07.25.10

IRC Proceedings: July 25th, 2010

Posted in IRC Logs at 6:03 pm by Dr. Roy Schestowitz

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Microsoft Still Loses Billions of Dollars Online

Posted in Finance, Microsoft at 5:27 pm by Dr. Roy Schestowitz

“Sadly, many of these brilliant people have been blinded by the stock price and unable to see that Microsoft is also the key architect of the greatest financial pyramid scheme this century.

–Bill Parish

Summary: The side of a monopolist’s operations that it does not want the public to know about

SEVERAL HOURS ago we wrote about Microsoft’s results, which seems to be a case of accounting tricks. According to Business Insider, Microsoft continues to lose about $2,000,000,000 per year because it’s failing on the Web.

Microsoft’s Windows 7 is blowing the doors off, but the company’s online division continues to piss away a fortune.

How much, exactly?

Nearly $2 billion a year.

How did Microsoft respond to Business Insider? Its lead spinner mentioned search (Bong [sic] is a complete disaster) and told off the author, Henry Blodget. He recently said that “odds are increasing that Microsoft’s business will just completely collapse.” █

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Intellectual Monopoly Owners Association Wants Patents Off ACTA and the Dangers of Monopoly Are Explained

Posted in Europe, Law, Microsoft, Patents at 5:15 pm by Dr. Roy Schestowitz

Summary: The Intellectual Property Owners Association (IPO) does not want the ACTA to strengthen its funders’ monopolies; more news about monopolies and their tactics

“IPO asks US to remove patents from the scope of ACTA, text defines “intellectual property” broadly,” says the president of the FFII, pointing at this document [PDF]. It’s dated June 25^th (a month ago) and it starts by saying that “Intellectual Property Owners Association (IPO) appreciates the circulation of the Consolidated Text of the Anti-Counterfeiting Trade Agreement (ACTA).”

IPO correctly points out that “Counterfeiting is making a copy that is a fake – it is forged to look real and intended to be passed-off to the public for what is in fact real. Consumers may even know that what they are purchasing is a counterfeit, (i.e., a “knock-off” DVD sold rather inexpensively at a street corner stand). Furthermore, the counterfeit may also pose significant health and safety risks to our citizens.”

“ACTA goes far beyond addressing the subject matter of counterfeiting.”
      –IPOACTA basically mixes that with copyrights in order to apply pressure and carry out Hollywood’s mission (under the falsehood that ACTA is necessary just to impede fake medicine).

IPO says accurately that “As currently drafted, given the expansive use of the broadly-defined term “intellectual property,” ACTA goes far beyond addressing the subject matter of counterfeiting.”

It is true that counterfeiting can cause damages, but that mustn’t be confused with intellectual monopolies. That’s something which ACTA negotiators/apologists like Pedro Valesco-Martins, Paul Rübig, and Luc Pierre Devigne have been doing in Europe, for example. These people help harm Europe’s patent law in the same way that New Zealand's patent law is currently being ruined by adding software patenting through a loophole (the mainstream press continues to report about it somewhat inaccurately). Europe’s ACTA boosters have been repeating the counterfeiting talking points while actually referring to a controversial document which encompasses a wide range of issues (patents included), not just counterfeiting. We recently learned that Luc Pierre Devigne fled or got fired. Serves him right for his arrogance.

As a little lesson regarding the problem with software patents, consider patents which are almost everywhere that involves video. We are talking about MPEG-LA, which is a patent parasite that we covered in:

• Canonical Needs to Tell Ubuntu Users How Much It Paid MPEG-LA for Patent ‘Protection’
• Microsoft and MPEG-LA Called “Patent Trolls”, Antitrust Complaint Filed
• Patent Troll (MPEG-LA) May Own Your Personal/Family Videos
• Alexandre Oliva Explains Why the Patent Troll Larry Horn (MPEG Cartel) is Bluffing
• “We’re in the Era of Digital Video, and It’s a Mess,” –Steve Jobs, MPEG-LA Proponent/Lobbyist
• Simon Phipps: “MPEG-LA is a Parasite Using Standards Bodies as Its Host, Whether They Want it or Not.” (and a Rant About Banshee/Mono)

The H currently writes about “commercial licences for H.264 encoder x264″ (including the unacceptable terms), but this is not satisfactory for software freedom.

A commercial x264 license is only required by users who link the x264 library to proprietary software or software which is otherwise incompatible with the GPL and who want to sell their software commercially. Interested users should contact x264 LLC. Garrett-Glaser points out that all vendors are obliged to pay license fees to the holder of the H.264 patent, i.e. have to sign a contract with MPEG LA.

H.264 is a good example of quiet addiction that develops without sufficient scrutiny until it’s too late. It poisons media files along with their contents.

Well, it’s time to break the H.264 ‘addiction’, based on the lessons we learned from Windows. “Get them while they’re young” is the key slogan of the exploiters, who obviously include Microsoft.

Ashlee Vance recently wrote a good piece in the New York Times that touched on a concept well-known to every major company catering to consumers or other mass markets: Try to get them when they’re young.

Microsoft developed its business based on this principle (Vance mostly focused on Microsoft in this piece), which helps teach us about the dangers of monopolies and what enables them to develop in the first place (except the aspect of crime). They seed the market with their copyrights or their patents, then charge at a later stage. It’s a form of ambush where the trap is the monopoly. Software patents should be rejected, patents-encumbered standards need to be rejected, and proprietary software too should be avoided (because it’s related to the former two issues, on top of copyright with draconian licensing terms). █

“They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.”

–Bill Gates

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Apple Still Smears Linux Phones Using Blatant Lies, FUD

Posted in Apple, FUD, GNU/Linux, Google at 4:28 pm by Dr. Roy Schestowitz

Summary: Apple resorts to FUD tactics against Linux-based phones that capitalise on Apple’s failures

Apple’s hypePhone 4 is both a technical failure and a public relations failure (because Apple refuses to apologise for the technical failure). Yesterday we explained why Apple's phones are hostile towards the users and Apple is hostile towards Android. Steve Jobs and his group have resorted to spreading FUD about other phones, hoping that this would somehow redeem them from their own PR mess. Today we have another new example where “Apple attacks Droid X antenna,” at least according to CNET’s headline.

This is turning into one of those charming cage matches in which wrestlers desperately try to maim each other with chains and chairs and blows to very private regions.

In a new video, posted to both its own Web site and to YouTube, Apple attempts to show that the dazzling new Motorola Droid X, which many seem to rather appreciate, also has something of an issue when it comes to being held in the Death Grip.

It’s nice to know that Apple applies its “Mac and PC” FUD tactics in its game against Linux too. It shows that Apple is indeed no friend of software freedom (some people are still in denial over this), that Apple is an elitist, and probably a dishonest company too. Who would want to make business transactions with such a company? According to this report, Apple may be going after youngsters with their DRM and artificial scarcities (which are generally discouraged in education). More on that angle in the next post. █

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Links 25/7/2010: Wayfinder Set Free

Posted in News Roundup at 4:03 pm by Dr. Roy Schestowitz

Clip of the Day

Firefox: Tab Candy

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Microsoft Kickbacks and Pressures on Dell: Lessons From Intel

Posted in Dell, GNU/Linux, Hardware, Microsoft, Windows at 1:10 pm by Dr. Roy Schestowitz

“We should whack them [Dell over GNU/Linux dealings], we should make sure they understand our value.”

–Paul Flessner, Microsoft

Summary: The commonalities between GNU/Linux and AMD are explained in the context of Dell

DELL received a lot of flak and public backlash recently, mostly because of its fair/unfair description of Ubuntu GNU/Linux, especially when it comes to security. Pressure from Microsoft was a possibility [1, 2] and Dell became the focus of attention for reasons it did not crave. More recently, Dell was again accused of a “Confusing Take” (regarding Windows vs. Ubuntu) over at Tom’s Hardware and yesterday a storm started/volcano erupted in Slashdot, which linked to this British article. The headline says “Dell drops Ubuntu PCs from [UK] website… for now” and Glyn Moody wrote: “you mean *again*? can’t they make their mind up?”

We only alluded to this news yesterday when we wrote about Intel's crimes with Dell. We did not mention this immediately because we waited for more clarifications and commentary. Here is how GreyGeek put it (he gave us permission to quote in full):

DELL stops listing Ubuntu computers in the UK

http://www.pcpro.co.uk/news/359740/dell-drops-ubuntu-pcs-from-website-for-now

Dell has stopped selling consumer PCs preloaded with Ubuntu from its website, and doesn’t know when they’re coming back.

A search for Ubuntu on the Dell UK website returns only one laptop – the Dell Latitude 2100 from the company’s business range.
…

The Dell spokesperson also suggested Ubuntu is failing to win over the public. “The reason why they’re not on our main pages is because Ubuntu systems are primarily targeted towards advanced users and enthusiasts, and the vast majority of consumers purchase PCs with Microsoft Windows pre-installed,” the Dell spokesperson claimed.

One reason why consumers might not be snapping up Linux-based systems is that Dell’s own advice page warns anyone other than open-source developers to stick with Windows.
…

In checking perhaps I’ve found a web page that Dell missed?
http://www1.euro.dell.com/uk/en/business/4x_latit_2100/fs.aspx?refid=4x_latit_2100&s=bsd&cs=ukbsdt1
Clicking on the “Customize” button I find that the Ubuntu 9.04 offering is surrounded with a graphic PUSHING Windows 7.   It doesn’t matter.  The other DELL Ubuntu offerings are:
http://www.dell.com/content/topics/segtopic.aspx/ubuntu?c=us&cs=19&l=en&s=dhs&~ck=anavml
Mini 10n
Inspiron 15n  (no webcam!)
Vostro V13 (no webcam!)
Latitude 2100 (no webcam!)

What a measly selection.    With “friends” like DELL Linux needs no enemies.

DELL’s entire Linux effort for the last three years has been, IMO, one big gigantic FRAUD, with the intent to offer Ubuntu pre-installed on a few marginal boxes without significant customization available and for only one reason: so that Microsoft can avoid charges that it holds an illegal monopoly on the PC OEM desktop.  Which it does.

The only question remaining is: “What are the advantages to DELL for allowing itself to be controlled as if it were a wholly owned subsidiary of Microsoft?

Well, we have one answer to that question already.  Just yesterday (7/23) we learned that DELL corporate has agreed to pay a $100 Million fine, and Dell personally has agreed to pay $4 Million.  Two of his lieutenants have agreed to pay $4M and $3M each.   And what did the SEC fine them for?  

They failed to disclose material information to investors and used fraudulent accounting to make it falsely appear that the company was consistently meeting Wall Street earnings targets.

If THAT is a crime then Microsoft is guilty as well. That’s how they got to the top of the pile they are setting on today.    What DELL actually did was take payoffs from Intel to not use AMD chips.

The SEC charged that Dell did not disclose to investors large “exclusivity payments” the company received from Intel Corporation to not use central processing units (CPUs) manufactured by Intel’s main rival, Advanced Micro Devices Inc. (AMD).

“It was these payments rather than the company’s management and operations that allowed Dell to meet its earnings targets,” the SEC said.  “After Intel cut these payments, Dell again misled investors by not disclosing the true reason behind the company’s decreased profitability.”
…
The SEC’s complaint charged that the exclusivity payments made by Intel to Dell for not using CPUs made by AMD grew from 10 percent of Dell’s operating income in fiscal year 2003 to 38 percent in fiscal year 2006.  It peaked at 76 percent in the first quarter of FY 2007.

In fiscal year 2007, after Dell announced its intention to begin using CPUs made by AMD, the company and the individuals charged failed to disclose the basis for the company’s sharp drop in its operating results.  “In dollar terms, the reduction in Intel exclusivity payments was equivalent to 75 percent of the decline in Dell’s operating income” the SEC said, and Messrs. Dell, Rollins, and Schneider told investors in an earnings call “that the sharp drop in the company’s operating results was attributable to Dell pricing too aggressively in the face of slowing demand and to component costs declining less than expected.”

Intel is the subject of antitrust lawsuits brought by the Federal Trade Commission and several states.  In November 2009, Intel agreed to pay AMD $1.25 billion as part of a settlement in a private antitrust suit brought by AMD.

This reveals the injustice in prosecuting corporate white collar crime: that Dell and the other people involved at both companies did not face CRIMINAL prosecution and didn’t even have to admit guilt, even though there was enough evidence to force them to pay hundreds of millions in fines, which amounted to about 10% of their annual net profit.  Perhaps if Dell and the Intel management and major share holders had to spend some hard time in jail they wouldn’t be so willing to flaunt the law for obscene profits.  It’s like a hand-slap and defacto approval of their behavior.

DELL’s behavior with Intel suggests that DELL is staying afloat, despite the poor quality of their machines and their high return rates, because Microsoft is paying them to NOT include Ubuntu on their desktops in a significant way, including not giving Ubuntu front page representation.  It also raises questions about the other PC OEMs who won’t free up their desktop for competition against Microsoft.

How Microsoft got to the top of their pile of cash is shown specifically here:
 http://www.billparish.com/msftfraudfacts.html

Financial Pyramid Building Techniques Being Used by Microsoft:

Stock option programs are an excellent benefit and many companies use them responsibly. At Microsoft, however, stock option accounting is only one of its many pyramid building techniques, what could be called a cash generating component. Additional pyramid building techniques include the following.  It is important to note that the genius of the pyramid scheme is to leverage share growth from investors using a passive investment approach based upon indexing to the S&P 500.  Most smaller and mid size technology firms are not in the S&P 500 and therefore are locked out of this key aspect of the pyramid from the beginning.

1) Earnings Management: The first and most important tool Microsoft uses is the manipulation of earnings to ensure analysts’ expectations are met.  According to an ABC News 1/22/99 article by Michael Martinez, Microsoft’s own internal auditor, a respected 30 year veteran and former partner of Deloitte and Touche, was fired in 1996 after informing management that their earnings manipulations were illegal and violations of the SEC and FASB laws.  He was given the option to resign or be fired and later settled for $4 million after suing under the Federal Whistle Blowers Act.
2) Speculating on Their Own Stock:
3) Convincing Employees to Take Less Real Wages:
4) Publicly touting the stock
5) Controlling the media.
6)  Stock Option Accounting: (You really have to read this one.  It explains how Microsoft used YOUR tax money to pay for developing Win95!
7) Purchasing future sales via equity investments:
8 ) Managing the financial analyst community.
9)  Trying to Discredit Those Seeking to Expose the Scheme:
10)  Money Laundering:
11)  Corruption of Higher Education:
12)  Manipulating Investors Who Use a Passive Approach Relying on Indexes Such as the S&P 500.

Several Impacts from Microsoft’s Financial Pyramid Scheme Include the Following:

This scheme led by Microsoft is having many unexpected impacts, a few of which are noted here.  The upcoming book will  detail additional impacts and also explain how this situation affects a variety of people in different occupations.

1)  Government Will Be Defunded.
2)  The Retirement System Is Being Plundered.
3)  Business Owners Are Exposing Their Personal Assets By Not Paying Enough Attention To Their 401K
4)  The Dollar Is Being Devalued In Relation to the Yen.
5)  False Inflation is Emerging.
6)  The Integrity Of The Markets Is Being Destroyed
7)  The Fraud Is Accelerating
8 )  Microsoft auditor, Deloitte and Touche, issued a “clean” audit opinion. (The auditor for  Deloitte and Touche who originally did the work reported several of the problems mentioned above and was fired and his character impuned publically.  He sued and won almost $5M in damages.
10) Significant one day stock value declines at major corporations that pay more in cash wages than stock options are accelerating.
11)  Microsoft organized a lobbying effort to defund the Department of Justice, using supposedly non-partisan groups like the Citizens for a Sound Economy.
12)  Conversions to cash balance pension plans are increasing.  

>The State Gov agency where I worked switched to “Cash Balance” a couple years before I retired.  I had the option to not switch.  

This is another pyramid impact. What IBM employees still don’t seem to realize is that their lost pension benefits are resulting from fraud at Microsoft.  Microsoft is pilfering these cash balance plans into its pyramid scheme by overstating its earnings, thereby drawing a larger percent of the index based investment on the S&P 500 and correspondingly making it more difficult for companies like IBM to compete.  This forces these companies to cut back on real benefits in an effort to keep its earnings and stock price up.  This was also clearly identified in the original study.

These are some interesting thoughts on Dell, GNU/Linux, Intel, and Microsoft. Connected to this news (via Slashdot) we have reports from The Economist and from the Financial Times.

Intel seems close to putting behind it a decade of market abuse complaints from round the world in a settlement with the US Federal Trade Commission this week.

The deal will include concessions on the US chipmaker’s business practices, according to a person familiar with the settlement, but will not include fines because the FTC does not have the authority to issue civil penalties.

[...]

It also alleged Intel secretly redesigned key software to stunt the performance of rivals’ chips that were licensing its “x86” microprocessor design.

But, in addition, the FTC alleged that Intel was repeating in GPUs its tactic of slowing down competitors, such as graphics chipmaker Nvidia, so that it could catch up.

As we summarised this yesterday, Microsoft, Intel, and Dell are exceptionally corrupt and it pays off for them. █

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Piled In

Posted in Boycott Novell, Finance, GNU/Linux, Microsoft at 12:05 pm by Dr. Roy Schestowitz

Summary: Lack of news about Microsoft not an indication of nothing worth saying about its current affairs/actions

WE ARE WELL behind when it comes to Microsoft news (vacations take their toll). Truth be told, we have not kept track of Microsoft for almost 3 weeks now and we ought to make up for it by catching up at these important times. We still have a pile of news about Microsoft (including financial news), but this task takes a really long time as it involves a lot of reading, with up to 2,000 headlines at the moment. It will maybe take another week to go through it all and properly research the material.

“Wall Street has already spoken and Microsoft’s stock declined right after the latest financial results.”One urgent matter is Microsoft’s financial report. Wall Street has already spoken and Microsoft’s stock declined right after the latest financial results. Days ago we explained very quickly why the press misreports the results, just as Microsoft’s PR intended. Remember that Microsoft announced more layoffs just weeks beforehand [1, 2]. It wasn’t because Microsoft performed “too well to keep its staff”; the reality of the matter is that Microsoft has serious issues, especially with foresight. Some terrible early reviews of Vista Phone 7 [sic] indicate that Microsoft is dying in the mobile space, still [1, 2]. Mozilla won’t even bother with the damn thing, which tossed away all older applications (loss of backward compatibility). From the news:

Mozilla on Windows Phone 7 – “We’re not going to bother.“

Christopher Blizzard, Director of Developer Relations and Open Source Evangelist at Mozilla spoke to Gizmodo about the future of their browser in the new order, where they are facing competition from Google on the desktop and mobile, and are also seemingly excluded from many mobile platforms, such as the iPhone and Windows Phone 7.

Readers can help us keep up with Microsoft news by submitting articles which we will happily publish, as usual. Positive GNU/Linux news is still a higher priority and our most popular posts are the daily links that we now post more often than before. We also try to catch up with older news that was missed — positive news for a change. █

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Distrusted Media and the Illusion of Microsoft as an Open Source Player

Posted in Deception, Free/Libre Software, GNU/Linux, Microsoft at 11:47 am by Dr. Roy Schestowitz

Summary: New press coverage which fails to inform readers about Microsoft’s real views and intentions when it comes to “Open Source”

EARLIER THIS month we wrote about Microsoft’s decision to give Russia’s secret services access to Vista 7 source code [1, 2], which does not make the operating system open source, it just makes it less secure. It means that the “new KGB” — not just the tyrannical company from Redmond — will have exclusive rights of knowing what code runs on hundreds of millions of machines. It’s a power game. Paul Rubens writes about the subject as follows:

What do you do when you find a serious vulnerability in Microsoft server OS source code? You could tell the whole world about it, or you could keep schtum and just inform Microsoft. Or, of course, you could tell no one and use the knowledge to go and attack other systems.

What would the Russians do? That’s an interesting question, and I guess we are about to find out because Microsoft (NASDQ: MSFT) recently signed a deal with the Russian Federal Security Service giving it access to source code for Windows Server 2008 R2, Office 2010 and SQL Server.

This morning we wrote about Microsoft pretending to be "Open Source". Its usual bunch of “infiltrators” do this by pressuring people to pay attention to them. Last week we also saw Microsoft boosters like Gavin Clarke and Marius Oiaga pushing the same talking point about Microsoft “embrac[ing] ‘official’ open source” and releasing “open source” [1, 2] (we also found one example where this talking point was pushed not by a Microsoft booster). Over at IDG, two Microsoft-oriented people (one of whom of runs the Microsoft Subnet at IDG) ran a show on “open source” where the guest was talking about Fog Computing, not open source. Are they out of their minds? Well, it's IDG after all. Some of the predictions from these IDG Microsoft blogs are echoed here and it is not helpful to the ‘real’ “Open Source” movement — the core people who actually promoted Free software under a different name/banner, well before Microsoft and its former staff were promoting the whole 'open' core nonsense. Here is another new example where the Microsoft booster (last mentioned here) promotes SugarCRM, an ‘open’ core company which has just announced that it will run as part of Microsoft’s Fog Computing hosting plan (Azure) in the midst of controversy. All of these things ought to be understood because this same IDG blog which calls itself “open source” is also home to two bloggers from Microsoft-oriented/sourced/accommodated companies that spread fear about the GPL and then monetise that fear. Those companies are OpenLogic and Black Duck (Black Duck Software boasts in a new press release that it “Maintains Exceptional Growth Pace in Q2,” which proves that GPL fear works well for companies like these -- those that pretend to promote open source but actually sell fear and proprietary software). Joining them last week was this newcomer called nSyte, whose business seems similar if not identical. In its press release it says:

New SaaS Audit Tool from nSyte Software to Reduce Risk Associated with Use of Open Source Code in Proprietary Software

Colorado Technology Start-up Takes a Proactive Approach to Addressing a Growing Problem in the $220 Billion Dollar Software Development Industry Involving the Inadvertent Use of Protected Open Source Code

This was covered in at least one publication that we found:

Lafayette, Colorado-based nSyte Software, a startup developing software testing tools, said today that it has launched a new open source code auditing tool.

The way they put it makes it sounds like they launched “a new open source” something, but what they actually launched is an “open source code auditing tool” which is probably proprietary like Black Duck’s. They make money from fear of open source, not from producing open source.

Lastly, it ought to be pointed out that Dr. Dobb’s Journal feeds the ‘Microsoft press’ and gives the impression that Microsoft is “Testing Open Source Waters”. Although we mentioned this before, Dr. Dobb’s Journal is now owned by CMP Technology/United Business Media, which runs some Microsoft-sympathetic sites like Information Week (it still places large Windows advertisements in articles about GNU/Linux). There are some publications out there (IDG included) which depend on Microsoft’s business, namely contracts (e.g. IDC) and advertising. █

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