About that gorilla ...

For the benefit of people outside the Seattle region, who won't see it in the newspaper boxes, that's the cover of the latest Seattle Weekly, which includes an extensive story examining Microsoft's commitment, or lack of it, to Washington state. The story's author, Jeff Reifman, cites examples including Microsoft's use of Nevada corporations for the reporting of certain royalty revenue, a practice that, based on Reifman's calculations, has saved the company hundreds of millions in Washington state taxes. The practice has been reported in the past, but not in so much detail.

The Seattle Weekly story also offers a different take on Microsoft General Counsel Brad Smith's comments last week to the Association of Washington Business. Reifman is a former Microsoft employee who also wrote this previous Seattle Weekly cover story, which drew a lot of attention in part because of his favorable comments about Apple, compared with Microsoft.

Microsoft's cable play

Brian Roberts, Comcast Corp. CEO, is in Seattle this week, and during an appearance yesterday he told the behind-the-scenes story about how Microsoft Corp. decided to make substantial financial investments in cable companies in the late 1990s. P-I reporter John Cook relayed the story in this article this morning, as Roberts described a 1997 dinner meeting involving himself and Gates at Bellevue's Harbor Club:

At that meeting, Roberts and other cable executives described some of the challenges facing the industry, including depressed stock prices and competition from satellite television. When Gates asked how he could help out, Roberts boldly suggested that the billionaire buy a 10 percent stake in every major cable company.

"There was a lot of laughter and people were kind of looking at their shoes," recalled Roberts.

After asking how much it would cost and if there would be any regulatory problems, Gates -- who was leaving for a vacation to the Amazon -- had his chief financial officer follow up with Roberts that week. Thirty days later Microsoft invested $1 billion in Comcast, paving the way for the widespread adoption of cable Internet in the United States.

Its stake in Comcast may have been the exception, but on the whole, Microsoft's investments in cable and telecommunications companies ultimately proved less-than-successful from a financial standpoint for the Redmond company.

Operation Code Name

Law enforcement agencies like to come up with catchy names for their investigations, and some of the Internet-related cases end up with particularly good ones. A recent federal investigation into counterfeit Microsoft software, for example, was dubbed "Operation Digital Marauder." I've always suspected that the code names are actually conceived just before the news release announcing the arrests -- kind of a last-minute branding effort -- but I've never gotten anyone to admit as much.

But with that in mind, in gathering information for this story about Microsoft and Amazon teaming to fight spam, I was sure the two companies would have a cool code name for the effort, perhaps reflecting their Seattle-area roots. Something along the lines of "The I-90 Project," or maybe even "Operation Digital Rain."

No such luck. It turned out the initiative was without a code name. I was tempted to suggest that maybe it wasn't too late to come up with something.

3rd open-source project

Here's the page on the SourceForge site for Microsoft's latest open-source project, a program called FlexWiki. Read more about the two previously released projects, and the company's decision to make them open source, in this previous story, and this one.

FlexiWiki is a program for creating and editing Web pages based on the collaborative "wiki" concept, which was described well in this recent Associated Press story. (See also our January profile of Ward Cunningham, the inventor of the wiki concept.) Mary Jo Foley reports on Microsoft's motivations for open sourcing the FlexWiki project in this eWeek story. Here is the official Microsoft press release. And here's the reaction on Slashdot.

But most interesting are related blog posts by Microsoft's David Ornstein, the primary originator of the FlexWiki software. In this entry, he announces the decision to move the FlexWiki project to the SourceForge site. And in this one, he reacts the reaction and responds to speculation about the broader implications of Microsoft's move:

A fair number of people out there seem to be trying to read the tea leaves of the FlexWiki announcement to find indicators of a deeper Microsoft strategy (plot?) related to Open Source.  My take on that: relax, it's just tea; enjoy it for what it is. Tea. Just tea.

On tap: EU court hearing

News coverage is ramping up in anticipation of Microsoft's hearing later this week before the European Court of First Instance, in which the company will ask for a suspension of the European Commission antitrust ruling pending the outcome of its broader appeal.

Bloomberg News notes that Microsoft still hopes to reach a settlement in the case, while the Associated Press reports that the company says it is prepared to offer a version of Windows without the Windows Media Player, if its efforts to suspend the decision are unsuccessful.

MSN TV review

The Engadget site has an extensive review, complete with hardware photos and screenshots, of the upcoming version of Microsoft's MSN TV 2 Internet Player, to be launched next week. It's the latest evolution of the WebTV technology acquired by Microsoft in 1997, offering Web access and other Internet-related features on a TV screen. See also previous coverage by CNet News and Gizmodo.

Microsoft 'Search Champs'

Microsoft has formed a new advisory group called "Search Champs" to give it feedback on its efforts to develop a new MSN Search engine, according to this blog post by Elizabeth Lane Lawley, a Rochester Institute of Technology assistant professor who has been invited to be part of the group. She notes that the company is keeping the identities of the group members confidential, even to other members, at least in advance.

L-i-n-d-o-w-s auction

Here's a link to the eBay auction for the former Lindows headquarters sign, as explained in our Insider column this morning. Bidding ends tomorrow. CNet News had a funny item on the auction last week:

Have you ever dreamed of being sued by Microsoft? Then now's your chance to grab one of the remaining vestiges of a name that reliably sends Redmond lawyers into overdrive.

The rest of the motto

Steve Ballmer talked about a wide range of issues, including his vision for continued innovation in the software industry, during his keynote address last night at the 20th anniversary celebration of the WSA, the tech trade group formerly known as the Washington Software Alliance. But one of the most interesting moments came when the Microsoft chief executive told the story of how the company came up with its original and famous mission statement.

Here's the audio clip, which runs about 1:33. (Real | Windows Media | MP3)

It's an interesting inside story. But beyond that, you'll notice in listening that Ballmer says the mission statement was, "A computer on every desk and in every home." That's the way Microsoft executives tend to refer to the original mission these days.

But in fact, people who have been following the company since the early days point out that the stated goal was actually, "A computer on every desk and in every home, running Microsoft software." In an October 1995 interview with Fortune magazine, for example, Bill Gates said: " ... I still believe in our vision -- a computer on every desk and in every home, all running Microsoft software."

By 2000, after the company became embroiled in antitrust disputes, Gates had dropped the phrase, as reflected in an essay marking the company's 25th anniversary: "When we started Microsoft, we always thought we'd remain a relatively small company. Even though we had dreams of putting 'a computer on every desk and in every home,' we didn't fully appreciate how much software people would really need."

Freelance journalist Paul Andrews, the co-author of the "Gates" biography, is among those who have noted this evolution in the past. Is dropping the last phrase a conscious choice, a subconcious shift, or merely a nod to brevity? Your opinion about that probably depends on your feelings about the company. But clearly, as Microsoft has grown from brash start-up to dominant industry force, achieving a PC operating system monopoly and practically accomplishing the stated goal of the now-omitted last phrase, the notion of the company striving to have every computer running Microsoft software has taken on a much different meaning.

Sun exec's Microsoft bonus

What's the Microsoft/Sun Microsystems settlement worth? For one former Sun executive, the answer, at least in part, is $100,000.

An SEC filing today by Sun contains an interesting footnote about Mark Tolliver, the former Sun executive vice president and chief strategy officer, who left the company shortly after the Microsoft deal was announced. The footnote is attached to a line about Tolliver receiving a bonus of $527,760 for Sun's 2004 fiscal year. Explains the footnote: "Includes special recognition bonus in the amount of $450,000, including $100,000 related to our settlement with Microsoft."

The filing shows no other Sun executive receiving a bonus explicitly related to the Microsoft settlement. But it makes some sense in the context of reports that Tolliver played a significant role in the process. Among other indications, Tolliver was the Sun executive who signed the settlement documents on behalf of the company, alongside Steve Ballmer's signature for Microsoft.

And a BusinessWeek magazine story after the settlement was announced recounted a funny story involving Tolliver and Bill Gates, who during the negotiations made a secret visit to Sun's headquarters when the office was closed for the July 4 holiday:

The famous exec escaped notice, until he and Sun's chief strategist, Mark Tolliver, went for a bathroom break and ran into a Sun staffer who had come to the office, dog in tow. "He looked Gates straight in the eye, and he had the most stunned look on his face,'' recalls Tolliver.

Highest-paid executive

Linux World notes an interesting point that might not have been obvious in reports this week about Microsoft's executive compensation: The company's highest-paid executive in its 2004 fiscal year, judging solely by the combination of salary and bonus, was not Bill Gates or Steve Ballmer but rather Jeff Raikes, the company's Information Worker (Office, etc.) group vice president.

That was one piece of information disclosed in the company's annual proxy filing Monday. In case you're wondering, it's not the first time that an executive other than Ballmer or Gates has received the largest combination of salary and bonus. The previous year, for example, Windows boss Jim Allchin had the highest combined total among the company's top executives.

Also, apart from salary and bonus, neither Gates nor Ballmer receives stock awards, unlike the company's other executives, and neither received options when the company gave those to executives and employees. Of course, Gates is already the company's largest shareholder, owning more than 10 percent of Microsoft's outstanding shares, according to the proxy statement. Ballmer owns about 3.8 percent.

For this year's numbers, here's the executive compensation list that ran with our story about the filing yesterday, showing the combination of salary and bonus in the 2004 fiscal year:

• Bill Gates, chief software architect: $901,667, up 4.5 percent
  
• Steve Ballmer, chief executive officer: $901,667, up 4.5 percent
  
• Jim Allchin, group vice president, platforms: $900,334, down 0.5 percent
  
• Kevin Johnson, group vice president, sales: $915,336, up 35 percent
  
• Jeff Raikes, group vice president, IW: $962,500, up 17 percent

Big buys ahead?

IDG News Service reports on a speech in Silicon Valley this week where Microsoft Chief Financial Officer John Connors talked, among other things, about the company's acquisition strategy:

"I think there is a probability that we will do more large deals than we have done historically. There are not many SAPs out there, but there is the potential that we could do a few big ones, but not likely that big," Connors said. A big deal would be an acquisition valued over $1 billion dollars, Connors indicated.

Microsoft at the Shrine

If you watched the Emmy Awards last night, just replace Gary Shandling with Bill Gates, paparazzi with tech trade press and long acceptance speeches with long keynote speeches, and you'll have a sense for what the situation will be probably be like in a few weeks.

Microsoft has reserved the site of the Emmys, the Shrine Auditorium in Los Angeles, for an Oct. 12 event where it plans to make several consumer-technology announcements. Gates will be among the speakers. The company is mum so far on the details, but InfoWorld and CNet News.com reported last week on some of the speculation.

Real's MSN Music foothold

After courting users of Apple's music service, is RealNetworks turning its attention to users of Microsoft's MSN Music?

Not specifically, perhaps, but Jupiter Research analyst Joe Wilcox writes on the Microsoft Monitor weblog that he noticed an unexpected sponsored link on a search results page inside the MSN Music store -- touting none other than RealNetworks' competing RealPlayer Music Store. Clicking on the link takes users from the MSN Music site to the related page within the RealNetworks service. (Click here for a screenshot I took after reading his post.)

There is an explanation: The sponsored results within the MSN Music service's search function use the same technology as the broader MSN Search service does, licensed from Yahoo's Overture Services unit. (The same query on MSN Search yields the same link to the RealNetworks store.)

Still, seeing the result within the MSN Music store is odd, to say the least. Wilcox writes that he burst out laughing when he saw it. He concludes: "Maybe someone at Microsoft needs to tune MSN's paid search service, or maybe, just maybe, the MSN Music store's business model is broad enough to embrace competitive ads."

'Mr. Office' at patent trial

In a trial under way in Providence, R.I., software company Arendi USA alleges that Microsoft's Smart Tags technology infringes on an Arendi patent for a technology it calls OneButton. A staff writer for the Providence Journal, Timothy C. Barmann, has been reporting from the trial, and he included an interesting observation in a story yesterday:

The case is apparently important enough to merit the presence of Steven Sinofsky, Microsoft's senior vice president of the Office line of products, or "Mr. Office," as the company lawyer introduced him. Sinofsky was once a technical adviser to Microsoft chairman Bill Gates, and is credited with being among the first to try to convince Gates in 1994 that the company should pay closer attention to the growing popularity of the Internet.

See also Barmann's story from today and earlier coverage by CNet News.com.

Microsoft/Sun documents

If you're up for some light reading, see the links below for the underlying documents that formed Microsoft's April settlement with Sun Microsystems. The full text was made public for the first time this week as part of Sun's annual Form 10-K filing with the Securities and Exchange Commission.

The second document, the limited patent covenant and stand-still agreement, was the basis for our story in this morning's P-I about Microsoft explicitly reserving the right to sue licensees (i.e., users) of the open-source OpenOffice.org productivity suite, which competes with Microsoft Office programs and is seen as one key to the future growth of Linux on personal computers.

• Technical collaboration agreement
  
• Limited patent covenant and stand-still agreement
  
• Settlement agreement

Inside the secret meeting

Microsoft's annual employee meeting was held yesterday at McCaw Hall, Seattle's new opera house. As mentioned in Monday's Insider column (third item), the meeting this year was, as in years past, closed to people from outside the company, including reporters, which is why you generally don't see news stories about what goes on there.

But as with the earlier Microsoft Global Briefing, some Microsoft employees have been sharing a few details on their weblogs. Some highlights:

• Randy Santi: "Since there were a limited number of seats available, tickets were collected and ID badges were verified at the door (as well as a check for cameras, as is common with most conferences/meetings of this size). Rip and tear tickets? Naw -- the McCaw Hall uses a bar code scanner that to verify a ticket, and in that scanner is a Palm III device. Nice to know they're good for something, besides just pretending to be a coaster."

• Dave Welsh: "All in all it was a great meeting, as much as or even more 'energy' than say the Amazon.com company meetings I went to back in the 1990's which were also great, but it was good to hear that Microsoft knows it's important to work even more on being better 'citizens' and help create better technology for the world."

• Robert Scoble: "I'm not sure what I think of the new format (most employees watched in their offices around the world -- here in Redmond I watched part of it with David Weller, my next-door neighbor, and part of it in solitude). The echoes of Ballmer's voice could be heard throughout building 18. It was a little goofy."

• Sandy Khaund: "I spent today getting swept away once again. [Steve Ballmer's] optimism and excitement is infectious."

• And the opposite of that sentiment from Cyrus Najmabadi: "I'm sitting here at the company meeting. Slightly bored. MS MS MS, yadda yadda yadda."

Joystick? Try 'joyboulder'

A story today on NPR's Morning Edition featured host Steve Inskeep learning to play Madden NFL 2005 with the help of a Brian Ekberg, sports editor for GameSpot. They never said explicitly which console they were using, but a couple clues suggested it was Microsoft's Xbox. Assuming that was the case, Inskeep became the latest to weigh in on the controversial bulk of the Xbox controller, with a little help from Ekberg:

Inskeep: "I'm holding this spaceship-looking control thing -- calling this a joystick would be such a ridiculous understatement."

Ekberg: "It's more of a joy boulder."

Inskeep: "Thank you very much. OK, I'm going to press 'A' on the joy boulder. ... "

Fans of Madden's primary competitor, Sega's ESPN NFL 2K5, will also appreciate a statement that Ekberg made about 2:50 into the segment. Access the online audio here.

Microsoft's new semi

Coming soon to a KOA near you ... The new "Microsoft Across America" RV semi truck, which looks to be a big upgrade from the previous "Microsoft Across America" shuttle bus.

Xbox 2 speculation rises

Could these be preliminary models for the next Xbox? Even Engadget, which says it received the images from an anonymous tipster, isn't convinced they're real. But it's an interesting thought, especially if you consider the second image and "Xbox FS" logo in the context of this previous Engadget report, also unconfirmed and somewhat questionable but intriguing nonetheless.

Copy, rip, or import?

If you've been using the new Windows Media Player 10 for Windows XP, you may have noticed that Microsoft shifted from some of the more formal language that it used in Windows Media Player 9 -- "Copy from CD" and "Copy to CD" -- to the more casual terms "Rip" and "Burn" for the same functions in the new media player. The Windows Media Player team says it made the changes after its consumer research found that "rip" and "burn" were more intuitive and more quickly understood by most users.

For whatever it's worth, Apple has apparently reached a different conclusion. Although the company caused a bit of a stir in the music industry a couple years ago with its "Rip, Mix, Burn" campaign for iTunes, Apple actually uses the word "import" rather than "rip" within the iTunes software.

On a related note, in this column, Washington Post columnist Rob Pegoraro draws a direct line between Apple's launch of the iTunes jukebox for Windows last year and Microsoft's decision to overhaul the Windows Media Player. "It's amazing to see what an entrenched monopolist will do when it finally meets real competition," he writes.

Computer security series

If you didn't happen to see USA Today's two-day series this week on Internet security, it's worth checking out. Here's the online version of the first day's main story, with links on the right to the other pieces of the series. This line from yesterday's installment stood out:

Most industry executives, when pressed, concede that market forces likely will have to emerge to compel Microsoft, Internet service providers and anti-virus companies -- all of whom are already pushing hard -- to embrace an even larger burden for securing the Web.

One year later ...

It has been one year since we started this blog, and by way of reflection, I thought it would be interesting to go back and see which posts drew the most traffic overall -- sort of a quantitative "best of" list. (Brian was kind enough to compile the stats.) As it turns out, a post on Service Pack 2, of all things, was the runaway winner. In fact, SP2-related posts appear three times in the top 10. Mike Rowe, Steve Jobs, Madden NFL -- those I understand. But who knew a cumbersome security upgrade could be so popular?

At any rate, here's the list, ranked by number of page views:

1) SP2 First Impressions
2) MikeRoweSoft Reaction
3) A look at 'Looking Glass'
4) Steve Jobs on Longhorn
5) Service Pack 2 Roundup
6) PS3, Revolution, Xbox 2?
7) NFL 2K5 vs. Madden '05
8) SCO, Linux and Microsoft
9) More on Service Pack 2
10) Mike Rowe, future CEO?

Microsoft in Oracle ruling

Microsoft is referenced repeatedly -- 77 times in all -- in the federal court ruling today rejecting the U.S. Justice Department's attempt to block Oracle's acquisition of PeopleSoft. The upshot: The judge didn't buy Microsoft's assertion that it doesn't have major ambitions in the market for high-level enterprise resource planning, or ERP, software.

Why does that matter? Microsoft's intentions in the ERP market were a key element of the case, as Oracle tried to show that the market is actually more competitive than the Justice Department contends, lessening the potential market impact of its proposed PeopleSoft acquisition.

The judge, Vaughn R. Walker, didn't mince any words in his treatment of Microsoft. Here is part of what he wrote about the testimony of Microsoft Business Solutions chief Doug Burgum.

The court accords little weight to Burgum’s testimony attempting to prove Microsoft’s absence from the so-called high function ERP product market. Burgum’s Uriah Heep like humility about Microsoft’s intentions regarding the failed SAP alliance and the successful BearingPoint alliance was unconvincing. It strains credulity to believe that Microsoft would offer billions of dollars to acquire SAP merely to make data processing easier for customers who use both Microsoft Office and SAP ERP. Further, this proposition is impeached by Microsoft’s actions with BearingPoint concurrently, or soon after, the SAP alliance was discontinued. Finally, the court wholly discounts Burgum’s testimony that MBS software, especially Axapta, lacks the functionality to be considered high function ERP. Burgum stated that MBS products cannot provide the “multi, multi, multi” functionality, but BearingPoint is selling Axapta on the basis that it can handle “multiple languages, currencies and businesses.” Accordingly, the court discounts Burgum’s testimony portraying MBS solely as a mere humble mid-market vendor.

By way of explanation, Walker's reference to the "failed SAP alliance" is about Microsoft's acknowledged merger talks with the German software giant, which were revealed as a result of the Oracle trial. BearingPoint is a company that Microsoft has allied with to do business in the ERP market. Axapta is a type of Microsoft ERP software. And if high school literature wasn't your best subject, Uriah Heep is a character from Dickens' David Copperfield who disguises his true aims with false modesty.

Download a .pdf of the ruling here. The Justice Department's official statement is here. See also coverage of the ruling by CNet News.com, Reuters, Bloomberg News, and InformationWeek.

Redmond citywide wi-fi?

Microsoft employees have access to wireless Internet connections in buildings across the company's Redmond campus, but what about everyone else across the city? (Yes, contrary to popular belief in the technology world, there are people and things in Redmond beyond the company.) A Microsoft employee who also serves as a member of the Redmond Planning Commission is encouraging the city to consider becoming the latest municipality to provide free citywide wi-fi access. Korby Parnell explains the effort on his weblog.

IE vs. Firefox

In his Mossberg's Mailbox column today, Wall Street Journal personal technology columnist Walter Mossberg gives advice to a reader who asks whether to switch from Microsoft's Internet Explorer Web browser to Mozilla's Firefox. His answer, in part:

If you're worried about security, Firefox is a good way to go. I have been using it recently, with no problems. But there are some downsides. For one thing, it's not finished. It's still a preview, or beta, with a version number that hasn't reached 1.0 yet. And, there are some Web sites it doesn't handle properly, because the developers of those sites have tailored them to specific features of Internet Explorer. But it's stable and fast, and you could always use Internet Explorer for those few sites Firefox doesn't render correctly.

The worst assistant ever

One of the co-founders of Sucker Punch Productions, the Bellevue video-game company we profiled in today's paper, is Bruce Oberg, whose legacy from his days at Microsoft includes one of the company's more legendary pranks. The story is best told by him, so rather than give it away in advance, I'll simply point to his account. Also see Rick Schaut's recollections of the incident.

MSN, iTunes and 'choice'

Microsoft's effort to send a message to Apple via legions of iPod users isn't quite as elaborate as RealNetworks' Freedom of Music Choice campaign, but the gist is the same. Here is what Microsoft is saying on a user-help page to people who might want to listen on an iPod to tracks downloaded from the new MSN Music store (Link via Paul Thurrott):

Unfortunately Apple refuses to support the popular Windows Media format on the iPod, choosing to only support their own proprietary DRM format. If you are an iPod owner and are unhappy about this, please send feedback to Apple and ask them to change their policy and interoperate with other music services.

There are more than 70 portable audio devices that support MSN Music today, and we hope that someday Apple decides to join with the industry and support consumer choice.

On the Daring Fireball site, John Gruber desconstructs Microsoft's language and notes that the same page on the site previously offered a very different and more constructive answer to the question of how to play files from MSN Music on an iPod. (It's possible, though cumbersome, requiring first burning the songs to CD and then reimporting them.) Gruber concludes, "Help pages are more useful when they’re helpful, rather than spiteful."

And finally, it's worth noting that one company's lack of choice is another's competitive advantage. CNet News.com had a good story on the broader subject last week, including an Apple executive's take on Microsoft's approach to the digital music business: "Its biggest problem may be that its downloaded songs can not play on the iPod," said Eddie Cue, Apple's vice president of applications.

Update, Tuesday evening: For what it's worth, the explanation on MSN Music's iPod help page has now been changed again -- shortened and toned down significantly. Compare the previous version, above, to the new language, below:

The iPod does not currently support the Windows Media Audio (WMA) format and will not natively play any songs purchased from MSN Music, or any other Windows Media-based music service.  If you are an iPod owner and would like to play MSN Music songs on your iPod, you can send feedback to Apple and ask them to change their policy and add support for the Windows Media format.

Linux license cover-up

The headline above doesn't refer to anything close to what you were probably thinking it would. It's a reference to this weblog post, in which Microsoft employee Michael Swanson tells the story of what happened when a Linux devotee noticed the MCROSFT license plate on his car.

Can't find 'Nemo' on iPod

In a newly published interview with BusinessWeek magazine, Bill Gates offered a funny response to Apple CEO Steve Jobs' frequent assertions that people aren't going to want to watch video on handheld devices such as the new Portable Media Centers built around Microsoft software. Jobs has said repeatedly that most people would prefer audio-only devices like Apple's iPod, which they can use while doing other things.

The magazine's Jay Greene asked if Jobs was wrong. Gates answered:

"Yes. Ask kids in the back of a car on a two-hour trip, 'Hey, would you like to have your videos there?' My kids would. I guess Steve's kids just listen to Bach and Mozart. But mine, they want to watch Finding Nemo. I don't know who made that, but it's really a neat movie."

Deciphering job numbers

Microsoft filed its Form 10K with the Securities and Exchange Commission earlier this week, outlining the state of its business as of the June 30 end of its 2004 fiscal year. One of the interesting elements of the report each year is a passage breaking down Microsoft's employment into finer categories than the company provides in other places.

More interesting is to go back and compare the current numbers to those offered in the company's previous 10K reports, to see the trends in those categories. I did that yesterday and charted them out for myself, to see if there was anything noteworthy. (I've posted a slightly fancier version of the chart above. You can see the raw numbers here.)

At first glance, it appeared that the past year brought a decline for the first time in several years in both finance/administration and manufacturing/distribution employment. But looking at the situation more closely, it turns out that the company has started rounding the reported figures to the nearest thousand. For example, the company reported its U.S. employment as of June 30 as 37,440 on its Web site, but gave the number as 37,000 as of the same date in this week's 10K.

So from the 10K alone, it's not clear whether the reported decline in finance/administration employment -- from 4,300 to 4,000 -- comes from rounding or from an actual decline. Same with the dip from 2,400 to 2,000 in manufacturing/distribution employment. But at the very least, it's safe to conclude that employment in those categories was relatively flat, if not down, during the past year.

Also apparent is a slower pace of hiring in product research and development. Reported employment in that category rose by only 800 in the 2004 fiscal year, compared with an increase of 2,400 in 2003. In contrast, the company's total sales, marketing and support employment looks to be growing steadily -- climbing by a reported 1,900 positions in the past year, compared with growth of 1,600 in the previous year.

More on MSN Music

Microsoft held media briefings for its new MSN Music service yesterday at a tony hotel in downtown Seattle, recently refurbished and high-tech enough to have TV monitors in the elevators. As I was heading back to the ground floor, after an hour learning about the new Microsoft service, none other than an iTunes/iPod ad starting playing on the monitor. Clearly just a testament to the pervasiveness of Apple's marketing, but a strange coincidence nonetheless.

One of the people quoted in our story this morning on the service was Jupiter Research analyst Michael Gartenberg, who noted that Microsoft hasn't done as much as it could have to distinguish the service from others. He expands on that position in this post on his weblog.

And Wall Street Journal personal tech columnist Walter Mossberg reviews MSN Music in this column. His conclusion: "Overall, MSN Music is no match for iTunes -- yet. But if you don't have an iPod and want or need to buy music in Microsoft's format, it may be a good choice over time."

iMac: 1 thumb up, 1 down

Siskel and Ebert, meet Scoble and Taulty, two Microsoft employees who offer polar opposite reviews of Apple Computer's new iMac:

Mike Taulty: "The iMac G5 looks very cool to me. I'm seriously thinking of buying one of these things when they're shippable (and possibly after some real hands-on reviews) just so that I can see 'how the other half lives'."

Robert Scoble: "Personally, why get this when you can actually get a Tablet PC that you can take off your desk and walk around with?"

30 years, and $10 billion

Microsoft was founded in 1975, which means the company will turn 30 next year -- which means there will be an abundance of magazine and newspaper articles in 2005 marking the event, looking back at the company's history, and casting a journalistic eye toward its future. In fact, they've already started, with Forbes magazine's newly published Microsoft @ 30 package.

The feature includes an online poll asking which of Microsoft's smaller businesses -- i.e., everything but Windows and Office -- is most likely to hit the $10 billion mark first.

Leading the poll so far (not counting the "all of the above" category) is the company's business applications division -- a puzzling development, given that it's the second-smallest of Microsoft's seven divisions, with $667 million in revenue last year. With $8.5 billion in revenue, the company's server software and tools business is significantly closer to the $10 billion mark. In fact, it would seem to be the clear favorite. None of the other Microsoft businesses in question is even close in terms of current size. But it's third in the preliminary poll results. Do Forbes' readers know something we don't?