Microsoft: “Would you like to form an alliance with me?” Nokia: “Absolutely!”

Microsoft and Nokia have made an agreement that will bring Microsoft Office, as well as other productivity software to Nokia phones. This partnership marks the first time that Microsoft will make office for non-Microsoft mobile phones. The deal is an attempt to get in on the business that RIM has been getting with its BlackBerry e-mail software and services.

Microsoft has been hurting in the mobile market but with the Nokia deal, they hope to have more of an edge. With programs like Word, Excel, and SharePoint, Microsoft will be attempting to gain more ground in the smart phone tech competition.

The first Microsoft Office product that comes with Nokia Smart Phones is the Mobile Communicator, it enables business users to find and communicate with colleagues via IM. Plus, both companies have promised a joint partnership in the development of new applications for Nokia smart phones.

A month ago, the CEO of Activision, Bobby Kotick, complained about the high cost of Sony’s PlayStation 3. Kotick’s threat to Sony, to lower the price of the PS3 or Activision stops making games for the console, is covered here.

Yesterday, in an investor call, Sony CEO Nobuyuki Oneda revealed that manufacturing costs of the PS3 are down by 70%.

Sony reported the company’s first annual loss in 14 years when it released its fiscal first quarter earnings yesterday. Further, the company is projecting over a $1 billion loss through March 2010. Sony may be blaming poor sales on the state of the economy, but people like Bobby Kotick would be sure to argue the price of the PS3 is to blame.

Why does Sony’s PS3 cost so much?

The cost of manufacturing each console is roughly $800. The price to buy a PS3? $399. While it may be the highest priced console against its competitors, Microsoft’s Xbox and the Nintendo Wii, Sony is taking a hit for every PS3 sold.

Sony saw some relief in January when it announced that the cost of manufacturing had dropped by 35% to $450. Though a 70% drop in cost seems to be just what the company needs, which would allow, as rumored, Sony to drop the price of the PS3. But will Sony really want to eat into its new profits, especially after a first quarter in the red and a poor outlook for the rest of the fiscal year?

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Yesterday, Google hoped to appeal to businesses by removing the ‘Beta’ label from Google Apps. Hours later, Google dropped a nuclear bomb on Microsoft, via its official blog, by announcing its plans to release a Google Chrome Operating System in the second half of 2010.

Without surprise, Google is aiming to solve problems associated with Microsoft Windows by the release of Google Chrome OS. The following excerpt from Google’s blog entry details some features in the new OS:

“Speed, simplicity and security are the key aspects of Google Chrome OS. We’re designing the OS to be fast and lightweight, to start up and get you onto the web in a few seconds. The user interface is minimal to stay out of your way, and most of the user experience takes place on the web. And as we did for the Google Chrome browser, we are going back to the basics and completely redesigning the underlying security architecture of the OS so that users don’t have to deal with viruses, malware and security updates. It should just work.”

Google Chrome will run within a windowing system on top of a Linux kernel. Google Chrome OS will also be open-source, but Google does not clarify whether that means the OS will be free.

So let’s break this down: fast, secure, simple, free?, web-oriented and….possibly everything Windows is not?  Or is Microsoft Windows as synonymous to the OS as Google is synonymous to search? Will Microsoft have the advantage of releasing the new Windows 7 before Google releases Google Chrome OS? More importantly, will the majority of netbook users, Google’s initial target market, already have Windows 7 running before the official release of Google Chrome OS?

Microsoft is warning users of Windows XP and Windows Server 2003 of a security hole in Internet Explorer - a serious vulnerability that allows attackers to gain the same user rights as the local user.

The hole is reportedly caused by the interaction of IE and Microsoft Video ActiveX Control. This vulnerability can allow hackers to remotely take control of victims’ machines. User need to do nothing more visit a Web site that has been hacked to get infected. According to security experts, criminals have been attacking the security hole in IE for nearly a week, installing viruses on users who click certain links in spam emails.

Microsoft assures users that its IT professionals are working diligently to develop a security update. Until the company is able to provide a a patch for the security breach, the software giant has suggested that users disable the video software, ActiveX. Instructions for deactivating ActiveX Video Control are available here.

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CNET has a source claiming that Microsoft may decide to make life easier for Netbook users anxious to upgrade to Windows 7.

Since debuting its new operating system last fall, Microsoft has often advertised Win 7 on Netbooks. But for owners of machines that are missing CD/DVD drives, installing the operating system is no small feat.

The solution?

Windows 7 operating system loaded and sold on a flash drive, allowing usually disadvantaged Netbook users to easily upgrade their machines.

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Yesterday, Microsoft announced that it would be tossing yet another product into its growing bin of underperforming software. Like Encarta, Flight Simulator, and Windows Live OneCare before it, Microsoft Money has been scrapped. And just as Wikipedia defeated Microsoft’s Encarta reference software, Money could not survive against Intuit’s financial software package, Quicken. On the Money website, the company states, “With banks, brokerage firms and Web sites now providing a range of options for managing personal finances, the consumer need for Microsoft Money Plus has changed.”

In August 2008, Microsoft ended updates to Money and pulled the software from retail shelves. By October of that year, the company began scaling back on the development on at least 13 products, which can be found here.

Microsoft Money will be available for purchase until June 30, 2009. Online services will be available until January 31, 2011. Microsoft assures the product will continue to work after that point, but users will no longer have access to automated data feeds from banks, credit card companies, and other financial service providers.

For those who currently own, or plan to purchase the software before the end of June, be sure to activate the program before January 31, 2011. And, for users who are concerned about exporting information from Money to another financial management application (Quicken, anyone?), Microsoft provides a support document on its corporate website, available here: Exporting Account Information.

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After being rumored for some time now, the Zune HD has at long last been confirmed by Microsoft.  The rumors about a touch screen Zune began over a month ago. Microsoft has kept quiet despite the growing amount of rumors, until now.

The new Zune HD will have a 3.3″ 480×272 OLED touch screen with up to 720p, but only through an HDMI AV dock. The new Zune will also feature HD radio, Internet browser (obviously), and Wi-Fi for instant streaming from the Zune store.

The surprising thing from Microsoft is the Xbox live capabilities the new Zune will have. There will be some type of integration between the Zune HD and live, but it is unclear at this point exactly what it will be.

A price has not been revealed yet, but we do know that the Zune HD will be release in the fall of 09. Microsoft will be showing off the new Zune , and its Xbox live capabilities at E3 09. I am looking forward to it.

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Yang Giving Up the Good Fight and the Fate of Yahoo!

In Tuesday’s – 11/18/08 Wall Street Journal, it was reported that Yahoo’s co-founder will be stepping down after they find a replacement. Apparently Mr. Yang will stay on the board and remain a senior executive within Yahoo. With the rejection of the earlier Microsoft offer and now its co-founder about to step aside - the fate of Yahoo in general and whether it will remain an independent company remains unclear.

Of course the announcement on November 5, 2008 surely didn’t help (or the final nail in coffin) when Google decided to abandon their advertising partnership with Yahoo due to pending antitrust challenges by the Government. With Google essentially turning its back on Yahoo by backing away from their advertising partnership - everyone immediately speculated that Yahoo was back in play with Microsoft.

What Could Have Been

So the irony. . . because of Google’s move, the pressure on Yahoo is greater than ever for them to renew talks with Microsoft and sadly. . . get much less than the $33 per share that Microsoft had offered in May 2008.

A shame to Yahoo shareholders when you consider Yahoo’s stock as I type this is on 11/18/08 is at $11.71 per share. And, no doubt Yang has heard the roar for months from investors who kept saying he should not be the one to lead Yahoo – especially since only 66% of shareholders agreed he should stay in his current position. So, at this point – the Board is considering going with Susan Decker, Yahoo’s current president but some investors have said her former role as Yahoo’s Chief Financial Officer, still does give her enough experience to weather Yahoo’s uncertain future.

Timing is Everything

With the current economic environment and new people soon to be appointed in antitrust roles within the Government, the on-again-off-again negotiations with Microsoft remain in question. This past summer Microsoft’s Steve Ballmer mostly blamed Yang for the companies’ inability to draft an agreement. So, at this point who knows what will happen - no matter what – whether it was its partnership with Google or Yahoo being acquired by Microsoft, there will be less competition in the Internet advertising arena.