Microsoft and Lenovo announced an agreement Wednesday that will combine their research and development efforts in the consumer and mobile technology sectors. The announcement comes as Chairman Bill Gates arrived in China to hold talks with government leaders.

The company is in China to strengthen its ties with the Communist nation even as tension increase between Beijing and Washington. Microsoft sees the country as a new growth opportunity, and is working with the government and local companies to promote its products.

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In recent years, Microsoft has made major strides in building up its community outreach. The company has invited bloggers to special events and conferences, established a "Featured Communities" program, and even actively sought feedback from enthusiasts for Windows Vista.

Now, the company is taking that effort one step further by launching a series of beta Web sites designed for those who can't get enough of Microsoft. Initially, the Microsoft Community will be made up of Forums, Blogs, and a social bookmarking tool called Tagspace.

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The Internal Revenue Service's electronic filing system used by Intuit's popular TurboTax tax preparation software came to a grinding halt Tuesday night, as users rushed to file before midnight. The company apologized to users, and promised that their taxes will be considered on time.

A message on Intuit's site last night read: "Intuit is working with the IRS and has notified them that throughput on our electronic filing system was not what we expected, resulting in a system slowdown. We encourage customers to continue trying to e-file as we continue to work on the issue."

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Microsoft is now accepting beta test applications for the next version of Windows Media Center, code-named "Fiji." The update will likely contain bug fixes and some new digital media features, arriving alongside Windows Vista Service Pack 1, say sources.

Microsoft program manager Jessica Zahn announced the beta test on The Green Button forum. "We only have so many spots, and we need a diverse group of testers from across the US and from supported countries," Zahn said. "You'll only be contacted if you're chosen, and we will choose people by May 31."

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Citing changes in the gaming industry, Sony announced that it would likely be cutting hundreds of jobs in its gaming division across Europe, Japan, and The United States. The exact number is unknown, but a spokesperson for its European division said a little over 8 percent of its 1,900 employees would be laid off. A final decision on cuts would likely come by next month.

Sony is under increasing pressure to turn its business around, and it has taken heavy losses in its gaming division to ensure a good launch for the PlayStation 3. For the final calendar quarter of last year, Sony reported losses of $1.05 billion. While job cuts are only one possible solution to the problem, it does appear one of the most likely.

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A very early draft of patent reform legislation that will be proposed on the floors of both the US House of Representatives and Senate later this afternoon would change the very fabric of patent law. Among other changes, the proposed Patent Reform Act of 2007 would limit plaintiffs' damages in patent reform suits to only the amount to which they may have been entitled had they been allowed to profit from their work under normal economic conditions.

Such a change would eliminate not only massive patent damages judgments in US courts, but also the likelihood of huge settlement fees in attempting to avoid those damages. That change could irrevocably alter the patent portfolio business, which has recently blossomed into a legitimate industry unto itself.

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Service has been restored to Blackberry users after an overnight failure caused the system to be unable to send e-mails. Research In Motion said the exact cause of the problem is still unknown.

North American users were affected by the problem, said to have begun around 5pm Eastern on Tuesday. Service began to come back around 4am Eastern, although problems associated with the backlog of e-mails may still result.

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The news continues to get worse for Vonage, which last month lost a major patent infringement lawsuit filed by Verizon Wireless.

In a filing with the Securities and Exchange Commission Tuesday, the VoIP provider acknowledged for the first time publicly that its legal problems could seriously harm the company's financial health.

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At this time last year, Intel was on the threshold of a major restructuring, the full extent of which had yet to be ascertained, and the impact of which was keeping many investors and customers on edge. The earliest we would expect to see the results of the turnaround, we were told, would be the first quarter of 2007. That quarter has now passed, and by the looks of things, Intel is healthy, breathing, but maybe not out of the woods.

Revenue is down over the last quarter, by 9% to $8.9 billion – down 1% on an annual basis. Operating income is also down a tick over Q1 2006, though up 13% over the previous quarter, during which the costs of restructuring were keenly being felt. But here’s the good news: With CEO Paul Otellini’s cost-cutting program now in full swing, net income is up 19% over the previous year, to $1.6 billion.

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In a speech this morning at Intel Developer Forum in Beijing, senior vice president and long-time conference favorite Pat Gelsinger presented initial performance estimates for the latest prototypes of Penryn, the company's first high-k-plus-metal-gate technology processor at the 45nm lithography level. There, Gelsinger presented figures pointing to as much as 25% faster performance in 3D rendering operations for Penryn prototypes over today's Core 2 Duo, introduced last July.

Intel's tests tend to focus on processor performance rather than that of systems in which those processors are installed. So conceivably, with GPU speeds due to increase even between now and later in the year when the first Penryn CPUs are shipped, desktop system perceived speeds could actually be faster still.

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Even though Google continues to claim that its online productivity suite is not intended to compete with Microsoft's Office product, its latest addition is beginning to raise eyebrows.

The Mountain View, Calif. company disclosed Tuesday that it is about to release a presentation and slide show tool in the coming months. The product would join its word processing software, released last August, and its spreadsheet application, launched in October.

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BetaNews has learned that Microsoft plans to reissue the pink Zunes in a limited fashion by Mother's Day, with at least one retailer expecting to receive the devices within the week.

In a copy of a message sent to Best Buy stores obtained by BetaNews, the new Zunes are to first appear in the April 29 ads from the retailer. However, it seems as if the devices will be placed on shelves immediately.

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HD DVD announced it is the first of either format to reach 100,000 stand-alone players sold in the US market, saying Tuesday the price drop helped to spur sales of the product. Not included are PC or Xbox 360 drive sales.

It is said those products are also selling strongly as well, meaning the actual number of HD DVD players sold is likely significantly higher than that number. It is also the first time sales numbers on either format hardware has ever been released.

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Without subscriber revenue to depend on, AOL is looking for new avenues in which to generate cash. One of these is in entertainment, and the company announced deals on five new Web productions Tuesday.

AOL is hoping that these offerings help it generate more advertising impressions, which is now its primary source of revenue. Deals have been announced with Mark Burnett, Dreamworks, Endemol, Madison Road, Stone & Co., and Telepictures.

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In an advisory this morning borrowing language used during previous statements about completely different exploits, Microsoft's Security Response Center team confirmed that it has seen at least one new wave of attacks based on proof-of-concept code impacting its DNS server software in Windows Server-based systems.

The concept enables malicious users to run code remotely under the system privileges generally granted to the DNS service itself. Although technically, the exploit does not directly threaten Internet routing the same way as the crafted IPv6 header problem in Cisco routers that also periodically rears its ugly head (or heads its ugly rear), this exploit can impact the routing of e-mail and other IP traffic within an enterprise or limited domain.

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