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FYI: OS X copes with exploit (was Re: Tool makes mincemeat of passwords)
by billing 29 Mar '08

29 Mar '08

On 26-Mar-08, at 3:18 PM, Lonnie Smetana wrote: > Tool makes mincemeat of Windows passwords > By Dan Goodin in San Francisco > Published Tuesday 4th March 2008 23:57 GMT > > A security researcher has released an easy-to-use tool that accesses > locked Windows computers in seconds without entering a password. > > The tool, which was released Tuesday by Adam Boileau, works by > connecting a Linux machine to the Firewire port of the target PC and > modifying the password protection that's stored in local memory. > > The attack exploits a well-known weakness in Firewire that makes it > easy for connected devices to read and write to the memory of the > host machine. Similar hacks work on machines running OS X and Linux > (see here (http://www.matasano.com/log/695/windows-remote-memory-access-though-firewir…) > ). > [...] ...from: http://rentzsch.com/macosx/securingFirewire Friday, November 12, 2004 "The only evidence I have seen of the 'fix' [for the Firewire hack] was in Darwin's source-code - ie, nothing official from Apple. It first appeared in IOFireWireFamily v122.4.2 (Darwin v6.2/Mac OS X 10.2.2) which was released November 2002. That was obviously a few months after MacHax Best Hack Contest 2002 where [the Firewire/DMA exploit won first prize.]" - - - - - - In addition, Apple's technical people suggest, if you wish more protection against any RAM exploits under OS X that you "Use secure virtual memory". They've said that this will protect not only application memory but also the actual OS areas where password exploits would most probably be aimed. How to enable "Use secure virtual memory": - from the Apple menu, select "System Preferences..." - click on (Security) and choose the General tab if necessary - ensure there is a check mark next to "Use secure virtual memory" I've been running this for a while now without any problems and there does not appear to be any performance hit either. Finally, I've done a little bit of looking for similar protections for LINUX and Windows. Will post if I stumble across them. Wayne

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FYI: An invitation to the Aperture World Tour
by billing 24 Mar '08

24 Mar '08

[NOTE: a (free) ID at Apple is required for registration for this event.] Venue information: Aperture 2 Canadian Tour Attend a free, in-depth seminar given by Apple photography experts for a close look at the next generation of Apple’s powerful photo editing and management software. April 29, 2008 - April 29, 2008 01:30 PM - 04:30 PM The Park Theatre and Movie Café 698 Osborne Street Winnipeg, MB Canada Number of seats still available for this event : 114 Begin forwarded message: > From: Apple <News_Canada(a)insideapple.apple.com> > Date: March 24, 2008 4:06:48 PM CDT (CA) > Subject: An invitation to the Aperture World Tour > > > > > > > > > > Aperture World Tour > Join the tour: > Edmonton - April 8 > Vancouver - April 10 > Calgary - April 14 > Montreal - April 23 > Winnipeg - April 29 > > Apple takes Aperture 2 on tour around the world. > > With its simplified user interface, Aperture 2 is easy enough for > any photographer to pick up and use. Intuitive and accessible, it > brings a variety of new interface features that members of Apple's > pro photo marketing team will demonstrate during the tour. > > Space in the Aperture Tour fills quickly, so you'll want to sign up > right away and reserve your seat. > > > > > All seminars are held in English. > > Space is available on a first-come, first-served basis. > > Dates and product specifications are subject to change without notice. > > Apple Canada Inc. 7495 Birchmount Road, Markham, ON L3R 5G2 > All Rights Reserved / Privacy Policy / My Info > > If you prefer not to receive commercial email from Apple, or if > you've changed your email address, please click here. > > Copyright © 2008 Apple Inc. > >

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INTEREST: Court documents show evolution of "Vista Capable"
by billing 09 Mar '08

09 Mar '08

...from: http://www.nytimes.com/2008/03/09/business/09digi.html?_r=1&th&emc=th&oref=… They Criticized Vista. And They Should Know. By RANDALL STROSS Published: March 9, 2008 ONE year after the birth of Windows Vista, why do so many Windows XP users still decline to “upgrade”? RelatedMicrosoft's E-mail Messages (pdf)Text of Plaintiff Complaints (pdf)Text of Microsoft's Response to Plaintiffs (pdf) Microsoft says high prices have been the deterrent. Last month, the company trimmed prices on retail packages of Vista, trying to entice consumers to overcome their reluctance. In the United States, an XP user can now buy Vista Home Premium for $129.95, instead of $159.95. An alternative theory, however, is that Vista’s reputation precedes it. XP users have heard too many chilling stories from relatives and friends about Vista upgrades that have gone badly. The graphics chip that couldn’t handle Vista’s whizzy special effects. The long delays as it loaded. The applications that ran at slower speeds. The printers, scanners and other hardware peripherals, which work dandily with XP, that lacked the necessary software, the drivers, to work well with Vista. Can someone tell me again, why is switching XP for Vista an “upgrade”? Here’s one story of a Vista upgrade early last year that did not go well. Jon, let’s call him, (bear with me — I’ll reveal his full identity later) upgrades two XP machines to Vista. Then he discovers that his printer, regular scanner and film scanner lack Vista drivers. He has to stick with XP on one machine just so he can continue to use the peripherals. Did Jon simply have bad luck? Apparently not. When another person, Steven, hears about Jon’s woes, he says drivers are missing in every category — “this is the same across the whole ecosystem.” Then there’s Mike, who buys a laptop that has a reassuring “Windows Vista Capable” logo affixed. He thinks that he will be able to run Vista in all of its glory, as well as favorite Microsoft programs like Movie Maker. His report: “I personally got burned.” His new laptop — logo or no logo — lacks the necessary graphics chip and can run neither his favorite video-editing software nor anything but a hobbled version of Vista. “I now have a $2,100 e-mail machine,” he says. It turns out that Mike is clearly not a naïf. He’s Mike Nash, a Microsoft vice president who oversees Windows product management. And Jon, who is dismayed to learn that the drivers he needs don’t exist? That’s Jon A. Shirley, a Microsoft board member and former president and chief operating officer. And Steven, who reports that missing drivers are anything but exceptional, is in a good position to know: he’s Steven Sinofsky, the company’s senior vice president responsible for Windows. Their remarks come from a stream of internal communications at Microsoft in February 2007, after Vista had been released as a supposedly finished product and customers were paying full retail price. Between the nonexistent drivers and PCs mislabeled as being ready for Vista when they really were not, Vista instantly acquired a reputation at birth: Does Not Play Well With Others. We usually do not have the opportunity to overhear Microsoft’s most senior executives vent their personal frustrations with Windows. But a lawsuit filed against Microsoft in March 2007 in United States District Court in Seattle has pried loose a packet of internal company documents. The plaintiffs, Dianne Kelley and Kenneth Hansen, bought PCs in late 2006, before Vista’s release, and contend that Microsoft’s “Windows Vista Capable” stickers were misleading when affixed to machines that turned out to be incapable of running the versions of Vista that offered the features Microsoft was marketing as distinctive Vista benefits. Last month, Judge Marsha A. Pechman granted class-action status to the suit, which is scheduled to go to trial in October. (Microsoft last week appealed the certification decision.) Anyone who bought a PC that Microsoft labeled “Windows Vista Capable” without also declaring “Premium Capable” is now a party in the suit. The judge also unsealed a cache of 200 e-mail messages and internal reports, covering Microsoft’s discussions of how best to market Vista, beginning in 2005 and extending beyond its introduction in January 2007. The documents incidentally include those accounts of frustrated Vista users in Microsoft’s executive suites. Today, Microsoft boasts that there are twice as many drivers available for Vista as there were at its introduction, but performance and graphics problems remain. (When I tried last week to contact Mr. Shirley and the others about their most recent experiences with Vista, David Bowermaster, a Microsoft spokesman, said that no one named in the e-mail messages could be made available for comment because of the continuing lawsuit.) RelatedMicrosoft's E-mail Messages (pdf)Text of Plaintiff Complaints (pdf)Text of Microsoft's Response to Plaintiffs (pdf) The messages were released in a jumble, but when rearranged into chronological order, they show a tragedy in three acts. Act 1: In 2005, Microsoft plans to say that only PCs that are properly equipped to handle the heavy graphics demands of Vista are “Vista Ready.” Act 2: In early 2006, Microsoft decides to drop the graphics-related hardware requirement in order to avoid hurting Windows XP sales on low- end machines while Vista is readied. (A customer could reasonably conclude that Microsoft is saying, Buy Now, Upgrade Later.) A semantic adjustment is made: Instead of saying that a PC is “Vista Ready,” which might convey the idea that, well, it is ready to run Vista, a PC will be described as “Vista Capable,” which supposedly signals that no promises are made about which version of Vista will actually work. The decision to drop the original hardware requirements is accompanied by considerable internal protest. The minimum hardware configuration was set so low that “even a piece of junk will qualify,” Anantha Kancherla, a Microsoft program manager, said in an internal e-mail message among those recently unsealed, adding, “It will be a complete tragedy if we allowed it.” Act 3: In 2007, Vista is released in multiple versions, including “Home Basic,” which lacks Vista’s distinctive graphics. This placed Microsoft’s partners in an embarrassing position.Dell, which gave Microsoft a postmortem report that was also included among court documents, dryly remarked: “Customers did not understand what ‘Capable’ meant and expected more than could/would be delivered.” All was foretold. In February 2006, after Microsoft abandoned its plan to reserve the Vista Capable label for only the more powerful PCs, its own staff tried to avert the coming deluge of customer complaints about underpowered machines. “It would be a lot less costly to do the right thing for the customer now,” said Robin Leonard, a Microsoft sales manager, in an e-mail message sent to her superiors, “than to spend dollars on the back end trying to fix the problem.” Now that Microsoft faces a certified class action, a judge may be the one who oversees the fix. In the meantime, where does Microsoft go to buy back its lost credibility? Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross(a)nytimes.com.

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FYI: Sun Microsystems announces intent to make JAVA for iPhone
by billing 09 Mar '08

09 Mar '08

http://www.sun.com/home-modules/media/k5_030808.html This would probably be based on the Java Micro Edition, a "mobile" version of the software most often used for cellphone games and specialized business applications. "We're going to work to make sure that the [virtual machine] offers the Java applications as much access to the native functionality of the iPhone as possible," Sun's Java marketing VP, Eric Klein said. Release of Java for the iPhone and iPod touch would not appear until sometime after Apple's June launch of its version 2.0 firmware and the App Store needed to download the program. ...more details may be available at Sun's Java One conference May 6-9, 2008. Wayne

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Apple - Bringing Learning to Life - Manitoba 2008
by Doug Hamilton 28 Feb '08

28 Feb '08

Apple Seminar for Educators, Teachers, Curriculum Coordinators, Principals & Administrators. Explore what it means to teach and learn in a 21st century learning environment. Today, the pressure to improve academic performance and to prepare students with the skills they need to succeed is greater than ever before. Research studies show that the more access students have to technology based learning, the greater their engagement and time on task. Achievement levels improve even faster when students and teachers are comfortable with technology. This conference is designed to help you rethink how an innovative educational environment can enable students to achieve in school and prepare them to succeed in the future. With subject matter experts from across Canada and the United States, listen as they share their experiences and expertise in global curricula and communities, digital learning projects, the research, assessment and the pedagogy that supports them. For More Details: http://edseminars.apple.com/seminars/event_template.php?eventTemplateID=389 This seminar is being presented by Apple Canada and does not involve the University of Manitoba directly. Please send all questions regarding this presentation to Apple Canada (see link above for contact information). Regards, Doug ------------- Doug Hamilton, BA, MA, APP Senior Computer Consultant Computers-on-Campus; Univ. of Manitoba 204-474-6196 (Ph.) 204-474-7556 (Fax) http://www.umanitoba.ca/bookstore/

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INTEREST: Today, EU fine Microsoft record $1.4bn; further investigations
by billing 28 Feb '08

28 Feb '08

...from: http://news.bbc.co.uk/2/hi/business/7266629.stm http://www.youtube.com/watch?v=_ZyUU8LBXsw DISPUTE TIMELINE March 2004: EU fines Microsoft 497m euros and orders it to release key Windows code to rival software developers September 2004: Microsoft tries to have the ruling temporarily suspended April 2006: Microsoft appeals the ruling in the European Court of First Instance September 2007: Microsoft loses its appeal EU fines Microsoft record $1.4bn Wednesday, 27 February 2008, 20:40 GMT What's the dispute about? The European Commission has fined US computer giant Microsoft for defying sanctions imposed on it for anti-competitive behaviour. Microsoft must now pay a record 899m euros ($1.4bn; £680.9m) after it failed to comply with a 2004 ruling that it abused its dominant market position. The ruling said that Microsoft was guilty of not providing key code to rival software makers. EU regulators said the firm was the first to break an EU anti-trust ruling. The fines come on top of earlier fines of 280m euros imposed in July 2006, and of 497m euros in March 2004. "Microsoft was the first company in 50 years of EU competition policy that the Commission has had to fine for failure to comply with an antitrust decision," Competition Commissioner Neelie Kroes said in a statement. Future improvements? An investigation concluded in 2004 that Microsoft was guilty of freezing out rivals in products such as media players, while unfairly linking its Explorer internet browser to its Windows operating system at the expense of rival servers. The European Court of First Instance upheld this ruling last year, which ordered Microsoft to pay 497m euros for abusing its dominant market position. Last week, the firm announced that it would open up the technology of some of its leading software, including Windows, to make it easier to operate with rivals' products. "As we demonstrated last week with our new interoperability principles and specific actions to increase the openness of our products, we are focusing on steps that will improve things for the future," Microsoft said. Further cases But the firm is still being pursued by Brussels. Last month, the European Commission launched two new anti-competition investigations against Microsoft into similar issues. The first will look at whether there are still problems regarding Microsoft abusing its dominance of the PC market to grab market share of the internet. The Commission will also investigate the continued interoperability of Microsoft software with rival products.

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INTEREST: Cold Boot Attacks on Encryption Keys for encrypted data
by billing 27 Feb '08

27 Feb '08

...from: Lest We Remember: Cold Boot Attacks on Encryption Keys J. Alex Halderman, Seth D. Schoen, Nadia Heninger, William Clarkson,William Paul, Joseph A. Calandrino, Ariel J. Feldman, Jacob Appelbaum, andEdward W. Felten With thanks to the Center for Information Technology, Princeton University Abstract: Contrary to popular assumption, DRAMs used in most modern computers retain their contents for seconds to minutes after power is lost, even at operating temperatures and even if removed from a motherboard. Although DRAMs become less reliable when they are not refreshed, they are not immediately erased, and their contents persist sufficiently for malicious (or forensic) acquisition of usable full- system memory images. We show that this phenomenon limits the ability of an operating system to protect cryptographic key material from an attacker with physical access. We use cold reboots to mount attacks on popular disk encryption systems — BitLocker, FileVault, dm-crypt, and TrueCrypt — using no special devices or materials. We experimentally characterize the extent and predictability of memory remanence and report that remanence times can be increased dramatically with simple techniques. We offer new algorithms for finding cryptographic keys in memory images and for correcting errors caused by bit decay. Though we discuss several strategies for partially mitigating these risks, we know of no simple remedy that would eliminate them. ...from: http://www.nytimes.com/2008/02/22/technology/22chip.html?th&emc=th Researchers Find Way to Steal Encrypted Data Center for Information Technology Policy, Princeton University Princeton-based researchers broke the encryption system by freezing memory chips, permitting them to read the software. By JOHN MARKOFF Published: February 22, 2008 SAN FRANCISCO — A group led by a Princeton University computer security researcher has developed a simple method to steal encrypted information stored on computer hard disks. The technique, which could undermine security software protecting critical data on computers, is as easy as chilling a computer memory chip with a blast of frigid air from a can of dust remover. Encryption software is widely used by companies and government agencies, notably in portable computers that are especially susceptible to theft. The development, which was described on the group’s Web site Thursday, could also have implications for the protection of encrypted personal data from prosecutors. The move, which cannot be carried out remotely, exploits a little- known vulnerability of the dynamic random access, or DRAM, chip. Those chips temporarily hold data, including the keys to modern data- scrambling algorithms. When the computer’s electrical power is shut off, the data, including the keys, is supposed to disappear. In a technical paper that was published Thursday on the Web site of Princeton’s Center for Information Technology Policy, the group demonstrated that standard memory chips actually retain their data for seconds or even minutes after power is cut off. When the chips were chilled using an inexpensive can of air, the data was frozen in place, permitting the researchers to easily read the keys — long strings of ones and zeros — out of the chip’s memory. “Cool the chips in liquid nitrogen (-196 °C) and they hold their state for hours at least, without any power,” Edward W. Felten, a Princeton computer scientist, wrote in a Web posting. “Just put the chips back into a machine and you can read out their contents.” The researchers used special pattern-recognition software of their own to identify security keys among the millions or even billions of pieces of data on the memory chip. “We think this is pretty serious to the extent people are relying on file protection,” Mr. Felten said. The team, which included five graduate students led by Mr. Felten and three independent technical experts, said they did not know if such an attack capability would compromise government computer information because details of how classified computer data is protected are not publicly available. Officials at the Department of Homeland Security, which paid for a portion of the research, did not return repeated calls for comment. The researchers also said they had not explored disk encryption protection systems as now built into some commercial disk drives. But they said they had proved that so-called Trusted Computing hardware, an industry standard approach that has been heralded as significantly increasing the security of modern personal computers, does not appear to stop the potential attacks. A number of computer security experts said the research results were an indication that assertions of robust computer security should be regarded with caution. “This is just another example of how things aren’t quite what they seem when people tell you things are secure,” said Peter Neumann, a security researcher at SRI International in Menlo Park, Calif. The Princeton researchers wrote that they were able to compromise encrypted information stored using special utilities in the Windows, Macintosh and Linux operating systems. Apple has had a FileVault disk encryption feature as an option in its OS X operating system since 2003. Microsoft added file encryption last year with BitLocker features in its Windows Vista operating system. The programs both use the federal government’s certified Advanced Encryption System algorithm to scramble data as it is read from and written to a computer hard disk. But both programs leave the keys in computer memory in an unencrypted form. “The software world tends not to think about these issues,” said Matt Blaze, an associate professor of computer and information science at the University of Pennsylvania. “We tend to make assumptions about the hardware. When we find out that those assumptions are wrong, we’re in trouble.” Both of the software publishers said they ship their operating systems with the file encryption turned off. It is then up to the customer to turn on the feature. Executives of Microsoft said BitLocker has a range of protection options that they referred to as “good, better and best.” Austin Wilson, director of Windows product management security at Microsoft, said the company recommended that BitLocker be used in some cases with additional hardware security. That might include either a special U.S.B. hardware key, or a secure identification card that generates an additional key string. The Princeton researchers acknowledged that in these advanced modes, BitLocker encrypted data could not be accessed using the vulnerability they discovered. An Apple spokeswoman said that the security of the FileVault system could also be enhanced by using a secure card to add to the strength of the key. The researchers said they began exploring the utilities for vulnerabilities last fall after seeing a reference to the persistence of data in memory in a technical paper written by computer scientists at Stanford in 2005. The Princeton group included Seth D. Schoen of the Electronic Frontier Foundation, William Paul of Wind River Systems and Jacob Appelbaum, an independent computer security researcher. The issue of protecting information with disk encryption technology became prominent recently in a criminal case involving a Canadian citizen who late in 2006 was stopped by United States customs agents who said they had found child pornography on his computer. When the agents tried to examine the machine later, they discovered that the data was protected by encryption. The suspect had refused to divulge his password. A federal agent testified in court that the only way to determine the password otherwise would be with a password guessing program, which could take years. A federal magistrate ruled recently that forcing the suspect to disclose the password would be unconstitutional. --- - - - - - - - http://www.aladdin.com/etoken/solutions/pc-laptop-security.aspx

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FYI: Microsoft Windows VISTA SP1 scheduled for mid-March
by billing 21 Feb '08

21 Feb '08

...from various Microsoft web pages: Windows Vista Service Pack 1 (SP1) Published: February 20, 2008 Windows Vista Service Pack 1 is an update to Windows Vista that addresses feedback from our customers. In addition to previously released updates, SP1 contains changes focused on addressing specific reliability and performance issues, supporting new types of hardware, and adding support for several emerging standards. Windows Vista SP1 also addresses some management, deployment, and support challenges. On February 4, 2008 Windows Vista Service Pack 1 was released to manufacturing. Windows Vista SP1 will be available to the public in mid-March via Windows Update and the Microsoft Download Center. - - - - - - - - - - - Things to know before you install Windows Vista SP1 Release Candidate: Published: February 14, 2008 • If you have a prior version of the SP1 beta installed, you must uninstall it prior to installing the final version. Use the Control Panel applet "Programs and Features" and select "View installed updates" from the top left of the task pane. Under Windows, look for "Service Pack for Windows (KB936330). • If you've had a previous release of SP1 installed you may encounter an issue with a small set of hardware devices that may not function properly after updating a Windows Vista PC to the final release of SP1. This is an issue with the way the device drivers were re- installed during the SP1 update process, not with the drivers themselves—these drivers worked on Windows Vista RTM (release to manufacturing) and they work on Windows Vista SP1. This problem is typically corrected by simply uninstalling and reinstalling the driver. If reinstalling the driver does not help and you’d like to report a devices/driver bug please download the tool available in this posting http://forums.microsoft.com/TechNet/ShowPost.aspx?PostID=2852824&SiteID=17&… • We are working with the manufacturers of these devices to get the drivers and their install programs updated, and also on other solutions we can use to ensure a smooth customer experience when updating to SP1 over Windows Update. For new PCs provisioned with Windows Vista SP1, this is not an issue. The Microsoft Windows VISTA Service Pack 1 FAQ can be found at: http://technet.microsoft.com/en-us/windowsvista/bb972745.aspx ...and the Microsoft Windows VISTA Service Pack 1 forum can be found at: http://forums.microsoft.com/TechNet/ShowForum.aspx?ForumID=1992&SiteID=17 Wayne

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FYI: Toshiba says good-bye to it's HD DVD format
by billing 20 Feb '08

20 Feb '08

...from: http://www.toshiba.co.jp/about/press/2008_02/pr1903.htm Toshiba Announces Discontinuation of HD DVD Businesses 19 February, 2008 Company Remains Focused on Championing Consumer Access to High Definition Content TOKYO--Toshiba Corporation today announced that it has undertaken a thorough review of its overall strategy for HD DVD and has decided it will no longer develop, manufacture and market HD DVD players and recorders. This decision has been made following recent major changes in the market. Toshiba will continue, however, to provide full product support and after-sales service for all owners of Toshiba HD DVD products. [...] "We carefully assessed the long-term impact of continuing the so- called 'next-generation format war' and concluded that a swift decision will best help the market develop," said Atsutoshi Nishida, President and CEO of Toshiba Corporation. "While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality." [...] Toshiba will begin to reduce shipments of HD DVD players and recorders to retail channels, aiming for cessation of these businesses by the end of March 2008. Toshiba also plans to end volume production of HD DVD disk drives for such applications as PCs and games in the same timeframe, yet will continue to make efforts to meet customer requirements. The company will continue to assess the position of notebook PCs with integrated HD DVD drives within the overall PC business relative to future market demand. This decision will not impact on Toshiba's commitment to standard DVD, and the company will continue to market conventional DVD players and recorders. Toshiba intends to continue to contribute to the development of the DVD industry, as a member of the DVD Forum, an international organization with some 200 member companies, committed to the discussion and defining of optimum optical disc formats for the consumer and the related industries. [...]

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INTEREST: Microsoft Reassigns Several Top Executives
by billing 16 Feb '08

16 Feb '08

...from: http://www.nytimes.com/2008/02/15/technology/15soft.html http://bits.blogs.nytimes.com/2008/02/14/will-microsofts-executive-shuffle-… Microsoft Reassigns Several Top Executives By SAUL HANSELL and JOHN MARKOFF Published: February 15, 2008 Microsoft announced a sweeping shake-up of its executive ranks Thursday, placing new executives over operations facing fierce new competition from Google, Apple and cellphone makers. Microsoft's Yahoo Bid Full coverage of Microsoft's offer to buy Yahoo, who is advising, who else might be in play and where the bid goes from here. The announcements were part of a broad management reorganization involving seven new senior vice presidents and seven new corporate vice presidents. One of the more significant leadership changes was in the cellphone operations. Andy Lees was named senior vice president for mobile communications operations. Mr. Lees, who had overseen the server business, succeeds Pieter Knook, who, the company said, “made the decision to leave Microsoft to pursue other opportunities.” Microsoft has been paying more attention to its cellphone business following the introduction of Apple’s iPhone and Google’s Android software operating system. In only a few months of the iPhone’s release, according to Canalys, a market research firm, Apple gained 28 percent of the smartphone market in the United States, a greater share of the market than the cellphones using Microsoft’s Windows Mobile software. Research In Motion, maker of the BlackBerry, leads the category that has been dominated by phones made for business users. Microsoft is showing more interest in the consumer market. This week it announced it was buying Danger, the maker of the popular Sidekick cellphone. Analysts said that Microsoft was moving to confront a growing competitive threat from a range of companies that have positioned themselves to offer Web-based alternatives to Microsoft’s core office- productivity applications. The other major change was the replacement of Steve Berkowitz, the current senior vice president of Microsoft’s Online Services group. Mr. Berkowitz, the former chief executive of the online site Ask Jeeves, was hired with great fanfare in April 2006 to help revive Microsoft’s search and portal operations. Microsoft has been unable to make a dent in Google’s growing dominance in search and search advertising. Mr. Berkowitz will leave the company this August, the company said. Responsibility for online operation was split among three executives who will work in the combined organization that handles both Internet activities and the Windows operating system, which is run by Kevin Johnson. Satya Nadella, will be the senior vice president for the search, portals and advertising group. Mr. Nadella is on the engineering side of Microsoft, and will look after the technical side of Web search, advertising systems and related systems. He will also have responsibility for the programming of the MSN portal. Bill Veghte, will be the senior vice president for online services and Windows, handling sales, marketing and product management both for Windows and online operations. Brian McAndrews, the senior vice president of the advertiser and publisher solutions group, will look after the strategy and marketing of Microsoft’s online activities jointly with Mr. Veghte and Mr. Nadella. February 14, 2008, 10:17 pm Will Microsoft’s Executive Shuffle Scare Yahoo? By SAUL HANSELL If there was apprehension at Yahoo already about the prospect of a takeover by Microsoft, the fear will no doubt increase as those in Sunnyvale study the details of Microsoft’s reorganization announced Thursday. There is a consensus at Yahoo that many of Microsoft’s ills can be traced to near paralysis that stemmed from its complex matrixed organization, excessive bureaucracy, and war between competing internal units. Microsoft has long thrived with a bifurcated organization—half the company devoted to engineering, the other half to sales and marketing. This worked well enough in a software world where the engineers would hand a gold master CD of a program every year or two to the sales side which would take it to market. The Internet, where product cycles are months, sometimes weeks, generally requires much more tight coordination between functions. Microsoft is positioning many of its online sites as Internet extensions of its software products. That led to the renaming, for example, of its Hotmail service, once the market leader, as “Windows Live Hotmail,” a brand that resonates with few outside of Redmond. Microsoft looked like it was trying to overcome some of these problems and create more accountability two years ago when it hired Steve Berkowitz, the former head of Ask Jeeves, to be the senior vice president of what it called the online services group. But Mr. Berkowitz never had control of the engineering teams for the products he was charged with running, which created friction within Microsoft, according to Internet company executives. Mr. Berkowitz will leave Microsoft this summer after a short transition. The online business will now be split between four executives, who all work for Kevin Johnson, a former I.B.M sales executive. Three of those four make up a group charged with the overall strategy and marketing for Microsoft’s Internet services. Marketing and product management for Microsoft’s online operations will be handled by Bill Veghte, who also performs that role for Windows Vista and its successors. (His unit is called the online services & windows business group.) Satya Nadella, a longtime engineer, now will run what is called the search, portals and advertising group. Mostly, this will look after the engineering for Microsoft’s Web search, advertising systems and related systems. Awkwardly, he will also have responsibility for the programming of the MSN portal, which is run by Joanne Bradford. Mr. Nadella doesn’t even control all the technology related to the Internet operations. Steven Sinofsky, runs engineering for both user interface of Windows and the Windows Live services like e-mail and instant messaging. Mr. Sinofsky, however, is not part of the three- person group overseeing online strategy. The third member of the Microsoft online triumvirate is Brian McAndrews, the former chief executive of aQuantive, the advertising company Microsoft bought last year. His area is dubbed the advertiser and publisher solutions group, includes both engineering and marketing for the company’s advertising systems. A Microsoft spokesman said its too early to say whether this structure is what the company will use if it succeeds in buying Yahoo. For Microsoft to get its $45 billion worth out of Yahoo and create a real challenge to Google, it will need to have a much more nimble structure, with clear lines of responsibility, and an unambiguous mandate to win online without any regard for the effect on the Windows franchise.

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