USA Today backed off its NSA domestic spying story on Friday, saying it could not confirm the participation of either BellSouth or Verizon in the program. However, the company stood by its claim that AT&T was part of the program, saying second interviews with its sources as well as anonymous politicians confirmed the telecom's involvement.

The newspaper reported in May that the NSA has been collecting phone call records from AT&T, Verizon and BellSouth containing the phone calls of tens of millions of Americans. United States President Bush previously asserted that the spying only involved calls made to international destinations.

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Yet another Microsoft employee has left the Redmond company for its biggest rival. Vic Gundotra, Microsoft's evangelism head will join Google next year, the two companies have confirmed. Google said it had not decided what position he will assume at the company, but said he will be a valuable asset. Gundotra had spent nearly a decade and a half at Microsoft.

Gundotra follows some other high-profile Microsoft employees who have since left for Google: Adam Bosworth, a former general manager; Mark Lucovsky, former engineer and apparent witness to Ballmer's chair throwing incident; and most notably Kai-Fu Lee, former head of Microsoft's China arm.

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A bill that once threatened iTunes' dominance in France was approved by the country's parliament on Friday, albeit in a watered down form. While the initial bill essentially made closed proprietary digital rights management systems illegal, a loophole inserted into a compromise bill softened that requirement.

Although the bill passing through the lower house led some to believe that Apple might pull out of the country to protect its proprietary FairPlay DRM, the French Senate in May amended the bill to say that music stores would be allowed to keep their exclusivity only after receiving the go-ahead from copyright holders and artists.

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Security researchers have discovered two new flaws in Internet Explorer. While proof of concept code is available for both, there are no known exploits of either flaw.

The first involves a cross-site scripting issue where an attacker could view information in an open browser window from another that is visiting a malicious site. However, researchers called the issue less serious than the other flaw, saying it requires user interaction, and sensitive data in other browser windows.

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Napster has begun offering new customers its own branded music player for free in return for a one-year subscription to its music service. Users would be able to select from either a 256MB player at no charge that is capable of playing MP3, WMA, and WAV files, or a 1GB player that adds a larger color screen capable of displaying JPEG photo and MPEG video files for an extra $50 charge.

Music services like Napster have struggled in Apple's shadow. According to the most recent estimates by NPD Group, the iTunes Music Store garners over 80 percent of the market. This leaves services like Napster turning to special promotions like free gifts in order to fight over the remaining fifth. Napster did not comment on the MP3 player promotion.

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With the European Commission expected to hand down fines of 2 million euros per day dating back to December 15 for Microsoft's alleged non-compliance with antitrust sanctions, the company has sent an e-mail to employees updating them on the situation. Microsoft's associate counsel in Europe, Horacio Gutierrez says the company has done everything the EU has asked.

E-mail from Horacio Gutierrez to Microsoft EMEA Employees

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Storage manufacturer EMC announced late Thursday that it would acquire RSA Security, maker of the popular SecurID devices, in a deal valued at $2.1 billion. EMC will pay $28 per share for RSA, a hefty premium that has concerned investors and sent EMC shares plunging on Friday.

Security has become a critical factor in data storage, with companies like Microsoft releasing technologies to help companies lock down their data. EMC says it was missing a security solution from its product offerings. The acquisition is expected to close late in the third quarter, with RSA becoming EMC's Information Security Division.

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Security firms warned users of Apple's Mac OS X earlier this week about the existence of an exploit that could result in the execution of arbitrary code. The news has made upgrading to version 10.4.7 even more important, as the update fixes the issue. The vulnerability lies in an operating system file called "launchd."

The proof-of-concept code was created by Digital Munition security researcher Kevin Finisterre. He has written other exploits in the past, including another for a Bluetooth flaw within Mac OS X. Finisterre says he does his work out of a desire to show those who believe the operating system is completely safe that there are flaws that need to be addressed.

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To accompany the release of Windows Vista, Microsoft is preparing what it calls the "Ultimate Keyboard," which blends a modern design with advanced features such as proximity sensing and a 30-foot range. Microsoft has also moved the Windows key to below the spacebar and added a Media Center button.

Like Apple's laptops, the Ultimate Keyboard detects the amount of light in the room and turns on backlighting when needed. It can additionally detect when the user leaves the room. Both the keyboard and its partner mouse utilize Bluetooth for connecting to a PC. Microsoft has given no timeframe for release or pricing for the new hardware.

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Microsoft is the target of a class action lawsuit after a California man sued the company over violations of spyware statutes for its Windows Genuine Advantage anti-piracy program. The suit was filed Monday in a U.S. District Court in Seattle.

The case revolves around the WGA Notifications component, which was rolled out last November in a pilot phase, and officially launched worldwide earlier this week. The feature originally had a "phone home" functionality that caused computers to connect with Microsoft servers each day and check for updated configuration files.

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Microsoft on Thursday acknowledged that it was pushing back Office 2007 from its scheduled October release to manufacturing. The company also backed away from promising a public launch in January, simply saying Office 2007 would arrive in "early 2007."

"Based on internal testing and beta 2 feedback around product performance, we are revising our development schedule to deliver the 2007 Microsoft Office system by the end of year 2006, with broad general availability in early 2007," a Microsoft spokesperson told BetaNews. "Feedback on quality and performance will ultimately determine the exact dates."

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Microsoft UK .NET platform product manager Ian Moulster wrote in a post to his personal Web log that the company will cut access to Windows Vista Beta 2 on Friday, as the company has reached the number of testers it was looking to give access to through its Customer Preview Program.

Moulster gave some tips to those who want to beat the cutoff and ensure they have access to a copy of the Vista beta and Release Candidate builds. Users should start their downloads today, as Microsoft plans to maintain download servers until July 14, which means the download could be stopped and restarted later.

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A laptop stolen in May that contained data and social security numbers of some 26 million plus armed forces veterans and active duty personnel has been recovered, the FBI disclosed Thursday. The agency also said there was no evidence that data on the laptop had been accessed. To date, there have been no reports of identity theft stemming from the incident, and the FBI has no suspects in custody.

"The protection of the sensitive data, and well being of those potentially affected, has made this investigation a number one priority for the investigating agencies," the agency's Baltimore office said in a statement. "A thorough forensic examination is underway, and the results will be shared as soon as possible. The investigation is ongoing."

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The city of Anaheim officially launched its wireless network on Thursday In cooperation with EarthLink. The ISP has announced two plans for usage, including occasional use and continuous access plans.

To support the Anaheim network and other Wi-Fi projects around the country, EarthLink has added a Wi-Fi option to its line of products, which include a modem, along with eight e-mail accounts and the company's malware protection tools. That package will cost $21.95 USD per month.

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Shares of Apple fell Wednesday to their lowest levels in eight months after a financial analyst said Apple would not debut new versions of its players until the fourth quarter at the earliest. Shaw Wu, analyst with American Technology Research, said that a switch of suppliers was his reasoning for suspecting a delay. Wu had believed Apple would refresh its product line starting in the summer quarter with the Nano, and later the video iPod during the holiday quarter.

The delay would push each launch a quarter behind, Wu said. If true, it could mean a wait of as much as a year for new iPods. The iPod nano was released in October, and some analysts have warned sales have begun to slow. Wu said there could be an upside to the delay, as it could mean a better spacing of iPod launches during 2007.

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