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If you’re buying a
car, for example, threatening to walk away and then insisting you won’t settle for a higher price can help minimize the amount you end up paying.

It should be noted that Microsoft’s position, as viewed through the “people familiar with the matter” who have The Wall Street Journal on speed dial, has changed dramatically in a short period of time. In the last day, Microsoft has moved from threatening to walk away, to threatening go hostile with the acquisition, to back in “intense” talks.

Microsoft has various options to consider in its attempt to acquire Yahoo. Hostile ones include making a tender offer directly to shareholders and offering an opposing slate for election to Yahoo’s board of directors.

Microsoft’s discussions with Yahoo “intensified” Friday as the two companies considered possibilities for a last-minute friendly acquisition, The Wall Street Journal reported, citing anonymous sources.

The talks are no guarantee a deal will close, but investors found the evidence convincing. Yahoo’s stock rose $1.82, or 7 percent, to $28.63, in late-day trading.

This report was jointly written by News.com staff writer Stephen Shankland.

But posturing is par for the course in any serious negotiation.

The purported talks, if successful, could spare Microsoft the trouble and time of a hostile bid for the search company, if indeed it chooses not to walk away from its three-month-long attempt to acquire Yahoo.

While a deal is far from imminent, the two sides are talking more directly than they have for some time, a source familiar with the situation told CNET News.com. The talks, which picked up steam on Friday, are being held in the San Francisco Bay Area, with at least some of the parties on both sides meeting in person, the source said.

And The New York Times had a similar assessment, citing a source who said talks were back on and that Microsoft had increased its offer by “several dollars.” Late Friday afternoon, the Journal said that the two companies were “discussing a possible price in the mid-$30s range per share.”

“What we’re testing this year are the synergies,” Donahoe told the Financial Times. “If the synergies are strong, we’ll keep it in our portfolio. If not, we’ll reassess it.”

Donahoe did say Skype is doing well. It generated $126 million in the first quarter, up 61 percent from a year ago. This year, it’s expected to generate $500 million in revenue and be profitable. Overall, first-quarter eBay revenues reported Wednesday were up 24 percent from a year ago to $2.19 billion. Profit was $460 million, up 22 percent from the same quarter a year ago.

Has eBay about had it with Skype?

But the question about Skype, which eBay acquired for $2.5 billion in 2005, has never been whether it’s a decent business, it’s whether it’s a good fit for eBay. By the end of the year, the company will finally be closer to that answer.

New eBay CEO John Donahoe told the Financial Times the online auctioneer will consider selling Skype if it can’t find a way to make the service better help eBay’s e-commerce business.

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Sun Microsystems has spent years getting bludgeoned by commodity hardware and software. Now it’s planning to apply those painful lessons to its competitors in the storage industry, as highlighted by The New York Times reporter Ashlee Vance:

In the early part of this decade, Sun learned all too well just how disruptive (”good enough” technology at a significant discount) can be. Customers moved away from products built on Sun’s own custom microprocessors and software to cheaper servers that relied on Intel processors and the open-source Linux operating system. While larger customers still wanted Sun’s high-end hardware for some tasks, the Intel-and-Linux combination could satisfy the majority of most customers’ needs.

Software plays a large role in any discussion of this type, and again Sun thinks it has something that can rattle NetApp and EMC.

Sun spent years fighting this trend toward “good enough at a great price,” but now it’s wielding the weapon of open-source software and commodity hardware (as well as its not-so-commodity hardware). It seems to be working. The Register reports that Sun grew its market share in the external disk storage market faster than any other vendor in the second quarter of 2008 at 34.7 percent to NetApp’s 22.9 percent growth.

The key for Sun will be to sustain this growth. It won’t be an easy task, but customers should be cheering as Sun lowers the cost of storage and improves choice and flexibility through open source. NetApp may not like it, but then, Sun didn’t like getting beaten up for its former proprietary intransigence, either. Sun learned its lesson. Will NetApp also learn?

Updated at 10:30 a.m. PDT with comments and further details from Microsoft.

In its latest move into virtualization, Microsoft said on Wednesday that it has bought Kidaro, a company that helps businesses manage their collection of virtual machines.

Microsoft said the technology will make it easier for businesses to manage application compatibility challenges, ultimately spurring faster Vista adoption as well as broadening the use of virtual machines within corporations.

“The challenge we have with Virtual PC today is it doesn’t have enterprise-level management and deployment with it and the user experience could be improved,” said Gavriella Schuster, a senior director in Microsoft’s Windows unit. Schuster said that Kidaro’s technology helps on both scores. In addition to tools for setting up and managing virtual machines, Kidaro has technology that makes virtual machines less jarring for users, making them appear to be part of the standard desktop. (Parallels has a similar feature in its Windows-on-Mac virtualization product)

Schuster declined to give financial details on the deal for the privately held firm, which has 35 employees, with its development based in Israel. Schuster said Kidaro’s three founders are remaining with Microsoft and will continue to lead the product’s development in Israel.

Kidaro’s technology will be added to a future version of the company’s awkwardly named Microsoft Desktop Optimization Pack. The collection of tools is sold as an add-on to Microsoft’s Software Assurance program for volume license customers. Other things in the collection include an application virtualization technology known as SoftGrid and asset management tools that stem from Microsoft’s AssetMetrix acquisition.

Microsoft announced the Desktop Optimization Pack in October 2006 as an add-on to its subscription Software Assurance program.

Schuster said that Microsoft won’t know exactly how long it will take to add in Kidaro’s product to MDOP until it has a look at the code. “We hope that it’s certainly less than a year,” she said, adding that Microsoft aims to have a more concrete time frame by its Management Summit next month.

While perhaps not a mainstream way for businesses to move to Vista, Schuster said Microsoft thinks some companies will find it more palatable with Kidaro’s tools to run older, Vista incompatible applications via a Windows XP virtual machine.

“We do see that as a pretty significant option for a lot of our customers,” she said.

Social.fm, a music site that was known as Mercora until last year, has officially folded.

“We regret to inform you and apologize for this inconvenience, but Social.fm will be shutting down the system on July 31st, 2008,” a message on the site read.

The shutdown was first reported by GigaOM.

Despite having raised $5 million in venture funding from Norwest Venture Partners and signing a deal with Microsoft, Social.fm never found its niche. It originally started out as a peer-to-peer Web radio and music search site, and CEO Srivats Sampath once made the dubious claim that his company “beat Steve Jobs to the
iPhone” by letting people share music wirelessly through its smartphone-based “M” service.

With its makeover as Social.fm, Mercora cut its subscription fee and focused more on social music. But with significantly larger competitors in the space–Pandora, Last.fm, Imeem, and iLike–Social.fm’s traffic tumbled.

Disclaimer: Last.fm is part of CBS Interactive, which also publishes CNET News.

In the latest example of how commercialism continues to creep into art, NBC Universal has plans to create programming designed to highlight a sponsor’s products, the company said Friday.

The new shows, which will appear on NBC Universal digital properties, are being produced by the company’s Digital Studio division and units, in conjunction with the Omnicom Group, one of the world’s most powerful advertising and marketing companies.

One of the first shows to emerge form the partnership will be an Internet sci-fi show called Gemini Division, starring actress Rosario Dawson. The show’s planned sponsors are Acura, Intel, Microsoft, and UPS.

Just how the program’s creators will weave the commercial products into the story line without alienating an audience that might feel manipulated is anyone’s guess.

Sony Pictures Entertainment last year began offering advertisers the chance to have their products take more of a starring role in Web productions.

Gemini Division and shows like it from NBC Universal will likely be offered by Hulu, the video portal created by the TV network and News Corp.

Nvidia’s “Optimized PC” campaign, announced today, is the market-oriented manifestation of its larger ambitions. The idea is that Nvidia wants to show you how to build or buy a PC that’s “balanced.” In Nvidia’s opinion, that means that rather than spend all of your PC budget on a quad-core processor (and relying on a built-in graphics chip), for a truly modern PC experience you’re better off spending less on the CPU and more on a dedicated graphics card. What this campaign really signifies is that a new fight over who gets to do your processing dollar has officially begun.

So says Nvidia.

(Credit:
Nvidia)

You can check out the official page for Nvidia’s Optimized PC campaign here. You’ll find a Flash presentation informing you that “Your PC is more visual than ever,” as well as a generic configurator demonstrating the supposed benefits of a “balanced PC.” There’s also a page of links to various online retailers that lead you to lists of Nvidia graphics cards for purchase, as well as links to configurators from Gateway, Velocity Micro, Cyberpower, and Puget Systems, which lead to presumably “optimized” systems.

What’s frustrating is that Nvidia offers little in the way of specific processor and graphics card pairings that might help you make an actual purchase. As for the vendor links, if you click through and start to build a system, Velocity Micro is the only one with a visual indicator that shows you the balance between graphics and CPU processing capability as you select different components. The allegedly balanced Cyberpower systems still allow you to match Intel’s highest-end quad core processor with an integrated graphics chip.

If the Optimized PC site isn’t all that useful, the point Nvidia is trying to make is clear. Rather than throw all of your money at a quad-core Intel chip, Nvidia wants you to spend less on the CPU and more on a graphics card. In turn, Nvidia promises that its 3D hardware will not only allow you to play games, but it will also enable you to watch and edit HD movies, edit and organize photos in flashy new interface designs, as well as turn on all of those visual effects in
Windows Vista. You can do some of those things with quad-core CPU and an integrated graphics chip, of course, but you need a dedicated 3D card for the most robust visual experience. Therein, the battle for your processing dollar.

PicLens benefits from a 3D card, but have you heard of it?

(Credit:
CNET)

Whether Nvidia has a compelling argument depends on just how visual you like your computing. Do you turn the 3D cities on in Google Maps? Do you like Vista’s translucent windows? Have you even heard of PicLens (which we actually like, but that’s not the point)? PC Gamers already tend to favor Nvidia, but in order to appeal to mainstream PC buyers, Nvidia has to convince you that there’s a nongaming need for the specialized visual processing capabilities of its hardware.

Arguing for the necessity of 3D hardware in day-to-day computing has traditionally been a tough position, largely due to a lack of compelling software. If Nvidia is going to continue with this marketing push, we need to see more than just a handful of applications that truly benefit from accelerated graphics. The question is, will that happen before Intel makes its next move? With graphics card plans of its own on the near-horizon, it’s possible that Intel may be able to offer a balanced computing experience of its own.

Ian Fleming, the creator of James Bond, was born 100 years ago Wednesday in London.

(Credit:
IanFlemingCentre.com)

While that historical footnote passed with hardly any mention in Silicon Valley, Fleming’s spy novels deserve a place on the shelf in the section titled “history of technology.” Fleming, who rose to the rank of commander in the British Admiralty during the World War II, introduced Bond in 1953 with the publication of Casino Royale. The subsequent Bond books and films brought to public notice everything from luminous watches to
car phones and pagers–long before they became commonplace commodities in contemporary society.

We also can thank Fleming for the popular phrase, a “James Bond gadget.” For a look back, take a look at the list compiled on Wikipedia.

So let’s raise a glass–shaken, not stirred, of course–to Q and the rest of the team. Happy birthday, Mr. Fleming. the man whose imagination contributed mightily to popular thinking about all those cool high-tech toys.

Update 4:15 p.m. May 12: The file was actually infected with a remnant part of code from the Xorer Trojan, not with the full Trojan itself, according to a follow-up Mozilla blog post. The remnant “does not infect the user’s machine with the virus (and) is a remnant from a virus that most likely infected the language pack developer’s machine,” Mozilla said. “To minimize the potential of something similar happening in the future, Mozilla is now scanning all add-ons whenever the signatures for the antivirus software are updated.”

A Vietnamese language pack infected with parts of a Trojan for the
Firefox Web browser was available for download from the open-source Web browser’s official add-on site for months.

Mozilla, which oversees the project, announced the problem on its security blog on Wednesday, saying people should disable the add-on pack for now.

“Everyone who downloaded the most recent Vietnamese language pack since February 18, 2008, got an infected copy,” Mozilla said. “While we cannot determine the exact number of compromised downloads, there have been 16,667 total downloads of the Vietnamese language pack since November 2007, so we anticipate the impact on users to be limited.”

The author of the add-on pack, who acknowledged on Thursday that his machine had been infected, isn’t suspected of any intentional harm, according to the discussion of the problem. The author offered a cleaned-up version Thursday that so far appears OK.

Mozilla scans its files for viruses, Trojans, and other problems. But the file had been uploaded nearly two months before the antivirus software could detect the Trojan in question, called Xorer.

(Via SecurityFocus.)

Advanced Micro Devices on Wednesday released the source code aimed at making it easier to build media applications for x86 multicore processors.

The AMD Performance Library, which is now called Framewave, is available on SourceForge.

The framework is a collection of routines that optimize performance of media-oriented applications on multicore processors. For example, a developer could link to a library that optimizes video display on a specific graphics card.

By starting a project at SourceForge.net, the chipmaker will allow programmers to customize and further optimize the software, which will work with compilers for Linux, Windows, and Solaris, said Margaret Lewis, AMD’s director of commercial solutions and software strategy.

Experts say creating tools for developers to optimize their work for multicore processors is one of the biggest challenges the semiconductor industry faces.

Multimedia applications, in particular, get a relatively big performance boost by optimizing the code, Lewis said.

“Those particular applications are demanding and very complex, and a lot of the time, those routines are used repetitively,” Lewis said.

AMD will continue contributing to the software and take outside contributions through the Framewave project, she added.