Confirming the rumors, AOL told employees Monday that it would lay off 2,000 workers, which amounts to about 20 percent of its total global work force. 1,200 employees will lose their jobs in the United States, with 750 cut from AOL's headquarters in Dulles, Virginia.

The layoffs come as part of AOL's continued transition away from Internet service provider to advertising-driven Web services. In a letter to employees, AOL CEO Randy Falco said when he came to the company, he knew such measures would be required. Pink slips will begin arriving tomorrow, and continue for the next couple of months.

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The Supreme Court has rejected an appeal by Microsoft and Best Buy, which clears the way for a class-action fraud lawsuit against the two companies to go forward.

The suit stems from accusations from customers that a subsidiary of Best Buy had signed up customers for a trial of MSN Internet Service without their consent. The two companies had previously signed a $200 million marketing agreement surrounding MSN.

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Nintendo's diminutive, modestly-powered gaming machines have helped make it the third most valuable company in Japan, behind Toyota Motor Corp and Mitsubishi UFJ Financial Group - Japan's biggest bank.

Nintendo's stock rose 5.3 Percent on Monday, putting a market value of 10 Trillion Yen ($85 billion USD) on the once-struggling Japanese company.

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Just when it seemed Microsoft had averted a PR debacle after an update to its Automatic Updates service in Windows installed itself into users' computers even when they thought it was turned off, now it appears something is turning back on many users' Automatic Updates.

Late Friday night, Microsoft Update Program Manager Nate Clinton denied having discovered anything in his company's software that could be causing the problem. "We have received some logs from customers, and have so far been able to determine that their AU settings were not changed by any changes to the AU client itself and also not changed by any updates installed by AU."

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Gateway continued to reposition itself following its sale to Acer on Monday, saying that it had sold its professional division -- which includes desktops, laptops, and tablets -- to MPC (formerly Micron) for an undisclosed sum.

While initially the transition will be seamless to customers, within one year the MPC brand will replace Gateway's on professional products. Support relationships will be assumed immediately.

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Just days ago, Red Hat publicly responded to a very thinly veiled threat from Microsoft CEO Steve Ballmer that its Enterprise Linux users might eventually owe Microsoft some money by posting, "We are also aware of no patent lawsuit against Linux. Ever. Anywhere." Today, the company learned one was actually being filed against both it and Novell in the patent trial capital of America: Marshall, Texas.

The plaintiff is a familiar one: IP Innovation, LLC, the very same company that filed an infringement suit against Apple last April. The subject is also the very same patent: an old Xerox PARC filing renewed in 1991, #5,072,412, for "User interface with multiple workspaces for sharing display system objects."

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All of Universal's jockeying with iTunes may make sense now: the label may be planning a subscription music service of its own with other big record companies. But will the labels' own service be used simply to retain a stranglehold on the market rather than giving consumers more choice?

Universal has its own catalog, and is apparently taking to Warner Music Group about putting that label's music on the service. It has reportedly already signed up Sony BMG. Business Week reported Friday that the move is aimed at taking more control over the distribution of digital music, which Apple has a near stranglehold on.

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The friction in the extremely competitive applications server market turned up considerably this week, as one of the companies perceived as tied for third in market share issued a buyout bid on Tuesday for the company it's tied with. That fact might get buried on the back pages were the bidding company not Oracle Systems, the maker of the 10gAS Java Application Server, which late yesterday saw its $17 per share cash buyout bid for competitor BEA Systems rejected as too low.

"This proposal is the culmination of repeated conversations with BEA's management over the last several years," stated Oracle President Charles Phillips this morning. "We look forward to completing a friendly transaction as soon as possible."

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Symantec is warning about a new security exploit making the rounds that takes advantage of a flaw in Office 2004 for Mac. A maliciously crafted Word file could lead to malware and rootkits being installed on a vulnerable system, including Windows PCs running older versions of Office. The issue was patched on Tuesday by Microsoft.

"It seems that the trend for exploiting vulnerabilities around the same time as Patch Tuesday continues. Microsoft themselves confirm in their advisory that they have seen this issue exploited in the wild," Symantec said in a blog posting. "The good news is that the default configuration in Microsoft Office 2007 and Office 2003, Service Pack 3 will not allow you to open some older Office file formats, including Office for Macintosh documents."

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Although it has yet to launch its high-speed wireless network, T-Mobile is selling its first 3G-capable phone - but only in select New York City stores. The Samsung T639 handset, which supports GSM/EDGE and WCDMA 1700 networks, was approved by the FCC in July.

T-Mobile is the only major wireless provider in the United States not to offer a 3G network; rivals Verizon, AT&T and Sprint have been building out their networks for years. But sales of the T639 may be the first real indicator that T-Mobile is preparing to finally launch its high-speed offering in some markets. T-Mobile acquired wireless licenses for the 1700 MHz band in a 2006 auction.

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The private equity firm backed by U2 frontman Bono, which recently invested $325 million into Palm, has received a hefty return on its $300 purchase of game developers BioWare and Pandemic. EA has agreed to acquire the two studios from Elevation Partners, with 10 games in development, for $620 million in cash and another $205 million in stock.

The total price of $825 million is EA's largest acquisition yet, and the company says the deal will boost its market share in multiplayer online games by two percent. Interestingly, Elevation Partners founder John Riccitello was a former EA exec who rejoined the company as its CEO in April. Riccitello, who retains a stake in Elevation, did not vote on the deal but did endorse it.

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In a sure sign of trouble for the concept of legal peer-to-peer downloading, Snocap disclosed Thursday that it was laying off 60 percent of its workforce. The rumor, first reported by Valleywag, was confirmed Friday by CNET.

The company also confirmed blog reports that it may be pursuing a sale, saying it had received some interest from several possible suitors. It was not immediately clear from where the layoffs would come.

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It was not the same as handing advocates of so-called "net neutrality" a complete failure, but then again, nearly every US Federal Communications Commission decision of late has been a split at or near the middle. AT&T's request for forbearance -- for relaxing of regulation -- of some of its broadband services was partly granted late yesterday, with the result being that the company the FCC acknowledges as dominant in its field has a little more leeway now to charge business broadband customers more negotiable rates.

"The Commission seeks to establish a policy environment that facilitates and encourages broadband investment, allowing market forces to deliver the benefits of broadband to consumers," reads a statement from FCC Chairman Kevin Martin, released this morning. "Today, we take another step in establishing a regulatory environment that encourages such investments and innovation by granting AT&T's petition for regulatory relief of its broadband infrastructure and fiber capabilities. This relief will enable AT&T to have the flexibility to further deploy its broadband services and fiber facilities without overly burdensome regulations."

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Just days after its CEO admitted it was behind schedule in rolling out DVR service to Comcast customers, TiVo confirmed late Thursday that the first "non-Comcast employees" were now receiving the service. TiVo CEO Tom Rogers had said on Tuesday at an investor conference that the company was behind yet again in getting the TiVo service to Comcast customers. The result was a near immediate effect on the company's stock price.

Since that admission, TiVo's stock has fallen some six percent. Comcast's stock briefly dropped about 1.3 percent Tuesday, however it had recovered all of its losses by midday trading on Friday. In a move that seems to be more like damage control than an actual rollout per se, only "test customers" are able to receive the TiVo service via Comcast. The option will be more broadly available to those in New England "within the coming weeks," according to Comcast.

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Microsoft took a page from Evite's playbook late Thursday, announcing Windows Live Events, a free event planning service.

The latest free ad-supported addition to the Windows Live family allows the user to send invitations to events much like Evite already offers. The company is also allowing those who may not have a Windows Live ID to respond to invitations.

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