Investment Loss Drops Microsoft Profits
It's hard to know how to call this one: Microsoft announced yesterday that its earnings dropped 42 percent in the most recent quarter, mostly due to a $1.24 billion investment charge, but the company did earn $2.52 billion pre-charge, more than analysts expected, and a gain over last year's $2.21 billion. Revenues were also up year-over-year, $6.13 billion this quarter, compared to $5.77 billion for the same quarter a year before. And of course, the company has like 30 cajillion dollars in the bank, so unless it decides to buy Washington State and secede from the nation, it's probably going to be in good shape for a while.

* And speaking of which…
But there are some short term problems for Microsoft, of course. The company was quick to point out that global sales of computers will likely fall for the final three months of the year, leading to flat or lowered sales compared to the same time period last year. The 2001 holiday season isn't expected to be much a holiday for anyone, especially hardware makers, but Microsoft says that its diversified product lineup will help it get through. That and the 30 cajillion dollars it has in the bank.

* Apple Profits Drop 61 Percent
Apple Computer did something most PC companies have been able to do, and this time it had nothing to do with revolutionary product design: The company nnounced a profit for the most recent quarter. Apple earned net income of $66 million, which is down 61 percent from the same quarter last year, on revenues of $1.45 billion, down 22 percent when compared to the same time period last year. Apple, which is in the middle of an expensive retail store roll-out, said yesterday that it was not confident about consumer spending in the short term, which is probably a common sense observation. Apple's bright spot for the quarter was its popular new iBook, which is selling in record numbers; the iMac is falling off the chart however, thanks to its largely unchanged three year old design.

* Apple Preps Mysterious Digital Media Hardware (tm)
And speaking of Apple, the company mysteriously revealed that it will unleash a new digital media hardware device next week, perhaps in a bid to bolster its digital media hub claims in the face of the Windows XP launch. Apple is being particularly secretive about the new device, saying only, "it's a breakthrough digital device," and, "not a Mac." Most Mac mavens are speculating that the device will be some sort of TV set top box that burns CDs and the like, but I hope not: Compaq and HP are plying this particular bit of deadwood already, and I don't see anything compelling there. What I'd rather see is a Palm-like device that focuses on digital music, photos, and pictures, one that uses Firewire rather than USB. Come on Apple, surprise us.

* Gates Wows China
Microsoft chairman Bill Gates was in China this week to give a series of speeches in which he hoped to foist his vision of the tech future on the largest untapped market in the world. Striding on stage in Shanghai to the theme music from STAR WARS, one can only wonder what was going through the mind of the world's richest man, as the people cheered and whistled. But I can tell you what went through my mind: They should have used the music from the Empire Strikes Back instead. I'm pretty sure George W. Bush arrived in China this week with less pomp and circumstance.

* Microsoft to Security Sites: Stop
Microsoft has issued a series of stinging warnings to security Web sites, asking them to kindly stop popularizing security breaches in the company's products. In an essay posted to the Microsoft Web site, security manager Scott Culp calls on these sites to "end information anarchy" and stop posting information that he says is only helping hackers, and not actual users of the products in question. Culp says that recent security exploits, such as Code Red and Nimda, were made possible by information posted on such sites, and that the company had in fact posted fixes long ago that would have prevented any problems. The real reason so many servers were affected by these attacks? Yup, you guessed it, Frank Stallone.

* Watch Out for the Mini-Blurb Hot-Fix
And speaking of security exploits, thanks to Tony Pratley for pointing out a mysterious security update on the Microsoft Web site. If you peruse the Windows NT Server download page, you'll see a long list of critical updates, but one, titled "Security Update, August 17, 2001," has no explanation, just the text "mini-blurb." Go ahead, install it. I dare you.

* AOL releases AOL 7
And speaking of software I dare you to install, America Online released version 7 of its AOL online software this week, which adds more Time Warner content and an online radio service to the same tired, multi-window user interface we've been suffering with since the early 1990's. AOL defends the lack of change in its UI by noting that it "doesn't want to upset the audience," which is says more about the way the company views this crowd than I ever could. Word to the wise: Change can be bad, but bad is always bad. Just change the UI, AOL, it's bad.

* AOL Testing CompuServe 7 Without IE
And speaking of AOL, the company is testing a version of its upcoming CompuServe 7 software that dispenses with Microsoft Internet Explorer technology, going with in-house Web browsing technology from Netscape 6.x instead. If the company does decide to use Netscape in CompuServe, and then later in a future version of AOL's own online software, the browser wars are on again and all bets are off.

* Internet-Only Taxes Delayed Two Years
Thanks to the struggling economy, we're going to be spared any talk of Internet taxes for a while. This week, the US House of Representatives voted to extend a ban on Internet-only taxes for two more years, after which time we will no doubt be lamenting "the good old days." I can only imagine how much less enticing the Internet will be when the thousands of taxing jurisdictions in this country get their tendrils around the necks of eCommerce sites everywhere.

* European Xbox Launch Set
Microsoft revealed this week that it will launch its Xbox gaming system in Europe on March 14, with a price tag of 479 euros, or £279. This means that the Xbox will be significantly more expensive there than in the US, where the unit will cost $299. Microsoft says it hopes to sell 1.5 million units in Europe during the first three months of its availability. The Xbox will be available in 16 different European markets.

* PlayStation 2 Expected to Top Xbox, GameCube
Sony's entrenched PlayStation 2 is expected to mightily smite competition from Microsoft and Nintendo this holiday season, according to a survey of retailers. The PS2, which sold over 20 million units so far, also dominates the top 10 list for software, with retailers expecting seven of the top 10 games sold this season to run on the PS2. Two will run on Nintendo GameCube, and none on the Microsoft Xbox (some other titles in the top 10 also run on the handheld Nintendo GameBoy Advance). Oddly, despite the economy, many still expect this holiday season to be the best ever for video game sales.

* Microsoft Outlines New Security Measures
In the wake of a suspicious letter found in a Nevada office (one that turned up negative for anthrax when tested by the CDC), Microsoft is bolstering the security at its campus and other offices. The company will require employees to get parking passes now, forbid employees from opening their own mail, implement more frequent security patrols, and cancel upcoming parties. Now if only they'd be this serious about product security…

* What the Heck, We Don't Spend Enough on MS Products Anyway
If you feel some bizarre need to wear Windows Media logo'ed clothes and use Windows Media logo'ed pens and coffee cups, by all means, head over to the new Windows Media Store Web site and go nuts. But honestly, is this anything more than an intelligence test?