Apple shocked Wall Street after the closing bell on Wednesday, reporting both record revenue and profits that broke the $1 billion barrier. On top of these impressive results, the company shipped more than 21 million iPods and 1.6 million Macs, a record number for the former.

The numbers were well above estimates. An average of analysts surveyed by Reuters showed the Street was looking for profit of 77 cents per share on revenue of $6.43 billion. Instead, Revenue rose to $7.12 billion, on profits of $1 billion, or $1.14 per share.

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It may have been one of the longest skits ever to be delivered from the legendary studios of Saturday Night Live -- NBC Studio 8H at 30 Rockefeller Plaza -- before actually coming to the punch line. But eventually Microsoft CEO Steve Ballmer, along with the president/CEO of telecom server provider Nortel, Mike Zafirovski, announced the next phase of their collaboration, which began officially in June of last year.

Their mission is to integrate Windows, Office, Exchange, and Visual Studio -- all four pillars of Microsoft -- into the next round of Nortel server hardware on Intel platforms. The smaller Nortel Communications Server 1000 will be integrated with the new Unified Messaging edition of Exchange Server, for delivery in the second quarter of this year; more high-end models with multimedia conferencing capabilities on-board will be delivered in the fourth quarter.

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MySpace is continuing to be the focus of criticism for not protecting its younger users sufficiently. Thus the site is developing “Zephyr,” a system that allows parents to control their children’s access to the social networking site.

Existence of the tracking software was first confirmed by the Wall Street Journal in an article Wednesday. A release date has not yet been announced.

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Adobe on Wednesday released the final version of Flash Player 9 for Linux, bringing its multimedia offering for the open source operating system up to date with Windows and Mac OS X. Linux developers can now build rich Internet applications using Adobe's Flex 2 SDK.

Flash Player 9 for Linux includes better memory utilization, advanced features for graphics, video and text, as well as ActionScript Virtual Machine 2, which Adobe recently handed over to the Mozilla Foundation for a project called Tamarin. "Now the Linux community has full access to the high volume of Flash content and applications available on the Internet today, bringing Linux developers and users to the forefront of the Web 2.0 experience," remarked Emmy Huang, senior product manager at Adobe.

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It now appears as if security companies and Microsoft have settled their differences and will work together on the consumer launch of Windows Vista. Several leading manufacturers have committed to launch Vista-compatible versions of their software by January 30.

At least two of the companies who had earlier chastised Microsoft over Vista security, McAfee and Symantec, were among those listed as committing to Vista compatibility. Others included CA, Kaspersky, Panda Software, and Trend Micro, among others.

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A spokesperson for Toshiba of America told BetaNews late yesterday that the company is still researching whether a new, three-layer HD DVD disc format it may propose -- the existence of which was carefully leaked at last week's CES -- will work in the first generation on HD DVD players, including its own.

"Since the disc is not standardized yet," the spokesperson told BetaNews, "we are researching whether it is applicable to the current HD DVD players."

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Digital music sales worldwide are still on the increase, but it's still not enough to offset the declining sales of CDs. Nevertheless, the category is expected to make up a quarter of sales by 2010.

Revenues from digital music in 2006 reached $2 billion, which accounted for 10 percent of all sales. Overall, music sales fell about three percent. The International Federation of the Phonographic Industry (IFPI) had said that it hoped the medium would make up for lost sales.

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Intel has spent the better part of its history in restructuring - in fact, long-time employees have learned to live with it as part of the evolutionary course of business. But now, CEO Paul Otellini and company have a new challenge ahead of them in fiscal 2007: completing this latest round of restructuring so Intel can, at last, redefine "normalcy."

The company plans to do this while, at the same time, rolling out the first of its 45 nm processor parts - the replacements to the revolutionary Core 2 Duo CPUs it introduced to the world just last July.

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A California phisher faces up to 101 years in prison after being convicted in U.S. District Court of tricking AOL members into disclosing their personal information, including credit cards. The information was then used to make purchases, say prosecutors.

Federal authorities arrested Jeffrey Goodin, 45, in January 2006. He had been using hacked EarthLink accounts to send e-mails to AOL members. The messages were fashioned to look as if the user would lose service if they failed to respond.

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This afternoon, Seagate Technology made an unexpected announcement coming so soon after the Storage Visions conference in Las Vegas – a tag-along with CES. The company’s second wave of Savvio hard drives in the 2.5" form factor will be revved up from 10,000 to 15,000 revolutions per minute.

But as an indication that such revolutionary speed, literally speaking, may not yet be cool enough for notebooks where the company’s Momentus product line revs up to 7200 rpm, the 15K series is being billed for use in RAID storage batteries for the enterprise. There, Seagate says the new Savvios will run cooler than a typical datacenter installation, drawing 40% less power per drive while consuming about a third of the rack space.

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While it appears as if the effort to ban violent video games in America has hit a dead end, efforts are beginning in Europe to institute a ban there. It's unclear, however, if it will even matter in the end because the movement would only suggest methods to curb the sales of the games to minors and not implement any laws. It will be up to the 27 individual states as to whether they implement part, none or all of the recommendations.

There is some movement, however, to harmonize laws regarding the sale of games to children younger than the age on the label of the game. According to the European Commission, many EU retailers are not bothering to check the age of buyers, which is allowing some to purchase games not meant for those under the age of 16.

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Dell has been slapped by a class action suit in Canada over its issues with Sony laptop batteries last year. An Ontario resident alleges the company continued to sell certain models even after it knew they were susceptible to overheating.

In August 2006, Dell recalled 4.1 million batteries over the issue, and the fallout damaged both the company's stock value and overall image. The company has attempted to make up for the issue, and there were rumors that the company and others would go after Sony for compensation.

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This afternoon, Sony confirmed to BetaNews that the company has shipped its one millionth PlayStation 3 console to Japanese retailers. The statement from the Japanese division of the company (SCEI) is much more straightforward than a similar one made last week by the American division (SCEA), though both are trying to make up for what some analysts perceive as a massive sales gap for PS3s on both continents.

This morning's statement from SCEI is careful to use the term "shipments" to refer to units that have left the factory floor. A New York Times report last week cites data from the Enterbrain division of Japanese research firm Famitsu Marketing as estimating only 534,336 were sold to Japanese consumers in the period between November 11 and January 7.

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In what could be seen as both marketing stunt and ploy for donations, popular Swedish BitTorrent site The Pirate Bay has announced intentions to raise money to purchase Sealand, a claimed "sovereign Principality" founded in international waters, six miles off the eastern shores of Britain.

The idea is to establish The Pirate Bay in a location where international copyright laws do not apply. The service, easily the most popular site hosting torrent files for downloading illicit content such as movies and television shows, has faced increasing pressure since being raided and forced to relocate from Sweden last May.

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Telecommunications company Verizon said Tuesday that it will spin off its landline business in Maine, New Hampshire, and Vermont, merging it with Fairpoint, a Charlotte, N.C. telecommunications company specializing in rural and small urban markets. The deal would generate some $2.7 billion for both Verizon and its shareholders. The company will be the majority shareholder of the combined entity, although it will be headed by Fairpoint's current management team.

Verizon has expressed interest in spinning off its landline business in the past as it focuses on generating revenue to fund its rollout of FiOS Internet service. A report in May first indicated the above lines were for sale, and GTE lines in Indiana, Ohio, and Michigan may be next. Both areas were places where Verizon had no plans to upgrade to fiber-based lines.

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