Microsoft gets support in gag order lawsuit from U.S. companies

WASHINGTON -- Technology, media, pharmaceutical and other companies, along with major corporate lobbying groups, filed legal briefs on Friday in support of a Microsoft Corp lawsuit that aims to strike down a law preventing companies from telling customers the government is seeking their data.

Friday was the deadline for filing of friend-of-the-court briefs by nonparticipants in the case. The filings show broad support for Microsoft and the technology industry in its latest high-profile clash with the U.S. Justice Department over digital privacy and surveillance.

Microsoft's backers included the U.S. Chamber of Commerce, the National Association of Manufacturers, Delta Air Lines Inc , Eli Lilly and Co, BP America, the Washington Post, Fox News, the National Newspaper Association, Apple Inc, Alphabet Inc's Google, Amazon.com Inc, the Electronic Frontier Foundation and many others.

Microsoft filed its lawsuit in Seattle federal court in April, arguing that a law allowing the government to seize computer data located on third-party computers and often barring companies from telling their customers that they are targets is unconstitutional.

The Justice Department argues that Microsoft has no standing to bring the case and the public has a "compelling interest in keeping criminal investigations confidential." Procedural safeguards also protect constitutional rights, it contends. A Justice Department spokesman declined comment on Friday's filings.

Microsoft says the government is violating the Fourth Amendment, which establishes the right for people and businesses to know if the government searches or seizes their property, in addition to Microsoft's First Amendment right to free speech.

In the suit, which focuses on the storage of data on remote servers that are often referred to as "cloud" computers, Microsoft said it had been subjected to 2,600 federal court orders within the past 18 months prohibiting the company from informing customers their data was given to authorities pursuing criminal investigations.

Under the authority of the 30-year-old Electronic Communications Privacy Act (ECPA), the government is increasingly directing investigations at parties that store data in the cloud, Microsoft argued in its suit.

Five former law enforcement officials who worked for the FBI or Justice Department in Washington state also submitted a brief supporting Microsoft.

In July, a federal appeals court sided 3-0 with Microsoft in a separate case against the Justice Department, ruling the government could not force the tech company to hand over customer emails stored on servers outside the United States.

The Justice Department has not decided whether to appeal that decision, a spokesman said.

The case is Microsoft Corp v United States Department of Justice et al in the United States District Court, Western District of Washington, No. 2:16-cv-00537.

source: www.abs-cbnnews.com

Microsoft to buy LinkedIn for $26.2-B in its largest deal

Microsoft Corp. will buy LinkedIn Corp. for $26.2 billion in its biggest-ever deal, marking CEO Satya Nadella's first big effort to breathe new life into the software giant's business-productivity tools.

By connecting core software like Microsoft Word and PowerPoint with LinkedIn's network of 433 million professionals, the deal marks a turn for Microsoft, which stumbled in a mobile phone venture launched under Nadella's predecessor. It also aims to take on challengers in several areas.

The deal could help keep services like Outlook email relevant enough that customers won't want to leave it for rivals such as Google's Gmail, analysts said. And because the acquisition brings a network heavy in marketing and sales professionals, it delivers a shot across the bow to competitors in those areas, such as Salesforce (CRM.N) and Marketo (MKTO.O).

For LinkedIn, the opportunity to tap Microsoft's customers, including the 1.2 billion users of its Office suite of business software, could help it jumpstart growth, which has slowed in recent quarters.

"LinkedIn and Microsoft really share a mission" of helping people work more efficiently, said Microsoft CEO Nadella in a conference call with analysts. "There is no better way to realize that mission than to connect the world's professionals."

Nadella has been trying to reinvigorate the once-lumbering company since taking over two years ago, and has helped build more credibility around Microsoft's efforts in areas such as cloud-based services. When he took the top job in February 2014, the company's share price was $34.20; early Monday afternoon, it was trading around $50.

"The Venn diagram is pretty big," Nadella said in a separate call with Reuters, meaning the overlap of customers of both companies, although he didn't give a precise number.

In a presentation to analysts, Microsoft said after adding in LinkedIn, the total potential market size of Microsoft's productivity and business-process segment was $315 billion, up from $200 billion without LinkedIn.

Nadella gave an example of a customer walking into a meeting scheduled on a Microsoft Outlook calendar integrated with LinkedIn, receiving notification that one of the people in the meeting went to college with a colleague.

"The future of productivity is around people, identity and data and the relationships between the them," said Matt McIlwain, a portfolio manager at Madrona Ventures. "Microsoft is buying LinkedIn for the opportunity to leverage these capabilities and combine them with Microsoft's strong but complementary assets in those three areas."

The offer of $196 per share represents a premium of 49.5 percent to LinkedIn's Friday closing price.

MIXED TRACK RECORD

LinkedIn's shares soared 47 percent to $192.42 and Microsoft's shares were down 2.7 percent to $50.06.

Microsoft has a mixed track record when it comes to acquisitions, with past targets such as business network Yammer, internet video conferencing service Skype and particularly phone company Nokia failing to deliver hoped-for benefits.

Monday's deal raised investors' hopes that another social media company, Twitter (TWTR.N), could be the next acquisition target, sending shares up more than 5 percent.

Reid Hoffman, chairman of LinkedIn's board and the company's controlling shareholder, said the deal has his full support.

Jeff Weiner will remain chief executive of LinkedIn, reporting to Nadella. In a phone call with Reuters, Weiner said LinkedIn would remain its own entity in the way that YouTube is relatively independent from parent Alphabet (GOOGL.O), or Instagram from parent Facebook (FB.O).

Microsoft plans to speed-up monetization of LinkedIn by boosting individual and organization subscriptions as well as targeted advertising, it said.

Despite the rich premium paid by Microsoft, LinkedIn is selling for well below its peak of more than $270 per share in 2015. A weak forecast earlier this year sent its shares tumbling amid slowing online ad revenue.

LinkedIn went public in 2011 at $45.

The deal, which won the unanimous support of both boards, is expected to close this year, the companies said.

Microsoft, which has $105.55 billion in cash, said it would issue new debt to fund its acquisition. Moody's said it was reviewing Microsoft AAA rating for a possible downgrade.

After the deal, which will require approval from regulators in the United States, the EU, Canada and Brazil, LinkedIn will become part of Microsoft's productivity and business processes unit, the companies said.

Microsoft's financial adviser was Morgan Stanley and LinkedIn's financial adviser was Allen & Company LLC and Qatalyst Partners, founded by Silicon Valley dealmaker Frank Quattrone.

Microsoft's legal adviser was Thacher & Bartlett LLP and Wilson Sonsini Goodrich & Rosati and Professional Corp advised LinkedIn.

source: www.abs-cbnnews.com

Microsoft says game over for Xbox 360

Microsoft Corp. said on Wednesday it would stop production of its popular Xbox 360 video game console, which helped the company gain a firm foothold in the market.

More than 80 million units of the console have been sold since it was launched in 2005.

Xbox 360 also introduced Microsoft's Kinect motion-sensing game device. It was the company's primary gaming console, until it launched the Xbox One in 2013.

The Xbox 360 launched with a number of popular video games including Activision Blizzard Inc's "Call of Duty 2" and Electronic Arts Inc's "Need for Speed: Most Wanted".

Microsoft said in a blog post it would continue to sell existing inventory of the consoles, and that it would continue to provide customer support.

The company's Xbox Live network, which allows online multi-player gaming, will continue to be available for the Xbox 360.

Sales of older-generation consoles, such as the Xbox 360 and Sony's PlayStation 3, have been declining as consumers shift to newer versions of the consoles from the companies.

"While we've had an amazing run, the realities of manufacturing a product over a decade old are starting to creep up on us," said Phil Spencer, the head of Microsoft's Xbox division.

The company has also introduced the ability for users to play games launched for the Xbox 360 on its latest console. Microsoft currently offers over 100 video game titles as a part of its "backward compatibility" feature.

source: www.abs-cbnnews.com

Microsoft apologizes for offensive tirade by its 'chatbot'

LOS ANGELES - Microsoft is "deeply sorry" for the racist and sexist Twitter messages generated by the so-called chatbot it launched this week, a company official wrote on Friday, after the artificial intelligence program went on an embarrassing tirade.

The bot, known as Tay, was designed to become "smarter" as more users interacted with it. Instead, it quickly learned to parrot a slew of anti-Semitic and other hateful invective that human Twitter users started feeding the program, forcing Microsoft Corp to shut it down on Thursday .

Following the setback, Microsoft said in a blog post it would revive Tay only if its engineers could find a way to prevent Web users from influencing the chatbot in ways that undermine the company's principles and values.

"We are deeply sorry for the unintended offensive and hurtful tweets from Tay, which do not represent who we are or what we stand for, nor how we designed Tay," wrote Peter Lee, Microsoft's vice president of research.

Microsoft created Tay as an experiment to learn more about how artificial intelligence programs can engage with Web users in casual conversation. The project was designed to interact with and "learn" from the young generation of millennials.

Tay began its short-lived Twitter tenure on Wednesday with a handful of innocuous tweets.

Then its posts took a dark turn.

In one typical example, Tay tweeted: "feminism is cancer," in response to another Twitter user who had posted the same message.

Lee, in the blog post, called Web users' efforts to exert a malicious influence on the chatbot "a coordinated attack by a subset of people."

"Although we had prepared for many types of abuses of the system, we had made a critical oversight for this specific attack," Lee wrote. "As a result, Tay tweeted wildly inappropriate and reprehensible words and images."

Microsoft has enjoyed better success with a chatbot called XiaoIce that the company launched in China in 2014. XiaoIce is used by about 40 million people and is known for "delighting with its stories and conversations," according to Microsoft.

As for Tay? Not so much.

"We will remain steadfast in our efforts to learn from this and other experiences as we work toward contributing to an Internet that represents the best, not the worst, of humanity," Lee wrote.

source: www.abs-cbnnews.com

Microsoft, Google stand down in patent battles

NEW YORK - Microsoft Corp. and Google Inc. have agreed to bury all patent infringement litigation against each other, the companies announced on Wednesday, settling 18 cases in the United States and Germany.

In another sign of the winding down of the global smartphone wars, the companies said the deal puts an end to court fights involving a variety of technologies, including mobile phones, wifi, and patents used in Microsoft's Xbox game consoles and other Windows products.

The agreement also drops all litigation involving Motorola Mobility, which Google sold to Lenovo Group Ltd last year while keeping its patents.

However, as Microsoft and Google continue to make products that compete directly with each other, including search engines and mobile computing devices, the agreement notably does not preclude any future infringement lawsuits, a Microsoft spokeswoman confirmed.

"Google and Microsoft have agreed to collaborate on certain patent matters and anticipate working together in other areas in the future to benefit our customers," the companies said in a joint statement. They did not disclose the financial terms of the deal.

The companies said they have been cooperating on such issues as the development of a unified patent court for the European Union, and on royalty-free technology for speeding up video on the Internet.

One of the most bitter disputes between the rivals began in 2010 when Microsoft accused Motorola, later acquired by Mountain View, California-based Google, of breaching its obligation to offer licenses to its wireless and video patents used in Xbox systems at a reasonable cost.

In July, a U.S. appeals court ruled that the low licensing rate Microsoft pays to use the patents had been properly set by a federal judge in Seattle.

Wednesday's agreement is not the first among smartphone heavyweights to settle their patent disputes. In 2014, Samsung Electronics Co Ltd and Apple Inc. agreed to drop all litigation against one another outside the United States.

source: www.abs-cbnnews.com

Microsoft to buy Israeli cyber security firm Adallom: report

TEL AVIV - Microsoft Corp plans to acquire Israeli cyber security company Adallom for $320 million, the Calcalist financial newspaper reported on Monday.

Adallom, which develops cloud security platforms, is expected to become the center for Microsoft's cyber security business in Israel, the newspaper said.

Adallom could not be reached for comment and officials at Microsoft in Israel declined to comment.

The U.S. technology company has made several recent acquisitions in Israel, including security software developer Aorato for a reported $200 million. It also bought text analysis firm Equivio and the technology of digital pen maker N-trig.

Adallom has raised about $50 million from venture capital funds Sequoia Capitol and European Index Ventures as well as EMC Corp and Hewlett-Packard, among others, Calcalist said.

Adallom was founded in 2012 has 80 employees at its offices in Israel and the United States.

It offers users information security technology on remote servers. It can secure information stored on Salesforce's, Microsoft's or Google's cloud services and protect it from cyber attacks.

source: www.abs-cbnnews.com

Microsoft launches wearable fitness device

Microsoft Corp. launched a device called Microsoft Band that will allow users to monitor their fitness and exercise regime, marking the world's largest software company's debut into the wearable technology market.

The wrist-worn device has sensors that monitor pulse rate, measure calorie burn and track sleep quality, Microsoft said in a blog post.

Microsoft said the device will be available in the United States in limited quantities from Thursday for $199.

Apple Inc. unveiled a smart watch on Sept. 9 that will combine health and fitness tracking with communications and will go on sale in early 2015, while Samsung Electronics Co. unveiled its Galaxy Gear smart watch in September 2013. The Apple Watch will be priced at $349.

Microsoft also launched a health app called Microsoft Health that includes a cloud service for users to store and combine health and fitness data.

The Microsoft Health app will collect data from the fitness band and will work on iPhones and Android smartphones, as well as its own Windows Phone.

source: www.abs-cbnnews.com