Hines’ Moist & Easy cake mix. His cubicle mate was Jeffrey Immelt, today’s CEO of General Electric Co.

Gates lured him to Microsoft from Stanford business school in 1980, giving him broad management responsibility. Ballmer was known for being funny yet intimidating. He would learn details about the company by immersing himself in certain aspects of the business, whether it was by living in Europe for a few months or acting as Phoenix-area sales manager for a while.

Ballmer was given the title of president in 1998, as Microsoft was fighting off the Clinton administration’s attempts to break up the company. Ballmer became CEO in 2000, while Gates held onto the board chairman’s seat and created a new title of chief software architect for himself.

As Microsoft grew into a dominant force in computing, thanks to the mass popularization of its Windows operating system and Office software, Ballmer and Gates were close.

Ballmer was best man at Gates’ wedding.

They also have been unafraid to confront each other, shouting if necessary. One story holds that in 1985 Gates threatened to fire Ballmer if Windows wasn’t on the shelves by the end of the year. It was ready by November.

Ballmer has shown plenty of his own bombast in his CEO tenure, but the Yahoo pursuit is in some ways out of character. Michael Cusumano, a professor at MIT’s Sloan School of Management, said Ballmer “likes to do R&D, internal R&D, and small, targeted acquisitions.”

Clearly, Google has changed Ballmer’s thinking on such matters. Ballmer is not the kind of manager content to let Microsoft trail Google in the online search and advertising markets — while Google also threatens to steal Microsoft’s thunder with free software applications.

Forrester Research analyst Shar VanBoskirk pointed out that after Google agreed to acquire online ad company DoubleClick Inc. for $3.2 billion, Microsoft responded with an astonishingly high $6 billion purchase of aQuantive Inc.

“It’s like a Microsoft machismo thing,” VanBoskirk said. “Flexing their muscle and showing how serious they are in this space.”

That would also explain the court testimony of former Microsoft engineer Mark Lucovsky, who said that when he told Ballmer he was leaving for Google in 2004, Ballmer went ballistic, knocking a chair into a table in his office. According to Lucovsky, Ballmer lambasted Google and its CEO, saying he would “kill Google.”

Lucovsky also said Ballmer warned: “Google’s not a real company. It’s a house of cards.”

Ballmer has called Lucovsky’s account a “gross exaggeration.” But there’s no question that now Ballmer has to show he’s not the one building a house of cards.

His intense pursuit of Yahoo called into question the viability of Microsoft’s solo Web search and advertising strategy. Despite a search technology overhaul and the aQuantive purchase, Microsoft couldn’t get out of third place in the search advertising market.

Withdrawing the Yahoo offer may have spared the CEO from having to rationalize the massive deal, but it also leaves Ballmer where he started: on the hook to produce the online success that so far has eluded him.

___

AP Technology Writer Brian Bergstein reported from Boston.

___

On the Net:

Ballmer’s official bio:

http://www.microsoft.com/presspass/exec/steve/default.mspx

Microsoft has dropped its nearly three-month-long pursuit of Yahoo, ending a historic acquisition attempt whose failure takes Microsoft back to square one in its quest to boost its online business to better compete against Google.

“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 Microsoft CEO Steve Ballmer in a statement distributed early Saturday evening.

More Money Not Sufficient

Microsoft had raised its initial bid by about US$5 billion, but that didn't convince Yahoo to accept the revised offer, Microsoft said. “After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” said Ballmer.

In response, Yahoo issued a statement reiterating its position that Microsoft's offer was too low, and saying that many Yahoo shareholders agreed with its position.

“Yahoo is profitable, growing, and executing well on its strategic plan to capture the large opportunities in the relatively young online advertising market,” Roy Bostock, the chairman of Yahoo's board, said in the statement.

Yahoo CEO Jerry Yang said that “with the distraction of Microsoft's unsolicited proposal now behind us” Yahoo can continue with “the most important transition in our history.”

All parties with a stake in the deal had been waiting for Microsoft to announce its next move, after Yahoo failed to agree to a deal by last Saturday, the deadline Microsoft had set three weeks earlier.

But Microsoft stayed silent for days, as observers speculated whether it would walk away or prepare a hostile takeover. However, on Friday anonymously sourced reports in The Wall Street Journal and The New York Times said that Microsoft and Yahoo had turned a corner and were for the first time negotiating merger terms in earnest.

Too Much Trouble?

Ultimately, it seems that Microsoft's management, fatigued by Yahoo's resistance and demands, decided that engaging in a proxy fight to oust Yahoo's directors would be an arduous and nasty process. After all, for Microsoft, the goal of the massive acquisition was to quickly become a mightier competitor to Google in online advertising.

“This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo undesirable as an acquisition for Microsoft,” Ballmer wrote in a letter he sent Saturday to Yang.

As soon as Microsoft announced its bid for Yahoo on Feb. 1– valued at US$44.6 billion at the time– Yahoo's management began seeking and considering alternatives, while its stock began to rise from the latest pre-bid price of $19.18.

By the time Yahoo's board formally rejected the unsolicited offer on Feb. 11, saying it undervalued the company, Yahoo's stock price had risen to $29.87, erasing the offer's premium. The next day, Microsoft hinted in a letter to Yahoo that it wouldn't shy away from attempting a hostile takeover.

Meanwhile, several media reports appeared– all attributed to anonymous sources– that Yang was holding conversations with Google, AOL, Disney and News Corp., exploring alternative deals that would strengthen Yahoo's business and thus relieve the pressure to accept Microsoft's offer.

On April 5, Microsoft, clearly impatient, threatened Yahoo's board of directors with a proxy battle if it wouldn't agree to a buy-out in the next three weeks. That deadline passed last Saturday.

Courting Google

No alternative deal ever materialized for Yahoo, except for a very limited, albeit eyebrow-raising, test that saw Yahoo.com. Observers speculated that the test, announced on April 9, could lead to a full-blown outsourcing of Yahoo's search ad business to Google, a move that financial analysts believe could boost Yahoo's revenue. Press reports last week indicated that Yahoo and Google might still enter into such a deal.

This possible deal with Google played a big part in Microsoft's decision to walk away, Ballmer wrote in his letter. If Yahoo outsourced search advertising to Google, the deal would “fundamentally undermine” Yahoo's long-term viability, he wrote.

“This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth,” Ballmer wrote.

Moreover, the Google deal would cause key advertising-system engineers to leave Yahoo and would create regulatory and legal problems that Microsoft wouldn't want to inherit, Ballmer wrote.

Yahoo also made overt maneuvers to buy itself time. For example, on March 5, Yahoo lifted the following week's deadline for nominating directors to its board, an attempt to discourage Microsoft from launching a proxy fight to replace the current board with members willing to approve its Yahoo acquisition bid.

On March 18, it kicked off a tour to investors by dusting off a three-month-old financial plan to reinforce its contention that Yahoo is worth much more than Microsoft offered to pay for it. The plan, which had originally been presented to Yahoo's board in December, predicts that Yahoo will double its operating cash flow over the next three years from US$1.9 billion to $3.7 billion. The plan also forecasts that, subtracting the commission that Yahoo pays to sites in its advertising network, Yahoo will generate $8.8 billion in revenue in 2010. Financial analysts agreed the plan is highly optimistic.

Yahoo also got into hyperactive mode with product and strategy announcements after Microsoft's bid, always pointing out that each initiative proved that it is able to improve its situation as an independent company. For example, it acquired online video player Maven Networks, announced its social network OneConnect mobile service, re-launched its video site and introduced Yahoo Buzz, a social news site that has been very well received.

It also announced AMP, a new advertising management platform that it says will “significantly simplify” buying and selling ads online and that will roll out in phases starting in 2008's third quarter and continuing into 2009. Yahoo also added video to Flickr and joined Google's OpenSocial project of common APIs for social networking applications.

It also recently announced its most ambitious plan yet to take advantage of the popularity of social networking. Yahoo Open Strategy (YOS) calls for the company to swing wide open the doors of its Web platforms to let outside developers create applications across its network of sites, starting with its search engine via a beta project called Search Monkey.

Of course, there have been also reminders of why the company found itself an acquisition target. The most concrete of these reminders was on Feb. 12, when Yahoo started laying off about 1,000 staffers. Meanwhile, prominent executives like Bradley Horowitz, vice president of product strategy, voluntarily departed, in Horowitz's case to arch-rival Google.

Weaker Chance With Time

As time passed, Microsoft's hopes of a swift acquisition and integration evaporated. Ballmer maintained all along that the offer was fair and seemed perplexed that Yahoo didn't jump to accept it. At the prospect of a dragged out proxy fight, to be followed by a complicated and lengthy integration of MSN and Yahoo, Ballmer apparently grew increasingly disenchanted.

If Microsoft had $40-plus billion to spend on Yahoo, it can certainly go shopping for the many startup and niche companies that have gained traction in the Web 2.0 space in areas like social networking, social news, video, Web-hosted applications and mobile advertising.

Considering Ballmer's well-known competitive nature, he will dust himself off and draw up another plan, because one thing is clear: while he is giving up on acquiring Yahoo, he is certainly not giving up on his dream to top Google in online advertising, particularly in search.

“We have a talented team in place and a compelling plan to grow our business through innovative new services and strategic transactions with other business partners. While Yahoo would have accelerated our strategy, I am confident that we can continue to move forward toward our goals,” Ballmer said in Saturday's statement.

“We are investing heavily in new tools and Web experiences, we have dramatically improved our search performance and advertiser satisfaction, and we will continue to build our scale through organic growth and partnerships,” said Kevin Johnson, Microsoft president for platforms and services, in the statement.

As of the end of 2007's third quarter, Google had almost 25 percent of the U.S. Internet advertising market, up from almost 21 percent in 2006's third quarter, according to IDC. Meanwhile, Yahoo's share during this period dropped to 11.3 percent from 12.3 percent, while Microsoft's declined to 5.2 percent from 5.8 percent, according to IDC.

In search usage, Google held a commanding 62.4 percent of queries worldwide, followed by Yahoo in a very distant second place with 12.8 percent, according to comScore. Microsoft ranked fourth with 2.9 percent, after Baidu with 5.2 percent.

In November, Yahoo ranked first in the U.S. in display ad impressions with a 19 percent share, while Microsoft came in third with 6.7 percent, after News Corp.'s Fox Interactive (16.3 percent), according to comScore. Google took seventh place with 1 percent.

Management software is one category where Microsoft has never quite measured up to competitors. Redmond hopes to change that with an unlikely weapon: using code from the OpenPegasus project to extend its System Center suite to Linux and Unix environments.

Cross-platform management is the No. 1 customer request for System Center, and using open source code to get there represents recognition by Microsoft that it's far from a Windows-only world. It's also a significant move in the company's bid to be seen as a legitimate top-tier choice for enterprise management.

“I don't care what enterprise you walk into, they're not going to be single platform,” says Clear Channel solution architect Curt Smith, a System Center customer. Clear Channel uses Linux to operate its radio Web platform, and VMware provides virtualization. “I want the ability to manage it all from one spot. You can't have a bunch of tools all over the place.”

Last week, Microsoft released a beta of System Center Operations Manager 2007 Cross Platform Extensions, which it says will provide out-of-the-box service management for HP-UX, Red Hat Enterprise Linux, Novell SUSE Linux Enterprise Server, and Sun Solaris; the extensions will be part of the next Operations Manager service pack. But Microsoft brass is talking like Cross Platform Extensions is just the first step in moving beyond Windows with System Center. “We've established a strong position in Windows management, but customers want us to do more,” says Bob Muglia, senior VP of Microsoft's server and tools business, adding that open source was the right way to respond. “Obviously our depth of expertise in Linux and Unix is not as deep as in our Windows platform. There's a lot of knowledge in the Linux and Unix community in OpenPegasus.”

The company will join the OpenPegasus Steering Committee and contribute code back to the project; code Microsoft contributes will be freely modifiable and usable, so long as copyrights are left intact. OpenPegasus code ships in a number of Linux distributions, so Microsoft is technically announcing an intent to contribute to Linux by contributing to the project.

DIG DEEPEROpen source is making a name for itself in systems management, to the dismay of many big players.Download this
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