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Tuesday, November 22, 2011

FCC chairman opposes AT&T takeover of T-Mobile (AP) : Technet

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FCC chairman opposes AT&T takeover of T-Mobile (AP) : Technet

FCC chairman opposes AT&T takeover of T-Mobile (AP)

Posted: 22 Nov 2011 05:50 PM PST

By RYAN NAKASHIMA, AP Business Writer Ryan Nakashima, Ap Business Writer – Tue Nov 22, 8:50 pm ET

LOS ANGELES – The chairman of the Federal Communications Commission has come out against the merger of cellphone giant AT&T and T-Mobile USA.

Julius Genachowski made his position known in a document he circulated to fellow commissioners Tuesday.

Genachowski recommended sending AT&T Inc.'s proposed $39 billion takeover of T-Mobile to an administrative law judge for review and a hearing. That's what the FCC does when it opposes a merger.

According to an FCC official familiar with the matter, an agency analysis concluded the merger would result in higher prices for consumers, less innovation, less investment in the U.S. and fewer U.S. jobs.

The review also cast doubt on AT&T's claim that only the merger would allow it build out "4G" high-speed wireless Internet access to cover 97 percent of the population, up from about 80 percent. The agency concluded AT&T would likely do so anyway to remain competitive with Verizon Wireless.

The official wasn't authorized to speak publicly.

AT&T spokesman Larry Solomon said in a statement that the chairman's action was "disappointing."

"It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the U.S. economy desperately needs both," he said. "At this time, we are reviewing all options."

The FCC would be the second government agency to oppose the deal. The Justice Department filed a lawsuit with the U.S. District Court in Washington in August to stop it, and that trial is expected to start Feb. 13.

Genachowski's proposed order recommends the administrative law judge begin the hearing after the trial is done.

The deal announced in March would vault the combined No. 2 carrier AT&T and No. 4 T-Mobile into the top spot ahead of Verizon.

Dallas-based AT&T has about 101 million wireless subscribers. T-Mobile, the Bellevue, Wash.-based subsidiary of Deutsche Telekom AG of Germany, has 34 million. Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group PLC, has about 108 million, while Sprint Nextel Corp. has 53 million.

Lackluster results show challenge for HP's Whitman (AP)

Posted: 21 Nov 2011 04:49 PM PST

By JORDAN ROBERTSON, AP Technology Writer Jordan Robertson, Ap Technology Writer – Mon Nov 21, 7:49 pm ET

SAN FRANCISCO – Hewlett-Packard Co.'s first earnings report with Meg Whitman as CEO highlights the troubles she faces in setting a new course for the besieged company.

The latest quarterly numbers, reported Monday after the market closed, beat Wall Street's subdued expectations. But the forecast for the 2012 fiscal year left something to be desired. HP's shares fell.

The results show a company being pulled in two directions at once. The tensions underline a key challenge for Whitman, who is best known for building eBay Inc. from its startup days into a Silicon Valley icon and now must wrestle with one of technology's oldest companies amid management dysfunction and economic malaise.

Whitman's first major decision as CEO was deciding to keep the $40 billion-plus personal computer business, which her predecessor, Leo Apotheker, had wanted to sell or spin off. That business is pulling HP toward the low end of the technology market. PCs notoriously carry thin profit margins, and customers are spending less on them amid challenges from rival technologies, mainly smartphones and tablets. HP sees PCs as an inexpensive way to get its sales hooks into corporations and sell more expensive technology.

Meanwhile, HP has spent tens of billions of dollars expanding into those more profitable areas of technology services and software. But cracking those businesses means facing entrenched enemies such as IBM Corp. HP faces serious questions about its competitiveness at the high end of those markets.

The latest earnings report showed HP's net income fell 91 percent — mostly because of write-downs and charges for Apotheker's decision to kill off HP's fledgling tablet and smartphone lines. So staying on track will be a challenge.

The company earned $239 million, or 12 cents per share, for the quarter ended Oct. 31. That's down from $2.54 billion, or $1.10 per share, a year earlier.

Excluding one-time items, HP earned $1.17 per share, more than the $1.13 analysts expect on average, according to FactSet.

Revenue fell 3 percent to $32.12 billion, but that beat the $32.05 billion analysts expected.

HP's shares briefly rose in extended trading, after the results were reported. But momentum turned against the company as investors digested the weaker outlook, and the shares fell 28 cents. In regular trading Monday, the stock fell $1.13, or 4 percent, to close at $26.86.

The forecast was lower than most analysts' targets. HP said it was being "cautious," citing turmoil in Europe amid the debt crisis there, soft consumer spending and weakening spending by businesses.

Analyst Brian White with Ticonderoga Securities called the outlook "weak" but said the stock has some appeal in investors because of its previous declines. Indeed, the stock has fallen 40 percent since CEO Mark Hurd was ousted last year in an ethical scandal.

"HP has valuation on its side and expectations are low; however, we believe this turnaround story will take time to play out, and the darkening macroeconomic environment is only likely to hinder this cause," White wrote in a note to clients.

The profit decline in the latest quarter was caused in large part by $3.3 billion in charges for HP's earlier decision to kill its tablet and smartphone businesses, as well as other write-downs and acquisition costs. Revenue in three of HP's biggest divisions — personal computers, printers and ink, and servers and networking — fell as well.

Whitman faces a real test as she attempts to pull together a conglomerate beset by growing pains and managerial strife. She is HP's third CEO in a year and a half. Though HP is the world's largest information technology company by revenue, the company has had a hard time deciding whether it wanted to grow even bigger or start getting smaller.

Apotheker, who succeed Hurd, was ousted in September over his botched handling of key initiatives, particularly the plan to sell or spin off the PC division, which leaked early to the press and which Whitman has reversed.

For the fiscal first quarter, HP expects earnings of 83 cents to 86 cents per share, excluding one-time items. That's far less than the $1.11 per share analysts expected.

For the full fiscal year, HP expects to earn at least $4 per share, excluding one-time items. Analysts expected $4.53 per share on that basis.

Review: Nook Tablet is Kindle Fire's worthy foe (AP)

Posted: 21 Nov 2011 06:24 PM PST

By PETER SVENSSON, AP Technology Writer Peter Svensson, Ap Technology Writer – Mon Nov 21, 9:24 pm ET

NEW YORK – Listen, and I'll tell you the story of the bookstore chain that stormed into the hottest category in consumer electronics and conquered.

It's a nice underdog story, right? A bit like the tale of plucky rebels who attacked Lord Vader's Death Star.

But that was fiction. Barnes & Noble Inc.'s new Nook Tablet ($249) is a solid product, worthy of duking it out with Amazon.com Inc.'s Kindle Fire. Considering that the Nook comes from a desert planet where the only entertainment was shooting womp rats (Sorry, I mean "from a bookstore chain."), it's really impressive.

But the Nook doesn't quite muster enough force to blow up a Death Star. Barnes & Noble's earlier Nooks were dedicated book-reading devices, and the Tablet is at most a half-way step into the world of general-purpose tablet computing.

Like the new Kindle Fire, the Tablet has a 7-inch, touch-sensitive color screen, about half the size of the iPad's. It's the same screen as on the Nook Color, the e-reader Barnes & Noble launched a year ago. I thought it was the best e-reader yet when it launched.

The Tablet improves on the Nook Color mainly by beefing up the processor and the memory and extending the battery life to 11.5 hours of reading, or 9 hours of video.

The Tablet also has improved software, but the Color will be getting the same software through a downloadable update.

The Tablet is debuting with Netflix and Hulu applications. Coupled with the nice, sharp screen, that makes for a good device for that TV and movie fix _as long as you're connected to Wi-Fi. The apps actually highlight one of the shortcomings of the Tablet: there's no way (short of hacking the software) to use it for offline viewing of movies you buy or rent.

Barnes & Noble promises to provide access to some sort of movie store next year. Amazon, meanwhile, launched the Kindle Fire with access not just to Netflix and Hulu, but to its own store with downloadable video, plus free streaming content for Amazon Prime subscribers.

Barnes & Noble is also well behind when it comes to the selection of third-party applications: it has about 1,000 available today. That compares to just under 10,000 at Amazon, and 500,000 on the iPad.

However, the Nook has these features over the Fire:

• Faster processor and more memory for software operations, which means faster Web browsing and magazine page-flipping.

• Longer battery life.

• Twice as much storage space: 16 gigabytes compared to eight. Don't get too excited about this, though. What Barnes & Noble has left out of its marketing material is that only 1 gigabyte is available for content that isn't bought from Barnes & Noble. Since books don't take up much space and Barnes & Noble doesn't sell movies, much of the 16 gigabytes is likely to be wasted.

• A slot for memory cards. This is the cure for the lack of memory for non-Barnes & Noble content. You can add another 16 gigabytes of memory by buying a $20 card.

• The ability to load books from third-party stores like Google Books. On the Kindle, you can only read books from Amazon.

• Netflix streams are sharper. Barnes & Noble initially claimed they were in high definition, but that X-wing doesn't fly: the Tablet's screen isn't high-definition.

• Children's books with built-in narration (some Kindle apps have this).

• A microphone. This doesn't have a lot of uses at the moment, but it does allow you to record your own narration.

Apart from the ones mentioned above, the Kindle Fire has these features over the Nook:

• A lower price: $199.

• The Comixology app, the most popular one for comic books. On the Nook, you're pretty much limited to buying electronic comics from Barnes & Noble.

For the most part, the Nook Tablet justifies the higher price tag compared to the Kindle. Of course, anyone with money to spend should also be looking at the iPad 2, which starts at $499 and does all of what these smaller tablets do — plus a whole lot more. That's one Death Star that won't be exploding in a hurry.

___

Peter Svensson can be reached at http://twitter.com/petersvensson

Facebook lowers six degrees of separation to four (Yahoo! News)

Posted: 22 Nov 2011 06:19 PM PST

Netflix launches ‘Just for Kids’ section for Wii owners (Yahoo! News)

Posted: 22 Nov 2011 06:13 PM PST

Seminal RPG 'Chrono Trigger' Coming to iPhone (Mashable)

Posted: 21 Nov 2011 03:14 PM PST

Matt Silverman Matt Silverman – Mon Nov 21, 6:14 pm ET

Game publisher Square Enix iPhone and iPod touch next month. Originally released in 1995 for the Super Nintendo, Chrono Trigger is hailed by many as a landmark game for its unique story and mechanics. Players travel through time via mysterious portals, gathering a party of memorable characters across different epochs and learning of their mysterious interconnections -- all in a bid to save the world from a future of destruction.

[More from Mashable: Hands-on With Infinity Blade 2: The iPhone 4S's First Graphics Test]

Members of your party develop new skills as they fight together in combinations of three, and the deeds you do in one time period (e.g. the Middle Ages) affect circumstances in others (e.g. 2300 A.D.). With surprising plot twists and multiple endings, the game has heart and depth seen in few of its contemporary titles.

SEE ALSO: Top 10 Role-Playing Games for iPhone

[More from Mashable: 10 Best iPhone Action Games]

The game has been re-released previously on the Sony Playstation, the Nintendo DS, and most recently on the Wii's virtual console. The journey to iOS is one more step in the very gradual opening of Square's illustrious back catalog.

Square released some images showing the game's new touch interface. Besides a necessarily revamped UI, the original graphics appear to be intact.

The price and a specific release date have yet to be announced, though Square writes that fans will be able to get their thumbs on it "before the end of December." If you haven't experienced Chrono Trigger (or want to relive its 16-bit glory), mark your calendar and check the App Store. If the port is true to the original, you won't be disappointed.

This story originally published on Mashable here.

Another tech group speaks out against piracy bill (Reuters)

Posted: 22 Nov 2011 06:58 PM PST

Singapore Press Holdings sues Yahoo over copyright (Reuters)

Posted: 22 Nov 2011 06:21 PM PST

– Tue Nov 22, 9:21 pm ET

SINGAPORE (Reuters) – Singapore Press Holdings (SPH), which has a near monopoly of newspaper publishing in the city-state, said on Wednesday it filed a copyright infringement lawsuit against Yahoo Inc, alleging the internet giant reproduced news from its newspapers without permission.

Singapore is the headquarters for Yahoo's operations in Southeast Asia, a key market for the company where strong growth in mobile communications over the past decade has fueled internet connectivity in a region with around 500 million people.

"In our statement of claim, we cited as examples 23 articles from our newspapers which Yahoo! had reproduced over a 12-month period without our license or authorization," SPH spokeswoman Chin Soo Fang said in an email to Reuters.

SPH filed the writ of summons and statement of claim to the Singapore High Court on Friday and served them to Yahoo Southeast Asia on Monday.

Yahoo officials were not immediately available for comment.

Lawyers from Bird & Bird LLP represent Yahoo according to a Straits Times article, while SPH said Wong Partnership represents Singapore Press.

(Reporting by Harry Suhartono; Editing by Matt Driskill)

Xbox Live Users Scammed in Phishing Attack (NewsFactor)

Posted: 22 Nov 2011 04:55 PM PST

Jennifer LeClaire, newsfactor.com Jennifer Leclaire, newsfactor.com – Tue Nov 22, 7:55 pm ET

Bringing back memories of the Sony PlayStation hack that compromised thousands of gamer accounts, some British Microsoft Xbox Live users have been scammed in a phishing attack. Although Microsoft insists its network has not been hacked, the phishers have nonetheless fooled some gamers into disclosing credit-card information.

The Sun, a paper in the U.K., first reported that online crooks hacked into thousands of Xbox Live accounts to steal millions of dollars. The paper said the average catch was 100 British pounds, or a bit over $150 -- but that many suffered losses of more than 200 pounds.

"Xbox Live has not been hacked. Microsoft can confirm that there has been no breach to the security of our Xbox Live service," Microsoft said in a statement. "In this case, a number of Xbox Live members appear to have recently been victim of malicious 'phishing' scams."

Microsoft's Response

News reports suggest some Xbox Live users received e-mails tricking them into visiting "spoofed" Web sites and entering their personal information, including their credit-card numbers. Microsoft said it consistently takes measures to protect Xbox Live against ever-changing threats, and listed three current initiatives. Those initiatives sound like a lesson in basic Internet security 101.

For example, Microsoft is warning people against opening unsolicited e-mails because the messages may contain spyware or other malware that can access personal information on their computer without their knowledge or permission. Microsoft is also reminding all customers that they should be very careful to keep all personal information secure whenever online and never supply e-mail addresses, passwords or credit card information to strangers.

Finally, Microsoft said it is working closely with Xbox Live users who have been in touch with the company to investigate and/or resolve any unauthorized changes to their accounts resulting from phishing scams.

Back To Internet Basics

"It looks like these phishers convinced gamers that they were visiting an Xbox site and got the users to give up IDs and passwords and their credit card numbers," said Rob Enderle, principal analyst at Enderle Group. "The bad guys got enough information to actually charge the credit card, then pulled in small amounts of money over a long period of time."

News reports have suggested the phishers convinced gamers to enter the information in exchange for reward points. Enderle expects most credit card companies will indemnify the victims if they dispute the charges.

"This story points to the typical warning for anyone using the Internet: If someone is representing themselves as the vendor, they already have your password and ID. They don't have to ask you for it," Enderle said. "So it should be a red flag if anybody asks you for both your password or ID. Never provide it, even if the site looks to be safe."

U.S., South Korea tops in Android app downloads (Appolicious)

Posted: 22 Nov 2011 11:50 AM PST

Facebook porn, animal-cruelty hacks spark parent concerns (Daily Caller)

Posted: 22 Nov 2011 09:10 PM PST

Latest Xbox 360 Dashboard redesign coming December 6 (Yahoo! News)

Posted: 22 Nov 2011 03:07 PM PST

A bigger, better Infinity Blade 2 coming to iOS devices December 1 (Appolicious)

Posted: 22 Nov 2011 12:10 PM PST

New ASUS Tablet Has Quad-Core Chip (NewsFactor)

Posted: 22 Nov 2011 05:43 PM PST

Mark Long, newsfactor.com Mark Long, newsfactor.com – Tue Nov 22, 8:43 pm ET

ASUS is prepping a December U.S. launch for the world's first media tablet to feature a quad-core processor. Called the Asus Eee Pad Transformer Prime, the new mobile device uses Nvidia's new 1.3 GHz Tegra 3 chip, which is based on ARM's quad-core Cortex A9 technology.

Measuring 10.4 x 7.1 inches and just a third of an inch in thickness, the tablet weighs 1.29 lbs. Though shipping initially with the Android 3.2 Honeycomb operating system, the tablet also is upgradable to the new Android 4.0 platform, also known as Ice Cream Sandwich (ICS).

"Google has done a great job on ICS and has made the platform open to the ecosystem and easy to develop on," said Nvidia blogger Will Park on Tuesday.

"Thanks to Google's developer support, Nvidia's experienced software team was able to work with ASUS to quickly bring up ICS on the Transformer Prime," Park wrote.

Already available for pre-order on Amazon for $499 (32GB) and $599 (64GB), the ASUS Eee Pad is equipped with a 10.1-inch multi-touch screen made with Corning Gorilla Glass. The high-definition, 1280x800-pixel display also works at viewing angles of as much as 178 degrees.

Transformer Prime

The new tablet's Transformer Prime moniker is due to the device's optional detachable docking station, which hinges to the tablet's main body. Among other things, the docking station sports a full-size QWERTY keyboard, a multi-touch touchpad, two USB 2.0 ports, and a 4-in-1 SD card reader.

Available from Amazon for $110, the 1.41-lb. docking station also includes a reserve battery that adds six hours to the tablet's battery life. Additionally, the docking station doubles as a protective cover for the tablet's high-resolution display.

Beyond having Nvidia's quad-core Tegra 3 chip, the Eee Pad integrates 1 GB of DDR2 memory, both Wi-Fi (802.11b/g/n) and Bluetooth radios, a micro SD card reader and the user's choice of 32GB or 64GB solid state drives. The new tablet also has two cameras: a rear 8-megapixel camera with flash as well as a front-facing 1.2-megapixel camera for video conferencing sessions.

On the software side, the Eee Pad offers support for the full range of Android-based apps and mobile services from Google, including support for Adobe Flash. Also on tap is a SonicMaster codec for delivering a rich and acoustically accurate audio experience.

Ice Cream Sandwich

Though the source code for Google's new Android 4.0 platform was released just last week, Nvidia has already posted an early demo showing ICS running on the ASUS Eee Pad. Among other things, Park showed off some of the beautiful transition effects between the apps and widgets menu that Google has built in to the new platform.

"Another cool thing is that Google has built into the home screen the folder capability," Park said. "So you can actually drag and drop one icon into another icon to increase the folder."

Nvidia also demoed video playback at high-definition resolutions. "What we are showing here is full 1080p high profile video playback, [which is] flawless," Park said.

Additionally, Nvidia showed off a new gaming demo. "The cool thing about Riptide is that it is using all four cores built into the Tegra 3 and it really has these great water-effects built into the game," Park said.

With Ice Cream Sandwich, Google has finally addressed the fragmentation of Android across smartphone and tablet form factors, said Gartner Research Vice President Carolina Milanesi.

"Android can count on strong support from key OEMs, has a sizable developer community, and its smartphones application ecosystem is second only to Apple's," Milanesi said.

Netflix shares hurt by bleak 2012 outlook (Reuters)

Posted: 22 Nov 2011 04:31 PM PST

– Tue Nov 22, 7:31 pm ET

(Reuters) – Netflix Inc's shares dropped as much as 7 percent on Tuesday after it warned of a loss for 2012, a move the prompted several Wall Street analysts to cut their price targets for the online video and DVD rental company.

Analysts at Caris, Janney, UBS and Wedbush Securities all slashed their price targets for Netflix, citing the company's outlook. It had previously said it anticipates a loss only in the first quarter of 2012.

The problem, it said, is that it has recently lost a "significant" number of customers, who objected to Netflix's decisions to raise its prices and split up its streaming and DVD business -- an idea it later dropped.

Shares were down 4 percent in morning Nasdaq trade, after dropping as much as 7 percent to $69 in the session's opening minutes.

"If we do not reverse the negative consumer sentiment toward our brand, and if we continue to experience significant customer cancellations and a decline in subscriber additions, our results of operations including our cash flow will be adversely impacted," it said.

Until it can start adding more net subscribers, it said quarterly revenue would be relatively flat. For 2012, that means it will post a loss, it said.

Netflix's outlook adjustment came in a late filing on Monday, which said it had raised $400 million in new capital by selling convertible debt to long-time backer Technology Crossover Ventures and stock to funds managed by T.Rowe Price.

Most analysts welcomed the extra capital infusion as a form of insurance as Netflix invests in buying and creating more programing for its online video subscribers.

The Los Gatos, California, company has had a troubled second half of the year during which it has lost about two-thirds of its market value since its shares touched a high of nearly $300 in July.

There have been a range of strategic missteps that have led to more recent questions about its financial strength in the face of rising content costs and competitive pressures from the traditional cable and satellite TV companies.

Some on Wall Street appeared unhappy that Netflix did not provide cleared 2012 guidance on its October 24 quarterly conference call. In a research note, Lazard analyst Barton Crockett said investor relations had called the decision to update its guidance in the filing a "clarification" to its comments on the earlier conference call.

"At that time, Netflix punted when asked if they see losses for the full year," Crockett said of last month's call.

(Reporting by Paul Thomasch and Yinka Adegoke in New York, editing by Maureen Bavdek, Dave Zimmerman)

Nuance Plays Its Cards Right With Swype (The Motley Fool)

Posted: 22 Nov 2011 10:37 AM PST

By Vibhuti Shah Vibhuti Shah – Tue Nov 22, 1:37 pm ET

The technology segment has never been this exciting. With the launch of upgraded tablets and Apple's (Nasdaq: AAPL - News) much-awaited iPhone -- despite the fact that users got the 4S version instead of the promised 5 -- the market has been thrown wide open for newer, better technologies.

One company that has jumped onto the bandwagon is Nuance Communications (Nasdaq: NUAN - News). Nuance, a speech recognition and digital imaging software company, last month acquired its competitor, mobile-tech firm Swype, for $102.5 million. Swype's patented technology, which makes typing on screens of mobile devices, tablets, televisions, and game consoles easier, is expected to boost Nuance's growth.

Profitable nuances
Nuance has been looking to expand aggressively in order to tap into the fast-moving smartphone and tablets market. In the past year, the company has acquired three more businesses, all of which were related to mobile device technologies. In addition to a business partnership with Apple -- iPhone 4S' Siri technology is based on its speech-recognition technology -- Nuance also supports Google's (Nasdaq: GOOG - News) Android-based mobile devices. In fact, Nuance's acquisition has sparked speculation about Google's interest in buying out the company for its speech-recognition technology. According to one analyst, Swype had 15 manufacturing partners and 50 million devices shipped in the last 18 months. The acquisition means that Nuance gets Swype's current business partnerships and much more.

Swype's acquisition is seen as a big move for Nuance, as core speech-recognition technology allows the company to provide raw materials to big players. Potential customers for its latest technology include leading mobile device manufacturers such as Research In Motion (Nasdaq: RIMM - News), Nokia (NYSE: NOK - News), or Motorola Mobility (NYSE: MMI - News).

Tracing an aggressive growth path
Nuance is leaving no stone unturned in its effort to capture market share in the mobile devices and tablet segment. In line with its expansion plans, Nuance recently partnered with distributor Mindware for the promotion of its products in the Middle East. Investors have been happy with the moves. Since the iPhone 4S was launched, Nuance's stock has risen nearly 15%, recently hitting a 52-week high.

Foolish opinion
Speech technology in mobile and tablet devices promises to be the next big thing in the technology segment. With smart acquisitions, expansion strategies, the right product mix, and big partnerships, Nuance seems to be playing its cards right. In addition, its growth is tied to the progress made in the mobile devices and tablet market, which is only expected to move northward.

Vibhuti Shah does not own any shares in the companies mentioned above. The Motley Fool owns shares of Apple and Google.

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Gates back on stand in Utah in $1B antitrust trial (AP)

Posted: 22 Nov 2011 04:58 PM PST

By PAUL FOY, Associated Press Paul Foy, Associated Press – Tue Nov 22, 7:58 pm ET

SALT LAKE CITY – Microsoft's Bill Gates insisted that changes to Windows 95 that undermined a rival word processor were meant to protect the Windows operating system from crashing and not to hurt a competitor.

Gates completed a second day of testimony Tuesday defending his company against a $1 billion antitrust lawsuit filed by Novell Inc. The Utah-based company claims Microsoft Corp. enticed it to work on a new version of the WordPerfect writing program only to withdraw support months before Windows 95 was released.

Gates said he had no idea his decision to drop a tool for outside developers would sidetrack Novell and that the company never complained. WordPerfect's market share rapidly declined to less than 10 percent from nearly 50 percent as Microsoft's own office programs took hold.

"Whether or not our products get market share — that was completely up to the market," said Gates, who argued Novell could have worked around the problem but failed to react quickly.

Microsoft, he said, was under no obligation to help Novell, a wholly owned subsidiary of The Attachmate Group as a result of a merger earlier this year.

Novell said it was forced to sell WordPerfect for a $1.2 billion loss. It sued Redmond, Wash.-based Microsoft in 2004, claiming Gates ordered engineers to withdraw support for WordPerfect because he feared it was too good.

On Tuesday, Gates shot back that Word was "far superior" to WordPerfect, which was a "bulky, slow, buggy product" that did not integrate well with Windows 95. Gates said his engineers warned it threatened the reliability of future Windows versions.

For hours Tuesday, Gates sparred with Novell's trial attorney over software terms as jury members yawned in boredom.

"He's not an easy witness," said Novell attorney Jeffrey Johnson.

Gates insisted there was no viable alternative to the Windows operating system in the market at the time, which would mean Novell does not have an antitrust case.

Other systems lacked enough applications to be a "reasonable choice in the marketplace," he said.

Gates testified that Microsoft was racing to put out a new generation of Windows when he dropped a tool Novell said it needed to piggyback on the Windows 95 juggernaut. While some executives opposed his decision — Microsoft traditionally gave the keys to outside developers — other company developers warned it threatened the stability of new Windows technology.

Gates described his decision as a minor technical matter as he grappled with larger issues. He was betting on a revolutionary operating system code-named Cairo — an alternative so ambitious that Gates said it hasn't been achieved 20 years later. Cairo would have allowed multiple applications to run seamlessly inside an operating system, rather than as an adjunct to it.

Gates advanced Windows 95 to the forefront and called it a worthy successor.

"We worked super hard. It was the most challenging, trying project we had ever done," the Microsoft co-founder said. "It was a ground-breaking piece of work, and it was very well received when we got it done."

Gates was the first witness to testify in his company's defense after a monthlong case by Novell.

Asked outside of court to characterize Novell's case, he said, "I'll leave that to the lawyers."

Microsoft attorney David Tulchin said, "We think we're way ahead and that Bill Gates did a great job."

The trial resumes Monday with Microsoft calling other witnesses.

U.S. District Judge J. Frederick Motz said he expects to send the case to a seven-woman, five-man jury the week before Christmas.
at 10:13 PM

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