In an effort to boost lagging sales of the Xbox in Europe, Microsoft Thursday reduced the console's price to $266 USD in mainland Europe and $288 USD in Britain. Xbox went on sale in Europe last month, but its initial $434 price tag kept sales far below initial projections. Microsoft now expects to sell up to 4 million consoles this year, instead of the 6 million it had previously forecasted.

"We are making a clear statement today -- we mean business in Europe," said Sandy Duncan, Vice President of Xbox Europe in a statement. "The phenomenally positive response to Xbox through reviews, awards and game sales has demonstrated that consumers love Xbox. We want to make sure that price is not the obstacle to the Xbox experience."

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While this week's Windows Hardware Engineering Conference has been host to exciting new product announcements and upcoming technologies, Microsoft executives delivered disappointing news to Windows enthusiasts. In his keynote address, group vice president Jim Allchin disclosed that Longhorn, the next major version of Windows originally scheduled for 2003, would not ship before 2004. Windows .NET Server will not meet its timeline either, due in part to delays Microsoft attributes to the massive security review that took place in February.

What was once slated to be a relatively minor update to Windows XP, Longhorn will instead represent quite a significant jump from its predecessor. Microsoft has been working hard to perfect a completely new file system based on Yukon, the next release of SQL Server. Longhorn will also sport next generation three dimensional graphics with DirectX 9, enabling the company to potentially deliver a completely new 3-D user interface.

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TiVo has begun the initial rollout of its next software upgrade, code-named Firebolt. Version 3.0 is not a drastic update, primarily designed to sync the code base between older models and the new Series2 TiVo, but does provide many behind the scenes improvements. Most notable additions include improved suggestions and the ability to download program data directly from a cable broadcast without using the phone line.

For the hacker community, Firebolt includes ethernet drivers, allowing TiVo to download programming data from the Internet using a special backdoor key.

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Redmond executives once had high hopes for the project dubbed HailStorm and later renamed to the less evil moniker, .NET My Services. But the change did nothing to convince partners, whose less than enthusiastic response to the idea of Microsoft-operated user services, such as an electronic wallet, has forced the company to shift its focus.

Originally slated for inclusion in HailStorm's initial offering were e-mail, a calendar, electronic wallet, Passport, .NET Alerts, and more. Although the company says it will remain committed to such Web services, Microsoft will only host Passport and Alerts in house. The platform behind the other planned services will instead be offered to third parties.

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Microsoft late last week issued a critical cumulative patch that fixes 10 vulnerabilities in the company's IIS Web server software, which runs on Windows XP, Windows 2000 and NT 4.0. In the security bulletin Microsoft recommends all Web site operators running IIS immediately install the patch to avoid having their computer taken over by an attacker.

However, Microsoft managers sent an internal e-mail last week demanding that all staff install the patch by Tuesday or be blocked from the Internet, even if IIS is not enabled, demonstrating the potential severity of the flaws involved.

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Microsoft this week at Tech-Ed 2002 announced the release of its first commercially available Web service, MapPoint .NET. A very preliminary version of the service was tested by close Redmond partners last year, with version 2.0 entering beta in February. Hosted by Microsoft, MapPoint .NET enables independent software vendors and solutions providers to embed maps and location functionality into Web sites and services.

The service currently powers Microsoft's own CarPoint, HomeAdvisor, MSN Mobile and TerraServer Web sites, and driving directions for voice portal Tell Me Networks, utilized by AT&T.

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AT&T Research has unveiled a new project enabling Web surfers to easily understand the privacy policies of sites they visit, without having to delve into complex legalese. Currently in beta, software dubbed AT&T Privacy Bird installs as a plug-in to Internet Explorer and automatically reads in a site's P3P (Platform for Privacy Preferences) policies. Using visual and audio cues, the Bird warns users of sites that do not match a predefined set of privacy preferences.

Although it is a new standard, many sites have already begun to implement P3P after the release of Internet Explorer 6 raised its awareness. The World Wide Web Consortium offers a list of P3P-enabled Web sites and estimates that one-third of the top 100 most-visited sites support the new privacy standard. But this has not made it any easier for Web surfers to understand cryptic policies or keep track of changes.

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Microsoft on Thursday posted a patch to correct problems that can occur when burning CDs under Windows XP. When copying files or folders to a recordable compact disc, the CD can become unreadable and individual files are sometimes lost. Occasionally, the disc will work fine under XP, but not older versions of Windows or external CD players.

Microsoft recommends Windows XP users install the patch and is expected to post it on Windows Update next week. The patch is currently available at Microsoft's Download Center. More information on the flaw and possibly symptoms may be found at support.microsoft.com.

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Microsoft on Thursday issued a major software update to its UltimateTV service, which the company says it developed to respond to user feedback and suggestions. UltimateTV serves as an Internet-enabled digital video recorder for DirectTV, allowing subscribers to record up to 70 hours of television.

The version 3.5 update improves responsiveness of the receiver, and introduces new features such as automatic recording of programs - a feature highly touted by competitor TiVo. Subscribers also now have 30 new search options to help locate desired shows.

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After the Internet bubble burst, numerous companies faced the harsh reality of worthless advertising and insignificant stock options. A model of the times, Sonique saw its future abandoned when parent company Lycos -- already in turmoil -- handed developers pink slips despite paying upwards of 70 million dollars for the popular media player.

Nullsoft has been able to avoid a similar fate due in part to the size of its parent, AOL Time Warner, but it too has had its share of cutbacks. With the next version of Winamp right around the corner, Nullsoft is mulling over a new route to profitability - charge for an advanced version of its free player.

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In an attempt to improve its appeal among the academic community, Microsoft on Wednesday released the Shared Source CLI, a beta implementation of the ECMA standard on which the .NET Framework is based. Code-named "Rotor," the almost 1.9 million lines of source code constitutes the internal workings of the .NET Framework, and has been released with developers and academia in mind. Although the code may not be redistributed for commercial purposes, students and teachers are encouraged to explore and modify Rotor.

"The academic community plays a critical role in the software ecosystem as the launching pad for the next generation of developers," said Microsoft's senior vice president of the Developer Platform and Evangelism Division Eric Rudder. "Academia has delivered many breakthrough innovations through pure research. With the Shared Source CLI implementation, we hope to see great innovation around .NET technology."

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Novell's Chief Technology Officer Carl Ledbetter testified Wednesday in the ongoing remedy phase of the antitrust suit against Microsoft. Ledbetter told the court that the settlement proposed by the nine states and the District of Columbia would do nothing to stop Microsoft from refusing to disclose technical information required by competitors to ensure interoperability with Windows. He claimed Novell's network operating system would not benefit from such a proposal which largely covers Microsoft's desktop monopoly.

Redmond counsel Michael Lacovara fired back, questioning Ledbetter's assertion that his company faced numerous incompatibility issues when marketing material said Novell software was fully interoperable with Windows. Lacovara also showcased e-mails from Ledbetter that infer Novell planned to use the trial to force Microsoft to adopt Novell's products.

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According to the latest numbers released Wednesday by WebSideStory's StatMarket, Microsoft's Internet Explorer 6.0 has captured a 30 percent market share just seven months after its release - sending Netscape's usage plummeting to an all-time low of 7 percent. Netscape had previously held 12 percent of the browser market for over a year. IE 6 is now the second most-used browser in the world, only sitting behind predecessor IE 5.

"The fast adoption rate for IE 6 has been a definite threat to Netscape's usage share," said StatMarket vice president of marketing Geoff Johnston in a statement. "Although it looked originally as though Netscape had an entrenched core user base, IE6 has managed to take significant market share. It's do or die time now for Netscape."

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A federal appeals court this week rejected Napster's final effort to bring back its free song-swapping service, which it was forced to close in July until the company removed all copyrighted material. "The shutdown order was a proper exercise of the District Court's power to enforce compliance with the modified preliminary injunction," a three-judge panel said in its ruling.

"We affirm both the modified preliminary injunction and the shutdown order. The terms of the modified preliminary injunction are not vague and properly reflect the relevant law on vicarious and copyright infringement," the 9th U.S. Circuit Court of Appeals in San Francisco said.

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Both Hewlett-Packard and Compaq have claimed victory in votes which took place this week that were to decide the outcome of a proposed marriage of the companies. Compaq CEO Michael Capellas said Wednesday shareholders overwhelmingly approved the merger by a 9-to-1 margin.

Although HP's vote was much closer, HP CEO Carly Fiorina claimed victory Tuesday despite merger opponent Walter Hewlett's assertion that an initial count was too close to call. A final tally of HP's 900,000 shareholders could take weeks, with a final approval expected to arrive in April.

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