The Wall Street Journal is reporting that Facebook is negotiating with Microsoft to sell a stake in the hot social network at a valuation between $10 billion and $15 billion. That would net Mark Zuckerberg's company between $300 million and $500 million in cash, without Zuckerberg having to surrender any meaningful control over the company; the stake would represent 5 percent or less of Facebook. What's not clear is why a deal's happening now, save to lock in a stratospheric valuation. Some time ago, a Facebook insider called Zuckerberg "a crazy kid" for not selling. And we've said Facebook's valuation claims seemed a bit puffed-up. But given that suitors' offering prices have rocketed tenfold since then, Zuckerberg doesn't seem that crazy anymore. Instead, it's Microsoft executives, driven mad by Google and MySpace envy and determined not to miss out on the social-networking trend, who seem, well, a bit off.

Woot has even more Zunes to "give" away at the bargain price of $129. Apparently the fire sale is to clear shelf space for a rumored Zune 2.0 — though at these prices, who will be left to buy the new version? [Woot]

Microsoft executive Don Dodge captures a moment from the TechCrunch40 conference. Or, more specifically, after the conference, in the limo ferrying VIPs from the TechCrunch40 VIP dinner to the after party at Fluid. Pictured, from left, Mayfield Fund VC Raj Kapoor on the floor of the limo; Allen Morgan, also from Mayfield, throwing gang signs; DanceJam cofounder MC Hammer; and angel investor Ron Conway, looking bewildered.

Microsoft has lost its appeal with the European Court of First Instance, upholding the European Commission's antitrust ruling against the Seattle-area software maker for abusing its dominant position in the operating system, media player and server markets. The Court only overruled one minor provision regarding trustee oversight. While the American antitrust settlement was considered toothless, primarily imposing some minor business restrictions, the European decision is far more significant. It imposes technological restrictions on Microsoft's business, including Bill Gates's sacred cow — the right to provide "integrated products," something he fought for tooth and nail with the Department of Justice. It's a precedent that could have wide effects on other software makers. Microsoft's lawyers, while still reviewing the decision, are playing contrite: "We'll study this decision carefully, and if there are additional steps that we need to take in order to comply with it, we will take them."

Anyone with an email address has encountered fraudulent requests for online banking info and Paypal logins — but the new phishing target is Microsoft's Xbox 360. Microsoft confirmed today that subscribers to its Xbox Live online gaming service are receiving emails linking to a cloned Xbox login page. Since Live accounts are tied to your Microsoft Passport, these attempts are clearly attempting to access stored credit card and billing info.

Google has finally found an effective way to sell its Web-based applications: partnering with consulting/outsourcing/jack-of-all-trades firm Capgemini to offer an enterprise edition that will compete directly with Microsoft's Office. Despite Capgemini's proclamation that Google Apps and Office are complementary, Microsoft isn't taking kindly to this. In petty retaliation, the company sent out a list of questions "to ask when considering the switch to [Google Apps Premier Edition]," like whether Google actually has enterprise users. It also claims that Google releases incomplete products, and is only marginally invested in productivity suites. We can't wait for Google and Capgemini to respond. (Photo by Mahalie)

There's a new battleground for digitally ditributed content brewing in the most unlikeliest of places — home videogame consoles. Last week there was the rather shocking announcement that Sony's PlayStation 3 would soon be home to movie and television content. Not to be outdone, Microsoft's Xbox 360, which has had video content downloads since last November, is now courting the BBC and all of its TV shows and HD programming. While the soothing tones of the BBC are not usually what we associate with xBox, the deal, which Microsoft is "working diligently on," would add some much needed gravitas to a portfolio currently dominated by South Park and UFC Fights.

Microsoft's attempt to catch up with Adobe's dominant and newly updated Flash has reached final 1.0 status for Mac and Windows. Novell will bring Silverlight to Linux for Microsoft. A handful of obligatory partners were announced, and of course, several Microsoft Web sites will be using the browser plug-in [Scott Guthrie's blog]

Extending an olive branch in the midst of the high-definition movie-format wars, Sony has cordially invited HD-DVD rivals Microsoft and Toshiba to join the Blu-ray Disc Association. It is pretending HD-DVD backers didn't just shell out a ton of cash to get Paramount (and Michael Bay) on board.

Microsoft, apparently sick of taking guff from Windows haters, has banned users of Xbox Live, the Xbox 360 videogame console's online service, from setting their motto to "Linux." Apparently the company views competing operating systems — especially dreaded open-source ones — as "inappropriate" words. Unix is also considered too naughty for public display. Mentions of Apple, iPod, or variations of Mac OS X are, however, permissible. (Photo by zarcx)

Game reviewer Yahtzee Croshaw covers the videogame console wars.

For Wall Street, it's a juicy notion: Could Microsoft buy Research In Motion? It's the kind of high-concept idea that gets traders afroth and keeps analysts busy churning out reports. It's also — how to put this delicately — completely stupid. Yes, Microsoft could buy RIM — and yes, you could go out and buy a gun and shoot yourself in the face. Both are in the realm of possibility, and both are suicidal ideas.

Microsoft is finally rolling out a beta version of Windows Vista Service Pack 1, and promises that the official release of the set of Vista fixes will be out next year. Maybe. But only if those other guys release their software on time. [Windows Vista Team Blog]

Backed by Google, Yahoo, and Microsoft, the Computer & Communications Industry Association, a lobbying group, is targeting everyone from Hollywood to book publishers in its Defend Fair Use crusade. The CCIA is trying to drum up popular support for its allegations, submitted to the Federal Trade Commission earlier this month, that corporations are misleading consumers about copyright law. Copyright holders may not condone certain uses of its material, but that doesn't necessarily mean those uses are illegal. Fair use, an abstruse area of copyright law meant to encourage scholarship and journalism, is widely misunderstood. It's certainly a curious standard for CCIA's supporters to bear, since Google, Microsoft, and Yahoo all implement fair-use-defying digital-rights-management software, and comply with "takedown" requests from copyright holders without considering fair use.

A man who pleaded guilty to illegally downloading a copy of Star Wars: Episode III is being forced to use Windows as his operating system as a condition of his probation. Now that's cruel and unusual punishment. [VNUnet]

Sony's recent announcement that its PlayStation 3 console will soon act as a digital video recorder in Europe is little surprise to anyone following the industry. It's long been believed that the PS3 and Microsoft's Xbox 360 could act as DVRs. The real question is how this move will affect a soon-to-be crowded DVR marketplace. TiVo, the best-known DVR brand, has struggled financially as cable and satellite distributors released their own recorders. Although its future may be a bit brighter thanks to a recent licensing deal with Comcast and the potential of a renewed DirecTV contract, there's more competition for TiVo than ever — and from the unlikeliest of places.

We knew Microsoft had a Herculean — nay, Sisyphean — task when it rolled out its Zune MP3 player last year. It didn't help matters when Microsoft "designers" chose putrid brown as a launch color. Despite Microsoft's pledge of continued support of the product, it looks like it — or a major retailer left with unsold stock — is dumping Zunes on the cheap. Woot, the deal-a-day online retail site, is currently selling white Zunes for $150 apiece, a 50% discount over the retail price. While the site doesn't list available stock, hot items are known to sell out quickly. This obviously doesn't describe Zune, though.

Microsoft is allegedly demanding that startup XBux change its name to the far less hip XBucks, lest consumers be unable to distinguish between its Xbox 360 videogame console and a network that unites athletes with sponsors. Of course, we imagine Starbucks will then have grounds, as it were, to complain. [VentureBeat]

Microsoft is unleashing its Content Ads program on August 26, opening up what has until now been a small beta test of a system that targets ads to the content of Web pages. Now all U.S.-based advertisers will be able to place ads via Microsoft's Content Ads, which hopes to do for Microsoft's MSN websites what AdSense has done for websites partnering with Google: Blanket them in context-sensitive, keyword-based advertising. While many speculate the Content Ads program will put Google and Microsoft in close ad-selling competition, and foster advertiser-friendly price and technology wars, Microsoft still has a lot of catching up to do in market share. AdSense is already widely deployed across the blogosphere, and has become the default business model for unimaginative startups everywhere.

There's nothing like an old-fashioned mudslinging spat. And Microsoft is always glad to provide, when it comes to Google. The latest move: A Microsoft lawyer, speaking at the Progress & Freedom Foundation's Aspen Summit, has denounced Google's YouTube for irresponsibly taking advantage of copyright "loopholes" to get away with hosting a large library of allegedly pirated clips. In contrast, Microsoft's holier-than-thou video-sharing site Soapbox now uses digital fingerprinting technology to detect copyright-infringing files. This is the same Soapbox that was shut down for two months shortly after its launch because it was plagued by pirated media. And this was a lawyer for Microsoft, who, we imagine, would know a thing or two about legal loopholes.