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Microsoft Corp. (MSFT), the world’s largest software company, provides intelligence agencies with information about bugs in its popular software before it publicly releases a fix, according to two people familiar with the process. That information can be used to protect government computers and to access the computers of terrorists or military foes.

Redmond, Washington-based Microsoft (MSFT) and other software or Internet security companies have been aware that this type of early alert allowed the U.S. to exploit vulnerabilities in software sold to foreign governments, according to two U.S. officials. Microsoft doesn’t ask and can’t be told how the government uses such tip-offs, said the officials, who asked not to be identified because the matter is confidential.

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Michael Hayden, who formerly directed the National Security Agency and the CIA, described the attention paid to important company partners: “If I were the director and had a relationship with a company who was doing things that were not just directed by law but were also valuable to the defense of the Republic, I would go out of my way to thank them and give them a sense as to why this is necessary and useful.”

“You would keep it closely held within the company and there would be very few cleared individuals,” Hayden said.

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If necessary, a company executive, known as a “committing officer,” is given documents that guarantee immunity from civil actions resulting from the transfer of data. The companies are provided with regular updates, which may include the broad parameters of how that information is used.

Intel Corp. (INTC)’s McAfee unit, which makes Internet security software, regularly cooperates with the NSA, FBI and the CIA, for example, and is a valuable partner because of its broad view of malicious Internet traffic, including espionage operations by foreign powers, according to one of the four people, who is familiar with the arrangement.

Such a relationship would start with an approach to McAfee’s chief executive, who would then clear specific individuals to work with investigators or provide the requested data, the person said. The public would be surprised at how much help the government seeks, the person said.

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Anyone who uses Skype has consented to the company reading everything they write. The H’s associates in Germany at heise Security have now discovered that the Microsoft subsidiary does in fact make use of this privilege in practice. Shortly after sending HTTPS URLs over the instant messaging service, those URLs receive an unannounced visit from Microsoft HQ in Redmond.

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BlackBerry just shipped a new phone that almost nobody has tried. But lots of people already have an opinion about it! Some people think it is great! Others are already making fun of it! That’s pretty typical behavior. People love to fight and fight about phone platforms; to toss around the term fanboi and other insults and invective. People love to lob polemic after polemic in the most boring argument since Mac vs. Windows ever.

Do you like Android? You should, it’s amazing. iOS? Wow, what a great platform, no wonder it started a revolution. Windows Phone? Seriously, it’s got a remarkable and beautiful interface. BlackBerry? There are plenty of great reasons people love it. And no matter which platform you adore, it’s shockingly possible to both have a preference and respect that other people may prefer an entirely different device. I know. Totally weird. But true.

Or, you can just call anyone who expresses a contrary opinion a jerk, or a fanboi, or butthurt, some other un-clever and deeply unoriginal pejorative that ends with the suffix “tard” and ultimately makes you look dumber than the person you’re trying, vainly, to insult.

The phone wars, the platform wars, should be left to people who work for Apple and Samsung and Google and Microsoft and Nokia and BlackBerry. Do you work for Apple? Do you work for Samsung? No? Then shut up.

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Microsoft is backing a bill in Massachusetts that would effectively force schools to stop using Google Apps, or any other service that uses students’ data.

“Any person who provides a cloud computing service to an educational institution operating within the State shall process data of a student enrolled in kindergarten through twelfth grade for the sole purpose of providing the cloud computing service to the educational institution and shall not process such data for any commercial purpose, including but not limited to advertising purposes that benefit the cloud computing service provider,” the bill states.

The proposed legislation was introduced by state representative Carlo Basile (D-East Boston), and Microsoft has said it is supporting it, using the old canard of wanting to protect children from harm. Blocking Google and other providers that use an ad-funded service model is just a side benefit, it seems.

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Denmark wants Microsoft to pay 5.8 billion Danish crowns ($1 billion) in back taxes in one of the biggest tax cases in the country’s history, local media reported on Monday.

The Danish tax authority is in negotiations with Microsoft over unpaid taxes stemming from the 10.8 billion-crown ($1.88 billion) takeover of Danish software company Navision in 2002, Danish Radio DR said, quoting unnamed sources.

The tax authority claims Microsoft sold the rights to Navision’s successful business planning software, now under the name of Dynamics NAV, at below market value to a subsidiary in Ireland, DR said.

As a result the tax authority is claiming 5.8 billion crowns in back taxes and interest from sales of Dynamics NAV, the public service radio broadcaster said.

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In my experience, the behaviors and culture of an organization (large or small) that focuses on the Consumer as a customer is diametrically incompatible with the behaviors and culture of an organization that focuses on Business as a customer.

I feel strongly that this is a key reason Microsoft’s products are often good, but not excellent; the consumer ones and the business ones. This is why Google will never be able to beat Apple at Apple’s game: Google’s customer focus is split between the advertiser and consumer.  

The behaviors of organization, which are really driven by the attitudes, actions, priorities of the people, define what the organization produces. The behaviors required to delight the consumer are simply at odds with the behaviors required to delight businesses. You cannot do both simultaneously in a single organization and be excellent.

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The nuts and bolts of what is presented here is the idea that DLLs are loaded into memory space if there is memory available, and if there is no memory or only small amounts of memory available then the DLL will be put into the remaining memory hole. This sounds simple. And it works, we can load a DLL into a remaining memory hole. First of all the exploit writer has to code a javascript routine that does fill memory until the memory boundary is hit and a javascript exception is raised. When the memory is filled up the installed javascript exception handler will execute javascript code that frees small chunks of memory in several steps, each step the javascript code will try to load an ActiveX object. The result is that the DLL (sometimes there are several DLLs loaded for an ActiveX object) will be loaded at a predictable address. This means that now the exploit writer has a predictable address to jump to and the ‘where do i jump when I have code execution’ problem is solved. One problem the method has is that Windows will become unresponsive at the time memory is exhausted but will resume normal operation after the DLL is loaded at a fixed address and the memory is freed using the javascript code.

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The Google Maps on Windows Phone debacle looks like it will be resolved after all. Google now says that it is in fact planning to get rid of the redirect that’s preventing Windows Phone users from accessing the Google Maps website using Internet Explorer — “soon,” even.

So it isn’t IE incompatibility after all, right? You just got caught.

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Windows users were surprised to find that a Microsoft security update stopped fonts from working on their PCs.

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Every two months, AV-Test takes a look at popular antivirus software and security suites and tests them in several ways. In their latest test which was performed on Windows 7 during September and October, Microsoft Security Essentials didn’t pass the test to achieve certification. Although that may not sound that impressive, Microsoft’s program was the only one which didn’t receive AV-Test’s certificate. For comparison, the other free antivirus software, including Avast, AVG and Panda Cloud did.

I remember about a year ago, there was an article where Microsoft was one of the best. Either the playing field changes rapidly, or all these tests are bogus.

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The bottom line is that this isn’t about Microsoft, HP, Apple or Adobe. It’s about all of them, and how bad the experience has become. While many of these issues can be fixed, checkboxes unchecked, and so on, I feel like as time goes on, every company is trying to come up with any possible idea that they can garner in order to screw their customers over, in most cases just to make an extra buck. The simple fact is that most people don’t go through the trouble is fixing all of this crap, they just put up with it, and that’s exactly what companies count on.

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Security firm Kaspersky has released its latest IT Threat Evolution report. There were some interesting findings in the report, as always, but the most interesting thing that stuck out was all the way at the bottom:

Microsoft products no longer feature among the Top 10 products with vulnerabilities. This is because the automatic updates mechanism has now been well developed in recent versions of Windows OS.

On the Top 10 list: Adobe (5 times), Oracle (2 times), Apple (2 times), and Winamp AVI.

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Rumor has it that mobile phone carrier Verizon Wireless has delayed the launch of Windows Phone 8 handsets on its network, and that it might even cancel them due to a series of issues with the management software.

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Verizon requires for all smartphones on its network to be opened to remote management, yet Microsoft is reportedly refusing to provide the carrier with this feature at the moment.

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Then came a showdown late last year between the utility and Microsoft, whose hardball tactics shocked some local officials.

In an attempt to erase a $210,000 penalty the utility said the company owed for underestimating its power use, Microsoft proceeded to simply waste millions of watts of electricity, records show. Then it threatened to continue burning power in what it acknowledged was an “unnecessarily wasteful” way until the fine was substantially cut, according to documents obtained by The New York Times.

“For a company of that size and that nature, and with all the ‘green’ things they advertised to me, that was an insult,” said Randall Allred, a utility commissioner and local farmer.

A Microsoft spokeswoman said the episode was “a one-time event that was quickly resolved.”

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“When I started to realize that that needed to get done in family planning, I finally said, OK, I’m the person that’s going to do that,”

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The story of Microsoft’s lost decade could serve as a business-school case study on the pitfalls of success. For what began as a lean competition machine led by young visionaries of unparalleled talent has mutated into something bloated and bureaucracy-laden, with an internal culture that unintentionally rewards managers who strangle innovative ideas that might threaten the established order of things.

By the dawn of the millennium, the hallways at Microsoft were no longer home to barefoot programmers in Hawaiian shirts working through nights and weekends toward a common goal of excellence; instead, life behind the thick corporate walls had become staid and brutish. Fiefdoms had taken root, and a mastery of internal politics emerged as key to career success.

In those years Microsoft had stepped up its efforts to cripple competitors, but—because of a series of astonishingly foolish management decisions—the competitors being crippled were often co-workers at Microsoft, instead of other companies. Staffers were rewarded not just for doing well but for making sure that their colleagues failed. As a result, the company was consumed by an endless series of internal knife fights. Potential market-busting businesses—such as e-book and smartphone technology—were killed, derailed, or delayed amid bickering and power plays.

That is the portrait of Microsoft depicted in interviews with dozens of current and former executives, as well as in thousands of pages of internal documents and legal records.

“They used to point their finger at IBM and laugh,” said Bill Hill, a former Microsoft manager. “Now they’ve become the thing they despised.”

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Microsoft’s new logo, unveiled yesterday, is a bold departure from tradition because it’s the first to feature a visual symbol alongside the familiar wordmark. This sudden outburst of color from the typically staid company has inevitably stimulated designers’ imaginations, and one product from it has been a gallery posted on Tumblr showing what other famous brands would look like if they underwent the same minimalist treatment.

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While you can still add any host you want to the hosts file and map it to an IP, you will notice that some of the mappings will get reset once you open an Internet browser. If you only save, close and re-open the hosts file you will still see the new mappings in the the file, but once you open a web browser, some of them are removed automatically from the hosts file.

Two of the sites that you can’t block using the hosts file are facebook.com and ad.doubleclick.net, the former the most popular social networking site, the second a popular ad serving domain.

Anybody have Windows 8 installed and to try this?

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When Microsoft shipped its Release Preview of Windows 8 in June, it announced that the default browser, Internet Explorer 10, would have the Do Not Track (DNT) signal enabled by default. That action unleashed a heated debate in the Tracking Protection Working Group of the World Wide Web Consortium (W3C).

To the advertising and analytics companies that make up the tracking industry, this issue is an existential one. If the default browser in the world’s most popular operating system is set to disallow tracking, the effect would be profoundly disruptive to companies that live and die by their ability to follow users around the web.

After much discussion, the working group agreed that DNT could only be turned on by a browser if that decision “reflects the user’s preference.” The result was a consensus by the working group that a browser (technically, a user-agent) should not enable DNT by default.

Today, Microsoft answered those critics by saying it still intends to enable DNT in Internet Explorer in IE 10. But the final released version will make one concession, according to Microsoft Chief Privacy Officer Brendon Lynch, who announced the decision in a blog post

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Apple sold 1.3 million Apple TV devices during the June quarter, an increase of 170 percent over the same quarter a year ago.

That still qualifies as a “hobby,” according to Apple CEO Tim Cook, who disclosed the number in response to an analyst’s question on the company’s earnings conference call. But here’s an interesting data point: Microsoft sold 1.1 million Xbox 360s worldwide during the same time period.

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Historically, Skype has been a major barrier to law enforcement agencies. Using strong encryption and complex peer-to-peer network connections, Skype was considered by most to be virtually impossible to intercept. Police forces in Germany complained in 2007 that they couldn’t spy on Skype calls and even hired a company to develop covert Trojans to record suspects’ chats. At around the same time, Skype happily went on record saying that it could not conduct wiretaps because of its “peer-to-peer architecture and encryption techniques.”

Recently, however, hackers alleged that Skype made a change to its architecture this spring that could possibly make it easier to enable “lawful interception” of calls. Skype rejected the charge in a comment issued to the website Extremetech, saying the restructure was an upgrade and had nothing to do with surveillance. But when I repeatedly questioned the company on Wednesday whether it could currently facilitate wiretap requests, a clear answer was not forthcoming. Citing “company policy,” Skype PR man Chaim Haas wouldn’t confirm or deny, telling me only that the chat service “co-operates with law enforcement agencies as much as is legally and technically possible.”

So what has changed? In May 2011, Microsoft bought over Skype for $8.5 billion. One month later, in June, Microsoft was granted a patent for “legal intercept” technology designed to be used with VOIP services like Skype to “silently copy communication transmitted via the communication session.” Whether this technology was subsequently integrated into the Skype architecture, it’s impossible to say for sure.

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Microsoft, the once-dominant computer software giant that has seen its fortunes wane in recent years, posted its first quarterly loss since emerging as a public company in 1986 Thursday as it took a huge charge for a failed acquisition.

The Redmond, Wash.-based company reported a net loss of $492 million as its operating income was wiped out by a $6.2 billion writedown related to its acquisition of advertising company aQuantive in 2007. Microsoft wrote down almost the entire $6.3 billion purchase price.

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AT&T recently dropped the price of Nokia’s flagship phone, the Windows Phone-powered Nokia Lumia 900, to $50 with a new two-year contract. It’s a great deal for a high end phone that was already pretty cheap at the original price of $100, when most popular phones sell for $200. But is Nokia’s phone worth it, even at $50?

The problem with the Lumia 900 is that it’s essentially a dead end from a technology perspective. In the fall, Microsoft is rolling out Windows Phone 8, the next generation version of its new mobile platform. And all current Windows Phone devices can’t upgrade to the new OS. Sure, Microsoft will be upgrading current Windows Phone 7.5 devices to Windows 7.8, but is that enough to convince you to live with the Lumia 900 for the length of a two-year contract with AT&T?

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Eichenwald’s conversations reveal that a management system known as “stack ranking”—a program that forces every unit to declare a certain percentage of employees as top performers, good performers, average, and poor—effectively crippled Microsoft’s ability to innovate. “Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Eichenwald writes. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”

When Eichenwald asks Brian Cody, a former Microsoft engineer, whether a review of him was ever based on the quality of his work, Cody says, “It was always much less about how I could become a better engineer and much more about my need to improve my visibility among other managers.” Ed McCahill, who worked at Microsoft as a marketing manager for 16 years, says, “You look at the Windows Phone and you can’t help but wonder, How did Microsoft squander the lead they had with the Windows CE devices? They had a great lead, they were years ahead. And they completely blew it. And they completely blew it because of the bureaucracy.”

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Microsoft has filed for a technology patent which will allow advertisers to push their advertising to consumers based on their emotional states and recent behaviours and activities.

The platform works across devices, tracking and monitoring the online activity data of consumers stored in logs including browsing history, web page content, search queries, emails, instant messages, videos from webcams, gestures from a computing device, e.g., Microsoft Kinect and results from online games.

The technology created by a group of resident Microserfers goes on to process the online activity identifying a tone associated with content that the user interacted with, receiving an indication of the user’s reaction to the content and assigning an emotional state to the user based on the tone of the content and the indication of the user’s reaction to the content.

The user’s reaction is identified from facial expressions of the user captured by an image capture device during the time period of usage. Advertisers then provide targeting data that includes the desired emotional states of users it intends to target and the ads are duly served to unsuspecting emo targets.

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