Microsoft developing new tablet PC

SEATTLE (Reuters) - Microsoft Corp is developing a small tablet-style PC to rival a similar product that may be launched by Apple Inc, technology blog Gizmodo reported on Tuesday.

The booklet-shaped device, called Courier, is in the "late prototype" stage of development, Gizmodo reported, without identifying the source of its information.

Microsoft did not immediately answer a request for comment.

The Courier device has dual 7-inch screens that are touch sensitive and can be used in conjunction with a stylus, Gizmodo reported.

Apple has long been expected to launch its own tablet PC -- essentially a large version of its iPhone -- but has so far announced no plans to do so.
source [reuters]

Skype founders sue eBay, investors

By Gabriel Madway

SAN FRANCISCO (Reuters) - The founders of Skype have sued owner eBay Inc and an investor group that has agreed to buy the Webphone service, accusing them of copyright violation and potentially disrupting the $1.9 billion deal.

The lawsuit brought by Joltid Ltd, a Swedish firm owned by Skype founders Niklas Zennstrom and Janus Friis, says Skype used its technology without authorization. It comes on the heels of a legal dispute between Joltid and Skype in Britain over software rights.

Filed in Northern California U.S. District Court this week, the latest suit seeks a permanent injunction against Skype and damages. EBay has denied the allegations.

Joltid believes damages are piling up at a rate of more than $75 million a day.

"The Skype companies have continued to infringe Joltid's copyrighted works on a massive scale," the lawsuit said. "Each day that the Skype Companies continue to make available its Internet telephone software for download, Skype users download Joltid's copyrighted works approximately six times per second."

Ebay licenses peer-to-peer technology from Joltid for Skype, but has begun to develop its own alternative software given the uncertain outcome of pending litigation with Joltid.

"Their allegations and claims are without merit and are founded on fundamental legal and factual errors," eBay said in a statement.

Analysts have said the once-celebrated Skype business is an incongruous division of an Internet sales and auction house, and many have long urged the firm to spin off the unit or unload it.

The Internet auction house said on Wednesday it remained on track to close the Skype transaction in the fourth quarter.

JOOST BUSINESS

Ebay agreed to sell a 65 percent stake in Skype for $1.9 billion to a consortium including Netscape founder Marc Andreessen's Andreessen Horowitz, venture firm Index Ventures, private equity firm Silver Lake, and the Canada Pension Plan Investment Board.

Joltid's suit named those investors as defendants, along with Skype, eBay, and Mike Volpi.

Sources last week said Zennstrom and Friis had contacted several private equity firms to try and buy back their old business.

Days ago, Web TV firm Joost -- also owned by Zennstrom and Friis -- removed Volpi as chairman.

Volpi had joined Index Ventures by that time. Joost said they were investigating Volpi's actions during his tenure at the company, but did not elaborate.

Wednesday's developments are the latest in an escalating legal tussle. Earlier this year, Skype filed a claim in the United Kingdom against Joltid, trying to resolve a dispute over a software licensing agreement between the parties that Joltid was seeking to terminate.

Joltid brought a counterclaim, reiterating that it holds the rights to the peer-to-peer technology and that Skype is in violation of the original agreement.

A trial is expected to take place in early 2010 in the United Kingdom.

Skype, whose 2008 revenue rose 44 percent to $551 million, charges for calls to regular telephones but provides free computer-to-computer voice, video and text services. It had about 405 million registered users at the end of 2008.

EBay's deal valued Skype at $2.75 billion but that was well below the $3.1 billion eBay spent in acquiring Skype.

Its shares rose slightly in extended trade to $24.38 after closing at $24.32.

(Additional reporting by Sinead Carew and Ritsuko Ando in New York; Editing by Tim Dobbyn, Bernard Orr)
via [reuters]

Facebook makes money, tops 300 million users

By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Facebook is making enough money to cover its costs and now has 300 million users, the world's largest social networking site said on Tuesday, proving the Internet's newest star industry can be a viable business.

Facebook is now generating enough cash to cover its operating expenses, as well as the capital spending needed to maintain its fast-growing service.

Analysts said this shows the financial viability of Facebook, which has faced questions about its underlying business model, despite its popularity, and was a good sign for a potential initial public offering.

"It's certainly meaningful to show that this is absolutely the real deal," said Broadpoint Amtech analyst Ben Schachter. "They are executing. People are spending money on the site."

Since its creation in a Harvard dorm room five years ago, Facebook has emerged as one of the Internet's most popular destinations and is increasingly challenging the Web's established powerhouses like Yahoo Inc and Google Inc.

Facebook unveiled a revamped search engine last month and is currently testing an online payment system. Facebook users have tripled from about 100 million a year ago.

Facebook Chief Executive Mark Zuckerberg said in a blog post on the company site on Tuesday that Facebook reached its goal of being free cash flow positive in its most recently ended quarter. The company had previously projected reaching the target sometime in 2010.

"This is important to us because it sets Facebook up to be a strong independent service for the long term," said Zuckerberg in the blog post.

Facebook spokesperson Larry Yu said the free cash flow metric does not include any cash from private investment.

In May, Facebook announced a $200 million investment from Russian investment firm Digital Sky Technologies in a deal that valued the company's preferred shares at $10 billion.

DST valued Facebook's common shares at $6.5 billion in a subsequent deal to purchase shares from Facebook employees.

Facebook's becoming cash flow positive ahead of schedule provides another nugget of data to back up the lofty valuations, and according to one analyst, makes Facebook a more attractive candidate for a potential public offering.

"They can command higher confidence from investors now," said Collins Stewart analyst Sandeep Aggarwal, who noted that he believes Facebook could go public in the second half of 2010, or in 2011.

Zuckerberg said in May that any IPO is "a few years out."

Facebook did not provide any other financial details on Tuesday. The company has previously said its revenue was on track to grow 70 percent this year.
Facebook board member Mark Andreesen told Reuters earlier this year that the company will surpass $500 million in revenue this year.

Zuckerberg said in his post that the company is exploring ways to make the service perform faster and more efficiently as the number of Facebook users continues to grow.
Source [reuters]

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IBM uses DNA to make next-gen microchips

By Clare Baldwin

SAN FRANCISCO (Reuters) - International Business Machines Corp is looking to the building blocks of our bodies -- DNA -- to be the structure of next-generation microchips.

As chipmakers compete to develop ever-smaller chips at cheaper prices, designers are struggling to cut costs.

Artificial DNA nanostructures, or "DNA origami" may provide a cheap framework on which to build tiny microchips, according to a paper published on Sunday in the journal Nature Nanotechnology.

Microchips are used in computers, cell phones and other electronic devices.

"This is the first demonstration of using biological molecules to help with processing in the semiconductor industry," IBM research manager Spike Narayan said in an interview with Reuters.

"Basically, this is telling us that biological structures like DNA actually offer some very reproducible, repetitive kinds of patterns that we can actually leverage in semiconductor processes," he said.

The research was a joint undertaking by scientists at IBM's Almaden Research Center and the California Institute of Technology.

Right now, the tinier the chip, the more expensive the equipment. Narayan said that if the DNA origami process scales to production-level, manufacturers could trade hundreds of millions of dollars in complex tools for less than a million dollars of polymers, DNA solutions, and heating implements.

"The savings across many fronts could add up significantly," he said.

But the new processes are at least 10 years out. Narayan said that while the DNA origami could allow chipmakers to build frameworks that are far smaller than possible with conventional tools, the technique still needs years of experimentation and testing.