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NetEase (Nasdaq:NTES) may take over 50% stake in MSN China company Shanghai MSN Network Communications Technology, a joint venture between Shanghai Alliance Investment Ltd (“SAIL”) and Microsoft (Nasdaq:MSFT), from SAIL, Sohu reported April 20, citing an unnamed investment industry source.

NetEase and Microsoft have formed a basic agreement to operate MSN China through a joint venture, said the report, citing another source close to Microsoft.

SAIL set up the venture with Microsoft in May 2005, and rumors in 2007 said SAIL planned to sell off its 50 percent stake in the JV.

Microsoft made a concerted advance into Cisco and Avaya’s enterprise telephony territory this week with the unveiling of its Office Communications Server 14, which combines voice-over-IP, instant messaging and conferencing capabilities. In a blog post Wednesday, Gurdeep Singh Pall, corporate VP of Microsoft’s Unified Communications Group, offered some pretty ambitious predictions for converged communications.

In Microsoft’s vision, traditional, hardware-dependent desk phone systems soon will be supplanted by software-based systems running on laptop PCs and mobile devices capable of delivering a variety of traffic at once. The vision rests on a growing demand for collaborative capabilities over portable devices.

“In the next three years, we predict that UC will become the norm in business communications, more than half of VoIP calls at work will include more than just voice, and your communications client will enable UC with more than 1 billion people,” Pall wrote.

Two of the industry’s closest Microsoft watchers point out that the Redmond, Wash., software giant has been banging this drum for several years already. CNET‘s Ina Fried notes that it was back in 2006 that Microsoft started touting converged communications when it said it was going to get into the business of enterprise telephony.

Mary Foley at ZDNet compared Pall’s prediction to the “This is the year of IPTV” predictions, noting that technologies tend to take root several years after market participants expect. However, Foley reports that according to Microsoft, businesses using Office Communications Server today are in some pretty impressive company, including nine of the top 10 banks and seven of the top 10 drug companies.

For more:
- see Gurdeep Singh Pall’s post
- see Mary Foley’s post
- see Ina Fried’s post

A website that has made its mark revealing IT secrets has felt the heavy hand of Microsoft. Cryptome.org, a site that posts documents people want to keep secret, ran into trouble when it published a confidential Microsoft document that revealed how much information the company keeps on its users.

Microsoft succeeded in shutting the site down last Wednesday, filing a legal action and putting pressure on its ISP, Network Solutions. Microsoft claimed Cryptome violated its copyright by publishing a confidential document meant only for law enforcement. The document laid out its guidelines for responding to law enforcement subpoenas for information.

But on Thursday, after negative publicity in Wired.com and elsewhere, Microsoft suddenly withdrew its complaint, and the site was back online.

In a statement, Microsoft said it did not ask that the site be taken down, but only that its copyrighted content be removed. “We are requesting to have the site restored and are no longer seeking the document’s removal,” the company said.

Wired.com reported that the document contained no trade secrets, but tells Microsoft users some things they didn’t know. It said, for example, that Xbox Live records every IP address a user ever uses to login and stores them for perpetuity. Microsoft also said it retains the last 10 login records for Windows Live ID. As for instant messages, it tells police that it keeps no record of what anyone says over Microsoft Messenger although it will turn over who is on the buddy lists.

For more on this controversy:
- see this Wired.com article

A new report by Janco Associates noted that Microsoft’s Internet Explorer browser has lost more than 12 percent of its market share since February 2007, courtesy of competing browsers like Firefox and Chrome. Fortunately for Microsoft, interest in these competing offerings appears to have dipped with the recent release of IE 8.

The report from Janco Associates, reported in Network World, elaborated, “The acceptance of Firefox has stalled as the novelty and uniqueness of its features has worn off and has been duplicated by Microsoft’s IE. Firefox is no long unique as both IE and Google’s offerings provide most of the same features.” In fact, the research firm said the seemingly stalled interest is “a major defeat” for Google.

Personally, while I agree that the features in Firefox are no longer unique, I think it’s still far too early to dismiss Chrome. Indeed, it was only recently that Google released the latest version of the browser with support for plug-ins. What do you think? Do you think IE will still be dominant in a couple of years?

For more on this story:
- check out this article at Network World

Microsoft is planning to invest heavily in its cloud platform, but doesn’t expect a fast return, Bob Muglia, the president of the server and tools business, said during a conference call on Tuesday. While the economic recovery is still coming along, Muglia said the computer giant is taking the long view–it will take two or three years until it sees any return.

“From the perspective of investment internally, interest from customers and engagement clearly the cloud will be an area of focus,” Muglia said. “But in the next two to three years that is not what will drive financial growth in server and tools. It is essentially zero percent of our current operating revenue.”

It’s a slow-going strategy, but it is working, he said.

Microsoft just this month began billing users of its Azure cloud platform environment. Meanwhile, “the big dogs”–Windows Server and SQL Server–are the big revenue drivers, Muglia added.

For more on Microsoft’s cloud:
- see this NetworkWorld.com article

Competition in the search engine world is about to get steeper and it may result in better, faster searches for users under a new agreement with Microsoft and Yahoo.

The two companies received a green light last week from the Justice Department and the European Union for a search engine deal likely to increase competition with Google. Under the terms of the 10-year agreement, Microsoft’s Bing will become the search engine on Yahoo websites. And Yahoo will, in turn, focus on core news, financial and sports properties and new ways to deliver Microsoft’s search results to Yahoo users.

The Justice Department said in a statement that it’s a good deal for the industry and won’t harm Internet users or online publishers.

“U.S. market participants express support for the transaction and believe that combining the parties’ technology would be likely to increase competition by creating a more viable competitive alternative to Google, the firm that now dominates these markets,” the Justice Department said.

What does it mean for your bottom line? Probably not much. But it may mean a great deal for your business practices as you rely on search engines to develop business and keep your operations humming.

For more on the Microsoft-Yahoo deal:
- see this eWeek.com article
- see this Wall Street Journal article

Earlier this week, a number of websites carried reports of how Windows 7 machines are running “alarmingly low” on memory. These sites basically cite statistics provided by Craig Barth, CTO of Devil Mountain Software, that 86 percent of workstations running on Windows 7 are running at 90-95 percent of memory utilization. Devil Mountain Software is a company that does performance monitoring software, and the statistics were obtained from community members who download a free performance tool.

My initial reaction when I first saw the report was skepticism, because I am infinitely happier with Windows 7 than I was with any earlier versions of Windows. I also recall reading about Microsoft engineers saying “free” memory is wasteful, since it doesn’t really do anything in particular.

I wasn’t the only one who felt that way, apparently. Peter Bright of Ars Technica actually downloaded the XPnet performance monitoring tool to try it himself. Well, Bright found that while the tool performed correctly in reporting “free” memory, the missing link actually resides within “available” memory, which the tool conveniently ignores.

“The important number is not free, but available [memory]” Bright wrote. “The available memory includes both memory that is free, and memory that can be trivially made available, and this figure is far more representative of the true amount of memory available to applications.”

Taken this way, it is clear that attempting to track the amount of “free” memory alone is useless. Is it a genuine oversight though, or another case of Microsoft bashing in order to generate publicity?

For more on this story:
- check out this article at Ars Technica

Microsoft is fortifying its congressional lobbying team as major issues that could affect them begin to work their way through Capitol Hill this year. The software firm has hired Christina Pearson to join its Washington office as senior director for public relations.

Until recently, Pearson worked for the public relations firm Fleishman-Hillard helping clients deal with product recalls and public health emergencies. Software and computer companies such as Microsoft are gearing up to fight an Obama administration plan to curb offshore tax avoidance.

It comes at a time when the administration is looking for other tax loopholes that could affect firms like Microsoft.

For more on Microsoft’s hiring move:
- see this National Journal article
- see this Business Week article

Microsoft’s (Nasdaq:MSFT) outsourcing projects in China totaled $142 million in fiscal 2009, DoNews reported February 3 citing Microsoft Greater China CEO and President Liang Nianjian. Liang reiterated the company’s previously announced plan to spend $ 1 billion on research and development in China in the future, according to the report.