• Microsoft is in talks with Time Warner, News Corp., and several other potential partners to launch a new bid to take over Yahoo. [WSJ]
  

Microsoft has confirmed its $100 million purchase of Powerset, the overhyped search engine whose buzz flared and fizzled last year. Cofounder Barney Pell, whom investors pushed out of his CEO seat last November, amid rumors of a top-level love triangle, may not last long after the deal. Consider the faint praise Microsoft offers for him:

The dirty little secret behind the keyboard-tapping, button-mashing, cell phone-yapping, Valley lifestyle? Electronics manufacturing and waste are incredibly toxic. The cycle of planned obsolescence may drive profit growth. It also drives continuing shipments of used and broken electronics to places like Guiyu, China, where workers like the one pictured here make pennies picking over silica wafers for precious metals, while drining water polluted by lead and other industrial contaminants. Amidst all the cleantech hype that venture capitalists and entrepreneurs will save the world with technology, companies like Apple and Microsoft are still busy polluting it with old iPods and Xboxes. Microsoft is the second-worst polluter amongst large electronics manufacturers, according to Greenpeace. And while Apple's charming fakir Steve Jobs has made a public commitment to improving the company's environmental record, it lags behind less "innovative" rivals Dell, HP and Sony. But hey, can you believe the gas mileage you can get in a plug-in hybrid?(Photo from Getty Images)

Tired of fielding lawsuits from patent trolls and scared of court injunctions like that faced by RIM which nearly shut down the company's BlackBerry service, Google, Hewlett-Packard, Cisco, Verizon and Ericsson are among the companies rumored to be behind the formation of the Allied Security Trust. Ponying up $250,000 down payments and $5 million in escrow to make purchases, the trust seeks to buy patents before they fall into the hands of patent trolls. (That's the polite name the group's founders use for companies which seek to make money litigating infringers rather than by create products.) But the real bogeyman here is the rise of a possible patent troll to rule all patent trolls, Intellectual Ventures, which has close ties to Microsoft.

Yahoo shares are almost below $20 in morning trading and as the company approaches its August 1 annual meeting, Yahoo's directors have finally begun to fear for their jobs and their reputations. They're negotiating with Yahoo's major shareholders and, along with agreeing to renew talks with Microsoft and approach AOL for acquisition, some on the board are offering to promote CEO Jerry Yang into a non-executive chairmanship and fire Yahoo president Sue Decker. Reporter's reporter Kara Swisher reports that shareholders and some board members have already come up with a wish list of names for the top jobs.

Microsoft's Vista apologists no longer have to worry about former chief software architect Bill Gates letting slip an admission that its latest operating system sucks, sending computer makers and users back to Windows XP. As soon as Dell, HP and other major manufacturers sell their current-supply of XP-loaded PCs, no more will come off the shelves as Microsoft ends production of the aging but quite functional operating system today. But instead of moving on to Windows Vista, large corporate clients like General Motors intend to purchase Vista-loaded computers and "downgrade" them to XP. Meanwhile, only 8 percent of all software developers are working on applications for Vista, while 49 percent continue to develop for XP.

Microsoft co-founder, former CEO and executive chairman Bill Gates should be just about wrapping up his last day as a full-time employee of Microsoft and moving on to head up the Bill and Melinda Gates Foundation. While I never met the man, he certainly loomed large in my life growing up in Seattle and beyond. While the classic "Tiger Beat" style photo here tried valiantly to make Gates appear a little sexy for the publicity machine surrounding the launch of the original Windows operating system, it failed where Gates succeeded. While Gates was a ruthlessly competitive capitalist who used and abused Microsoft's monopoly position to maim and sometimes kill the competition, he did make being a computer nerd something to aspire to, if not exactly cool.

The Bill Gates media express rolls on as Gates powers down his infernally unusable computer at Redmond today, but he's leaving as a prophet. In an interview with Tom Brokaw, he notes that any Yahoo deal (which he was never enthusiastic about in the first place) probably won't happen. [CNBC]

Google has been bullish on their mobile device operating system Android, whereas Microsoft has been playing catch-up in search. Probably figuring it would probably be better to compete on a playing field that Google doesn't already dominate, Microsoft has acquired Portuguese mobile software maker MobiComp for an undisclosed amount. [NetworkWorld]

Powerset never quite managed to launch with their natural language parsing search product. But they did give everyone a glimpse with a preview of search for Wikipedia. Not quite game-changing enough for Yahoo to buy or Amazon's Jeff Bezos to invest in, but just enough to get Microsoft to pay $100 million. Which is considerably less what Team Redmond would have paid for Yahoo's search business. Not bad for a company running on borrowed hopes and dreams. (By Intern Alaska, photo from Powerset)

Taking the performance of other companies that Microsoft and Yahoo's outside board members direct, Portfolio's Russ Mitchell has calculated the "plus-minus" for the respective players, as a hockey statistician might say. In other words, have the public companies that share directors with Microsoft and Yahoo gained or lost in an otherwise down market? The Microsoft camp has actually beaten the market, posting a 4 percent gain with six directors enjoying share price gains in other companies, while the Yahoo camp is well behind, posting a 22.5 percent loss, with six directors sitting on stock losses.

Major Yahoo investors want Microsoft to buy a third of Yahoo at $30 to $32 a share and force Yahoo out of its Google search advertising deal. These shareholders say their pressure has Yahoo Roy Bostock believing he has to do a deal with Microsoft. These shareholders say Microsoft should pay Yahoo $1 billion to seal the deal. These shareholders shareholders say their plan would include firing Yahoo CEO Jerry Yang and president Sue Decker. These shareholders — like us — are probably just tired of hearing about either company at this point.

Back when Vista launched, Microsoft predicted corporate clients would adopt the new operating system at twice the rate of its predecessor, Windows XP. Hasn't happened. Now even longtime Microsoft partner, chipmaker Intel, has decided to not upgrade its 80,000 employees to Microsoft Vista. An IT buyer at the company told the New York Times that, after "a lengthy analysis" Intel's "information technology staff just found no compelling case for adopting Vista." Instead, Intel will keep its employees on the same OS they've used since 2001, XP.

Five years ago, which is probably about when Microsoft started announcing shipping dates for Vista, Bill Gates wanted to play with Windows Movie Maker. Thanks to the power of Windows XP and Microsoft's online support, it took him over an hour in frustration downloading software, installing it and rebooting and, in the end, still without the software he was looking for.

Ad agency conglomerate Publicis Groupe announced it will create a new "open source" ad network running on inventory from AOL's Platform-A, Google, Microsoft and Yahoo. Everyone knows the world does not need yet another ad network, so why is Publicis doing it? We asked AdWeek's Brian Morrissey. The five-word version: Because its scared of Google.

Putting media naysayers in their place, Microsoft co-founder Bill Gates continued his farewell tour by pointing to old press accounts of companies like Ashton Tate and Lotus as worthy competitors into the perspective only the ultimate winner can enjoy. When asked by CNET's Ina Fried about the early presumptions that IBM would eat Microsoft's lunch and how that turned out, Gates used the opportunity to challenge those who would similarly presume that Google will eventually destroy Team Redmond.

Yahoo shares are down 3.4 percent to $20.72 per share, nearing the $19 per share price when Microsoft made its unsolicited $31 per share offer on February 1. That means its time for Microsoft to forget how poorly Yahoo handled its offer and revisit its bid and buy the company on the cheap, argues BoomTown's Kara Swisher. Henry Blodget at Silicon Alley Insider says if this were June 2007, not 2008, private equity firms looking to raid and break up the company "would have been circling like pack wolves." How so? It turns out that after factoring in Yahoo's Asian investments and cash, $21 per share values Yahoo's core business at around $11 per share or $15 billion total. That's cheap, considering that Facebook is valued at $15 billion and only expects $300 million in revenues this year and Yahoo will pull at least $8 billion.

After a deal outsourcing search advertising to Google failed to impress shareholders, Yahoo board members — including chairman Roy Bostock — are reconsidering a deal that would outsource and sell Yahoo's search business to Microsoft instead. This according to a News.com report, which cites a single source — "one major investor who has been in contact with both parties" — and says that like Yahoo, Microsoft is also willing to renew negotiations and even "sweeten" its offer. We're skeptical.

As co-founder and former CEO Bill Gates prepares to soft-retire from Microsoft, he indulged in a feel-good photo op with his former business partner Paul Allen and the remaining staff from Microsoft's startup days when the company was based in Albuquerque, New Mexico. The team's fashion sense rather explicitly demonstrates the transition from innovative upstarts to staid conservatives over the last thirty years. [Newsweek]