... Bach, 45, is president of Microsoft's Entertainment and Devices Division, which includes the Xbox game console, the Zune music player, software that runs on mobile devices and new television projects. While the division has yet to turn a profit, Bach said in an interview that profitability is just around the corner, and Microsoft is relishing its competition with companies like Apple, Sony, Nintendo and Research In Motion. ...

Question: Can you talk a little bit about the Zune overall? Will we see next-generation Zunes coming out, particularly flash-based players?

Bach: We're still about nine months into having Zune in the marketplace. We're very pleased with the progress. We've sold a little over a million Zunes. In the category we're in, the hard-disk-based category, we've got about 10 percent market share. It's a good start. It's not an overwhelming start. I'm not going to pretend it's some gigantic move. ...

Vimicro Corporation (Nasdaq: VIMC - News), a leading fabless semiconductor company designing advanced mixed-signal multimedia products and solutions, and Microsoft China, reaffirmed their strategic partnership during a ceremony in Beijing on May 24. The companies are continuing to cooperate in the Microsoft-Vimicro Multimedia Technology Center, originally established in 2003 within Vimicro's Beijing headquarters, and are expanding the scope of their work together to include the mobile multimedia sector. Mike Yu, vice president of Vimicro is appointed as the Dean of Microsoft-Vimicro Multimedia Technology Center. ...

Vimicro and Microsoft China are finalizing a Memorandum of Understanding to increase their joint efforts in further developing the digital multimedia market. One goal of the Microsoft-Vimicro Multimedia Technology Center is to enable Vimicro's multimedia processors to be compiled to the requirements of Windows Vista drivers and be ready to get Windows Vista logo certification.

A Nintendo of America executive confirmed this week that the video-game company has been taking bids for a 27-acre Redmond site that it previously eyed for expansion. The vacant site is just north of the Japanese company's North American headquarters, on the west side of state Route 520 in the city.

Microsoft is one of the bidders. Considering its existing presence in the Overlake neighborhood, its ongoing space crunch and its financial resources, that's not surprising.

"Microsoft, of course, would bid for it, because it's so convenient for them," Perrin Kaplan, Nintendo of America vice president of marketing and corporate affairs, said in an interview at a Seattle event where Nintendo showed its latest video games.

We are currently in the process of rescheduling this fall’s Professional Developer Conference. As the PDC is the definitive developer event focused on the future of the Microsoft platform, we try to align it to be in front of major platform milestones. By this fall, however, upcoming platform technologies including Windows Server 2008, SQL Server codenamed “Katmai,” Visual Studio codenamed “Orcas” and Silverlight will already be in developers’ hands and approaching launch, which is where we’ll focus our developer engagement in the near term. We will update this site when we have a new date for the PDC that is better timed with the next wave of platform technologies.

Much has been written about Microsoft’s allegation of patent infringements in Linux (by which I’m sure they mean GNU/Linux ). I don’t think Microsoft is the real threat, and in fact, I think Microsoft and the Linux community will actually end up fighting on the same side of this issue.

I’m in favour of patents in general, but not software or business method patents. I’ll blog separately some day about why that’s the case, but for the moment I’ll just state for the record my view that software patents hinder, rather than help, innovation in the software industry.

Microsoft Corp. today announced it will expand its Fargo campus with the addition of a third 120,000-square-foot building. Expected to be completed in 2009, the new building will allow the facility to support an additional 575 employees. The new building is part of the first phase of Microsoft’s planned expansion of its Fargo campus. Microsoft currently employs 1,293 people in the Fargo area, including 956 full-time employees on its Fargo campus, and 337 vendors and contingent staff.

“The Microsoft Fargo location has significantly expanded its charter over the past several years, and today the campus is home to teams from across the company,” said Jeff Raikes, president of the Microsoft Business Division. “The expansion we are announcing today is very exciting and will help position us to keep pace with our growth and the changing needs of our business.”

Phase one of Microsoft’s Fargo campus expansion project will also include a 65,000-square-foot expansion to the campus’ existing Horizon Building, which will include a new cafe, meeting rooms and a company store. Phase one also includes the installation of connecting links between all buildings, renovations to the campus’ existing Vista Building to create additional meeting space, and land improvements.

Through its current master plan of record for the Fargo campus, which includes future planned expansion, Microsoft projects that it will be able to house approximately 3,800 employees, vendors and contingent staff when construction is complete.

Microsoft Corp. ... and Vietnam signed agreements on Monday that require government offices in Hanoi and other provinces to use licensed software.

IDGNS: In hindsight, do you think it was a good idea for Microsoft to release the number of patents it believes are being infringed?

Hilf: What we heard back after the Novell deal was "Give us more transparency. You say that there is IP involved, give us an understanding of what that is." So the attempt was that if we give a number and category of where these things fall, maybe that will help people get an idea of the scope. We are very much calling out to commercial companies to license this stuff and resolve these issues. This isn't like a trivial invention. There are a couple hundred significant patents here.

As part of its continued commitment to deliver interoperability by design, Microsoft Corp. today announced a new collaborative effort with the Beihang University (Beijing University of Aeronautics and Astronautics) and others to create an open source translator project between China’s Unified Office Format (UOF) and the Ecma Open XML File Formats. In addition, the company announced the beta release of translation tools for Windows® XP, and the 2003 and 2007 versions of Microsoft® Office Excel® and Microsoft Office PowerPoint® as part of the Open XML Translator project launched in July 2006.

The UOF translation tools will be developed and licensed as open source software, and ultimately will be made available as free, downloadable add-ins for Microsoft Office Word 2003 and 2007 customers from SourceForge.net. As such, the tools will be available for use with other individual and commercial projects to accelerate document interoperability across the industry and benefit Microsoft Office customers in China who need to work with the UOF standard. A preview of the UOF translator tools will be released on SourceForge this summer, with final versions expected early next year. Further details on the UOF SourceForge project are available at http://uof-translator.sourceforge.net. ...

The UOF-specific translator meets the needs of government and public sector customers in China who are interested in using the emerging standard, which is being developed by the Chinese Office Software Work Group (COSWG), led by the Ministry of Information Industry (MII), major suppliers of Chinese office software suites, and academic institutions such as the Beijing Information Technology Institute. The translator tools themselves will be developed and tested by leading Chinese independent software vendors and academic institutions such as the Beihang University, Beijing Information Technology Institute (one of the co-creators of the UOF Chinese standard), Tsinghua University and LitSoft (a member of Lenovo Group).

Our Server and Tools Business (STB), led by Bob Muglia, is moving from the Platform & Services Division (PSD) to the Microsoft Business Division (MBD). Also moving from PSD to MBD are Sanjay Parthasarathy and his Developer & Platform Evangelism (D&PE) team. The STB and D&PE teams will move intact, with Sanjay reporting into Bob and Bob reporting to Jeff Raikes.

Microsoft Corp. today announced it will acquire aQuantive, Inc., for $66.50 per share in an all-cash transaction valued at approximately $6 billion. This deal expands upon the Company’s previously outlined vision to provide the advertising industry with a world class, Internet-wide advertising platform, as well as a set of tools and services that help its constituents generate the highest possible return on their advertising investments.

“The advertising industry is evolving and growing at an incredible pace, moving increasingly toward online and IP-served platforms, which dramatically increases the importance of software for this industry,” said Steve Ballmer, chief executive officer of Microsoft. “Today’s announcement represents the next step in the evolution of our ad network from our initial investment in MSN, to the broader Microsoft network including Xbox Live, Windows Live and Office Live, and now to the full capacity of the Internet. Microsoft is intensely committed to creating a thriving advertising business and to partnering closely with all key constituencies in this industry to help maximize the digital advertising opportunity for all.”

The aQuantive acquisition enables Microsoft to strengthen relationships with advertisers, agencies and publishers by enhancing the Company’s world-class advertising platforms and services beyond its current capabilities to serve MSN. The acquisition also provides Microsoft increased depth in building and supporting next generation advertising solutions and environments such as cross media planning, video-on-demand and IPTV. Combining aQuantive’s technologies and services with Microsoft’s portfolio will provide value for the industry’s key constituencies as follows:

• Advertisers and ad agencies will benefit from a world-class media planning, buying and campaign management solution to drive maximum ROI and optimize their reach to audiences across the increasingly fragmented, interactive media landscape.

• Media owners/publishers will gain access to best-in-class inventory optimization and monetization solutions across a full suite of rich media, video and targeting capabilities.

• The broader advertising ecosystem will benefit from the leading interactive advertising agency, Avenue A | Razorfish, continuing to serve its impressive client roster, while also embedding the voice of the marketer into Microsoft’s next generation advertising solutions and services.

Popfly is designed to allow non-professional programmers and hobbyists to build mash-ups, gadgets, Web sites and applications using pre-built “blocks.” As of now, there are 40 of these Web-programming blocks from which they can choose, including Flickr, Windows Live Spaces, Virtual Earth and news service blocks. (More are coming from Microsoft and third parties, Fernandez said.) Popfly users can tie together these data-source, transformation and display blocks to create their own customized mash-ups.

Soros Fund Management LLC also increased its stake in Apple Inc. and JetBlue Airways Corp., among other companies, and took a position in cell phone company Motorola Inc. It dropped its stakes in online auction company eBay Inc. and in Take-Two Interactive Software Inc., which publishes the "Grand Theft Auto" video games.

In a form 13F-HR filed with the SEC Tuesday, Soros Fund Management reported holding 415,497 shares in Microsoft for the quarter that ended March 31, with a fair market value of $11.6 million, compared with a stake of 198,075 shares valued at $5.9 million last quarter.

Microsoft Corp., a colossus built on software, is making a new push in hardware manufacturing by building a factory in China to produce its Zune media player. ...

The original Zune, released in November, was produced using a framework and components provided by Toshiba Corp. Reindorp said the company hopes that by taking a more direct role in manufacturing a second version, it will help the device gain popularity.

After a year in trials, Microsoft Corp. is fine tuning its FlexGo initiative for developing world PCs. Partners including Advanced Micro Devices, Infineon, Intel, and Via Technologies are collaborating on new designs focused on a subscription business model through local telephone companies.

The new designs will use Windows Vista and a new security chip from Infineon. Microsoft reported on the outlook of its FlexGo program at the Windows Hardware Engineering Conference here Tuesday (May 15). FlexGo was first launched at WinHEC in 2006.