This week those nasty JavaScript attacks that besieged thousands of Web sites from January until March started back up again, with the hackers setting up shop at a Chinese IP address. Meanwhile, security officials in China expressed worries that computer systems there will be hacked during the Olympics in August, even as hackers went after the CNN site and defaced a sports page with a message that Tibet is part of China, now and forever.

Elsewhere, Steve Ballmer said Microsoft is prepared to carry on even if it does not succeed in buying Yahoo, OLPC head Nicholas Negroponte vexed open-source developers with his push to make the XO laptop interface Windows-compatible and a federal court said it's OK for customs agents to spark up our laptops and look over the contents, just because they can.

Here's a look at the week's Top 10 news headlines:

1. Hackers jack thousands of sites, including U.N. domains : The massive JavaScript attacks that were first detected in January and seemed to disappear since last month have started up again, with U.K. government and United Nations sites infected with malware after being hacked. It's unclear how many sites have been nailed this go-around, but in March the attacks affected (and infected) more than 100,000 URLs. "The attackers have now switched over to a new domain as their hub for hosting the malicious payload in this attack," according to a Websense alert. "We have no doubt that the two attacks are related." The domain in question is at a Chinese IP (Internet Protocol) address. So was the one in March.

2. Ballmer: Microsoft could walk away from Yahoo deal  : We're not sure what to make of this one, but after all the brouhaha and back and forth and digging in of heels, Steve Ballmer hinted at a conference in Milan that the company is "prepared to move forward without merging with Yahoo." But Microsoft's CEO also continued to insist that Microsoft needs Yahoo (even if Yahoo doesn't think it needs Microsoft) to succeed in online advertising and to compete with Google. "Today Google has the lead, there's no doubt about it, and I wanna make sure that they have plenty of competition," he said. "We think the best way to move that forward quickly is to come together with Yahoo. I hope that it works, but if it doesn't, we go forward alone." That sounds sort of lonely and sad, doesn't it? Ah, well. More will be known soon enough, as Microsoft's deadline for Yahoo's decision on the US$40 billion-plus bid is Saturday.

3. China worries hackers will strike during Beijing Olympics and CNN site hit by China attack : Last week a Chinese hacker group called for a cyberattack on CNN's Web site to protest the protests of the upcoming Beijing Olympics by pro-Tibetan and human rights activists. Then the group called off the attack, pulled the plug on its Web site and disappeared into cyberspace. Another group called HackCNN emerged and took over, attacking the site and causing slowdowns, and putting the message "Tibet was, is and always will be a part of China!" in place of scores on a CNN sports site. Then this week rolls around and Chinese security officials express concerns that hackers will go after Chinese computer systems during the Olympics in August. Meanwhile, the government is working to tighten network security, but good luck with that. "China's IT space is really one of the most malware-ridden in the world," said security consultant Jim Fitzsimmons, who is based in Shanghai. "In terms of platforms that people could attack in China, or subvert to attack something else, there's quite a bit out there." Pirated software usage and inattention to security management, including patching software, are factors, he said.

4. OLPC switch to Windows on OX is 'muddled,' developers say  : Some open-source developers took umbrage at written comments from One Laptop Per Child Chairman Nicholas Negroponte that they should stop bickering, get along and work to develop a Windows user interface for the OLPC's XO laptops. He wants Sugar, the XO interface that works with Linux, to be separated from the OS core and made platform agnostic. "To do that, we need to hire more developers, work more together and spend less time arguing." His comments, posted in a public note to the OLPC developer community, prompted argument. "You have only succeeded in alienating the developers you need to make Sugar-on-Linux work, without actually achieving any progress on Sugar-on-Windows," replied C. Scott Ananian.

5. Vista SP1 available for phased automatic update  : Windows Vista Service Pack 1 is part of the Microsoft Automatic Update service now. Vista SP1 will automatically download to PCs with the update feature turned on. SP1 fixes bugs and glitches in Vista, and its release is widely viewed as key to getting more users, particularly corporate IT shops, to move to the operating system. Although many corporate and business customers hold off on OS "upgrades" until the first service pack is available, there are some still expressing resistance to Vista, insisting they're going to take a pass and wait for the next Windows update.

6. No suspicion needed to search laptops at U.S. borders, says Ninth Circuit  : U.S. customs officers don't need a reasonable suspicion to search laptops of people coming into the country, the U.S. Court of Appeals for the 9th Circuit ruled this week, reversing a decision from the U.S. District Court for the Central District of California. The lower court had granted a motion to suppress evidence in an alleged child porn case that was found in a laptop search at Los Angeles International Airport, ruling that customs officers needed reasonable or particular suspicion to check the computer's contents.

7. Earth Day frenzy raises hardware recycling questions  : IT vendors joined the Earth Day parade this year, trumpeting their "green" initiatives, but the Basel Action Network (BAN) offered the reality check that it doesn't really count as environmentally friendly recycling to ship discarded electronics to developing countries. BAN took particular aim at 1-800-GOT-JUNK because the collection company offers no guarantee that its free electronic recycling program doesn't export used goods to developing countries. Some areas of developing nations have become toxic-waste dumps as a consequence of used electronics being shipped to them. 1-800-GOT-JUNK, which works with recycling brokers, told partners to avoid sending electronics gear overseas, and some of them complied with that and didn't use recyclers that BAN has identified as shipping discarded goods to developing countries.

8. So what is an enterprise mashup, anyway?  : Some attendees at the Web 2.0 Expo are trying to figure out exactly what an enterprise mashup is and whether their IT departments ought to join the mashup frenzy. So, Web 2.0 was a good place for them to be to learn that enterprise mashups are lightweight applications often developed to solve a specific problem, using various standards and often merging internal and external data sources. See, aren't you glad we cleared that up? (The story linked to does a better job of it!)

9. Competitive pay, training reduce IT employee wanderlust : Most of the chief information officers in a recent survey plan to increase compensation, provide training programs and permit flexible work schedules so that skilled IT workers are content to stick around. Better compensation was identified as the top way to boost IT staff retention, according to the survey of 1,400 CIOs by staffing consultancy Robert Half Technology. Retention is top of mind for CIOs because of the ongoing shortage of skilled workers. "Creating an attractive corporate culture, which includes everything from training to work/life balance programs, is crucial for keeping valued employees, especially when the hiring environment for highly skilled professionals is competitive," said Katherine Spencer Lee, executive director of Robert Half Technology. And even though we bet all of you CIOs out there already knew that, it never hurts to hear it again.

10. Apple aims to patent IM features on iPhone  : An instant-message client on the iPhone appears to be in the works -- an Apple patent filing titled "Portable Electronic Device for Instant Messaging" includes methods for sending, receiving and viewing such chats. The iPhone doesn't yet have IM support, although AOL recently demonstrated an AOL IM client at the launch of the iPhone SDK.

 Google officials fielded questions from developers Thursday at the O'Reilly Web 2.0 Expo in San Francisco who pressed the company about its Google App Engine , asking about everything from its language support, privacy assurances, pricing and backward compatibility.

To much fanfare, Google released a preview version of its App Engine earlier this month that it said allows developers to develop and write their Web applications using Google's infrastructure. The App Engine includes dynamic Web serving, persistent storage, automatic scaling and load balancing, Google APIs for authenticating users and sending e-mail -- and a full-featured local development environment, Google said.

[ Learn more about the substance behind a technology buzzword in InfoWorld's special report on  the emerging world of cloud computing. ]

Asked about backwards compatibility for developers who opt to run a Web application in the App Engine, Kevin Gibbs, technical lead for the project, said that Google will support multiple versions of the APIs the company provides.

"We're committed to not breaking that API we're providing to you," he said. "We have that ability to create new versions of our APIs, and you can actually say which one you want to use."

Addressing another concern, Gibbs added that Google does not want to lock people into its App Engine, saying that doing so is not good for the Web and "when the Web is doing well, Google is doing well." And he acknowledged that the company "needs better tools to get that data back out if you decide that you want to move that app, [so] you can dump that data out in a consistent way."

Developers at the presentation pressed Gibbs on when the project would include support for languages like PHP and Ruby. The runtime now supports only Python.

"I don't have those sort of dates available," he said. "We are very, very interested in supporting different languages. This is a preview release. We're trying to get it out there so you can tell us what you like and don't like."

Paul McDonald, Google App Engine product manager, declined to offer specifics when asked about the future pricing for the offering, which is free for up to five million page views a month in its current version. But he did say that users will only pay based on the CPU and bandwidth quota they use. They will not be required to sign contracts.

"Those rates will be competitive to existing rates out there."

Asked whether Google will be "scraping" and storing information about the applications it hosts on App Engine, he said: "Privacy is very important to us. The only reason that we exist as a company today is that everyone trusts us with their searches. The trust of our users and developers is very important. Like everything at Google, there are things that we log. That is in our privacy policy. This is standard Google privacy policy; there is nothing different with App Engine."

While Google is not providing support for the App Engine because it is a preview, it has detailed documentation and a few developers dedicated to answering questions on the Google Group associated with the project, McDonald said. He acknowledged that the company may need to provide some type of support for people who would eventually pay for the service, but said no details have been worked out yet.

As for what type of Web applications are best suited to be developed and run on App Engine, Gibbs said any type of request-based, database-backed Web application would be a good fit.

"If you have an application that responds to requests from users and generates dynamic content to return that, it works well on App Engine," he said. "Some apps need an offline component. Now, we're still working to be able to support that. There are certain liabilities in the system right now that make it hard."

In addition, because response times for input or output of applications running on App Engine are limited to one megabyte for now, developers with applications that use videos or other large file uploads might find it hard to use, Gibbs said.

Gibbs also used the forum to tout App Engine's data store, which is made up of Google's Big Table persistence layer instead of clusters of SQL databases. Because of the departure from SQL, with which many developers are familiar, developers are faced with "a little bit of ramp up" getting familiar with the new APIs.

Even so, Gibbs noted, the Big Table offers better promise for scaling than SQL clustering. "Your application at any point in time is on a number of our servers. [Big Table] is fault tolerant, and any part can fail and the application can still run. It adjusts organically to hot spots and when application loads increase... it allocates more resources to it. We use very little resources for an idle application. That is how we are able to run a lot of applications on average."

Computerworld is an InfoWorld affiliate.

Spammers are using an automated method to create bogus pages on Google's Blogger service, again highlighting the diminishing effectiveness of a security system intended to stop mass account registrations, according to security vendor Websense.

The spammers are sending coded instructions to PCs in their botnets, or networks of computers that have been infected with malicious software, wrote Sumeet Prasad, a threat analyst, on Websense's blog.

Those sophisticated instructions tell PCs how to register a free account on Blogger. The spammers also figured out a way to solve the CAPTCHA (Completely Automated Public Turing test to Tell Computers and Humans Apart), the warped text that has to be deciphered in order to complete an account registration.

The compromised PC sends a request to an external host that tries to solve the CAPTCHA and then sends the answer back to the PC. Websense estimates the process has an 8 to 13 percent success rate.

It's unknown how exactly the CAPTCHA gets solved. It's been theorized the process has been outsourced to real humans who get paid for every one deciphered. But researchers have successfully developed methods that enable computers to increase their success rate at solving the puzzles, indicating that hackers have also figured out how to do it.

Security vendors and researchers have seen a rapid rise in accounts used for spam on free e-mail services from Microsoft, Yahoo and Google, indicating current CAPTCHA technology has reached the end its usefulness.

In this case, the Blogger pages created by the spammers are then used to promote the usual line of spammer goods. But many of those sites are rigged with JavaScript that redirects the browser to another spammy Web site.

"Spammers include these redirecting accounts in different spam campaigns rather than including their actual spam domains," Prasad wrote. "Spammers use this tactic to defeat a range of antispam services."

In effect, they're using Google's Blogger domain as a shield, as it's unlikely to be blocked by other security software products for being a suspicious domain.

One option for Google would be to prohibit those redirects, said Dan Hubbard, vice president of security research for Websense. But every additional security restriction has the potential to drive away users who may use the function for a legitimate purpose, he said.

For so-called Web 2.0 sites that depend on high numbers of users, that could create a backlash, causing users to leave, Hubbard said. The redirection feature could also be tied into the way how advertising is delivered to the blog pages.

Google could also figure out a better way to spot blogs that are being created through automated bots, since many of those pages have tell-tale signs indicating machines created them rather than people, Hubbard said. Those detection mechanisms are still developing, however.

"There's not a lot of people and a lot of technology that does good content input validation on Web properties, and that's something that we're looking into," Hubbard said. "Link spam and blog spam is happening a ton, and obviously that's pretty painful for Web properties."

This latest method means a potential increase in the number of garbage pages on Blogger. But the sheer number of Blogger sites on the whole helps the spammy ones stay under the radar a bit longer, Prasad wrote.

Google has been fighting spam for a long time on Blogger. It uses automated spam classifying algorithms to keep blogs full of spam links out of its featured content. Users can also use a reporting tool to alert Google to spam blogs, but the fight continues.

EBay-owned Skype has released into open beta testing a client for mobile phones that supports phone calls, chat, and other features of the popular VoIP (Voice over Internet Protocol) application.

"This product is a part of our goal to be on as many platforms as possible," said Wilhelm Lundborg, product manager, Skype for Business.

About 50 handsets from Motorola, Nokia, Samsung, and Sony Ericsson are compatible with the service. Other phones might works as well, as long as they support Java, since that's what the client is based on.

Right now, all the features work in the U.K., Brazil, Sweden, Denmark, Finland, Poland, and Estonia. Elsewhere, the data features and incoming Skype calls work, but the software does not allow outbound calls.

Just like existing the existing Skype client, offered by, for example, mobile carrier 3, it uses the mobile network to make calls, like a traditional phone. All calls are routed via a Skype-owned gateway, to keep costs down.

The mobile data network is used to send presence information and instant messages.

What a user pays depends on a number of factors. Calling a Skype contact abroad will be cheaper than making regular calls, because users pay whatever their mobile carrier charges for a local or national call, which will be less expensive than regular international connections.

Skype's gateway setup makes the service unsuitable for users who are roaming internationally, however. Roaming users have to pay charges for a connection back to the Skype gateway, which could add up, the company warns.

The price to call a non-Skype user is split into two parts: first, users pay their carriers, as they would normally, and then they have to pay the SkypeOut fee for the destination being called. So the price of calling non-Skype users, abroad, for example, is cheaper than making regular calls only if the SkypeOut fee turns out to be less expensive than a user's regular international plan. To keep costs down for such users, Skype is offering a variety of SkypeOut packages, announced earlier this week.

Skype treats incoming calls like they are being forwarded to users' mobile phones. So users have to pay the SkypeOut fee for calling mobiles in their country when they answer calls from non-Skype users.

Since the client also uses the data network, users have to pay for that as well. Skype recommends that users sign up for a data plan, with a flat monthly rate, according to Lundborg.

Although the amount of data used is pretty small. A person with 20 contacts who's online for one hour, instant messages for 10 minutes and has a 20 minute call each day will use about 1MB of data per month, according to Skype.

A group of German researchers has unveiled the first publicly released research attempting to actively disrupt a peer-to-peer botnet - using as their case study the notorious Storm worm.

The researchers were able not only to infiltrate Storm, gaining in the process the most precise estimates of its size to date, but also had success in disrupting its communications through a "poisoning" technique, according to the study.

The study, "Measurements and Mitigation of Peer-to-Peer-based Botnets," was authored by five researchers working with the University of Mannheim and Institut Eurécom, and was presented at the Usenix Workshop on Large-Scale Exploits and Emergent Threats (LEET) earlier this month in San Francisco.

Botnets have become among the most pressing threats on the internet, accounting for most spam and capable of directing large-scale denial-of-service and other categories of attacks.

[ See related stories where researchers  dispute Microsoft's claims to have crushed the Storm botnet, and security experts assert the botnet problem is worse than ever. ]

Most recently, botnets such as that created by the Storm worm have begun using peer-to-peer techniques for communications, eliminating the need for a central control server and making them far more difficult to shut down.

By taking a more active approach, the researchers found a way to "poison" the communications of the Storm bots, effectively disrupting them.

"Our strategy can be used as a way to disable the communication within the Storm botnet to a large extent," they wrote in the study. "As a side effect, we are able to estimate the size of the Storm botnet, in general a hard task."

Previous research has been based on passive techniques such as observing network events such as the number of spam emails thought to have originated from a particular botnet, the researchers said.

They said the new study is the first to use active techniques, crawling the P2P network, keeping track of all peers and distinguishing infected peers from benign ones based on behavior.

Crawling the "Stormnet" every 30 minutes from the beginning of December 2007 to the beginning of February 2008, the researchers found between 5,000 and 40,000 peers online at any given time, with a sharp increase in bots during the Christmas and New Years Eve periods.

The bots were located in more than 200 countries, with the biggest proportion in the U.S., at 23 percent.

The "poisoning" technique involves the keys used by Storm bots to establish communication. The researchers published a large amount of false content for particular keys.

"Our experiments show that by polluting all those hashes that we identified to be storm hashes, we can disrupt the communication of the botnet," the researchers wrote.

Another technique, called a "sybil" or "eclipse" attack, aiming to separate a part of the P2P network from the rest, proved ineffective.

Active interference with a botnet may carry serious legal consequences for researchers, since the botnet hosts are effectively computer systems belonging to third parties, who ordinarily are unaware that their systems are being misused.

In part because of this factor, previous research has focused on passive techniques for identifying the size and control structure of a botnet, leaving law enforcement authorities to take action, the researchers acknowledged.

The researchers said future efforts will focus on analyzing a second tier of systems that issue the actual commands, which might allow the identification of the operators of the Storm worm.

Techworld is an InfoWorld affiliate.

China has proclaimed itself the world's largest Internet market, with 221 million Internet users, state media reported Thursday.

The Ministry of Information Industry (MII) cited statistics from the China Internet Network Information Centre ( CNNIC), a quasi-government organization that reports to the MII. China reached the magic mark at the end of February, English-language newspaper China Daily reported. In March, Beijing-based telecommunications consultancy and research firm BDA China reported that China had overtaken the U.S. in total Internet users.

With its large population, China made reaching the world's top mark look easy. China currently has only 16 percent Internet penetration -- below the world average of 19.1 percent, and well below the approximately 50 percent penetration in the U.S.

CNNIC normally releases Internet population statistics for the previous six months in January and July each year. U.S. Internet measurement firm Nielsen/Netratings estimated the American Internet population at 216 million at the end of 2007.

China began allowing consumer dial-up Internet access in 1995. In August 1996, it began filtering and blocking Internet sites it found objectionable, including pornography, foreign news sites and sites relating to sensitive political issues such as Taiwan and Tibet independence movements. The practice which continues today, although China has promised full and unrestricted Internet access during the 2008 Olympic Games in Beijing in August.

Internet usage in the country grew 53 percent from the end of 2006 until the end of the 2007, when it had 210 million users, according to the January 2008 CNNIC survey. Forty percent of new users came from rural areas, a new area of growth despite China's Internet population still coming largely from major cities like Beijing and Shanghai. CNNIC defines a user as anyone who uses the Internet at least once per month for any function.

The January survey also revealed that for the first time, the No. 1 use of the Internet in China was online music, the application of choice for 86.6 percent of users. E-mail placed only fifth, with 56.5 percent of users. They seem to be communicating via instant messaging instead, an application used by 81 percent of users.

On its way to the top slot, China has produced some of its own Internet brands. Alibaba.com, of which embattled Yahoo owns 40 percent, became one of Asia's largest Internet companies following its initial public offering in Hong Kong in November raised $1.5 billion. In three years, its Taobao consumer auction site overtook eBay's Chinese site, eBay Eachnet, and forced the U.S. auction giant out  of the market and into a minority joint venture with Tom Online. Alibaba also operates Yahoo's China site. Baidu has dominated the local search market, soaking up over 60 percent of all Chinese search queries and pounding Google in the process.

The U.S. should be safe in the No. 2 position for a few years: third-place India had only 60 million users as of September 2007, according to the International Telecommunication Union.

Vodafone, China Mobile, and Softbank are putting together a Joint Innovation Lab (JIL) to accelerate the roll-out of mobile Internet services. They plan to formalize the arrangement later this year.

The mobile Internet is taking off with mobile subscribers are using services like Google Maps on their phones, but JIL will take things a step further, according to Mark Street, spokesman at Vodafone Group.

The first order of business is to develop a platform for mobile widgets -- small, Web-based applications that give access to information services including weather, sport scores, traffic information, radio broadcasts, and language translators.

There are several advantages to widgets, according to Street.

"Using one, you don't have to open a whole web site, and they don't take so much screen size," said Street.

The JIL platform will have a set universal APIs (Application Programming Interfaces) making it possible for applications to run on different handset platforms and operating systems across different networks. The goal is to encourage Web developers to build widgets, according to Street.

More JIL projects are on the way, but Vodafone doesn't want to elaborate on what it will focus on next.

That these three companies are working together shouldn't come as a surprise: Vodafone owns a 3 percent stake in China Mobile, and they are already collaborating on trials of the upcoming 4G (fourth-generation) mobile network technology LTE (Long Term Evolution). JIL is also an extension of a deal made when Vodafone sold operations in Japan to Softbank, according to Street.

The weakening economy is beginning to effect the earnings of companies outside the industries that have been hit hardest by the mortgage crisis (financial services, real estate, and construction). Yesterday, UPS attributed a nearly 10 percent drop in its earnings per share to the " sharp decline in U.S. economic activity." Starbucks' newly reinstated CEO Howard Schultz revised downward his earnings outlook for 2008, citing weak economic conditions and a decline in consumer spending.

To minimize the effects of a recession on corporate profits, benchmarking firm The Hackett Group recommends in research it released earlier this week that companies make targeted cuts to their general and administrative (G&A) spending (IT, finance, HR and procurement) that quickly impact the bottom line without compromising the quality and service the company provides or its ability to grow when the economy picks up again. The study is available on Hackett's Web site (registration required).

According to The Hackett Group's research, a typical Global 1000 company can remove between 15 percent and 41 percent of its total G&A costs by focusing on certain processes, such as IT infrastructure management, purchase order processing and accounting, where the largest opportunities to improve efficiencies exist. These savings can offset a decline in pre-tax profit during a recession by between 21 percent and 45 percent. Hackett defines a typical Global 1000 as a company with $23.4 billion in revenue, 56,000 employees and $862 million in G&A spending.

The potential cost savings for IT are also noteworthy. According to Hackett, a Global 1000 firm that spends $444 million on IT can remove between eight percent ($34 million) and 39 percent ($171 million) of its baseline spending by making application maintenance, application development and implementation, end user support, and infrastructure management processes more efficient.

Five Specific Recommendations for IT Leaders*

1. Focus on big ticket items like telecom spending .

2. If outsourcing contracts are coming up for renewal, renegotiate them at a lower cost.

3. Consolidate and standardize datacenters, help desks, and applications.

4. Improve efficiency of application development and implementation processes.

5. Halt the development of certain projects temporarily or permanently. If any of these projects are outsourced and your paying the outsourcer for time and materials, stopping the project, even for just a few months, can immediately save you money.

*Source: Erik Dorr and David Ackerman, The Hackett GroupEfficiency Gains Through Budget Cuts Varies By Company

The total cost savings a company can achieve in IT specifically or G&A in general depends on a variety of factors, according to Hackett, including the level of efficiency at which the company is already operating; the extent to which it adopts best practices for managing G&A processes, eliminates redundancies (whether they be processes or systems) and standardizes technologies and processes; and the company's ability to undertake change.

Nevertheless, Hackett executives say, most companies are surprised by how much they can actually save when they examine their cost structures and compare them to best-in-class companies.

"I've seen companies take out 50 percent of their IT operating costs over a few years," says Erik Dorr, Hackett's senior IT research director and co-author of the report on G&A spending. "Going into that, people said, 'You've got to be kidding. That's going to shut us down.'"

IT leaders have this idea that their operations are already running efficiently because they dug so deep during the economic downturn of 2002, but Dorr notes, when the economy started growing again in 2004, some companies and IT operations lost their fiscal discipline.

"Take the example of investment banks, where in the good years, there was so much money going around that they [IT groups] could take on a lot of work without making sure the work should be done based on ROI," says Dorr. "We have seen many companies whose portfolio of development initiatives has not been managed sufficiently rigidly to make sure they should be doing them in the first place."

For companies and IT departments that got lax during this most recent period of economic growth, Dorr says the downturn can serve as a catalyst for "rationalization" and efficiency improvements.

"It could be the case that there are substantial inefficiencies that companies haven't been able to address because there wasn't the urgency to do so," he says. Some companies used the last recession to deal with inefficiencies."

Another reason why IT leaders should take a look at their spending and opportunities to cut is because there are new and more sophisticated ways for IT leaders to streamline their operations, says Dorr. He cites virtualization as an example.

"That's something that organizations didn't have a few years ago to the extent that they have it now to drive efficiencies in server utilization," says Dorr.

Hackett's recommendation to make targeted or focused cuts as opposed to arbitrary or across the board cuts may seem counter-intuitive. But according to Dorr and IT practice leader David Ackerman, many companies make cuts across the board because they lack the time to analyze which areas of their G&A spend are ripest for cuts or because making cuts is so politically charged that CEOs mandate, for example, 20 percent cuts from everyone to make the activity/initiative seem equitable.

The question is, do companies still have time in this economic climate to analyze their G&A spending and benchmark themselves against world-class companies to figure out what makes the most sense to cut? Ackerman says yes.

Dorr and Ackerman hope that the report gives IT leaders "some sense of the magnitude of potential savings." Adds Ackerman, "It shows CIOs there's a methodical approach they can use to address the need for cost reductions. There are comparative analytics they can use to find the low hanging fruit and make cuts that minimize the risk of damaging performance."

CIO is an InfoWorld affiliate.

Worried by the small but growing number of small businesses and consumers switching from Microsoft Office to cheaper or free online alternatives such as Google Apps, Microsoft plans to arm a key cohort of its formidable legion of partners to help fight the threat to Office 2.0.

Microsoft plans to test a yearlong change to a key part of its license for Office 2007 that will, according to multiple sources, enable Web hosting service providers to offer Microsoft Office via an emerging technology called application streaming.

The sources said Microsoft will make the announcement early next week during its weeklong Microsoft Management Summit show in Las Vegas.

If successful, the company will likely overcome its long-held fears about hurting its hugely profitable Office business and make the change permanent.

Microsoft "has been sensitive to whether it would cannibalize its own application business," said Neil Gardner, a vice president of marketing at application-streaming software vendor Endeavors Technologies. "They were also sensitive to the piracy side of it, of losing control over distribution."

Such a change could mean that Microsoft, with the huge data centers it is building, will start to stream Office directly to its customers, too.

It will be the second announcement by Microsoft this month that showcases its determination to fight growing competition from Google Docs, Yahoo's Zimbra, Zoho Office, ThinkFree, and similar services.

Last week, Microsoft confirmed that it is beta-testing a low-end Office bundle, code-named Albany, that it will offer on a subscription basis.

Microsoft did not respond to a request for comment.

Talk is cheap; is the service?News of the license change had already leaked out among members of Microsoft's hosting partner community, which had been campaigning for it for the past several years.

"What was frustrating for us was that Microsoft allowed Terminal Services for Office but explicitly disallowed application streaming," said Gardner, whose company is trumpeting the news on its Web site.

But others warned that Microsoft will have to price streaming Office low enough to make it competitive with the paid Enterprise version of Google Apps, which offers technical support for $50 per user per year, and competitive too with the free offerings.

"Why would a [small business] go out and pay an arm and a leg when they can get Google Docs or OpenOffice for free?" said Ty Schwab, CEO of Blackhawk Technology Consulting LLC, a Eugene, Ore., reseller of application streaming software. The price "has got to be close if Microsoft wants to make itself a force to be reckoned with."

Fording the streamingOffice 2007 as a streamed application is more similar technically to Google Apps than Albany, though all three share a subscription model.

While some of Albany's components, such as the Office Live Workspace file storage service and the Windows Live OneCare security service, are delivered through the Web, the core Office 2007 software will still be installed locally on users' PCs.

By contrast, a streamed version of Office would be stored on a server at a hosting provider or enterprise but delivered bit by bit to users on demand through a local network or the Internet, just as streamed music and video are.

The software code will be stored on the local PC and persist even after a user logs off. That means that while opening Office for the first time may take 4 minutes or more, subsequent start-ups should take only 10 to 20 seconds, Gardner said.

It also "preserves the value of desktop apps and the value of the fat desktop PC, which is very important to Microsoft," said Paul DeGroot, an analyst at independent firm Directions On Microsoft Inc.

Application streaming is similar to desktop virtualization, also known as virtual desktop infrastructure, except that in the latter, an entire application stack -- including the operating system and desktop interface -- is streamed down to the user. That requires more network bandwidth, and more storage and processing power on the server side.

Application streaming also differs from Terminal Services, a hosted delivery method that Microsoft has long supported. In Terminal Services, the application is entirely stored on the server. All data and application code is accessed through the Internet, in a manner roughly similar to a software-as-a-service app, except not through a Web browser.

Some types of application streaming delivery technology, such as Endeavors' Application Jukebox, can also be set to automatically download the necessary code so that users can run Office completely offline, such as when they are on an airplane, Gardner said.

Face to face with Redmond repsVendors have been preparing for application streaming for the past several years. Microsoft has been pushing its its Softgrid application streaming at its enterprise customers for the past year. VMware bought an application streaming firm, Thinstall, in January, while Symantec already owned AppStream via its Altiris acquisition.

That, along with the Google threat, may have helped convince Microsoft's information worker unit (which oversees Office) and its worldwide licensing and pricing group to approve the 12-month pilot of the change to its service provider licensing agreement, or SPLA.

Starting in June, hosting providers that pass a face-to-face interview with Microsoft representatives will be able to offer Office Standard and Office Professional Plus.

Microsoft's partners say they have been itching to offer streaming Office for years, only to be thwarted by a combination of Microsoft's onerous licensing terms and its rough treatment of violators, essentially treating them as software pirates.

But Microsoft's attitude was already softening when a British Web hosting firm Fasthosts began streaming Office to its customers in February for £4.99 (about $10) a month per user.

Microsoft talked tough -- an antipiracy executive told ZDNet U.K. that streaming "infringes our license regulations" -- but then failed to crack down on Fasthosts, which continues to advertise the service on its Web site.

Is $10 a month -- roughly equivalent to a $300 copy of Office depreciated over three years -- cheap enough to pull customers away from Google Apps, which costs a little more than $4 a month?

Not according to Schwab, who believes Microsoft needs to price streamed Office so that hosting providers can resell it for no more than $5 a month.

DeGroot agrees.

"Microsoft can't be complacent. They've got to be willing to be aggressive on price," he said. If it is, "I see the market shifting towards app streaming, though we're in the very early stages of that."

Sun continues to pursue talks with Apple Computer to have Java applications run on Apple's iPhone while acknowledging a third party's efforts toward the same goal.

"We've expressed our intent to do this and our desire, really, to work with Apple to build a JVM (Java Virtual Machine) for the iPhone and we're sort of moving forward with that," said Eric Klein, Sun vice president of Java marketing, this week. The JVM could run Java applications.

Apple has not been publicly receptive to having Java on its popular new device. There have been questions about whether Apple's iPhone SDK agreement would permit this. The JVM potentially could sidestep Apple's App Store program for dispensing iPhone applications.

Meanwhile, Sun also is working with Innaworks to bring Java applications to the iPhone.

"They're actually working on a solution that allows developers to compile [Java Micro Edition or Java ME] applications into native iPhone applications," said Klein. Companies can submit these applications for inclusion in App Store. Innaworks will show its solution at the JavaOne conference in San Francisco in two weeks, Klein said.

The Innaworks product, alcheMo for iPhone, is initially targeted at games publishers. Now in a beta release, alcheMo for iPhone can be used to port Java ME mobile games to iPhone and iPod touch without the need for further manual adjustments. The product features an optimizing translator to convert Java ME application source code to equivalent source code for iPhone, according to the Innaworks press statement on the product.

But Sun still wants to put a JVM on iPhone through the iPhone SDK. "[Apple is] well aware of what we're doing, and we're in discussions," Klein said. The two companies need to discuss clauses in the SDK license agreement.

"There's no question one of our goals from the Java platform perspective is to allow our developers to get to as many phones as possible, and obviously, the iPhone has turned out to be a very successful platform, and we want to be on it," said Klein. There has been much excitement about Sun's plans, he stressed.

Apple declined to provide a spokesperson to comment on the issue. But an industry analyst cited Apple's desire to maintain control of the iPhone.

"They believe that they can deliver a better product by exerting a great deal of control over their platform," said Ezra Gottheil, analyst for Technology Business Research (TBR). The license agreement for Apple's SDK apparently allows Apple to prevent a program that runs other programs, such as a JVM, from being used on iPhone, according to Gottheil.

He wondered whether having Java on the iPhone would offer a lot of value. "It doesn't seem like it adds a lot," Gottheil said.

While Gottheil acknowledged Java's large presence on handheld phones, he added, "I'm not aware of any big-winner Java applications on those phones. I could be wrong."

A Sun representative countered that applications like the mobile versions of Google Maps and Google Mail as well as the RIM application suite are written in Java.

The U.S. Department of Justice is trying to determine whether Yahoo's two-week test to deliver relevant Web advertising from Google alongside its own search results violates any antitrust laws, according to a Reuters news service report.

A source told Reuters that antitrust regulators "have initiated an investigation" of the test. According to the report, the source, who spoke on condition of anonymity, said the regulators were concerned about a telephone call from Google CEO Eric Schmidt to Yahoo CEO Jerry Yang to offer help in fending off Microsoft's $44.6 billion takeover bid.

Another source told the news agency that the DOJ was concerned about the possibility of a longer-term deal between the number one and number two search engine companies and opened up an inquiry into matter.

Yahoo and Google said they had informed the DOJ of the two-week test.

"Yahoo proactively kept the Department of Justice informed of its intention to conduct this limited test with Google and has provided information to DOJ on the nature of the test," said Yahoo spokeswoman Tracy Schmaler in an e-mail.

A Google spokesman concurred. "We informed the Justice Department before we launched this test and we have been responsive to their questions about it," said Google spokesman Adam Kovacevich, in an e-mail.

DOJ spokeswoman Gina Talamona declined to say whether the department had initiated an investigation. However, she said the department "was aware of the collaboration."

Microsoft could not be reached for comment. Earlier, company General Counsel Brad Smith roundly criticized the test, saying it raised antitrust issues.

The test, which ends this week, does not include Yahoo's network of affiliate or premium publisher partners and is limited to no more than 3 percent of Yahoo search queries. The companies have not said whether they are planning to extend the test.

"I assume Yahoo's interest in its deal with Google is to forestall a merger with Microsoft, largely so that its management can remain in control," said Keith Hylton, professor at the Boston University School of Law, in an e-mail.

"Google's interest is also to forestall a merger with Microsoft, so that it can avoid a competitive threat. I doubt that price-fixing is a major part of the aims of either Google or Yahoo. If Microsoft's goal in acquiring Yahoo is to make a run at competing against Google, the Yahoo-Google partnership has anticompetitive effects because it is shielding Google from having to face a tougher competitor."

Hylton said he didn't think it was fair to suggest that a Google-Yahoo partnership was the same in its competitive implications as a Microsoft-Yahoo merger.

"It's clear that Google is the dominant firm, while Yahoo and Microsoft are fringe competitors," he said. "The Google-Yahoo partnership effectively limits and minimizes the fringe even more. The Microsoft-Yahoo merger would allow two fringe firms to merge into a possibly serious rival to Google."

Hylton said antitrust regulators have looked with suspicion on mergers between dominant companies and other firms, especially if it appears those mergers were designed to avoid competition.

"The merger laws have probably been a bit too strict in this area. In the past, mergers have been deemed anticompetitive when the dominant firm joins with another firm with only one percent of the market," he said.

"In comparison, Yahoo, the'other firm' is a relatively big player among the fringe competitors in its market, and Google is clearly the dominant firm in its market. The courts could easily apply the reasoning of the merger case law to a monopolization inquiry - when, as in this case, the dominant firm seeks a partnership that appears to have a significant competition-avoiding effect."

At a press briefing this week, Microsoft COO Kevin Turner put some meat on the bones of Microsoft's "software plus services" strategy to deliver cloud computing capabilities to customers. Turner reviewed Microsoft's current on-demand offerings -- mainly Microsoft Dynamics CRM Online, plus hosted versions of Exchange and SharePoint -- but also revealed that major new announcements would follow at the Microsoft Partner Conference in early July.

Microsoft's near-term cloud focus When asked whether Microsoft plans to offer a development platform in the cloud, Turner grinned and said pointedly: "We are not announcing anything today." Given the strength of Microsoft's developer base, and the recent announcement of Google App Engine as a cloud-based development platform, Microsoft has every incentive to launch a hosted platform for developing Web applications as soon as possible.

[ As Microsoft and other vendors reveal new services, the platform lock-in game moves to the cloud, thereby bringing an entirely new set of risks for customers. But there's a right way -- and a wrong way -- to plan for such lock-in. ]

Much talk was devoted to which enterprise servers and applications would be offered on demand either by Microsoft or its partners. Turner put special emphasis on SharePoint, which as a collaboration tool is well suited to deployment in the cloud, and as a portal platform offers the potential to wrap enterprise, desktop, and Web apps into a unified user interface.

Hosted desktop virtualization in the cards And what of desktop virtualization, where Microsoft could host entire desktop environments for customers? "Most large customers would give us their desktops today and say, 'You go ahead and manage them,'" said Turner, who acknowledged that Microsoft already has desktop virtualization pilot programs in place with a few select customers. At this point, he said, Microsoft is gathering feedback and "looking hard" at this area, with no timeframe for commercial availability. He agreed, though, that Microsoft's combination of desktop and Dynamics enterprise apps puts the company in a unique position to provide fully integrated application environments to customers via desktop virtualization.

Tim O'Brien, senior director of Microsoft platforms, provided additional detail, noting that Microsoft is looking at on-demand versions of a whole range of software, including identity management. If Microsoft plans to go down that road again, what had it learned from the Hailstorm debacle years ago? "We should have offered customers a choice of where they wanted to put data about themselves, instead of trying to maintain all of it."

Choice is the Microsoft mantra when it comes to software plus services. If customers want locally installed software, Microsoft will provide it as it always has. If they want a customized, on-demand suite of applications hosted by a Microsoft partner, they should have that choice, too. And if they want software as a service hosted by Microsoft, the company is rearchitecting Exchange, SharePoint, Office Communications Server, and other software for multitenancy.

For the latter purpose, Microsoft is creating its own massive datacenter facilities "you can see from space," says O'Brien -- in Texas, Illinois, Ireland, and other locations.

At long last, Microsoft's commitment to on-demand computing seems very real. "If you're going to go in, you'd better get all in," O'Brien said.

?

The 3G iPhone will be announced June 9, the likely date of Apple CEO Steve Jobs' keynote at the company's Worldwide Developers Conference, analysts said in research notes on Thursday.

The 3G iPhone will be the "first of an impressive wave of new products" from Apple, wrote Citi analysts Richard Gardner and Yeechang Lee. They also expect an updated Mac laptop and iPod lines. The Apple conference is scheduled for June 9-13 in San Francisco.

In addition to a 3G iPhone release in early June, the 2.5G model could have a "minor casing change" and a price drop to between $299 and $349, compared to the current $399, wrote Shaw Wu, an analyst with American Technology Research, in a research report.

Those predictions are consistent with aFebruary prediction Gardner made that 3G iPhones will be announced by midyear. The 3G iPhone release will help Apple meet its target of shipping 10 million iPhones in 2008, Gardner wrote at the time.

Apple is confident it will sell 10 million iPhones this year, officials said during a conference call on Wednesday to discuss the company's second-quarter earnings.

When asked about the possible release of a 3G iPhone, Apple CFO Peter Oppenheimer declined comment. Apple has new products in the pipeline that the company is excited about, Oppenheimer said.

Apple sold more iPhones than expected during the quarter, and iPhone inventories were not enough to meet the strong demand, company officials said. Apple acknowledged that aggregate iPhone inventories were low in the U.S. and Europe, which in the past has led to speculation that Apple is reducing current iPhone supplies to prepare for the release of the 3G iPhone.

The iPhone shortage is consistent with Apple's "tendency to wind down inventory ahead of an update," Wu wrote in his note. Predicting unit shipment of around 11 million iPhones in 2008, Wu said that iPhone adoption could be driven by the acceleration of iPhone 2.0 software, which was released in March as a beta and will be delivered to iPhone users by the end of June.

The iPhone 2.0 software provides enterprise applications to iPhones, including push e-mail support through the Microsoft Exchange mail server. It also includes an SDK for developers to write iPhone applications.

Native Exchange support on the iPhone could boost its adoption, Wu said. The iPhone SDK should deliver many third-party applications for the iPhone and iPod Touch by the end of this year, the Citi analysts wrote. The SDK has already been downloaded 200,000 times and is being used in one-third of Fortune 500 companies to develop applications for the iPhone, according to Apple.

In the end, the 3G iPhone will be as good as the network it operates on, and AT&T needs to broaden the rollout of its 3G network in the U.S. to handle data traffic, Wu wrote. The current iPhones are putting a strain on AT&T's 2.5G EDGE (Enhanced Data GSM Environment) network, Wu wrote.

AT&T's 3G broadband network is available in many U.S. metropolitan areas, and the carrier intends to expand it. The network uses HSDPA (High Speed Downlink Packet Access) technology.

"Timing of a broad 3G roll-out at AT&T is unclear to us and in our experience, these types of significant network roll-outs tend to take longer than consensus thinking," Wu wrote.

Microsoft reported on Thursday quarterly earnings in line with Wall Street expectations but down slightly from the same quarter last year, reflecting the challenges the software giant faces in an increasingly competitive market.

For the three months ending March 31, Microsoft reported revenue of $14.45 billion, in line with the consensus polled by Thomson Financial and up slightly from the same quarter last year, when Microsoft brought in $14.40 billion in revenue.

Diluted earnings per share were $0.47, higher than Thomson Financial's consensus of $0.44 and down from the $0.50 reported during the same quarter last year.

However, Microsoft's earnings per share results included a charge of $0.15 per share for the fine the European Commission charged the company for failing to comply with the Commission's antitrust ruling.

Operating income was $4.41 billion, down from $6.59 billion for the same period last year. Operating income in the most recent quarter included a charge of $1.42 billion for the European Commission fine.

Microsoft highlighted growth in its entertainment and devices segment, which increased revenue by 68 percent compared to the same quarter last year, primarily due to sales of Xbox 360 game consoles. Cumulative console sales passed 19 million during the quarter, an increase of 74 percent from a year ago, Microsoft said.

Another bright spot was its server and tools business, which grew revenue by 18 percent compared to the same quarter in 2007. During the quarter, Microsoft made major product launches for Windows Server 2008, SQL Server 2008, and Visual Studio 2008.

While results for the quarter were mostly flat, Microsoft revised its expectations for its full fiscal year, ending June 30. It now expects revenue in the range of $66.9 billion to $68 billion instead of its previous prediction of $59.9 billion to $60.5 billion. Diluted earnings per share for the year should be $2.13 to $2.19, rather than $1.85 to $1.88, Microsoft now says. In addition, the company now expects operating income to be $26.7 billion to $27.4 billion, instead of $24.2 billion to $24.4 billion.

Marc Andreessen had no idea that the Mosaic browser he codeveloped would kick off the Web revolution and become such an enduring and important piece of software.

Mosaic, created by Andreessen and Eric Bina at the National Center for Supercomputing Applications at the University of Illinois at Urbana-Champaign, was "a renegade academic research project" aimed at universities and government contractors, he said.

At the time of Mosaic's release in 1993, the hot technology that was thought would change the world was interactive television and the availability of hundreds of channels, he said.

"We had extremely low expectations. And then of course it took off," Andreessen reminisced during a keynote session Thursday at Web 2.0 Expo in San Francisco during which he was interviewed on stage by John Battelle, chairman of Federated Media.

Of course, by the time he co-founded Netscape in 1994, Andreessen understood the potential of the Web browser, although he was in a minority among the skeptics in the industry and the media, he said.

Even today, when the Web is so widely considered a crucial element across most industries, it's interesting to find resistance to it and lack of understanding about how to leverage it, he said, citing media and telecommunication companies as examples.

Looking back, even Andreessen is surprised at the longevity and increasing impact of browsers on the Internet. "It turned out far better than anyone could have thought," he said.

Even elements that he thought would be quickly discarded as development progressed, like JavaScript, cookies and the back/forward buttons, have withstood the test of time, he said.

Far from nearing retirement, the browser is increasingly at the center of Web innovation, as more and more applications and services are built to be delivered via browsers, he said.

One clear example is social networking, which is, of course, browser-based and has displaced applications like instant messaging as the preferred communication method for young people, he said.

Perhaps unsurprisingly, Andreessen's latest venture, founded in 2004, is Ning, which provides a platform for anyone to create their own social network.

Ning currently hosts about 250,000 social networks, 70 percent of which are active, said Andreessen, Ning chairman and co-founder. The company has raised an eye-popping $560 million from investors.

Asked by Battelle and later by an audience member to comment about competing against Microsoft and Bill Gates, Andreessen had no fighting words, despite the historic conflict between Microsoft and Netscape and the ensuing U.S. Department of Justice antitrust probe.

He said the IT industry wouldn't have experienced nearly as much growth as it has if Microsoft hadn't provided a standard operating system for PCs. He also praised recent moves by Microsoft to become more open in its technology.

While it would be sad, from an entrepreneur's point of view, to see Yahoo lose its independence to Microsoft, such a merger could yield positive results for the companies, he said. Despite the potential for such a mega-merger, the competitive landscape in the computer industry is healthy, having "splintered and fragmented in very positive ways" in recent years, he said.

This means that there are more business models and opportunities for new companies to exploit, as well as more diversity and freedom in technology. "The underbrush of the valley keeps growing," he said.

Apple's attitude about unlocked iPhones hints that the company will abandon its business model of grabbing a piece of mobile carriers' revenues in order to make its goal of selling 10 million smart phones this year, an analyst said Thursday.

"They seemed absolutely blithe about making the 10-million number," said Ezra Gottheil, an analyst with Technology Business Research, referring to comments by Apple executives during Wednesday's earnings conference call. "And I get the funny sense that ultimately the whole idea of locked iPhones and the revenue almost doesn't interest them."

Several times during the call, Peter Oppenheimer, Apple's COO, and Tim Cook, the company's CFO, stood by the 10-million iPhone goal. "We are confident on hitting the 10 million for the year," Cook said.

According to the sales figures Apple released yesterday for the first three months of 2008 -- its second fiscal quarter -- the company sold 1.7 million iPhones worldwide, leaving 8.3 million more to go if it's to reach its iPhone sales goal.

"I think they think they'll go explosively into China" this year, said Gottheil, who stuck to earlier predictions that Apple will have to move into the massive Chinese market to sell 10 million handsets, and will probably have to forget about revenue sharing to do that.

"They'll go into China, they'll go into India, they'll go into all the large wireless markets," said Gottheil, "probably with a lower price." But likely without the business model they've used in the U.S. and Europe, where Apple has struck exclusive deals with one mobile carrier in each. In return, Apple receives part of each iPhone customer's monthly subscription.

China Mobile, that country's largest mobile service provider, has reportedly balked at any revenue sharing, a sticking point that's prevented negotiations between it and Apple from getting off the ground.

Financial analysts from several firms also pressed Oppenheimer and Cook to quantify the percentage of iPhones sold that have not been registered with one of the partner carriers, and thus presumably "unlocked," or hacked so that the devices can make calls with any mobile carrier.

In the one estimate given on unlocking, Cook said last October that about one in every six iPhones had been purchased with the intent to hack the hardware and use it with an unsanctioned carrier.

Yesterday, however, he refused to reveal what Apple thinks about unlocking trends, going only as far as calling the number "significant."

"We don't feel that we can quantify it with precision, and so we don't want to put out a number that we can't stand behind," Cook said. "But we've gone out of our way to classify the number as significant. I'm not sure how to be more clear than that."

Earlier in the call, in answering a question about recent shortages of iPhones in Apple's own retail stores, Cook blamed sales to buyers who planned to unlock the device. "Our U.S. stores have experienced more stock outs, or relatively more, and we believe the reason is that there are more phones being bought there with the intention of unlocking," he said.

The combination of Apple's refusal to estimate the extent of unlocking with Cook's matter-of-fact attitude caught Gottheil's attention, and fueled his speculation that Apple will do what it takes to sell 10 million iPhones this year, including ignoring unlocking and tossing out the revenue sharing model where necessary. "Don't get me wrong, they want to make nice, solid profit, and Jobs would like to be the best-compensated CEO," said Gottheil. "Revenue from the carriers goes straight to the bottom line, they don't have to do a thing to get it.

"But what they mostly care about is disseminating Apple products."

Gottheil also said that the signs are clearer that Apple will launch a new model of the iPhone that accesses the faster 3G data network, even though Cook passed on a couple of opportunities during Wednesday's earnings call to comment on a 3G-enabled device.

Specifically, Gottheil noted that Oppenheimer confirmed that Apple is still planning to update the iPhone's firmware in "late June." Dubbed "iPhone 2.0," the update will let users add third-party applications to their smart phones. It's also expected, though not announced by Apple, that Version 2.0 will also support 3G.

"I'm betting late June [for 3G]," Gottheil said.

VMware has announced the release of Fusion 1.1.2, an update to their virtualization software for Intel-based Macs. It's a free update for registered users. Fusion costs US$79.99.

Using features built into the Intel microprocessors that power newer Macintosh computers, VMware's Fusion enables those systems to run operating systems other than Mac OS X at the same time. You can install Windows, Linux, and other environments as "virtual machines," so you can access software you can't run on the Mac.

The 1.1.2 update enhances support for Apple's MacBook Air laptop and also enables the backup of virtual machines using Time Machine, Mac OS X v10.5 Leopard's integrated backup system. Support has been added for Windows XP SP3 Boot Camp partitions, and Simplified Chinese language support is now available.

Other highlights and fixes in this release include proper disconnection of USB devices connected to the virtual machine when shut down; correction of a problem with wireless bridged networking not being able to obtain an IP address from the DHCP server; a fix for the Apple Aluminum Keyboard; fixes to sound problems that would cause the default speaker to work only; remapped keyboard shortcuts; and correction of a "Signal 10" error.

InfoWorld has confirmed that Dell will sell and support Windows XP to consumers beyond the June 30 Microsoft sales cutoff date that Microsoft reaffirmed today, after earlier comments from CEO Steve Ballmer seemingly indicated it might reconsider that decision.

Dell will take advantage of a licensing option in Vista Business and Vista Ultimate that lets PC makers provide XP under the Vista license, which Microsoft calls a "downgrade" license. (Enterprises with site licenses have these same rights with any version of Vista.) In essence, the user is buying a Vista license that it can apply to XP, and Microsoft can still claim a Vista sale.

[ Jointhe more than 170,000 people who've asked Microsoft to keep XP on sale after June 30. Sign InfoWorld's "Save XP" petition today. ]

Dell will preinstall XP Professional as a "downgrade" on a variety of desktop PCs and laptops, a spokesperson said, saving users the hassle of doing it themselves. The computers available with the XP option will include the Windows Vista installation DVD in the box so users can later install Vista over XP under the same license if they wish.

The "downgrade" program is available as an option on some Dell Latitude, OptiPlex, and Dell Precision systems at no charge. It's also available as an option on some Vostro and Dell XPS gaming systems for a small fee; these systems are targeted mainly at small business users and consumers.

A Dell spokesperson said this program will be supported as long as Microsoft supports the "downgrade" program.

Although Dell will ship a resource DVD that includes XP and Vista drivers for included peripherals, it's unclear whether Dell will ship XP drivers for all the available options. For example, a Vostro 200 desktop today available with a choice of Windows XP and Windows Vista has an option for a wireless card that will not work under XP.

An assortment of vendors are releasing enterprise mashup development tools during this week's Web 2.0 Expo in San Francisco, but those announcements may gain additional resonance from news that broke about two weeks ago, when IBM announced a pair of mashup-related product releases.

"Anytime IBM gets into something, it usually calms people down as something safe to use in their business," said Michael Coté, an analyst with Redmonk.

Generally speaking, mashups are applications that combine data from a number of sources and present them through a rich user interface. They are meant to be built quickly and easily, and in many cases accessed over the Web. The concept first took hold with consumer-oriented applications that mashed publicly available data sources, such as Google Maps and event listings.

[ Learn more about mashup technologies from InfoWorld's Paul Krill in  Mashups a hot item at Web 2.0 show and  Enterprise mashups revealed at Web 2.0 conference ]

Today, there are a plethora of APIs available, and an array of companies -- including large players like BEA and Tibco -- are selling enterprise-focused tools.

The market is even showing subdivisions. Some vendors, such as SnapLogic, are focusing on data integration. Many others, often lumped into the RIA (rich Internet application) category, deal more with the presentation layer.

IBM's entry centers on two products: Mashup Center, a development environment aimed at nontechnical business users that entered beta on April 15, and WebSphere sMash, a more robust toolset for developers that enables the use of dynamic scripting languages. It is based on the previously announced Project Zero effort. IBM will release the commercial product later this year.

While the products may not offer anything fundamentally new and follow years of work by other companies, the fact that a vendor of IBM's weight is pushing a broad set of mashup tools could be proof the space has truly arrived, company officials and observers suggested.

"There comes a time when you have to place your bets," said Larry Bowden, vice president of portals at IBM. "With the force of our announcement, we're making a bet here."

"IBM's announcement substantiates the market," said John Crupi, CTO of JackBe, an enterprise mashup vendor that is launching the 2.0 version of its Presto platform this week.

But JackBe is well-prepared to compete, he said. "We are built as a pluggable part of the stack. We're very lightweight and very agile and can play with heterogeneous vendors."

JackBe has managed to get some heavy-duty customers to use its tools. The U.S. Defense Intelligence Agency created Project "Overwatch," a dashboard-like application that integrates and correlates various intelligence-related data.

Bob Gourley was CTO at the U.S. Defense Intelligence Agency during the project's creation. The DIA was drawn to mashup-style development due to one of the concept's central promises -- speed.

"For the end-user, it is speed in getting data. We don't want to wait hours for data to end up on someone's desktop," said Gourley, who is now principal of Crucial Point LLC, a consultancy.

"Another component of speed is the speed to deliver something," he added. "In the military and intelligence community, we have been pioneers in displaying information over terrain and maps and letting people interact with it. But that was all hard-coded -- that would take years to build something like that."

While the DIA found a place for mashups within its IT strategy, enterprises shouldn't buy first and develop later, said Jason Bloomberg, an analyst with Zapthink, a consultancy focused on SOA (service-oriented architecture).

"[Mashups are] really a solution looking for a problem," he said. "It's great to be able to put your pizza places on a Google map, but what good is it?"

One clear-cut role for mashups has emerged, he said. "Mashups are becoming killer-use cases for SOA," Bloomberg said. "You can show a mashup-based solution to an executive, and they'll get it."

Yet, any serious conversation about SOA inevitably turns to governance. "You can't just let anybody mash up anything ... all that has to fit into the governance framework an organization has," Bloomberg said.

IBM says its tools have governance and security built-in. JackBe also offers governance components, which include a connector to Hewlett-Packard's SOA Systinet, a management platform for SOA.

The ever-present spectre of vendor lock-in is another concern, Gourley warned. "The challenge is that each of the big players have inherent biases to build things that only work best with their solutions," he said. "This is never their stated intent, but the internal pressures to do that are something that all CTOs should watch closely."

Meanwhile, smaller companies like JackBe are "absolutely forced to work well with everyone," he said.

Then there's the question of what constitutes a mashup developer. While mashup vendors broadly proclaim their tools' ease of use for nonprogrammers, some level of development skill is realistically required, according to Coté.

"I think what you can do in [Microsoft] Excel is the bar," he said. "If a user can create macros and pivots in Excel, then mashups should be conceptually within their grasp.... [But] you're always going to need programmers."

Gourley said "the ideal mashup developer is no developer at all."

"A mashup platform should be so easy to use that in-house developer talent can succeed with it, and it should also be so easy to use that end-users can do the mashing," he added. "When large integrator companies claim that they field mashups, I start asking them hard questions like, 'Did you really field a mashup or did you hard-code the interface?'"

"But ... generally some development is required, and when a mashup platform is selected it should be one that lets internal developers field solutions fast, in days versus in months," he added.

Even before choosing a vendor's offering, companies should lay the groundwork for their mashup strategy, Gourley said.

A first step is to determine the initial data sources to be used. "You can add more later, but it helps to have an initial list so you can ensure the data can be securely consumed." Second, companies should go with a browser-based product, he argued. "You have many options to chose from, including thick applications, but browser-based solutions are more maintainable."

Echoing Bloomberg, Gourley said the most important thing is to "begin with a vision for what needs to be accomplished. Without a vision, the odds of success will be much lower."

Residential and small-business customers of Qwest Communications International in 23 U.S. cities will soon have access to broadband speeds up to 20Mbps because of the company's fiber-to-the-home rollout, the company said Thursday.

The phased rollout of fiber will bring two new service plans, Connect Quantim with 20Mbps service and Connect Titanium with 12Mbps, to 23 cities in the western U.S. The plans will be available this year in Denver; Phoenix; Portland, Ore.; Salt Lake City; Seattle; and Minneapolis and St. Paul, Minn., among other cities, Qwest said.

The new packages are already available in some neighborhoods in the 23 cities, said Tom McMahon, Qwest's director of corporate communications and government relations. Qwest began rolling out fiber to some neighborhoods last year, and customers in those neighborhoods were able to get speeds up to 7Mbps.

The company is ahead of its goal to reach 2 million customers with fiber by the end of the year, McMahon said.

Asked about the popularity of Qwest's fiber-based service, McMahon declined to give specific numbers. Qwest had 2.6 million broadband customers, including fiber and DSL, at the end of 2007.

"In the markets where we have already begun extending fiber, we've seen a terrific customer response," McMahon said. "So, we are expecting take rates to stay strong and that we'll continue to take market share. All in all, customers are satisfied and retention has been great."

Qwest's Connect Quantim service will cost $99.99 when a customer has another Qwest service, such as wireless or phone service. Connect Titanium will cost $46.99 a month when paired with another Qwest service. When customers sign up for two years of service, they are guaranteed that "price for life," McMahon said.

The two other major regional telecom carriers in the U.S., AT&T and Verizon Communications, are also rolling out fiber to the home. The fiber rollouts come as the traditional telecom carriers face competition from cable and other VoIP providers, with the cable and telecom providers often selling a package of services, including voice, Internet, and cable-like television.

But customers may not necessarily want faster broadband, said Jeff Kagan, an independent telecom analyst. "We are seeing all sorts of super-fast Internet connections for higher monthly fees," he said in an e-mail. "Faster is better, but if you have to pay extra for a faster connection, many customers would prefer a slower connection at a lower cost."

For most Internet use, 1Mbps to 3Mbps is sufficient for most people, he added. "There are times when faster is needed, like when you download a movie or other large file, but the vast majority of use is at a much slower speed and customers don't even realize it," Kagan said. "Customers who don't mind paying more can get the fastest speeds, but for customers who watch what they are spending, speeds of 3Mbps is more than fast enough for the vast majority of what they do online and costs less. That can save the average customer real [money] every month."

Yahoo is swinging the doors of its Web platforms wide open to let outside developers create applications across its network of sites, as well as radically stitching together its online services under the social profile concept.

The idea is to let the hundreds of millions of people who use its Web mail, instant messaging, calendar, photo management, and other online services replicate the social experience that social networks like MySpace and Facebook have made so popular.

This means that Yahoo users will have a profile under which their Yahoo services will fall, and which users will be able to customize by adding applications. This profile will also simplify the map of connections between Yahoo users so that they can find each other and interact more easily and efficiently.

If Yahoo is able to bring this vision to reality, it could pose a major threat to the appeal of MySpace, Facebook, and other social networks, and give Yahoo the boost it has been seeking for years among Web users.

"It is rewiring Yahoo from the inside out, across all of our properties, to fundamentally open up those Web services and provide a consistent development model, a consistent deployment and consumer experience as well," said Ari Balogh, Yahoo's CTO, during a keynote at the Web 2.0 Expo in San Francisco on Thursday.

While Yahoo has had open APIs for a variety of its services for years, Balogh said this initiative will take those efforts to much greater lengths, and it will include streamlining the development process so that it's uniform for developers across Yahoo platforms, he said. "It includes opening it up in a way we have never done before. It's about making the entire Yahoo experience more social," he said.

The process is already ongoing, as Yahoo on Thursday announced the opening up in beta of its Search Monkey development environment, which lets external developers customize Yahoo search results to make them, in theory, more relevant and richer with information. Yahoo had announced its intention to do this in February.

Yahoo expects to hit more significant milestones in its opening-up process throughout the year, he said.

With this vision, Yahoo seems to be finally tossing out the window its failed and misguided attempts to compete against MySpace and Facebook by creating a straight-ahead social networking site, like its disappointing Yahoo 360.

Instead, Yahoo is going to attempt to harness its users worldwide, which have some 10 billion latent social relationships already established amongst themselves via their Yahoo Messenger contact lists, Yahoo Mail address books, and the like.

By unifying all Yahoo user profiles, Yahoo will create its own consistent social graph for the benefit of both consumers and developers, he said. From the social graph, Yahoo will be able to establish relevant connections among users, as well as event streams of what people are doing online, which are popular on Facebook and via FriendFeed.

"We don't think of social as a destination. We think of social as a dimension. It infuses every element of the consumer's experience on the Web," Balogh said.

Yahoo will also take care of making sure that people are in control of the applications they opt to add and thus share data with, as well as making sure that data is kept safe.

This story was updated on April 24, 2008

The latest version of the popular Ubuntu Linux distribution was officially released to the public Thursday after the customary beta-test period. This version is designated "LTS," for "long-term support," which should make it attractive to business customers who prefer a longer upgrade cycle for their operating systems.

Ubuntu 8.04 is available in a version tailored for server systems, but in the past it has been the desktop version that has garnered the most attention. The new release should be no different as it includes a number of improvements for desktop users -- most notably, a new installer that allows the OS to coexist on a Windows computer without partitioning or re-formatting the hard drive.

As is customary for Linux distributions, Ubuntu 8.04 includes incremental updates to many of the software packages that make up the system, from low-level details like the window manager and graphics subsystem, all the way up to the bundled OpenOffice.org productivity suite. The new release is also the first to ship with the Firefox 3.0 browser, which is currently still in late-stage beta testing. Despite some bleeding-edge additions to the package, my early testing of Ubuntu 8.04 showed it to be a remarkably stable and well-polished Linux desktop.

Full disclosure: I've tried many different desktop Linux distributions, but Ubuntu remains my personal favorite. I will definitely be upgrading the Ubuntu partition on the computer from which I write this, just as soon as I'm able.

Of course, getting your own copy of Ubuntu may well be the trick. The main servers are typically overburdened in the first few days after a new release. Be sure to use the mirror nearest you, or better still, use BitTorrent. Links to torrent files are hidden away on the main Ubuntu site, but they're available. Using BitTorrent helps to relieve the load on the download servers, plus you get the satisfaction of helping fellow Linux users get their own copies of Ubuntu while you download yours. (If the server is too slow to let you navigate to the torrent files, try here for a torrent for the desktop version for i386.)

Comments by Steve Ballmer at a press conference in Europe on Thursday have led to speculation that Microsoft is reconsidering its June 30 deadline to stop selling most new Windows XP licenses . A spokeswoman from Microsoft's public relations firm said Thursday that there is no plan for a change in deadline, however.

"Our plan for Windows XP availability is unchanged. We're confident that's the right thing to do based on the feedback we've heard from our customers and partners," the spokeswoman said, reading from a Microsoft statement.

[ Related: Dell to sell Windows XP beyond the June 30 deadline | TechWatch: Can Dell save the day for Microsoft? | Sign InfoWorld's petition to save Windows XP ]

Ballmer's comments at a press conference at Louvain-la-Neuve University in Belgium led to a flurry of reports on Thursday that Microsoft may be considering an extension of its deadline.

"If customer feedback varies we can always wake up smarter, but right now, we have a plan for end-of-life for new XP shipments," Ballmer said, according to Reuters. Microsoft did not have a transcript of the event, but the spokeswoman from Waggener Edstrom said the comments seem accurate.

The spokeswoman said Microsoft is aware that some customers are pushing for an extension to the deadline -- more than 160,000 people have signed a "Save XP" petition launched by Infoworld , for example. But the company has also done its own research among partners and customers, and feels that "the dates are right," she said, speaking on behalf of Microsoft.

"We feel we've made the right accommodations for customers in certain segments who may need more time to transition to Windows Vista," she said. "But as Steve noted, we maintain a constant stance of listening to our customers and our partners. That's what is guiding our plan and will continue to guide us going forward."

The "accommodations" refer to several exceptions that Microsoft has made to the June 30 deadline. For example, companies that make volume purchases of Vista Business or Vista Ultimate can ask their vendor to "downgrade" their license to Windows XP. Microsoft has also made exceptions for the emerging class of small, ultra-low-cost PCs, and it will continue to provide Windows XP Starter Edition for PCs sold in emerging markets.

Retailers and PC vendors can also continue to sell any backlog of Windows XP licenses that they bought before the June 30 deadline. Beyond those exceptions, most new Windows licenses purchased af