Summary: The naked Xbox emperor becomes less able to hide his nakedness and vulnerability; chief staff flees, Microsoft expresses pessimism, and money is still a problem
MICROSOFT is sometimes gloating about Xbox 360, not letting reality get in the way. The matter of fact is that Microsoft lost billions of dollars selling and repairing failed units and the selling of physical media (games) from companies that just target Xbox and help sell more units of it (i.e. good for Microsoft) suffer from counterfeiting [1, 2, 3, 4]. This is an area where game partners of Microsoft are hurt more than Microsoft itself. If anything, fake games add to the appeal of Xbox 360 while hurting the bottom line of some game studios.
“Xbox Boss Quits Microsoft Games Divisions,” reminds us this new article. Almost every Xbox boss has already left in recent years. We gave some examples and giving a complete list would take a longer time.
Here is another item from last week’s news: “PS3 to outsell 360 globally in 2010 – analyst”
If a new analyst report turns out the be on the money, Sony will sell roughly 3.5 million more PS3s this year than Microsoft will Xbox consoles, which mark a turn of tides in the current-gen battle.
Another news item: “PS3 Increases Global Marketshare to 31 Percent”
The PlayStation 3 has jumped from an 18 percent market since last year at the same time, to a 31 percent share. Microsoft better watch out.
Ouch. There are other articles which speak about Sony’s edge over Microsoft and Michael Pachter, a respected analyst in this area, has tough words:
i. Pachter: Microsoft Wants to Own the Internet
ii. Pachter: No browser for 360 as Microsoft wants to “own internet”
Speaking on the latest version of GameTrailers show Pach Attack, Wedbush Morgan analyst Michael Pachter has explained why he feels Xbox 360 will never have a browser. It’s all down to ownership, apparently.
In response to a question on the subject, Pachter said:
“The 360 doesn’t have a browser, and never will, because Microsoft’s vision when they made the original Xbox was to own the internet. The way you own the internet is to make sure all traffic that passes through your box is controlled by you.”
Pachter opined that adding social media content to Live is acceptable to Microsoft because it still doesn’t allow open browsing.
“Microsoft [said], ‘You are not getting out of this box unless we control your access.’ So when you replicate Facebook, Twitter, Nextflix on the 360 it’s not the same. You aren’t actually going to those sites; you are going to a Microsoft-controlled site where they know exactly what you are touching.
Analysts may be biased, right? Well, how about this new article?
Former Microsoft Exec Says Natal Will Fail
In an interview with Retro Gamer, Scot Bayless, a former studio manager at Microsoft, said that he believes Project Natal will fail.
Bayless experienced the failure of the 32X peripheral for the Genesis when he was a Senior Producer at Sega and told Retro Gamer that he believes Natal could see a similar fate.
“When I met with Microsoft in 2008 to look at Natal I asked: ‘When will you integrate this into the 360?’ Their response was: ‘We’re probably going to wait and see on that.’ To which I said: ‘Then you’re going to fail.’”
Bayless believes that Natal will fail because it will split consumers between those who have the peripheral and those who don’t and will act as a disincentive to developers. “Plays like this always fragment and the disincentive to developers is powerful; when I’m spending tens of millions on a game, the last thing I want to do is lose 90 per cent of my market.”
People are already complaining about the expected price of Natal [1, 2, 3, 4], possibly showing that scepticism was worthwhile. Why did the leadership of Xbox leave just months before Natal even had its début? Are they not excited? Were they overwhelmed by impatience? The matter of fact is that Natal merely replicates what other consoles already have and it costs almost as much as a Wii console. It makes no sense. Natal will change nothing and the name is terrible too. What was Microsoft thinking? Rumours that it’s renaming Natal are afoot [1, 2]. Even Ballmer is unhappy.
It seems that Microsoft CEO Steve Ballmer is dissatisfied with the dreary performance shown by the company’s non-core business. This was evidenced when the company axed two of its top consumer product executives in games and mobile.
Over a year ago Ballmer called the Xbox business “funny” because he admitted that they hadn’t figured out a way to actually make money from it. How come a lot of the mainstream press misses this simple factoid? Dabbling one’s toes in many ponds does not guarantee more success; it’s about profitability. It is possible that Microsoft will quit the consoles business within years as it carries on shrinking. █
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Original photo here, fair use for humour purposes
Summary: Microsoft and x86 stakeholders are falling behind mobile device kings like ARM and wonderful platforms like Linux
LINUX is currently doing to Microsoft on the tablets what it did to it on sub-notebooks in 2008 and 2009. GNU and Linux are shredding Microsoft Windows margins and leaving two monopolies out of the game. There are two Linux-based operating systems that do this at the moment (Linux is their platform). One of them is WebOS and the other is Android, which the majority of tablets seem to be running (Maemo seems to be sidling with x86 these days, under the MeeGo banner).
What does Microsoft plan to do next? Well, it will probably try the same dirty tricks it used against sub-notebooks (“netbooks™”) with GNU/Linux. For those who missed it, there are posts such as:
Computex is coming and Microsoft is rumoured to be trying the same strategies with OEMs and with Intel [1, 2, 3, 4, 5]. As some of these articles rightly state, Microsoft and Intel have sympathy for each other and they are attacking Google because it supports ARM with Linux. Microsoft and Intel attacked OLPC when it ran GNU/Linux and AMD, so it’s a familiar routine.
In reference to the image of the top, it’s intended to depict the Linux-based WebOS, which beat Vista 7. Galen Gruman wrote the following article some days ago (also published here under a different headline):
Why the Fate of Windows 7 ‘Slate’ Tablet Is Sealed
The quiet disappearance of the HP Slate — Microsoft’s great tablet hope — shows that dream has died.
The HP Slate did not disappear. It just dumped Windows and Microsoft.
Having looked at Google News yesterday, we found no headlines about “Vista” and only around 10 about “Windows 7″ (surveying 7 days of news). There were also no headlines we could find with “Bing” or “Silverlight” in them because these are dying products in growth terms. So anyway, Vista 7 is failing in tablets [1, 2, 3] and Microsoft cannot afford to let it slide as a PR blunder. Damage control comes from Ina Fried and others, the party line being “Microsoft didn’t need Slate anyway.” It’s a sour grapes classic.
Microsoft made a huge deal about Slate at the beginning of the year when Ballmer bragged about it. Here is a photo. “HP Slate officially alive, ditching Windows 7 for Palm WebOS,” says the first among the following bunch of articles (we covered the confirmation of rumours last week).
This whole development gives an example for other tablets makers, insinuating by example that they have nothing to look for in Windows because HP rejected it for tablets. Linux is becoming abundant, Windows is becoming redundant. █
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Summary: Microsoft’s government affairs as described by the past week’s news, along with analysis and references
IN THE previous post we showed that Microsoft is knowingly lying to the public about security. Despite all this, Microsoft wants all taxpayers to pay for its security mistakes [1, 2, 3, 4, 5, 6, 7, 8] while it instructs government with former government staff which it hired (Charney for example). “Microsoft Researcher Calls for Information Literacy,” says this new article. Who’s controlling who? Shouldn’t the government give advice to Microsoft, which carries on lying about security? Well, quite frankly, as it was put in an earlier post about Christine Gregoire, it is Microsoft which tells the government what to do, not the other way around. Here in the news we see Republicans (GOP) contracting Microsoft to create a Web site:
The GOP teamed up with Microsoft to develop the site, “Americaspeakingout.com. ” The online portal allows citizens to log on wherever and whenever they want to talk, blog or tweet about what issues they think are the most important priorities for Republicans to champion on their behalf.
For those who do not know, Steve Ballmer and Bill Gates personally fund Republicans and there is a Microsoft-Republican National Committee (RNC) connection. It’s probably the Republican who helped Microsoft escape prosecution and splitting after many crimes had been committed .
Here is another article about it. The “Republicans’ new Web site not exactly what they hoped it would be,” says the Washington Post.
Republicans were very pleased with their technological sophistication as they introduced the Web site, America Speaking Out a ceremony at the Newseum. Rep. Kevin McCarthy (R-Calif.), who created the program, said that to get software for the site, “I personally traveled to Washington state and discovered a Microsoft program that helped NASA map the moon.”
It’s funny that they cite/bring up Microsoft’s work with NASA, which has been a disgrace to taxpayers. At NASA, Microsoft’s “Open” (or “Open Source”) simply mean that “open source” platforms like BSD and GNU/Linux are denied access to data which their users already paid for [1, 2, 3, 4, 5, 6]. It’s all about Windows and the rest of the proprietary stack. Here is a new article about this pair:
A partnership between NASA and Microsoft to bring high-resolution images of Mars to Microsoft’s WorldWide Telescope is almost ready for public viewing.
This is not only bad association; it also gives Microsoft possession of data it should have nothing to do with, not to mention taxpayers’ money. █
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Summary: Mike Reavey, the director of the Microsoft Security Response Center, admits that Microsoft is silently patching vulnerabilities without ever reporting the problem
IT’S official. Microsoft is a liar. Again. Now there is even admission from Microsoft, confirming an issue which we first raised some weeks ago. Whenever Microsoft says it patches x number of flaws with y number of patches/bulletins, Microsoft ought to be assumed to be lying. Microsoft’s silent patching is a subject we have been covering for years and it helps explain why one in two Windows PCs is believed to be a zombie PC, despite Microsoft’s claims that all of its flaws are being addressed. All those fake comparisons against platforms like Red Hat Enterprise Linux (where Microsoft stacks up and aggregates numbers of flaws) can be thrown into the wastebasket. If convincing proof is needed, here it is. Microsoft first tried to spin it (for weeks) and now it gives up and tells the truth.
Microsoft Official Admits to Quiet Security Patching
Microsoft doesn’t report all security vulnerabilities that it fixes in its software. Bug comparisons between vendors therefore paint an incorrect picture.
“We don’t document every issue found,” Mike Reavey, director of the Microsoft Security Response Center (MSRC), said at a meeting with reporters at the company’s corporate headquarters in Redmond, Washington.
Microsoft will issue a Common Vulnerabilities and Exposures (CVE) number to a vulnerability for flaws that share the same severity, have an attack vector and a workaround. If several flaws share all the same properties, they will not be reported separately, Reavey said.
The nondisclosure of fixes was brought to light early this month by a company called Core Security Technologies. After studying the Microsoft patches MS10-024 and MS10-028, it noticed three silent fixes. Security bulletin MS10-028 addressed a flaw that would expose a user of Microsoft Visio to a buffer overflow attack, which would allow an attacker to take over control of the system.
Finally. Thanks for the honesty. So how much damage has been caused by Microsoft’s lies so far. Microsoft has been denying this for years, but not exactly denying, either. It was spinning and avoiding the actual question. It’s the art of lying without practically lying, just evading. Adobe is at least honest about its proprietary software being insecure garbage. As far as we are aware, Adobe hasn’t a long history of systematic lying, unlike Microsoft.
“Microsoft smacks patch-blocking rootkit second time,” says another new report from Gregg Keizer.
For the second month in a row, Microsoft has tried to eradicate a mutating rootkit that has blocked some Windows users from installing security updates.
Here is another one (also here):
Jerry Bryant, a group manager with the Microsoft Security Response Center (MSRC), said his team is looking into Raskin’s claims, but hinted that Microsoft wouldn’t be patching IE anytime soon. “I wouldn’t classify this as a ‘vulnerability’ though,” Bryant said in an e-mail answer to questions.
The followup says:
Will browser makers patch this? Unlikely. Microsoft’s Jerry Bryant, a general manager at the company’s security response center, said the issue isn’t a security vulnerability per se, and that Internet Explorer (IE) falls for the scam because that’s the way browsers work.
“Working with [Raskin's] proof-of-concept, as written, is expected,” he said in an e-mail Tuesday when asked whether Microsoft had a fix in mind for IE.
Let’s remember how much damage was caused this year because Microsoft had refused to patch known Internet Explorer flaws for five months [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12]. Where is the liability [1, 2, 3, 4, 5]? Watch what it happening in Denver right now.
Denver officials have asked the FBI, Denver police and Microsoft Corp. to help them identify the person or people who have hacked into the city’s website twice in the past week.
If Microsoft gets involved, then it almost must be a Windows server. █
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Summary: Media companies are allowing themselves to become tools by which a monopoly abuser gains more power over their audience
THE BBC’s service to Microsoft [1, 2, 3, 4, 5, 6, 7, 8] is not too shocking, especially when one considers the intersection with Microsoft UK staff [1, 2, 3, 4]. We sometimes call it “MSBBC”, along the lines of MSNBC.
“BBC partners with Microsoft for new social iPlayer,” tells us this new post from a Microsoft boosting Web site. There is more information here:
BBC And Microsoft Team Up For A New Video On-Demand Service: iPlayer
The BBC has announced that it has struck a deal with Microsoft and has launched the beta version of a new video on demand service: iPlayer.
The last time the BBC worked with Microsoft it managed to exclude Apple Mac OS X and GNU/Linux users. It also ended up paying outrageous amounts of money for some DRM deal with a convicted monopolist which delivered bad service (the BBC ended up running to Adobe for help).
If the BBC is trying to make itself look like more of a joke, then it’s definitely succeeding. Check out this new article from MSNBC. They actually inject disclosures into the depths of articles:
(Msnbc.com is a joint venture between Microsoft and NBC Universal.)
So why is NBC Universal involved with Microsoft in the first place? Microsoft is clearly not in the news business, is it? This whole MSNBC situation is one that we last covered two weeks ago. The BBC is falling into a similar trap.
In other new, “Netflix Spreads DRM Evil With Microsoft,” says this headline.
Netflix has selected Microsoft PlayReady technology and the Protected Interoperable File Format (PIFF) for use in new Netflix ready devices and applications.
The corrupt Samsung has just done something similar and this move from Netflix is covered in:
Here is the press release. They actually brag about it. It’s not passive acceptance. █
“DRM is the future.”
–Steve Ballmer, Microsoft CEO
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Summary: Christine Gregoire’s apathy, indifference or fear of her colleague/s who came from Microsoft leaves her incapable of doing the right thing and demanding tax money from Microsoft
WE have already explained why attempts by Bill Gates Sr. to change tax law are self serving [1, 2]. In short, they hardly increase tax imposed on himself and his family and they do help Microsoft justify its legalised tax evasion. Here is a new article titled, “Trust Gates, Sr.? Washington state liberals? No way!”
Bill “I have my fortune, now I want to tax yours” Gates, Sr. wants to tax all of those “rich people” with a state income tax.
His “rich” threshold is $250,000 in income per year.
What a deal. Our property taxes and the B&O tax will be cut.
We can count on the state to do the cuts after we vote this tax in?
As we stated before, this would work pretty well for Microsoft and the Gates Foundation, which receives tax exemptions it cannot quite defend because it operates like a business. What are Washington’s heads going to do about it? Probably nothing because they are surrounded by former Microsoft employees like Hunter. Here he is mentioned again by Microsoft Nick in Seattle:
(A 17-year Microsoft veteran, Hunter left Redmond in 2000 after jobs such as program manager for Microsoft Access and general manager for Microsoft Commercial Internet System. He winced when he looped a Google badge around his neck Tuesday.)
As we showed some weeks ago, Microsoft used its external PR department (Waggener Edstrom) to help lobby against taxing Microsoft. It was a real PR blitz and Governor Gregoire is stuck in the middle, somewhere between former Microsoft manager/s, lobbyists, and AstroTurfing. “Governor Gregoire Isn’t Clueless, She’s Gutless,” says the headline of this latest post from a former Microsoft employee. He protests against the company’s tax dodge, which left the Governor acting more like a marionette than a representative of Washington’s citizens.
Her answer confused me since the bill she just signed gave Microsoft a huge effective tax cut, changing the royalty law from a tax on gross worldwide revenue to one only on sales to Washington State customers. Whereas Microsoft will earn approximately $20.7 billion in worldwide licensing revenue this year, its sales to Washington State are a tiny fraction of this. So having slashed Microsoft’s tax exposure, what exactly did Gregoire want to bring back?
Furthermore, every effort in the Legislature, spearheaded by 17 year veteran ex-Microsoftee and Chair of the Finance committee Rep. Ross Hunter, seemed geared towards rewriting the system in favor of Microsoft … the legislation even includes language which grants Microsoft amnesty on its past 13 year Nevada tax dodge, an estimated $757 million in unpaid taxes.
In the year of a $2.8 billion budget gap, Gregoire chose not to cast Microsoft as a tax evading villain, enforcing the old royalty tax in a PR and legal coup that might have netted the state $100.7 million this year (note: that’s more than $84.7 million) not to mention $1.2 billion in past payments, interest and penalties, instead she chose to raise the business service tax rate, create new “7-11″ taxes on beer, wine and candy and to cut vital services including unemployment benefits to the disabled.
The Two Biggest Myths About Microsoft in Washington State
Rather than worry about the next ten thousand high paying technology jobs Microsoft’s creating in India, China, Texas and elsewhere, she wants us to believe she’s fighting the company to return its 100 – 200 Nevada managed lawyers, paralegals and accountants who run its (formerly) tax avoiding royalty business. As it only takes a small number of lawyers and accountants to dodge $100.7 million annually in taxes, Microsoft’s tax avoidance jobs don’t scale the way it’s next big technical success like Azure, or Natal or Kin might.
The biggest myth in Washington State is that Microsoft plans to grow its next ten thousand jobs here. The second biggest myth is that if we tax the company more it will leave. The painful truth is that it’s already engaging in a number of steps to reduce its growth (and even downsize) here and we’d have to pass a lot more bad law like the one Gregoire just signed if we want them to stay.
Meanwhile, no one in state government has responded to legal precedents that suggest the state might have prevailed in a lawsuit to collect that billion in unpaid royalty taxes from Microsoft. Why would they, aren’t we all on the same team?
Gregoire is being used by Microsoft to keep injustice in tact and other companies do something similar (to a greater or lesser degree). From last week’s news we have another corporate opposition to tax:
The effort is led in part by the U.S. Chamber of Commerce and an alliance of companies including IBM, Microsoft Corp. and General Electric Co. They are targeting a measure that extends aid to unemployed workers, promotes bonds for infrastructure projects and renews more than three-dozen business tax breaks, including a credit for experimental research that many of the companies support.
Speaking of financial affairs, a short while ago we explained that money could be passed by Microsoft to SCO through Pequot Capital, whose manager got busted and escaped with a settlement but no prison sentence. Here is some more coverage of this corruption:
The SEC separately brought an enforcement action against Zilkha, which is continuing in an administrative proceeding before the SEC.
The SEC said that in Jan. 2009 it first received direct evidence that Zilkha had material, nonpublic information about Microsoft, including copies of emails that had been located on a computer hard drive that was then in the possession of Zilkha’s ex-wife.
Separately, the S.E.C. has filed a complaint against David Zilkha, a former Microsoft employee who later worked at Pequot, accusing him of tipping off the hedge fund and Mr. Samberg with nonpublic information about Microsoft’s earnings, the agency said in a statement.
The case against Mr. Zilkha will continue in an administrative proceeding before the commission, the agency said in a statement.
Let this teach us what happens when employees like Hunter move from Microsoft into another entity where mischief and corruption become more likely. Shouldn’t Gregoire just expel someone like Hunter for consistently serving his former employer’s interests whilst in government? No wonder such a small proportion of the US population trusts the government. These numbers may have improved when Bush left office, but they carried on declining since then. Industry and governance ought to be separated, but Microsoft won’t let them be. █
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Summary: After the disaster in the Gulf it should be easier to persuade Bill Gates to stop harming the environment and impoverished populations
THE IMAGE above is an Amnesty UK advertisement which the Financial Times refused to publish. The image is intended to ask shareholders of oil companies to stop investing in them. For those who do not know yet, the Gates Foundation has big investments (i.e. for-profit) in BP (also Exxon Mobil) and there is a video on the subject of the consequences. The short story is that the Gates Foundation harms Nigerian children (killing many of them or spreading polio) while pretending to help African children and saving the environment. An investigation done by the Los Angeles Times showed this a few years ago.
Please tell the Gates Foundation to stop investing in BP. Now there is a more compelling reason (Gulf incident). Previously, when people pledged for it, the Gates Foundation declined to review its portfolio (we covered this years ago). █
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Summary: A critical look at the scarcely-reported endeavours which the Gates Foundation is supporting
THIS is the last part of this week’s coverage [1, 2, 3] of the Gates Foundation, whose lesser-known activities have become more blatant in recent years. Dr. Paul Williams, a prolific writer in some major news sites, says that Bill Gates is funding an Islamist movement, potentially but not necessarily taking us back to Bill Gates’ relationship with Prince Al-Waleed bin Talal Al Saud [1, 2].
Bill Gates Funds Gulen Islamist Movement
The Fethullah Gulen movement, which seeks to restore the Ottoman Empire, has found a friend and benefactor in Bill Gates of Microsoft fame. Mr. Gates is ranked the third wealthiest person on planet earth.
In 2007, through the Texas High School Project, the Gates Foundation shelled out $10,550,000 to the Cosmos Foundation, a Gulen enterprise that operates 25 publicly funded charter schools in Texas.
The Internal Revenue Service Form 990 for Cosmos shows that the Cosmos Foundation received $41,570,721 from taxpayers.
“Another empire to permeate and peddle Microsoft products/services to,” remarks Ziomatrix. Gates Keepers accuses Gates of paying Mugabe (source does not quite confirm [1, 2], but maybe we are missing something).
Meanwhile, the press continues to discuss the many billions of dollars the Gates Foundation is investing in companies such as Walmart. Gates has just doubled his investments in Walmart; this was disclosed shortly after having the Walmart management over at Microsoft (with Bill Gates attending) and the press is adding to the list attendees the CEO of Bank of America.
Bank of America CEO Brian Moynihan swings through Seattle
Moynihan met with several hundred of them during his visit. He also met clients and attended Microsoft’s annual CEO summit.
Microsoft is hosting events for government people and bankers. Even Rupert Murdoch attends. Why is Microsoft getting involved in all of this if not in order to influence powerful people?
Here is another new report which we found interesting. “Starbucks co-founder visits coffee program funded by Gates Foundation,” says Bill’s press (the Seattle Times which always glorifies him without exception).
They dropped by the Addis Ababa offices of TechnoServe, which in 2008 announced a four-year, $47 million grant from the Bill & Melinda Gates Foundation to be used in its ongoing effort to improve coffee quality — and therefore prices to farmers — in Kenya, Tanzania and Rwanda. The program now includes Ethiopia.
This is also covered here, but watch the sole comment on the article. The comment says: “Mr.Jerry Baldwin knows coffee farms was confiscated from the rightful owners in 1975. Still under government control. Land ownership is still not allowed. Not only coffee farms but coffee businesses was confiscated recently, using the communist system before or any excuse now.
“Knowing this Mr. Jerry Baldwin is looking the other way selling coffee from confiscated land. Do you think this will be allowed in America?
“Kind Americans are fooled when they are told this is helping the “poor farmer” The poor farmer used to own the land and coffee and now is watching him and many others doing business with a government who took their land.
“This is stolen coffee not Fair Trade coffee. Tell kind Americans the truth.” █
“The Gates Foundation also held steady with large stakes in fast food chain McDonald’s (MCD), beverage maker Coca-Cola (KO), heavy equipment maker Caterpillar (CAT), waste services firm Waste Management (WM), energy giants Exxon Mobil (XOM) and BP (BP) and discount retailer Wal-Mart (WMT).” (source)
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