Hotmail Tweaks, Yahoo Rumors Marked Microsoft Week

Microsoft's week involved Hotmail and security updates, and a revival of long-running Yahoo acquisition rumors.

Microsoft's week involved some tweaks to Hotmail, a few crucial security patches for Patch Tuesday, and a revival of Yahoo-acquisition rumors.

Earlier this week, Bloomberg and Reuters offered opposing views of whether Microsoft planned to make a bid for Yahoo. Bloomberg's report claimed Microsoft had no serious plans to bid for the Web-portal company, clashing with an earlier Reuters report that suggested such a deal could be in the works. Both news services cited unnamed sources close to the situation for their information.

According to Reuters, Yahoo's market value stands at $18 billion, making it a significantly cheaper target than three years ago, when Microsoft tried to snatch it up for $44.6 billion.

Yahoo and Microsoft already have a wide-ranging partnership, with the latter's Bing powering Yahoo's back-end search apparatus. When that deal was announced in the summer of 2009, Microsoft CEO Steve Ballmer told reporters and analysts: "This deal is not better than the last deal; it is different than that last deal." The drawbacks to a Yahoo-Microsoft search engine deal, he added, included a "higher tax rate and less money up front."

Microsoft has made some substantial plays of late, including an $8.5 billion acquisition of Skype. It's an open question, however, whether the company has an appetite to swallow yet another huge property-especially since many Yahoo's cloud services, including email, are already part of Microsoft's own portfolio.

Speaking of email, Microsoft announced some significant tweaks to its Hotmail platform this week, aimed at reducing the endemic "graymail" clutter, including newsletters and updates from social networks and Websites, that fills many users' email boxes.

Those graymail-killing features include a new newsletter-filtering function, which is paired with a one-click unsubscribe feature that tells Hotmail to tell various companies you no longer want to receive their updates.

Other new features include a Schedule cleanup, which will eliminate email from a specific address after a preset period of time. A revamped flagging system automatically sorts important messages to the top of the inbox, and Custom Categories offers a way to personalize email sorting.

On the malware and security front, it could prove a light month for Microsoft: the company announced that its October Patch Tuesday-that's Oct. 11, for those marking their calendar-will feature two "critical" security bulletins out of eight total.

One of those critical-rated bulletins will patch a bug in present in many versions of Windows and Internet Explorer, including IE 6 through 8 and Windows XP, Vista and 7. Windows Server 2003 and 2008 are also affected. The other big bulletin tweaks .NET and Sliverlight.

There was also some debate over whether Microsoft had killed the Zune HD, its portable-media player that never managed to compete toe-to-toe against Apple's iPod. In recent quarters Microsoft has shifted its emphasis increasingly from "Zune the device" to "Zune the service" integrated into Windows Phone. As of this writing, however, the Zune HD is still available for purchase from its Website.

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