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SEATTLE (Reuters) - Microsoft Corp said on Sunday it has proposed an alternative deal to Yahoo Inc, rather than a full acquisition, in a move that could save the web pioneer from fighting a proxy battle with financier Carl Icahn.

“Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo,” the company said in a statement without clarifying what that alternative might be.

Microsoft emphasized it was not proposing to make a new bid to buy all of Yahoo, after recently being rebuffed, but could reconsider.

Yahoo said in a statement later on Sunday that it continued to consider a number of strategic alternatives and was “open to pursuing any transaction which is in the best interest of our stockholders.”

The company's board will “evaluate each of our alternatives, including any Microsoft proposal, consistent with its fiduciary duties, with a focus on maximizing stockholder value,” Yahoo said in a statement. It added that it had confirmed with Microsoft that it was not interested in “pursuing an acquisition of all of Yahoo at this time.”

Analysts were split on the benefits of an alternative scenario to a full-fledged takeover.

“I definitely think an alternative deal is better than a full a acquisition,” said Toan Tran, analyst at Morningstar.

“It is positive for both companies, because you are getting the benefits of a Yahoo acquisition without the negatives namely the integration risks.”

But Kim Caughey, a senior analyst at Fort Pitt Capital Group, said the market will probably send Yahoo shares higher while pushing down Microsoft shares when the market opens on Monday.

Caughey said a joint venture or minority investment with Yahoo could cause confusion about who was in charge.

“Microsoft walking away from Yahoo was a total head fake,” said Caughey. “Microsoft is a terrible poker player if it thought people were going to believe that the deal was dead.”

The New York Times reported that Microsoft and Yahoo may form a partnership or joint venture for search-related advertising to take on Google Inc, which dominates the search market with a share significantly larger than a combined Yahoo and Microsoft.

For its part, Yahoo continues to talk with Google Inc about a search advertising partnership and a deal could come as early as this week, a source familiar with the talks said on Thursday.

The statement from Microsoft comes on the heels of a proxy campaign launched on Thursday by Icahn to replace Yahoo's board with directors who would reopen talks with Microsoft, saying Yahoo had acted irrationally in refusing the giant software company's $47.5 billion bid.

Microsoft walked away from its pursuit of Yahoo two weeks ago after three months of negotiations when Yahoo's board rejected Microsoft's sweetened offer of $33 a share, saying the company was worth at least $37 a share.

Meanwhile, Microsoft and Icahn have not held discussions about Yahoo, said another source close to the company. A spokesman for Yahoo declined to comment and Icahn could not be reached for comment.

In a letter to Icahn last week, Yahoo board Chairman Roy Bostock said a new board would not be in the best interests of Yahoo investors, adding that Yahoo would consider any deal from any party, including Microsoft, if it offered the company full value.

Icahn, who has said he had accumulated 59 million shares and options in Yahoo, also has the support of Paulson & Co, a $30 billion hedge fund that has amassed a 3.4 percent stake in Yahoo, and other investors upset by the board's handling of negotiations with Microsoft.

Microsoft had said it had moved on from Yahoo and remained committed to building an online advertising powerhouse to rival Google. Company executives had said in making a case for a Yahoo acquisition that buying the web company would be the fastest way to close the gap on Google.

In an e-mail to employees on Sunday, Kevin Johnson, president of Microsoft's platform and services division, said the company must strengthen its online business regardless of how talks with Yahoo turn out.

“The fact is that we are not where we want to be in this business yet and we've been in this position longer than we'd all like,” Johnson wrote in the e-mail.

(Additional reporting by Anupreeta Das and by Sinead Carew and Megan Davies in New York; Editing by Gerald E. McCormick and Tomasz Janowski)

SEATTLE - Microsoft Corp. said Sunday it is talking to Yahoo Inc. about a transaction that doesn’t involve a full buyout like the software maker’s $47.5 billion offer that fell apart earlier this month.

Redmond, Wash.-based Microsoft walked away May 3 from its offer to buy the Web pioneer. Since then, billionaire investor Carl Icahn has launched an effort to oust Yahoo’s board.

In a statement Sunday, Microsoft says it is considering a different kind of deal with Yahoo as it pursues ways to improve and expand its online services and advertising business.

“Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo,” the statement said. “Microsoft is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo or discussions with shareholders of Yahoo or Microsoft or with other third parties.”

A Microsoft spokesman declined to comment beyond the written statement. Yahoo representatives could not immediately be reached for comment.

The statement may be a sign that Yahoo founders Jerry Yang and David Filo and Chairman Roy Bostock are scrambling to avert an ugly shareholder mutiny ahead of the company’s July 3 annual meeting.

Icahn has proposed his own slate of directors to replace Yang, Bostock and the rest of the board, in hopes of bringing Microsoft back to the bargaining table. The results of his effort would come to a vote at the meeting.

Many analysts believe that despite Microsoft’s assurances it is moving ahead without Yahoo, the software maker would revive its bid, likely at a lower price, if the Silicon Valley icon’s stock continues to languish.

Icahn told Yahoo’s board it could quickly quell the shareholder revolt by renewing negotiations with Microsoft, but the software maker warned Sunday that it’s possible no deal will be struck.

LOS ANGELES (Hollywood Reporter) - Apparently, 68% growth just isn't good enough, so investors sold shares of the video game software makers Friday.

Research firm NPD triggered Friday's sell-off with a report that said the U.S. video game sector grew 47% in April, compared with the same month last year, to $1.23 billion, with software up 68% and hardware up 26%.

The data sent shares of Electronic Arts down 3.8%, Activision down 1.6%, Take-Two Interactive Software down 1% and Midway down 1.4%. THQ bucked the trend, with its shares rising 1%. The overall market finished little changed.

But the disappointment should pass, with Wednesday's massively anticipated release of Nintendo's fitness-themed game “Wii Fit.” It is already sold out on Amazon.com.

That's why for May, “We look for a 160%-plus increase in software sales and a 100% increase in hardware sales,” Kaufman Bros. analyst Todd Mitchell said.

The family-friendly Wii, as per usual, dominated hardware in April with 714,000 units sold, nearly twice as many as the combined sales of Microsoft's Xbox 360 (188,000) and Sony's PlayStation 3 (187,000).

Sales of the PS3 and Xbox fell from the month before, a surprising development given that “Grand Theft Auto IV,” available only on those platforms, was by far the biggest-selling game in April.

NPD said consumers snapped up 1.85 million units of the raunchy game in April even though it wasn't released until the penultimate day of the month. The second-best-selling game in April, with 1.1 million games sold, was “Mario Kart Wii.”

Reuters/Hollywood Reporter

WASHINGTON (AFP) - Microsoft said Sunday it was considering some kind of new deal with Yahoo that would not involve a new takeover bid, two weeks after withdrawing its offer to acquire the struggling Internet pioneer.

“In light of developments since the withdrawal of the Microsoft proposal to acquire Yahoo Inc., Microsoft announced that it is continuing to explore and pursue its alternatives to improve and expand its online services and advertising business,” a statement posted on its website said.

“Microsoft is considering and has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo.

“Microsoft is not proposing to make a new bid to acquire all of Yahoo at this time, but reserves the right to reconsider that alternative depending on future developments and discussions.”

It said there was no guarantee the talks would lead to a transaction.

Microsoft offered to buy Yahoo for 44.6 billion dollars in stock and cash on January 31, but withdrew the offer on May 3, saying Yahoo refused to budge despite the software giant upping its offer to nearly 50 billion dollars.

Corporate raider Carl Icahn this week accused the board of Yahoo of having “completely botched” the merger talks, saying he was amassing Yahoo stock to oust the board of directors, at which point he would restart negotiations.

Microsoft wanted to merge its Internet resources with Yahoo's worldwide offerings to gain ground on undisputed online advertising juggernaut Google.

NEW YORK - The Internet is routinely used when making buying decisions, but its influence is small compared with offline channels such as friends and sales personnel, a new study finds.

Sunday’s report from the Pew Internet and American Life Project looked at consumer behavior in purchasing music, cell phones and homes or renting apartments. It found the Internet’s role to be indirect.

“The Internet helps people eliminate irrelevant alternatives,” said John Horrigan, Pew’s associate director. “The Internet may influence the choice modestly but has important consequences in getting better deals and in having a more focused search process along the way.”

Only about 10 percent of real estate and cell phone buyers and 7 percent of music purchasers credit the Internet with having a major impact on their decision. And only a small portion — 22 percent of the music buyers and 12 percent of cell phone purchasers — ultimately bought their product over the Internet.

“People do cast their information nets widely when doing consumer research,” Horrigan said. “At the end of the day, though, it’s the offline nugget that has more influence.”

And while many people look at recommendations from fellow consumers before buying, few bother to give back to the system by adding their own ratings or comments after a purchase.

Horrigan suggests that consumers are so eager to use what they have just bought, they leave a product research mode and simply forget — risking turning such forums into unreliable accounts by a vocal minority.

The study is based on phone interviews conducted Aug. 3 to Sept. 5, 2007, with 2,400 adults, including 1,684 Internet users. It has a margin of sampling error of plus or minus 2 percentage points.

BEIJING - Almost nonstop, the uncensored opinions of Chinese citizens are popping up online, sent by text and instant message across a country shaken by its worst earthquake in three decades.

“Why were most of those killed in the earthquake children?” one post asked Thursday on FanFou, a microblogging site.

“How many donations will really reach the disaster area? This is doubtful,” read another.

China is now home to the world’s largest number of Internet and mobile phone users, and their hunger for quake news is forcing the government to let information flow in ways it hasn’t before.

A fast-moving network of text messages, instant messages and blogs has been a powerful source of firsthand accounts of the disaster, as well as pleas for help and even passionate criticism of rescue efforts.

“I don’t want to use the word transparent, but it’s less censored, an almost free flow of discussion,” said Xiao Qiang, a journalism professor at the University of California, Berkeley, and director of the China Internet Project, which monitors and translates Chinese Web sites.

China is well known for controlling the flow of information.

“We didn’t know that hundreds of thousands of lives passed away during the Tangshan earthquake in 1976 until many years after the disaster took place,” sociologist Zheng Yefu said in a commentary last week in the Southern Metropolis News.

But word about Monday’s magnitude 7.9 quake spread quickly on Web sites and microblogging services, in which users share short bursts of information through text and instant messages. The services also publish the messages online.

“It all depends on the users; we don’t edit it,” FanFou founder Wang Xin said. “We just gather their words together.”

A string of crises over the last few months — including crippling snowstorms and Tibetan protests — has taught the government a few lessons, Berkeley’s Xiao said.

Government officials held a rare, real-time online exchange with ordinary Chinese on Friday to answer angry questions about why so many schools collapsed in the quake.

“They understand better now that to react slowly or to cover up in the Internet age is a bad idea,” Xiao said in a telephone interview.

But the government is still monitoring the online conversation. Seventeen people have been detained since the earthquake, warned or forced to write apologies for online messages that “spread false information, made sensational statements and sapped public confidence,” the state-run news agency, Xinhua, reported Thursday.

Police also warned of the spread of scam text messages asking for quake donations.

One post deleted from the popular Tianya online forum had complained about the government response to the earthquake.

“A politician visited Dujiangyan for less than two minutes, and police kept the people away. Most residents don’t even know he ever came!” the post said. “Who can tell me, where is the food and water that is being promised by the city government. … I paid 50 kuai (about $7) to get on a vehicle to drive me away from this hell.”

Tianya declined comment on why the post was removed, but a customer service representative said that in general, posts may be deleted for having “sensitive words” or for not being “relevant to the theme of discussions.” Company policy does not allow her to be quoted by name.

Still, fierce discussion was allowed on popular online forums about whether the Chinese government should let foreign rescue teams into the earthquake zone and why so many schools collapsed.

Many people just wanted to help, creating online projects to connect quake survivors with friends and family and to spread information about how to donate blood and money and how to adopt children orphaned by the earthquake.

Even a local government joined in. With nothing but a satellite phone, a once-quiet government Web site quickly turned itself into the only source of information from the epicenter.

“Whenever we heard any news, we immediately put it on the Web site,” He Biao, director of the Aba prefecture’s emergency response department, told the Chinese portal Sina.com.

The Aba site shared the first details of the missing and the dead after getting the information by satellite phone from forestry departments throughout the worst-hit area.

Phone and Internet connections were cut to the epicenter for days, but a Xinhua report Friday gave a glimpse of the network that had been in place even in one of China’s more remote corners. The eight worst-hit counties had more than 16,500 wireless phone stations, Xinhua said, though about 10,000 remained damaged Friday.

A team of 12,000 technicians was working to restore the telecommunications network, Xinhua said, despite a series of strong aftershocks throughout the region.

People gathered at emergency phone stations, and at power sources to recharge their mobile phones. “A direct connection to the disaster zone!” Sina.com headlined Friday night.

“All the major online communities, bloggers, all are very eager to help. It’s quite amazing,” Xiao said. “I haven’t seen anything like that, the freedom and the participation, how much the average Internet netizen wants to help.”

The information ranged from the useful to the mundane.

“The milkman has arrived,” 22-year-old British student Daniel Ebbutt noted through Twitter, a microblogging service, just hours after the quake. He lives in Chengdu, the capital of hard-hit Sichuan province. “It seems people are just getting on with things now.”

But he also noted that rumors are sweeping the region via the text and online services.

One rumor, that the water might be polluted with ammonia, led to a series of posts by Ebbutt about a frantic shopping spree for bottled water.

Rumors are the downside of the free information flow, said Kevin Morris, a 26-year-old American teacher and blogger living just outside the hard-hit area of Dujiangyan, an hour’s drive northwest of Chengdu.

“The official media has actually been much better at keeping people calm and is surprisingly frank with its reporting,” Morris said by e-mail Wednesday. “The rumors are mostly damaging — causing people to rush out of their homes at the slightest hint of an aftershock or, now, causing people to buy as much water as possible because the government is supposedly turning off the water.”

On May 15, a Missouri woman was indicted on federal charges for fraudulently using an account on MySpace. While many people may pretend online to be someone they're not, this particular incident apparently had deadly consequences.

The woman being charged posed as a teenage boy who feigned romantic interest in a 13-year-old girl, Megan Meier. Megan later committed suicide after the “boy” spurned her and told her, among other things, that the world would be a better place without her.

Lori Drew, 49, of O'Fallon, Mo., was named in a four-count indictment returned last week by a federal grand jury. The indictment charges one count of conspiracy and three counts of accessing protected computers without authorization to obtain information to inflict emotional distress.

“This adult woman allegedly used the Internet to target a young teenage girl, with horrendous ramifications,” U.S. Attorney Thomas P. O'Brien said. “After a thorough investigation, we have charged Ms. Drew with criminally accessing MySpace and violating rules established to protect young, vulnerable people. Any adult who uses the Internet or a social-gathering Web site to bully or harass another person, particularly a young teenage girl, needs to realize that their actions can have serious consequences.”

A Tragic Turn

In the indictment, Megan is referred to only as M.T.M. because of juvenile privacy rules, although her name was previously disclosed in the press when the story broke in November 2007.

The indictment alleges that Drew, along with others, registered as a member of MySpace under the name “Josh Evans.” Drew and her co-conspirators then used the Josh Evans account to contact Megan and began what the girl believed was an online romance with a 16-year-old boy.

In taking those actions, the indictment alleges, Drew and her co-conspirators violated MySpace's terms of service that prohibit users from, among other things, using fraudulent registration information, using accounts to obtain personal information about juvenile members, and using the MySpace communication services to harass, abuse or harm other members.

After approximately four weeks of flirtatious communications between “Josh Evans” and Megan, Drew and her co-conspirators broke off the relationship. Within an hour, Megan had hanged herself in her room. She died the next day.

“Whether we characterize this tragic case as cyber-bullying, cyber abuse or illegal computer access, it should serve as a reminder that our children use the Internet for social interaction and that technology has altered the way they conduct their daily activities,” said Salvador Hernandez, assistant director in charge of the FBI in Los Angeles. “As adults, we must be sensitive to the potential dangers posed by the use of the Internet by our children.”

Anonymity of the Web

Cyber-bullying is a huge and growing problem, according to Parry Aftab, a security, privacy and cyberspace attorney and executive director of WiredSafety.org, an online safety and educational program in cyberspace.

Aftab's latest initiative is StopCyberbullying.org. The group is holding a conference in New York June 2-3 to bring together industry, media, law-enforcement and government regulatory groups, educators and community organizations as well as mental-health experts, kids, parents and anyone who has a stake in the issue to try to frame and address the problem.

“Cyber-bullying is a much larger problem than anyone realizes unless they work in schools or in a social network,” Aftab said. “Eighty-five percent of the middle schoolers I have polled indicated they have been cyber-bullied at least once during the last year. In other polls we've conducted, 70 percent of kids indicated they had cyber-bullied others. Only 5 percent of the kids would ever tell their parents or another trusted adult.”

Aftab is disappointed that the defendant “escaped justice” for a year and a half, but is glad O'Brien stepped in. The conspiracy count carries a maximum penalty of five years in federal prison. Each count of accessing protected computers, each of which alleges that the access was for the purpose of intentionally inflicting emotional distress on M.T.M., carries a maximum possible penalty of five years in prison.

“Megan was not the first suicide from cyber-bullying, and sadly she has not been the last,” Aftab said. “I believe the Drew indictment will be the beginning of people understanding what they do online has legal consequences.”

LONDON (Reuters) - U.S. mobile navigation device company Garmin Ltd (GRMN.O) is the mystery bidder behind a takeover approach for Britain's Raymarine Plc (RAY.L), the Sunday Telegraph reported, citing sources close to the deal.

Garmin's approach could be worth as much as 200 million pounds ($389 million), it said.

Raymarine, which makes navigation equipment for the marine market, said last month it had received an approach from an unnamed party, sending its shares rocketing.

The UK company makes a range of nautical devices including satellite navigation for boats, autopilots, satellite radio and radar systems. It is seen as an attractive target for larger players as the market for satellite and mobile navigational devices consolidates.

A number of private equity companies are also thought to be eyeing Raymarine, the Sunday Telegraph said.

Officials at Raymarine were not immediately available to comment.

(Reporting by Ben Hirschler; Editing by Jason Neely)

Mozilla Corporation on Friday released Firefox 3 RC1, more or less the final form of this iteration of the popular open-source Web browser. RC stands for Release Candidate and represents a stage in which the browser's features are complete and the code is stable enough for public testing. Barring any serious bugs, RC1 will become the official release version of Firefox 3, which is planned for June.

Firefox 3 offers significantly improved speed and memory usage.

Mozilla VP of engineering Mike Schroepfer claims that Firefox 3 is 9.3x faster than Microsoft Internet Explorer 7 and 2.7x faster than Firefox 2 in terms of JavaScript performance. In terms of Gmail message load time, he claims Firefox 3 is 6.8x faster than IE7 and 3.8x faster than Firefox 2. And he says Firefox 3 beats Apple's Safari, which is also faster than Firefox 2.

Schroepfer says that Firefox 3 uses for 4.7x less memory than IE7. This is significant achievement given that earlier versions of Firefox have a reputation for using a lot of memory. (As this article was being written, Firefox 2.0.0.14 had claim on 103,728K of memory on my PC while Outlook required 107,856K. IE6 meanwhile demanded a mere 17,548K).

Firefox 3 comes with more than 15,000 improvements, according Mozilla, but you have to be counting tiny changes very carefully to get to that number. More likely, you'll notice maybe two dozen new and improved features.

The major new additions include the Smart Location Bar, One-Click Bookmarks, Tags, Library, Smart Bookmark Folder, the Gecko 1.9 Engine, Malware Protection, Instant Web Site ID, and Full Page Zoom.

Features that aren't new but have nonetheless been reworked include the Add-On Manager, the Download Manager, Phishing Protection, the Password Manager, Security for Add-Ons, UI/OS Design Consistency, and Tabbed Browsing.

The Smart Location Bar is the box that where Firefox users typically type URLs. In Firefox 3, it has become search-enabled, with respect to the user's search history. Typing a terms like “jeans” will return a drop-down list of Web sites related to that term. Schroepfer acknowledged that this might diminish searches done through the search box at the top right side of the browser, for which Firefox gets paid if Google is the selected search engine. However, he said that a better use experience was more important.

Another standout feature is Instant Web site ID, which provides a way to see Extended Validation SSL certificate information, when available, by clicking on a site's favicon — the little graphic that many Web sites display to the left of the browser location (URL) bar. When you use this feature, a display box extends down from the location bar with details about the site being visited and its owner. The graphic can't be easily spoofed using JavaScript, so it should be difficult for malware sites to spoof this trust mechanism. Sites that figure prominently in cyber scams, like eBay, should benefit from this feature.

It's worth noting however that a report by Netcraft on May 16 about a cross-site scripting vulnerability on paypal.com suggests that Extended Validation SSL certificates can be abused.

Other security features deserve mention as well. The new malware and phishing protections built into Firefox 3 help prevent users from accessing sites blacklisted for hosting malware. The blacklist, which relies heavily on data provided by Google, is updated every 30 minutes.

If you haven't yet taken Firefox for a test drive, the browser's latest incarnation has a lot to recommend doing so.

See original article on InformationWeek.com