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WinInfo Daily UPDATE, September 27, 2004

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In the News

- Microsoft Nixes Outlook, Outlook Express Access to Free Hotmail Accounts
- Microsoft Wants Settlement, Is Prepared to Comply with EU Sanctions
- Virgin Launches Online Music Service

==== In the News ====

by Paul Thurrott, [email protected]

Microsoft Nixes Outlook, Outlook Express Access to Free Hotmail Accounts

Citing concerns about spammers abusing the service, Microsoft will announce today that the company is dropping a feature from its Hotmail service that lets nonpaying customers access their Hotmail email from Microsoft Office Outlook and Outlook Express. The feature is based on a technology called Distributed Authoring and Versioning (WebDAV), an extension of the HTTP protocol on which the Web is based.
"Since we implemented Human Interactive Proof (HIP) to ensure that only humans and not automated systems were opening Hotmail accounts, spammers have found other ways to go after the system," MSN Lead Product Manager Brooke Richardson told me in a prebriefing Friday. "Recently, there's been an increase in exploits of the WebDAV protocol, which is used to enable people to access Hotmail from Outlook and Outlook Express. We've offered \[this access\] for free for some time, although it's typically a feature that other email providers charge for. But because of the rise in abuse of this protocol, we're making a change to WebDAV to curb abuse. Over the next few months, we're transitioning WebDAV to be available only to customers of our subscription services, such as Hotmail Extra Storage and MSN Premium. We expect this change will help us to more effectively stop spam emanating from Hotmail."
Richardson said that only a small percentage of free Hotmail account holders use the WebDAV feature. "About 5 to 10 percent of people have it set up," she said, "but most don't use it. And among that group, most activated it once, then never used it again. About 95 percent of our users don't use the feature." Richardson was also careful to note that this change doesn't mean that Microsoft is walking away from its nonpaying users. "We continue to invest heavily in Hotmail," she said. "We've recently instituted antivirus scanning and cleaning and brought back the \[free\] MSN Calendar. And we're actively moving free customers to the new storage allotments we announced earlier this summer." Richardson said that the company will upgrade storage allotments for all free Hotmail accounts by the end of the year. Microsoft has already upgraded paying customers, such as those who opted for Hotmail Extra Storage, she said.
Microsoft won't immediately shut off nonpaying users who have enabled Outlook or Outlook Express access to Hotmail. Instead, the company will phase out those customers over several months and give them plenty of warning that the change is coming. "Free Hotmail customers who want to use WebDAV have two choices," Richardson said. "They can opt for Hotmail Plus, which offers 2GB of storage space and 20MB attachments for just $19.95 a year. Or they can subscribe to MSN Premium." Microsoft will continue to enable WebDAV for customers of both products, she said.
For more information about Hotmail Plus, visit the MSN Web site at the first URL below. For more information about MSN Premium, click the second URL below.

Microsoft Wants Settlement, Is Prepared to Comply with EU Sanctions

This week, as Microsoft prepares for a decision regarding its request to suspend sanctions in its European Union (EU) antitrust case, the company says it's prepared to meet all the EU requirements if necessary. Those requirements include shipping a new version of Windows XP that doesn't include a bundled copy of Windows Media Player (WMP) However, the company says that the best possible resolution of this case is a settlement, not a drawn-out legal battle that could take years to decide.
"We have certainly not eliminated in our minds the possibility that it might be possible to get back to the negotiating table," Microsoft Senior Vice President, General Counsel, and Corporate Secretary Brad Smith said. "We think that these issues would best be resolved by a negotiated settlement."
Thursday, the company will appear in the European Court of First Instance in Luxembourg to argue its case. Microsoft will ask the court to suspend its EU-levied sanctions and fine while the company launches an appeal. If the EU court decides not to suspend the sanctions, Microsoft will be forced to ship the stripped-down Windows version in European markets.
In addition to the aforementioned version of Windows without WMP, Microsoft also will be forced to share with competitors more technical information about its server products. To argue that this measure is unnecessary, Smith's team of lawyers will take the unusual step of demonstrating the success of Linux, Microsoft's chief server competitor. "The ... server case is based on the premise that Linux will not survive unless it has access to our communications protocols, yet I know of no one in the industry who subscribes to that point of view," Smith said.
This week's hearings could last through the weekend. Court President Bo Vesterdorf has 60 days to issue his decision.

Virgin Launches Online Music Service

Virgin launched its online music service today. Virgin Digital offers customers 99-cent song downloads and a streaming music service that costs just $7.99 a month. Today's version of the service seems to combine the best features of the Apple iTunes Music Store and RealNetworks' RealRhapsody music service, plus Virgin has two aces up its sleeve. First, the service is compatible with the Windows Media Audio (WMA) format, making it instantly compatible with more than 70 portable audio devices. Second, the company plans to extend its service to a new subscription-based model that will let users transfer songs to portable devices. The latter service will cost just a few dollars extra per month when it's released later this year, Virgin says.
But the biggest difference Virgin can bring to the crowded digital music services market is a sense of personality. Unlike the sterile environments Apple Computer, Microsoft, and RealNetworks offer, Virgin Digital is as outgoing and quirky as Sir Richard Branson, Virgin's founder.
"Virgin stands for innovation, fun, and an absolute dedication to customer value," Branson said. "We worked directly with passionate music fans around the world, and together we've come up with a digital music service that truly defines the Virgin energy and spirit. It's time for a digital music revolution!"
Virgin Digital requires a standalone player, which you can download for free from the company's Web site (see the URL below). The service features a "ginormous" catalog of more than one million tracks for sale or streaming. Although individual song downloads are available at the now-standard 99-cent price point, Virgin's streaming service is unusually inexpensive at just $7.99 a month--a fact that should win it converts. The company also bundles with its service a player called Radio Free Virgin, which gives users free access to more than 70 Internet-based radio stations. Want to hear what people in the Virgin Megastores in Paris are listening to? Check out Radio Free Virgin.
Virgin is pushing a customer-centric approach to its online music service, and the company says its customer service efforts will differentiate it from its competitors. An Ask the Expert customer service and music-discovery option will help users virtually walk through the online store and find new music, just as they might with a sales representative in a retail store. Customers also have access to live music and technology experts who can help them with any questions they might have. Finally, the company is touting an exclusive feature called 3-D browsing that cross-links the store's content, including music, album credits, reviews, and artist biographies. "We set huge goals with Virgin Digital," Virgin Digital President Zack Zalon said. "\[We want to bring\] the excitement and customer-focused experience of a Virgin Megastore directly to the world of digital entertainment. And we nailed it. This is the most entertaining, powerful, and intuitive way for dedicated music fans to find, listen to, and manage their music collections. It's a true 360-degree world of music."
I guess we'll find out whether those claims will be borne out as people test the new service in the coming days. In the meantime, you can grab the free Virgin Digital player and try the service at the URL below.

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