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But, will the changes automatically lead to an uptick in overall piracy rates? That’s a more complicated question.

When it comes to software piracy, Microsoft may just be aiding the enemy.

Microsoft has been counting on gains against unlicensed software to boost revenue from the Windows unit, which accounts for a huge chunk of overall profits and sales. However, one of the company’s own decisions could make its antipiracy battle more difficult.

Microsoft now expects its gains for the year to be just a percentage point or two, though it believes it can continue to see improvements next year as well.

On its face, it would seem the answer would be a clear “yes.”

“Piracy is a tough battle and an area where we will need to continue investing,” said Colleen Healy, Microsoft’s general manager of investor relations.

I would argue, though, that having an unusable copy of Windows is a far greater deterrent than having one that simply labels its user a pirate. Microsoft has maintained that the new approach will be just as effective and is more palatable to customers and partners. Color me skeptical.

What is clear is that piracy rates remain a critical issue for Microsoft, which needs to continue growing its Windows revenue and profits to help fund its advertising battle against Google.

Time will tell whether Microsoft’s technical changes will have an impact on the broader piracy issue. Enforcement is also key, with Microsoft CFO Chris Liddell noting that a couple of legal actions can make a big difference in any given quarter, suggesting true gains (or losses) from piracy require looking at a longer time horizon.

Microsoft had seemed to be making major headway against piracy, surprising analysts and itself in the September quarter by gaining 5 percentage points of growth through piracy reductions. Last quarter, though, Microsoft actually saw piracy rates head upward, reversing what had been a particularly positive trend for the company.

However, there are a couple of other factors to keep in mind. First, Windows XP is pirated far more than Vista (at least 2 to 1, according to Microsoft). Also, Microsoft did close several notable hacks to its Vista protection scheme with SP1. So while the price for piracy is arguably lower, Microsoft has closed a few loopholes that let pirates bypass the security features altogether.

In the newly released Service Pack 1, however, Microsoft is softening its stance somewhat. The reduced functionality mode is gone, and in its place, a series of warnings and visual indications that a computer is not running a genuine copy of Windows.

With
Windows Vista, Microsoft took an extremely tough stand on piracy. Computers that were not properly activated within a short period of time went into a virtually unusable state known as “reduced functionality mode.”

In a prepared statement, Rambus’ head legal counsel, Tom Lavelle, said that Rambus has been attempting to get Nvidia to purchase a license for the patents, and the suit was the last resort. However, he said, Rambus hopes to settle the issue out of court.

The Los Altos, Calif.-based company says that chipsets, graphics processers, and media communication processors across six different Nvidia product lines are illegally infringing. The patents held concern memory controllers for SDR, DDR, DDR2, DDR3, GDDR, and GDDR3 SDRAM.

CNET News is waiting to hear back from Nvidia for comment.

Rambus is suing Nvidia, accusing the company of violating 17 Rambus-held patents on memory controllers. The suit was filed Thursday in the U.S. District Court for the Northern District of California.

Rambus is asking the court for an injunction (which would stop Nvidia from selling the products at issue), as well as monetary damages.

For a relatively low monthly fee, you’ll be able to pick out certain magazines you want to receive, and they’ll show up on your doorstep for you to read and dispose of. If you like something, you can simply keep receiving it, while replacing less-liked titles with new ones at a much lower price than it would cost to go out and buy them at the newsstand. Each plan can also be scaled up to higher tiers, meaning that you can continue to expand on your read publications while experimenting with new titles.

I’m eager to give the service a look when it launches. I think there’s a real potential to grab folks who want to save some money but not commit to certain titles. There’s also a nice possibility for publications that tend to have better seasonal content, such as cooking and video game magazines, to get a few more subscribers at critical times.

According to Folio Maghound is opening up for business in September, also known as back-to-school time for high-school and college students. The site’s reportedly been in development for four years, all the while the company’s been tweaking the distribution and billing system.

A site that’s slipped through the cracks of our coverage is Time Inc.’s upcoming service Maghound. It’s best described as a cross between a beer-of-the-month club and Netflix.

It sounds like it’s been worth the wait, if only for privacy. The service will act as a proxy for your billing information, meaning that even if you’re subscribed to 30 magazines, only one company is going to have your information–Maghound. This could theoretically keep it from being sold to other companies, something nearly all publications have done to bring in an extra stream of revenue.

How do you get your magazines?

( surveys)

Of course, the results won’t be nearly as deep as Netflix, which currently has a library of more than 100,000 titles and a veritable arms race between teams of statisticians and software engineers to build better algorithms. Maghound is starting out with just less than 300 magazines (published by companies ranging from Time Inc. itself to rival Conde Nast) from which to choose. There will be “premium” titles, which cost a buck or two per month, something not found on Netflix.

The company also has an inside track to your tastes and the tastes of others. It has the potential to build in a recommendation engine like what Netflix has to tell you magazines you would like or not like, based on what you’ve thought of your past orders.

Real estate search site Trulia announced Wednesday that it has inked a deal with 1020 Placecast, an advertising company that uses location-based information to target audiences, that will see the site’s advertising become location-specific.

In order to deliver that ad, Placecast works with publishers in categories such as travel, events, real estate, and weather to offer advertisements that not only try to appeal to visitors, but make their location a key factor in targeting them.

The partnership with Placecast is extremely important for Trulia. The company is naturally affected by the downturn in the real estate market, and it relies on home ownership for success. Realizing that, Trulia executives needed to act and increase revenue as quickly as possible during these suspect times, and they evidently believe Placecast is their best bet.

“Once we know the place a user is interested in, we can derive a lot of useful insights about what kind of consumer they are, and then serve them a very targeted ad,” Alistair Goodman, CEO of Placecast, said in a statement.

Once users input a location they want to learn more about on Trulia, Placecast will access that data and apply it as a key component along with common demographic data points like psychographic information to provide more targeted ads.

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The only way that open source can replicate this, given commercial open source’s young age, is through “perpetual escrow.” Even so, if I’m an IT buyer it matters to me that Microsoft, IBM, etc. have been around a long time, and will be around for an even longer time.

Microsoft does many things wrong, but one thing it does very well is long-term support for its products. As a case in point, Windows for Workgroups, born to the world in 1993, is finally being retired on November 1, 2008. Fifteen years…Most software companies haven’t even been in existence that long.

Now if I could just get vendor longevity and open source at the same time, in the same place, I’d be golden.

But for now, its ClosedClip, not OpenClip. Even communities must apparently bow to Apple. Code is law, to borrow Larry Lessig’s phrase, and Apple controls the iPhone code.

Well, that didn’t take long. As soon as people started to get excited about open-source OpenClip, and its ability to bring copy-and-paste functionality to the
iPhone, Apple found a way to shut it down with its 2.1 firmware.

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Of course, OpenClip is open source, and perhaps enterprising developers will find a way around the 2.1 firmware. Or maybe (gasp!) Apple will actually deliver the copy-and-paste functionality many have demanded.

Microsoft will offer browser-based Word, Excel, and PowerPoint in two ways. For consumers, they will be offered via Microsoft’s Office Live Web site, while businesses will be able to offer browser-based Office capabilities through Microsoft’s SharePoint Server product.

LOS ANGELES–After years of questioning the value of Net-based productivity applications, Microsoft confirmed Tuesday that it will offer new versions of Word, Excel, and PowerPoint that can run from within a standard Web browser.

“This was part of the conversation, absolutely,” Elop said. “We have been sharing with customers under varying circumstances to a greater or lesser extent.”

Elop said that not all of the editing capabilities of the desktop products are in the browser versions. “The editing we are characterizing as lightweight editing,” he said.

As first reported by CNET News last week, Microsoft will use its Professional Developer Conference here to show off browser-based versions of its Office programs.

In an interview, Microsoft Business Division President Stephen Elop said that the browser-based editing capabilities are being developed in conjunction with the next version of Office, known as Office 14. Microsoft won’t say when that version will arrive, but Elop said that a technology preview of the browser-based products will come later this year and that a beta version will be released in 2009.

Although Google Apps has seen most of its popularity among consumers, it has started to attract attention from corporate customers. Google Apps got a strong look from Procter & Gamble, which only decided to stick with Office after a strong push from Microsoft. Part of that pitch, Elop said, included Microsoft offering details on its plans for the Web-based versions of the Office programs.

Although he didn’t name names, Elop said Microsoft has found itself in a competitive situation with Google in other business accounts as well.

“If you go into some competitive products right now and take a Word document in and then spit it out afterword, it’s unrecognizable,” Elop said. “You lose a lot of fidelity.”

The company has been pushed into this arena by Google, which has been offering its free Google Apps programs for some time. In competing with Google, Microsoft is touting the ability to use Microsoft’s familiar user interface, as well as the fact that all of the document’s characteristics are preserved.

Find more deals, coupon codes, and bargains on CNET’s Shopper.com.

Air Sharing Turns your device into a portable, wireless hard drive and document viewer. Note: this jewel will eventually be priced at $6.99, but for the next few days you can snag it free.
Graphing Calculator Why spend big bucks on a graphing calculator when your iPhone/touch can do the job for nada? This uber-handy tool offers functions ranging from absolute value to tangent.
Hanoi A beautiful rendition of the classic Towers of Hanoi game. The object is simple: move a stack of disks from one side of the board to the other. I couldn’t put it down.
Instapaper Free When you’re browsing on your PC and come across a Web site (cough *Cheapskate* cough), blog post, news item, feature, or whatever that you want to read later, just click the Instapaper bookmarklet. Then fire up the Instapaper app on your iPhone, and presto: there’s the Web page. Genius!
White Noise Having trouble getting to sleep? White Noise offers an assortment of ambient sounds–waves, rain, wind chimes, etc.–to help you drift off. And there’s a shut-off timer so you don’t wake up to a dead battery.

Tuesday’s roundup of killer freebies for Windows reminded me that I haven’t covered
iPhone/iPod Touch freeware in awhile, so here’s another list of must-have apps that won’t cost you a penny:

If you like this list, be sure to check out my original roundup of iPhone freebies and the sequel. In the meantime, hit the comments and vote for your favorite no-cost iPhone apps.

The free Graphing Calculator app for iPhone/iPod Touch.

(Credit:
Gabor Nagy)

Owned and operated display ad revenue growth, year over year: More than 18 percent growth is considered good; 15 percent to 18 percent is so-so; and Citi’s estimate is 17.8 percent.

So, with this score card, tune into Yahoo’s earnings report, following the market’s close later on Tuesday.

Future forecasts

Nitty-gritty Q1:

The New York Post, citing several sources close to Yahoo, reported Tuesday that the Internet company will “not blow the lid off earnings, but will likely beat analysts’ expectations.”

Comments on macro environment impact on Yahoo’s display business

Buyback of Yahoo shares

Updated 8:45 a.m. PDT to include comments from Microsoft.

Microsoft Chief Executive Steve Ballmer, speaking in Morocco for the launch of the software giant’s North Africa Web portal, issued these comments, according to a Reuters report:

A number of Wall Street soothsayers and Microhoo observers have been speculating for weeks that a strong first-quarter earnings report from Yahoo could serve as a face-saving catalyst for Microsoft to increase its bid and draw Yahoo into formal negotiations.

Second-quarter revenue, excluding traffic acquisition costs: $1.37 billion meets Wall Street estimates/$1.39 billion meets Citi’s estimates. Wall Street expects a 10 percent year-over-year growth.

EBITDA: $460 million meets Wall Street estimates/$456 million meets Citi’s estimates.

Owned and operated search advertising revenue growth, year over year: More than 28 percent is considered good; 25 percent to 28 percent is so-so; and Citi’s estimate is 27.7 percent.

The high end of the analyst range is 14 cents a share; earlier in the year, Yahoo’s management gave a revenue range that topped out at $1.38 billion, excluding traffic acquisition costs.

GAAP earnings per share: 9 cents per share meets Wall Street estimates /10 cents meets Citi’s estimates.

Comments on impending Microsoft offer

Wall Street is expecting Yahoo to report earnings of 9 cents a share and revenue of $1.32 billion, which excludes traffic acquisition costs, according to a consensus of analysts reported by Thomson Reuters. Yahoo will report its first-quarter results after the markets close Tuesday, in what is expected to be one of its most closely watched earnings reports.

One great little “cheat sheet” to stack up the performance of Yahoo’s first quarter is provided by Citigroup Global Markets analyst Mark Mahaney. Here’s his guide for tracking the quarter:

Revenue, excluding traffic acquisition costs: $1.32 billion meets Wall Street estimates/$1.34 billion meets Citi’s estimates. Wall Street expects a 6 percent quarter-over-quarter revenue decline.

Ad networks/exchange rollout

Microsoft just threw cold water on hopes that a better-than-average Yahoo earnings report Tuesday would likely yield a higher buyout bid for the Internet pioneer.

EBITDA: $435 million meets Wall Street and Citi’s estimates. Look for 33 percent EBITDA margin

Improvements to search monetization and Google search test results

“We think we can accelerate our strategy by buying Yahoo and will pay what makes sense for our shareholders,” Ballmer said, according to the report. “I wish Yahoo all the success with its results, but it doesn’t affect the value of Yahoo to Microsoft.”

10,000- foot items:

While Yahoo’s first-quarter results may not affect the value of Yahoo to Microsoft, it could affect the stubborn factor for Yahoo and its institutional investors, who may dig in their heels even more on wanting a higher buyout bid should the Internet pioneer perform well on its earnings report.

Just having things work when they turn on the computer gives people reassurance. Telling them to try something else, and thereby risk breaking this system, was a difficult proposition.

Microsoft did not obtain its (Internet Explorer) hegemony solely through competition on the merits of IE. A number of illegal activities were also involved in creating IE’s market dominance…The idea that Microsoft is an innocent victim (of European Commission intervention) is deeply flawed.

The Internet became mixed in people’s minds with Microsoft. Many people conflated Windows with “the Web.” Our first great challenge was to convince people that they could improve their life by making a choice in their browser. To this day, most people think of “the Internet” as the blue “E” (IE’s icon).

Again, had Microsoft achieved this coup with fair dealings, Mozilla might grumble but would ultimately learn to compete on Microsoft’s terms, as it has for years.

Despite this success, Baker believes that government, and in the European Commission in particular, has a role to play in further leveling the playing field. As she notes in a recent blog post, government entities would perhaps have less relevance but for the antitrust activity that resulted in Microsoft’s dominant market share in the first place:

While most Microsoft competitors lay down and die when Microsoft claims 90 percent or more of a market, Mozilla has fought back to earn more than 20 percent of the browser market.

Mozilla Foundation’s Mitchell Baker describes
Firefox, the open-source Web browser, as “an anomaly.”

It’s actually worse than this. Not only did Mozilla have to convince would-be Firefox adopters once; it has to do it over and over, as Baker suggests:

(Credit:
Mozilla)

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Mozilla Foundation Chairman Mitchell Baker

Mozilla isn’t looking for a handout. It’s looking for a level playing field. It has managed to scratch out 20 percent of the browser market on Microsoft’s terms. Imagine what it could do with a fair and truly competitive market.

It’s always there on the desktop. The muscle memory of the blue E has been a giant problem for us and for competition.

But IE’s “brainwashing” of the market didn’t come through fair means, so Mozilla is getting involved in the European Commission’s suit against Microsoft. Baker and her team have been granted special status that enables them to access Commission documents and offer their perspective on the proceedings.

Most people, as Baker continued, fear their computers or, at best, consider them somewhat foreign and difficult to understand. They just want them to work and aren’t in the habit of using any software other than what comes preinstalled:

Follow me on Twitter at mjasay.

I interviewed Baker at length on this topic on Friday, and though I have something of a knee-jerk negative reaction to government involvement in markets and have argued against Mozilla’s need for government bailouts, one thing she said particularly resonated with me. When I asked the most damaging thing Microsoft’s activities had done to the browser market, Baker turned to psychology:

In Silicon Valley, this might seem like an odd argument–”surely, everyone knows that IE is just a browser, not the Web, and that Windows isn’t a browser or the Web!”–but outside the borders of highways 280 and 101, the argument resonates. Deeply.

Every time someone buys a new machine, they have to make a decision to go out and download/install Firefox, even if they’ve already made that decision. There is persistent resistance to Firefox. We have 220 million users, and a lot of those users have had to choose Firefox more than once. That’s an issue.