Adobe Systems plans to extend its AIR (Adobe Integrated Runtime) software to Linux later this year, Adobe CTO Kevin Lynch said during the company's Engage event in San Francisco on Monday morning.

Formerly called Apollo, AIR is the company's runtime enabling RIAs (rich Internet applications) to run offline on the desktop. Right now, AIR 1.0, which debuted Monday, is limited to Windows and Macintosh systems.

"This could enable a whole new frontier of applications for Linux," Lynch said. "We're actually looking for Linux users to help us test it." The Linux version of AIR is currently in an alpha format, according to Adobe.

Lynch also stressed the company's plans to have AIR run on mobile devices. Mobile as a whole will grow in its emphasis, Lynch said. "I believe [the emphasis] is going to shift in the next few years where we're actually going to start talking about mobile first and making it work on the big screen [afterward]," Lynch said.

Asked whether AIR would be extended to Apple's iPhone, Shantanu Narayen, Adobe CEO, deferred questions on this to Adobe partner Apple.

"We're excited about seeing it on iPhones," Narayen said. He cited Adobe's plan to make AIR ubiquitous on different devices, saying, "Our goal is AIR everywhere."

Meanwhile, Microsoft in a prepared statement cited security concerns about AIR.

"There is a significant risk in letting Web applications run loose outside the browser security sandbox. [Microsoft] Silverlight applications run within the browser security sandbox," Microsoft said.

But AIR features modifications to enable applications to run securely, said Michele Turner, Adobe vice president of platforms.

"It's not that it's running wild and free on the desktop. We kind of created our own sandbox," she said.

AIR applications run with the same security model as any exe executable file. Also, AIR applications are signed by the developer, she said.

Microsoft stressed its own approach to development as an alternative to AIR.

"Microsoft offers a dramatically different approach for creating and delivering experiences in a way that aligns more with our customers' development and deployment needs. We are building a true development platform, not just a player or a browser," the company said. "This platform spans Windows to the Web and includes emerging surfaces, such as the media/living room (Xbox360, Media Center PC), as well as mobile devices. Even though each surface has differing capabilities and form factors, our platform enables easy repurposing through shared tools and project formats. Having unified tools, languages, and markup allows developers and designers to 'learn once and apply everywhere.' "

Microsoft technologies in this space include Windows Presentation Foundation and Silverlight.

Cyberlaw author and professor Lawrence Lessig has decided not to run for the U.S. Congress after briefly flirting with the idea, he announced on his blog Monday.

Lessig said last week he was considering a run for the House of Representatives seat in Silicon Valley vacated upon the death of Rep. Tom Lantos, a Democrat, earlier this month. Lessig, an advocate for free software and online civil liberties, had considered a campaign after a "draft Lessig" movement launched online.

But Lessig wrote Monday that a run for Congress would not help his Change Congress initiative, which he launched this month. After consulting with a pollster, Lessig decided there was also "no possible way" to achieve the name recognition he needed to run against Jackie Speier, a popular former Democratic state senator in California, in the primary election scheduled for April 8, he said in a video on his blog.

"Certainly, we would lose this race, and not just lose in a tight contest, but lose in a big way," Lessig said.

Losing big, he said, would not inspire others to join the Change Congress movement, focusing on getting lawmakers to stop taking money from political action committees and lobbyists and to stop adding so-called earmarks for special projects in appropriation legislation.

Lessig expressed "regret that this movement, this challenge to change Congress, doesn't have, here, an early and easy victory."

Lessig thanked people who already sent money, said they'd volunteer or weighed in on whether he should run, "especially the many friends who in the harshest way told me it would be a mistake."

Several posters on Lessig's blog applauded him for deciding not to run. "Ultimately, I think it is a good call," wrote one. "You ... have always had your eye on the bigger picture, on the long-term struggle and I am glad we have you fighting on our side. Looking forward to participating in the Change Congress movement."

Lessig, a Stanford University professor, is author of books such as "Free Culture" and "Code 2.0." He has served on the boards of the Free Software Foundation, the Electronic Frontier Foundation, the Public Library of Science, and Public Knowledge.

Phishers, cyber-squatters, and other online fraudsters continued their assault on well-known corporate brands over the last 12 months, increasing the burden on the companies being targeted and further frustrating consumers.

According to MarkMonitor's annual "brand-jacking" report -- which attempts to gauge the level of damage being extracted on corporate reputations by online scammers via schemes like phishing -- problems only intensified last year for businesses in defending their public images online.

Among the biggest shifts from the findings of the company's previous report was a dramatic spike in 2007 in the prevalence of cyber-squatting, or the practice of occupying a URL that either contains or is constructed to appear similar to the name of an established corporate brand for the sake of deceiving users or carrying out some form of fraud. MarkMonitor, which bases its results on investigations of public records, including URL registration applications filed with Internet Corporation for Assigned Names and Numbers (ICANN), estimates that cyber-squatting rose by 33 percent in 2007 compared to the previous year.

The research firm said that it observed some 382,248 instances of cyber-squatting during the fourth quarter of 2007 alone with a particularly noticeable increase in the use of brand names and trademarks utilized to drive traffic to illegitimate, unauthorized, or offensive Web sites through popular search engines.?

MarkMonitor experts said that the renewed growth in cyber-squatting, which had become less prevalent than brand attacks carried out using phishing schemes over the last several years, is likely tied to the large number of people trying to make money through online advertising scams.

While people could make money through buying generic URL names and building sites that pointed to advertisements using legitimate means in the past, the increase in operating expenses driven by the price of attractive domains names is pushing wider brand abuse, experts said.

"With well-known terms going for six to seven figures in legitimate domain auctions, people trying to make money by driving traffic to online advertising find themselves struggling because all the most recognized dictionary words and phrases are already gone," said Frederick Felman, chief marketing officer at MarkMonitor. "As a result, some of these people who are trying to make money are resorting back to exploiting brand names to do that."

Another increasingly common tactic emerging among cyber-squatters is the use of combinations of popular brands in URL names, the report said, such as a site recently observed by MarkMonitor at "GucciFendi.com" which adds a pair of well-known fashion brands together for the sake of drawing eyeballs. The site was not authorized by either Gucci or Fendi but could show up in Web searches for either company.

Phishing still a favorite tactic Phishing schemes also remain extremely popular in 2007. MarkMonitor said that it tracked attacks aimed at 412 different organizations during the fourth quarter of last year, an increase of 38 percent from the previous quarter and a 37 percent gain over 2006.

The report also finds that 122 of the organizations phished during the fourth quarter were being victimized for the first time. The company said that phishing scams aimed at retailers increased a staggering 533 percent over the course of 2007 with campaigns targeting retail and auction brands accounting for 50 percent of the attacks during the fourth quarter.

Interestingly, after years of hammering on financial services companies' brands, phishers appear to have moved their focus away from the market, at least slightly. The research company said that phishing attacks against financial services providers decreased by 20 percent during Q4 2007 and fell by 10 percent for the entire year.

In addition to changing the companies that they're targeting, phishers have also continued to refine both their technological and social engineering techniques, according to the report. The use of schemes aimed at people posting to social networking sites is one manifestation of the new methods for roping users in, MarkMonitor said, with attackers using the information posted on such forums to play on the level of familiarity fostered among users of the sites and launch more targeted phishing campaigns.

On the technical end, phishers have begun launching a greater numbers of attacks that integrate VoIP components in an effort to trick people into calling phone numbers to share their personal data as well as a larger variety of scams delivered via text message to handhelds.

"We're seeing a lot of interesting marketing techniques from the phishers, which shows how business savvy many of them have become; on the back end it's clear that people are moving cash around by recruiting mules and the like, it's all very professional," Felman said. "And there is a lot of really whacky stuff going on with the techniques we see with hard core blended abuse that combines voice capabilities, phishing, and malware."

Despite all the dour news, MarkMonitor said there are some signs of light around brand protection online.

Aggressive legal action carried out by some of the companies whose brands have been repeatedly tarnished by the activity as well as increasing scrutiny of new domain registrations by ICANN have helped improve some aspects of the issue, said Felman.

Prosecution on the part of financial services companies may have also helped contribute to the lower overall volume of attacks in that sector, the expert maintains.

"To fight this activity, companies need to marshal their resources, their legal and marketing teams, and operational research, to hammer at brand-jackers until they move on to more fertile fields and undefended brands," Felman said. "People are finally admitting this is a big problem that hits at their bottom line; it's very interesting to see the difference between firms who approach the problem passively and those who are more aggressive; you can do a lot to help yourself."

Advocates on both sides of the net neutrality debate descended on Harvard Law School Monday for a U.S. FCC hearing that multiple speakers suggested was crucial to the Internet's future.

Members of the FCC, along with industry representatives, legal scholars, and pro-neutrality advocates spoke at the hearing, which drew an overflow crowd.

"The Internet is as much mine and yours as it is AT&T's and Comcast's," said Rep. Edward Markey, a Democrat from Massachusetts.

Markey has filed a bill along with Rep.Charles Pickering, a Republican from Mississippi, in support of net neutrality, the idea that network providers shouldn't discriminate against Web sites or various types of traffic. The FCC is investigating complaints that Comcast has interfered with p-to-p (peer-to-peer) traffic associated with file-sharing sites.

"Network operators are making choices right now that will determine how Americans communicate, now and in the future," said FCC Commissioner Michael J. Copps. "I am not saying that any or all of these practices are unlawful. I am saying that choices like these, when you add them all together, are going to determine what kind of Internet we have in the future."

Other FCC members echoed Copps.

"Respect for the free flow of information was bred into our country from its founding," said Commissioner Jonathan S. Adelstein. "We must preserve the open and neutral character of the Internet, which has been its hallmark from the very beginning. It is clear consumers don't want the Internet to be a another version of old media dominated by a number of giants."

Gilles BianRosa, CEO of Vuze, a video service that uses P-to-P technology, said that while his company competes with Comcast in the delivery of content, the latter company holds an unfair advantage. "What we have here is a horse race, and Comcast owns the racetrack. I agree the market should decide which services win ... but there is no market without basic ground rules and transparency. ... We believe corporate assurances of good faith are not enough."

Marvin Ammori, chief counsel for Free Press, an advocacy group backing the net neutrality effort, also described Monday's discussion in sweeping terms.

"This hearing is not about technical details of managing networks, it's about the future of online TV and the Internet," Ammori said. "By targeting p-to-p, Comcast is disrupting investment and innovation in its online competition."

But David Cohen, executive vice president of Comcast, was as vigorous in defending his company's practices as its critics were in lambasting it.

"Comcast does not block any Web site, application, or protocol, including p-to-p. Period," he said.

The company only "manages" protocols such as p-to-p during limited periods of heavy traffic; does so in limited geographic areas; only manages uploads, not downloads; and merely delays, not totally blocks requests for uploads, he said.

"It's true that to maximize our customer's Internet experience, we do manage our network. But don't let the rhetoric scare you. There's nothing wrong with it," he said. "Every network must be managed. Our customers want us to manage network congestion, so they can do what they want, when they want, at reasonable speeds."

Tom Tauke, executive vice president for public affairs policy and communications at Verizon, noted that his company's investment in fiber-optic networks has resulted in exponential growth in the size of data pipes to residential homes, but network management is still necessary. "As capacity grows, so do the applications and services. This is a good thing, but you still have to have reasonable network practices," he said.

Later Monday, the hearing continued with a second panel, this one stocked with an array of technologists from the academic and commercial sectors.

"Some kind of network management is critical. ... the question is how to do that in an open manner," said Daniel Weitzner, director of the MIT's Decentralized Information Group.

At the same time, the Web's days as a primarily client-server environment are over, he suggested: "The profile of the way people use the Internet today is peer-to-peer, and we have to deal with it. But I think it poses a challenge way beyond whether we all get our BitTorrent or not. What's really at stake is everyone's ability to speak with everyone else."

David Clark, a senior research scientist at MIT, predicted the debate could ultimately be settled by moving away from current pricing plans -- which see ISPs charge varying rates for a broadband line's speed, but not for the amount of content downloaded -- to a cost schedule based more on data volume.

Eric Klinker, CTO of BitTorrent, said it is wrong for the industry to view his company as a force "endlessly consuming bandwidth."

In fact, he argued, BitTorrent has actually solved a problem: "How do we effectively move large files on the Internet?" He listed off a series of public and private-sector organizations, ranging from film studios to NASA, that employ p-to-p file sharing to deliver large files.

Efforts to thwart p-to-p traffic "would stamp out in its infancy the most promising technology we have to deliver a world of near-infinite content," he said, adding that the United States falls far behind other nations in terms of its Internet infrastructure: "Geopolitically, we might think of ourselves as a superpower, but when measured against network power we're a third-world country at best."

This article was updated on Feb. 25, 2008.

The launch of a new family of Windows server products this week will kick-start a broad shift among customers to 64-bit versions of Microsoft's server software, analysts and customers said.

Microsoft CEO Steve Ballmer is due to launch two major product upgrades at an event Wednesday in Los Angeles -- the Windows Server 2008 OS, which is due for release next week, and its SQL Server 2008 database, expected in the third quarter after delays. He's also expected to discuss Visual Studio 2008, which shipped in November.

Like their predecessors, the new products will be offered in both 32- and 64-bit editions. But several factors this time will prompt more customers to choose the 64-bit versions, including the broad availability of 64-bit x86 server hardware and the trend toward consolidating and virtualizing server workloads to reduce power consumption and improve efficiency.

The shift will happen gradually because most customers are not expected to deploy the products widely until next year. But it will mark a significant maturation for Microsoft's server products, which long were seen as an also-ran in the datacenter beside 64-bit Unix OSes from companies such as Sun and HP. It should also mean better performance for Microsoft customers.

"This will absolutely tip the scales in terms of more 64-bit deployments moving forward," John Enck, a vice president and research analyst with Gartner, said of the new products. The move will be driven by a desire among customers to get the most out of their 64-bit server hardware, he said, which means using a 64-bit OS.

The difference lies in the amount of physical memory the software can address. A 32-bit OS can address only 4GB of main memory without having to use technology tricks that diminish performance gains. A 64-bit OS can address far more memory -- up to 2TB in the case of Windows Server 2008, according to Microsoft.

That will boost the performance of some applications because they will be able to pull data quickly from main memory instead of having to retrieve it from disk, which is slower. The gains should be evident for databases and for Microsoft's Exchange Server, although line-of-business applications will see less benefit, Enck said.

Customers may also be driven to 64 bits by concerns about the future. Microsoft has said this will be the last big upgrade to Windows Server offered in both 32- and 64-bit editions, and some expect the same to be true for SQL Server. Exchange Server 2007, released in November, already is available only in 64 bits. Customers would be wise to start preparing now for a move that soon will be forced upon them anyway, analysts said.

Also propelling the move is the trend toward server consolidation. One option for that is virtualization, which allows multiple OSes and application loads to run on a single physical machine, and server virtualization requires the capacity of a powerful, 64-bit server.

"Anybody doing a deployment today would be foolish not to at least consider when and where a 64-bit OS would be a good fit," said Al Gillen, a research vice president with IDC. "It's really about future-proofing your IT environment, giving yourself the ability to support the workloads that you'll have on these servers before they are retired in five years' time."

IDC has called the lack of adoption of 64-bit Windows Server "one of the biggest missed opportunities among today's customer base." It notes that the 64-bit products will be priced the same as their 32-bit counterparts and argues that the transition is relatively easy for customers.

The 64-bit processors from Intel and AMD have maintained the x86 architecture from the 32-bit world. That means 32-bit applications can still run on 64-bit servers and that "the majority of existing 32-bit applications will run aboard 64-bit Windows Server without modification and, most frequently, with improved performance," IDC said.

Customers will need to update low-level system tools, such as security products, antivirus tools, and some system-management products, which interact directly with the Windows Server kernel, IDC said.

At the end of 2007, the research company estimates, only about 10 percent of Windows Server customers were using the 64-bit edition of Windows Server 2003. It expects that figure to approach 50 percent by the end of 2010, driven by Windows Server 2008. For new licenses sold in 2010, close to 75 percent will be for a 64-bit version of Windows Server, IDC said.

Microsoft is keen to promote the transition to 64 bits. It will give its customers better performance and will help Microsoft catch up with the Unix world, where powerful, but more expensive, servers from Sun, IBM, and HP have long been based on 64-bit OSes. Microsoft believes the products launching this week will mark "a big turning point" toward the use of 64-bit Windows software, said Ward Ralston, a Microsoft senior technical product manager.

Microsoft also is pressuring ISVs to get their software 64-bit ready after a lack of preparedness held back the transition after Windows Server 2003 was released. ISVs aren't required to have a native 64-bit edition of their software to receive a Certified for Windows Server 2008 logo, but they will need to assure that their software can run on the 64-bit OS.

Some expect Microsoft's virtualization technology, Hyper-V, to be a factor. The hypervisor will be offered free with the 64-bit edition of Windows Server 2008. Andrew Brust, head of new technology for the IT consulting company Twentysix New York, a Microsoft partner, said that Hyper-V "once it ships, is going to be huge. The virtualization space is ripe for some new competition."

Brian Randell, a senior consultant with another Microsoft partner, MCW Technologies in Los Angeles, said Hyper-V will be a major impetus for the move to 64 bits. "It demands that you have that kind of processor environment available," he said.

However, others pointed to Hyper-V's immaturity. It was originally planned to ship with Windows Server 2008 but has been delayed for up to six months. Even then it will be Microsoft's first attempt at virtualization, noted Michael Cherry, an analyst at Directions on Microsoft.

"I think there's too much emphasis on virtualization with this release," he said. Hyper-V may eventually play a significant role for Microsoft, but the company first needs to develop the required tools for managing a complex virtualized environment. After the hypervisor is released, he said, Microsoft will also need to update its Virtual Machine Manager product.

Still, Cherry is upbeat about the new products, particularly Windows Server 2008. The redesign of the OS to allow customers to install only the functions they need for particular tasks, or roles, will provide security and maintenance advantages, he said. He also pointed to the new Internet Information Server, which gives more options for running and controlling applications remotely, and a significant update to Terminal Services, which will make it easier to run line-of-business applications on a server and make them appear to the end-user as if they were running locally.

Twentysix New York's Brust said the new server products are "rock solid on 64-bit, and so too are the currently shipping versions of SQL Server, SharePoint and other server applications."

"When SQL Server 2008 ships, it will be the third version of the product to offer 64-bit support," Brust said. "Lets face it, its time to move off 32-bit."

A critical vulnerability in VMware's virtualization software for Windows lets attackers escape the "guest" operating system and modify or add files to the underlying "host" operating system, the company has acknowledged.

As of Sunday, there was no patch available for the flaw, which affects VMware's Windows client virtualization programs, including Workstation, Player, and ACE. The company's virtual machine software for Windows servers and for Mac- and Linux-based hosts are not at risk.

The bug was reported by Core Security Technologies, makers of the penetration-testing framework CORE IMPACT, said VMware in a security alert issued last Friday. "Exploitation of this vulnerability allows attackers to break out of an isolated guest system to compromise the underlying host system that controls it," claimed Core Security.

According to VMware, the bug is in the shared-folder feature of its Windows client-based virtualization software. Shared folders let users access certain files -- typically documents and other application-generated files -- from the host operating system and any virtual machine on that physical system.

"On Windows hosts, if you have configured a VMware host-to-guest shared folder, it is possible for a program running in the guest to gain access to the host's complete file system and create or modify executable files in sensitive locations," confirmed VMware.

VMware has not posted a fix, but it instead told users to disable shared folders.

The Palo Alto, Calif.-based company also made it clear that the vulnerability isn't present in its server line of virtual machine software; VMware Server and ESX Server do not use shared folders. Newer versions of VMware's Windows client virtualization tools also disable shared folders by default, the company added. Users must manually turn on the feature to be vulnerable.

A similar bug was reported by VeriSign's iDefense Labs to VMware in March 2007. VMware patched it about a month later.

Friday's alert, however, was the second security-related notice posted by VMware in two days. On Thursday, VMware patched its ESX Server line to quash five bugs that could be used to slip past security restrictions, launch denial-of-service attacks, or compromise virtualized systems.

The increased reliance on virtual machines, particularly on enterprise servers, has come with its own set of security problems, researchers, and IT administrators have noted previously. Sunday, an analyst at the SANS Institute's Internet Storm Center (ISC) extended that warning to desktop virtualization users, particularly security professionals.

"We make an extensive use of virtualization technologies for multiple purposes: malware analysis, incident response, forensics, security testing, training, etc., and we typically use the client versions of the products," said Raul Siles in a post to the ISC blog. "It is time to disable the shared-folder capabilities."

Computerworld is an InfoWorld affiliate.

Two related companies that offer to finance the purchase of PCs to consumers with poor credit ratings have agreed to pay up to $5 million to settle a U.S. Federal Trade Commission complaint that they violated a federal lending law and sometimes failed to deliver the computers, the FTC said.

BlueHippo Funding and BlueHippo Capital failed in many cases to tell consumers that they could not get a refund even if they canceled orders before delivery of computers, the FTC said in a news release Monday. Many consumers paid hundreds of dollars and received nothing in return, an FTC complaint alleged.

A settlement before the U.S. District Court for the Southern District of New York includes a fine of at least $3.5 million and up to $5 million, which will be used to repay customers who entered into contracts with BlueHippo before March 2006 and did not receive products or a refund.

The two companies offered to extend credit to consumers to finance purchases of personal computers and other consumer electronics with down payments of $99 to $124, plus a year of weekly or biweekly payments ranging from $36 to $88. The companies, in television and radio commercials, said consumers with "less than perfect credit, bad credit, no credit" could finance computers.

The companies required consumers to agree to a series of automatic debits from their bank accounts, the FTC said. In many cases, the defendants debited consumers' accounts without first telling them they could not get a refund even if they canceled their orders, and regardless of the reason for cancellation, the FTC said.

BlueHippo issued a statement saying it was "extremely pleased" to reach a settlement that allows it to continue serving its customers. "We worked closely with the FTC to help them understand the important role companies like BlueHippo play for those without access to traditional credit," the statement said.

 BlueHippo, based in Baltimore, sells desktops and laptops from Hewlett-Packard, Lenovo, and Apple, monitors, plasma television sets, and long-distance calling cards.

Many consumers did not receive the merchandise they ordered or refunds, the FTC complained. BlueHippo failed to clearly and conspicuously disclose their policy of not providing refunds before debiting accounts, in violation of federal law, and consumers had no opportunity to make an informed decision about whether to risk the loss of advance payments, the FTC said. The defendants also allegedly failed to deliver the products after consumers made 13 weeks of payments, as promised during the sales call, in violation of the FTC Act, the FTC said.

The defendants also are charged with violating the FTC's Mail Order Rule by failing to ship merchandise in a timely manner or give consumers the right to cancel and receive a refund, the FTC said. They allegedly violated the Truth in Lending Act by failing to make written disclosures before a transaction was made under an open-end consumer credit plan, and they allegedly violated the Electronic Fund Transfer Act by linking the extension of credit to consumers to preauthorized electronic debits.

Under a settlement proposed by the FTC, the companies are barred from misrepresentations in the marketing of consumer electronics or any product requiring four or more periodic payments before shipment. They also are barred from misrepresenting refunds, cancellations, exchanges, or repurchases of products without disclosing the terms and conditions before receiving payment, the FTC said.

VMware unveiled three management tools ahead of VMworld, the European version of its user conference, which officially starts Tuesday.

The company announced Lifecycle Manager, Stage Manager, and Site Recovery Manager on Monday, with all three tools playing a specific role in a virtualized enterprise.

Stage Manager takes care of administrative duties, including testing and integration, until a system is put into production. "You can test a new service pack before it's put into production," said Robin Prudholm, senior systems engineer at VMware.

Then, Lifecycle Manager takes over and is used until it's time for the system to be retired, with the goal of combating "virtual machine sprawl."

"It's really easy to create a new virtual machine and that sometimes leads to a loss of control, especially when you have your IT department in more than one location," Prudholm said.

With Lifecycle Manager, the creation of virtual machines is more tightly controlled.

"Whenever an administrator needs to create a new virtual machine, he heads to a portal and fills out which project the virtual machine is for and how long it's needed. A top-level administrator then approves the creation of the machine. This puts the IT department back in the driver's seat," Prudholm said.

With the last tool, Site Recovery Manager, VMware wants to simplify the recovery of failed systems.

"Site Recovery Manager opens a lot of doors for small and medium-sized companies," Prudholm said.

Traditionally, site recovery has been a very complex and expensive enterprise. But virtualization can change that, according to VMware.

"In the physical world, the hardware needs to be identical, down to network cards, at both sites. In the virtual world that's not an issue. You can choose any servers you like," Prudholm said. "Testing is also much simpler; you can do it automatically over night and get a report in the morning."

VMware expects to make the tools available by the second quarter. It did not announce prices.

Market researcher IDC gave the launch a thumbs-up.

"The products help automate processes which currently consume a lot of manual time or require complex scripting -- in particular Lifecycle Manager should assist IT operations in managing virtual machine sprawl. It will be interesting to see whether this creates opportunities for other ISVs or impairs their business -- for most it should create opportunities," said Chris Ingle, consulting and research director at IDC.

The products are very important for the future of VMware. The battle for virtualization supremacy is becoming more and more about providing the best and most complete management option, and less about the software.

"The differentiation between the different vendors will be the management tools," said Philip Dawson, research vice president at Gartner.

If VMware wants to remain the virtualization leader, and stay ahead of companies like Microsoft, Sun, and Oracle, it has to keep developing management products at a fast pace, Dawson said.

But VMware isn't alone in trying to improve the management of virtualized environments. Late last year Microsoft announced System Center Virtual Machine Manager.

"For customers, there is today a trade-off between the best vitalization tools and some OS management with VMware and the best OS management and good tools for virtualization with Microsoft," Dawson said.

But irrespective of the vendor, better management tools are needed. Effective management is still one of the biggest challenges when companies move to a virtualized environment. According to a recent survey by CA, more than half of chief executive officers and IT executives polled say they face challenges related to or are uncertain of the effectiveness of their approach to managing virtual servers.

Blu-ray Disc may have beaten out HD DVD as the high-definition optical disc format to replace DVDs, but it now faces a new test against Internet downloads, market researchers Gartner and iSuppli said.

The two high-definition disc formats had battled for the past few years until Toshiba last week handed victory to Blu-ray Disc by announcing an end to its support of HD DVD. The company's decision came after a major Hollywood film studio and several retailers, including Wal-Mart, said they would back Blu-ray Disc exclusively.

But the victory for Blu-ray Disc may be short-lived if consumers choose to download high-definition content from the Internet, market researchers say.

"After years of a standards war, the major question for Sony and the Blu-ray camp is whether a physical format for high-definition still has any relevance to consumers in this era of Internet-delivered movies and video on demand," said David Carnevale, vice president of multimedia content and services at iSuppli, in a report.

Online movie download services from iTunes, Amazon, and others have gained traction in recent years and increased their movie, TV, and other video content offerings. The Internet gives consumers a choice of building a library of HD movies bought over the Internet instead of buying a Blu-ray Disc player and building a new library of movies-on-disc, said Carnevale.

"Physical media distribution could become a thing of the past," he said.

Blu-ray Disc could be further harmed unless prices come down quickly and more manufacturers start making players, according to Gartner. The market researcher said that most manufacturers will probably hold off on announcing new Blu-ray Disc equipment until the first quarter of 2009. In addition, consumers may also put off buying Blu-ray Disc players because DVD players that up-convert existing DVDs is already seen by some as a good alternative to making a big investment in high-definition discs.

"Most manufacturers are still trying to persuade consumers that high-definition optical discs are worth investing in, as many consumers and industry pundits see video-on-demand services and Internet downloads as viable alternatives," said Paul O'Donovan and Hiroyuki Shimizu in a report.

Microsoft has introduced a reporting tool for its online advertising platform that it claims measures the impact of online ad campaigns rather than merely counting clicks.

The tool, called Engagement ROI, has been integrated into Microsoft's Atlas Media Console, which is software used for booking and managing online advertising campaigns. A senior Microsoft executive will officially announce the tool on Monday at the Interactive Advertising Bureau's annual meeting in Phoenix.

The Media Console was developed by Atlas, a company that was owned by aQuantive, which Microsoft bought for $6 billion in May 2007. It marked Microsoft's biggest acquisition in the online advertising space, following Google's announcement in April 2007 of its intention to acquire a rival online advertising firm, DoubleClick.

Google has a huge lead over Microsoft in online advertising. To counter Google's dominance, Microsoft made an unsolicited offer earlier this month to buy Yahoo, but the acquisition has been so far resisted by Yahoo's board. Microsoft wants access to Yahoo's engineers as well as the company's online advertising technology.

Engagement ROI is in a beta release. Microsoft said the tool will undergo testing with national advertising agencies such as McKinney, Mindshare Interaction, World Vision, and Neo@Ogilvy.

Engagement ROI looks at several aspects of an online ad, such as how recently it has been displayed, its size and its format, and then determines how successful the message is in influencing a purchase. Microsoft calls the concept "engagement mapping."

Microsoft said the most commonly used metric in the industry, counting clicks, is a poor way to measure the effectiveness of an ad campaign. Generally, the success of an ad is determined on how frequently it is viewed or clicked.

Microsoft expects to begin receiving results on how successful the tool is by the end of June.