News : Industry leaders join push for home media networks

FRANKFURT (Reuters) - Chip and electronics makers Intel (INTC.O: Quote, Profile, Research), Infineon (IFXGn.DE: Quote, Profile, Research), Texas Instruments (TXN.N: Quote, Profile, Research) and Panasonic (6752.T: Quote, Profile, Research) have formed an alliance to promote home networks for movies, music and pictures using domestic wiring.

The four leading chip and electronics makers will help market and test a standard to wire together computers, TVs and entertainment systems using electricity, phone and coaxial cable lines that already exist in most homes, they said on Tuesday.

They hope the first products using the new standard will be on the market in about a year.

Consumer electronics and computer makers have long talked of the so-called digital home, in which entertainment appliances and PCs are linked and typically controlled from the computer, making it easy to share digital media content between devices.

But a lack of common standards between makers of these devices has held back progress.

There is already a common wireless standard to link home devices using Wi-Fi. Wired networks often have the advantage of being more stable and having more capacity, and the building blocks for the infrastructure already exist in most homes.

"Powerline is the most ubiquitous technology in the world. You have powerlines to almost every house in the world," Intel's Matt Theall, president of the new HomeGrid Forum (homegridforum.org) said on a conference call.

"There's a huge market potentially for this type of technology. It can be embedded in DVD players, TVs, PCs, speakers -- any home entertainment device."

The four leading members of the HomeGrid Forum (homegridforum.org) said they would work with the International Telecommunications Union to promote, test and contribute to a standard the ITU is already working on, called ITU-T G.hn.

Their role will be similar to that played by the Wi-Fi Alliance, which helped promote an IEEE (Institute of Electrical and Electronics Engineers) wireless standard and has certified thousands of products for wireless local area networks (WLANs).

The HomeGrid Forum has seven other founding members: Aware (AWRE.O: Quote, Profile, Research), DS2, Pulse Link, Ikanos (IKAN.O: Quote, Profile, Research), Sigma Designs (SIGM.O: Quote, Profile, Research), Westell (WSTL.O: Quote, Profile, Research) and Gigle Semiconductor.

Intel, Infineon, Texas Instruments and Panasonic -- who will serve on the board of directors -- said they were recruiting additional members among chipmakers, service providers and makers of consumer electronics and personal computers.

(Reporting by Georgina Prodhan; Editing by David Cowell)

News : DreamWorks' Katzenberg disappointed with 3D talks

By Sue Zeidler

LOS ANGELES (Reuters) - DreamWorks Animation SKG (DWA.N: Quote, Profile, Research) Chief Executive Jeffrey Katzenberg on Tuesday said he was disappointed with the pace at which movie theater chains were moving to deploy digital and 3-D technology.

"Things haven't progressed as well as I had hoped," Katzenberg told analysts on a quarterly conference call.

"I feel as though things have dragged along, and it's been pretty disappointing," said Katzenberg, a huge proponent of 3-D films, who has pledged to make all future films in 3-D at an incremental cost of $15 million per film.

For Dreamworks, which makes about two films a year, that commitment to 3-D amounts to about $30 million per year.

Katzenberg on the conference call said he still believed DreamWorks will see a good return on its investment based on projected ticket prices and the number of 3-D screens he is certain will be in the market by the time his studio's first 3-D film, "Monsters vs. Aliens," is released in spring 2009.

"But whether or not it achieves the fullest potential and outside goals I've set for ourselves and challenged exhibition with, is the thing up for grabs right now," he said.

We have indicated that we would like to see 5,000 3-D screens domestically by the time we released 'Monsters vs. Aliens,' but we need to make sure that major theaters chains are committed to getting these screens in the next 30 days or it's unlikely we will get all 5,000 screens," said Lew Coleman, Chief Financial Officer for DreamWorks in an interview.

Katzenberg had hoped by now the Digital Cinema Implementation Partners, owned by Regal Entertainment Group (RGC.N: Quote, Profile, Research), Cinemark Holdings Inc(CNK.N: Quote, Profile, Research) and AMC Entertainment IncAC.N had reached a $1.1 billion financing deal with Hollywood studios to deploy cinema digital technology. Once outfitted with digital projectors, theaters can then add 3-D technology.

The DCIP first hoped to clinch the deal by the fourth quarter of 2007, but various issues prolonged the talks.

Travis Reid, chief executive of DCIP, last month said he hoped to conclude a deal in the second quarter 2008. Reid declined comment on Tuesday.

About 4,000 of the 37,000 cinema screens in the United States are digitally equipped, while a little more than 1,000 screens have 3-D capability.

Some analysts have cited concerns there will not be enough 3-D screens to accommodate all the upcoming 3-D titles from Dreamworks and other studios due out in coming years.

Many in Hollywood look to the success of the 3-D concert movie, "Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour," which grossed nearly $30 million in its opening weekend as a template for the future. Tickets sold for $15.

Once the DCIP digital upgrade starts, it is expected to take about three years to complete the upgrade of the 14,000 screens of those theater chains involved.

"In terms of getting the big three on board and actively moving forward, I feel as though things have dragged along, and it's been pretty disappointing," Katzenberg said, referring to the movie chains.

"If these guys don't get their act together very quickly in the next 30 days, they're not going to be able to achieve that goal and it will start to deteriorate quickly. Every week that goes by will be several hundred less screens that will manage to be rolled out in the timeframe," he said.

(Reporting by Sue Zeidler; editing by Carol Bishopric)

News : Nokia confident free music downloads will profit

By Tarmo Virki

HELSINKI (Reuters) - Offering unlimited music downloads to phone buyers will make money for Nokia as well as record labels, the handset maker said, dismissing talk the move would come at the expense of profits.

"We expect to make money both from our traditional device sales, as well as from the 'Comes With Music' service," said Liz Schimel, head of Nokia's music business. "I can assure you that we are looking out for everyone's interests in creating these new business models, including our own."

The new music offering from Nokia, the first cellphone maker to push heavily into content, would differ from any other package on the market as users can keep all the music they have downloaded during the 12 months.

Last week Nokia struck a deal with Sony BMG to offer the label's tracks in its "Comes with Music" service, adding to last December's deal with top record label Universal.

Having the world's two largest labels on board looks set to help Nokia attract smaller music companies and challenge the dominant pay-per-track sales model for digital music.

"This new model is innovative and creates a positive situation for all stakeholders, but it does require a different way of thinking for our content partners," Schimel said, but declined to go into details.

Reports on different Internet media have suggested the world's biggest handset maker was paying $35 to Universal alone for each sold handset; and some reports suggest Nokia would be paying an extra fee for each downloaded song after the first 35 songs, potentially eroding its close to 40 percent gross margins in cellphone operations.

"Recent articles that I've seen have fundamentally misunderstood the concept behind the Comes With Music model," Schimel said.

Such unlimited download models could offer a shot in the arm to the ailing music industry, which is struggling to find ways to make up for falling CD sales.

However, the success of Nokia's service could hurt CD sales further when clients who still buy their CDs turn to phones, said Mark Mulligan, research director at Jupiter Research.

"There is inherent tension in there," he said.

CHANGING THE APPLE WORLD?

The digital music market totaled just $2.9 billion in 2007.

Nokia sold 146 million music phones last year -- if all of those had included the "Comes with Music" bundle, just an extra $20 per phone would make Nokia's service bigger than the total market.

"Comes With Music has the potential to equal -- and even exceed -- the current value of the business," Tero Ojanpera, head of entertainment and communities business at Nokia, told a news conference last week when unveiling Sony BMG deal.

"If we sell a single percentage of our total sales as Comes With Music bundles, the revenue for the music industry would be almost the same," Ojanpera said.

Total sales of Nokia's top music phones, the 5310 and the 5610, were more than 4 million during the January-March quarter. Unsubsidised retail prices for the phones were 215 euros ($334) and 280 euros.

With its iconic touch-screen model, Apple's iPhone shocked the handset industry last year, but at prices starting from 400 euros it has not captured a mass following in Europe.

Now, Nokia has stolen the spotlight from Apple in the digital music world, analysts said.

Record labels are looking to Nokia and others to challenge the dominance of Apple's iTunes as they have struggled to negotiate with the American group on a level footing when it comes to issues such as pricing.

"Comes with Music is one of the most exiting things out there in the digital music," said Jupiter's Mulligan.

"Apple is facing market perception of iTunes looking like yesterday's service. Basically, iTunes looks pretty much the same it looked 4 or 5 years ago," he said.

(Reporting by Tarmo Virki; Editing by Louise Ireland and David Cowell)

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News : Yahoo's open platform now has a name and a mascot

If the software industry truly is to transcend the PC level and start an entirely new economy on a Web platform, then it doesn't appear any one player will have an automatic, native advantage. Yahoo is gambling it will be one of those players.

There are four centers of gravity emerging in the complex and semi-defined social Web services field, where the application platform is moved from the local or company network to the Web. The proprietors at these four points include Microsoft, whose Live Mesh concept was given more definition just two days ago. Then there's Adobe, which is constructing a Web services platform around Flash using AIR. Also there is Google, whose tenacity alone is testament to its formidability.

And as of today, we know for certain that the other center of gravity in "open," social Web services will be Yahoo, especially if it continues to render moot the need for a merger with Microsoft.

"We are literally in the process of re-wiring Yahoo from the inside out, to create a development platform at Yahoo that will literally open up all the assets of Yahoo to developers across the Web in a way that we've never done before," stated new Yahoo CTO Ari Balogh, during a keynote speech yesterday at the Web 2.0 conference in San Francisco. "And as part of this, we're going to the consumer experience at Yahoo social throughout, and provide hooks for that for developers to do the same."

All four companies are basing their Web services development platforms in such a way that they feed their respective core strengths. In Yahoo's case, its forthcoming Open Social or Open Strategy platform -- or Y!OS, for short -- all the energy of its willing, volunteer developers for gadgets and inline applications is directed toward its home page, still considered the Web's principal portal. The paint isn't quite dry on the idea, and it's so fresh, it isn't always clear what the "S" stands for.

Without giving too many examples of just what these applications will consist of -- that matter is typically left for us to decide -- Balogh showed attendees how developers will be given sensible, graphical, free tools to generate "mashup" applications. These apps will be geared to respond to certain elements of a Yahoo user's search, and can pop up or in query results pages to offer information that responds to, and hopefully refines, that search.

The query-responsive portion of Y!OS was made available just yesterday, and was given the moniker "SearchMonkey." The beta developer platform is available now from this link (do yourself a favor and avoid "searchmonkey-dot-com," because Yahoo apparently didn't register the domain in time). Currently the company plans a formal launch of this plank of its platform on May 15.

Yahoo CTO Ari Balogh, speaking before the Web 2.0 Conference in San Francisco April 24. 2008."Later this year, we will be delivering the first version of our Y-Open Strategy Platform [Y!OS], and it will deliver...a social graph, hooks for developers to be able to use that, event-stream feeds (we call it 'Vitality')," stated Balogh yesterday, "and it'll include an application development platform that allows this sort of development and easy deployment."

Another plank of Y!OS will be its underlying social engine, one of whose principal features will be the ability to pull up lists of people associated with a user, in the context of that user's search. As one example, Balogh described a situation where a user who happens to be searching for something related to fantasy sports leagues, is given a list of friends and associates who are part of his fantasy sports circle.

As a pre-emptive strike against conclusions that Yahoo thinks it can try to be the next MySpace, or that the "S" in "Y!OS" stands for "Social" 100% of the time, Balogh told the audience that Yahoo really doesn't have any intentions to take the place of real social networks. Instead, he proposed a vision where Yahoo's social components would merely have a prominent place on its mere 120 billion page views per month.

"I want to be very clear here: We are not creating yet another social network," spelled out Balogh slowly. "We are going to rewire the entire Yahoo experience for consumers to make it social in every dimension. We've experimented with social for awhile, and I'll tell you, at Yahoo, we don't think of 'social' as a destination. We think of 'social' as a dimension, and it infuses every element of the consumer's experience on the Web. It drives relevance, it drives community, it drives 'virality."'

News : Gene therapy improves sight in near-blind patients

By Deena Beasley and Ben Hirschler

LOS ANGELES/LONDON (Reuters) - Gene therapy for a rare type of inherited blindness has improved the vision of four patients who tried it, boosting hopes for the troubled field of gene repair technology, scientists said on Sunday.

Two separate teams of doctors reported successes in using gene therapy to treat Leber congenital amaurosis, or LCA.

LCA damages light receptors in the retina. It usually begins affecting sight in early childhood and causes total blindness by the time a patient is 30. There is no treatment.

Both teams used a common cold virus to deliver a normal version of one damaged gene that causes the disease, called RPE65, directly into the eyes of patients.

Although both trials were only testing for safety, patients reported they could see a little better afterwards, the researchers told a meeting of eye specialists in Florida and also reported in the New England Journal of Medicine.

Dr. Katherine High of the Children's Hospital of Philadelphia and the Howard Hughes Medical Institute and colleagues said all three of their volunteers had improved vision after the treatments.

Dr. Robin Ali of University College London and colleagues said one of their three volunteers got better.

Because the patients were adults, already had severe sight loss and received only low doses of treatment, researchers had not expected to see a benefit at all.

"This result is important for the entire field of gene therapy," said High, a former president of the American Society of Gene Therapy.

One volunteer in Ali's trial, Steven Howarth, said he had significant improvement in night vision, allowing him to navigate a simulation of a night-time street.

"Now, my sight when it's getting dark or it's badly lit is definitely better. It's a small change -- but it makes a big difference to me," Howarth said in a statement.

GREAT HOPE

"The fact we see any evidence of improvement under these circumstances gives great hopes for the effectiveness of the treatment," Ali said in a telephone interview.

In High's trial, three patients aged 19, 26 and 26, all reported better vision.

"Patients' vision improved from detecting hand movements to reading lines on an eye chart," said Dr. Albert Maguire of Children's Hospital.

In each case, only one eye was treated, so the other eye could be used as a "control" to tell whether vision improved.

Ali and his team are working on the research with Targeted Genetics Corp, which made the genetically engineered virus. The Children's Hospital and University of Pennsylvania team developed their own virus, called a vector, to carry the corrective gene.

The next stage of testing will involve treating children, whose eyes have deteriorated less and who have a better chance of improving, Ali said.

"We are pretty convinced that once we can do this with younger children we will be able to arrest the damage," said Targeted Genetics Chief Executive Stewart Parker.

One important thing both teams were looking for was proof the virus did not leave the eye. "It stays in there. It doesn't go anywhere else," Parker said.

Both safety and efficacy have held back the field of gene therapy. One experiment cured two French boys with a rare immune disorder but gave them leukemia in 2002, and an Arizona teenager died in a 1999 gene therapy experiment.

(Editing by Maggie Fox and John O'Callaghan)

News : Reuters Technology Week

Cloned puppies sniff out drugs, Londoners do a Wii workout, and Tripoli goes wireless.

Plus, the Martin Conquest 1200 gets wheelchairs revving their engines.

Manoush Zomorodi reports.

News : Grand Theft Auto IV set to roll

The latest title in the Grand Theft Auto franchise is expected to generate sales in the neighbourhood of $400 million in its first week.

Available to purchase for both Sony's Playstation 3 and Microsoft's Xbox 360 from April 29, Grand Theft Auto IV is expected to sell between 9 million and 12.5 million units in 2008.

Reuters Technology Correspondent Matt Cowan reports.

Matt Cowan reports.

News : "Grand Theft Auto 4" set to entertain and inflame

SAN FRANCISCO (Reuters) - Beatings, carjackings, drive-by shootings, drunk driving and hookers. For video game fans, it can only mean one thing: "Grand Theft Auto 4" is here, with all the subtlety of a shotgun blast.

The latest chapter in the wildly popular and controversial criminal action franchise from Take-Two Interactive Software Inc (TTWO.O: Quote, Profile, Research) is poised to be the biggest entertainment product of the year, with expected first-week sales of up to $400 million -- dwarfing Hollywood's biggest box-office openings.

The handiwork of Take-Two's Rockstar game studio headed by British brothers Sam and Dan Houser, "Grand Theft Auto 4," which will be launched next Tuesday, promises to crank up the thuggish drama that made previous installments the equivalent of "The Godfather" for Generation PlayStation.

"We also felt over the last few years there hadn't been a great standout gangster movie. Maybe we could do something ourselves that would live alongside that stuff," Rockstar's Dan Houser told Variety magazine in a recent interview.

The gobs of processing power provided by Microsoft Corp's (MSFT.O: Quote, Profile, Research) Xbox 360 and Sony Corp's (6758.T: Quote, Profile, Research) PlayStation 3 gaming consoles allowed Rockstar to imbue even background characters with personalities and unique behaviors.

"The game just feels like a movie now. The camera angles, the little details and things you look for in a film are things they can do now," said Ricardo Torres, editor-in-chief of GameSpot, a leading gaming review Web site.

CONTROVERSY, AS ALWAYS

Of course, it would not be a "Grand Theft Auto" game without controversy.

The series that gave gamers the freedom to shoot cops and hook up with prostitutes before beating them up and stealing their money has added drunk driving and lap dances to its repertoire of vicarious thrills.

"A lot of it is done just tongue-in-cheek. It has that same sense of humor (as past games) that is very juvenile but at the same time is a parody of American culture," said Crispin Boyer, senior executive editor of video games for the 1UP Network.

Previous GTA games have been a lightning rod for criticism by politicians. 2008 Presidential hopeful Hillary Clinton said in 2005 that the series was demeaning to women.

The negative publicity has not stopped GTA from becoming one of the most successful game franchises ever, having sold 70 million copies worldwide and spawning legions of imitators.

The game may also determine the fate of Take-Two, which is resisting a $2 billion takeover offer from rival Electronic Arts Inc (ERTS.O: Quote, Profile, Research). If sales are stronger than the already lofty expectations, it could force EA to pay more.

A dystopian coming-to-America story, "Grand Theft Auto 4" revolves around an Eastern European immigrant who ends up running illicit errands for local mob bosses.

Yet the game is not without moral consequence. Players face tough choices regarding who lives or dies and whether ambition is more important than friendship, decisions that affect the outcome of the story.

"Grand Theft Auto 3," debuted in 2001 and was seen as a new beginning for the franchise because it defined a new genre of "open world" games that gave players unprecedented freedom. Two unnumbered games in the series have launched since, each with lots of sales, and lots of controversy.

"'Grand Theft Auto' really speaks to a new age of gaming. It's a type of gaming that is culturally relevant," said Geoff Keighley, host of Spike TV's GameTrailers TV show.

OPPOSITION STIRS

The game carries a Mature rating, meaning retailers are not supposed to sell it those under 17 years old, but critics charge the industry rating system is easily skirted and that children will end up playing the game anyway.

"We are calling on all major retailers to reconsider any decisions to sell this," said Tim Winter, president of the Parents Television Council, a media content watchdog.

Rockstar, which declined requests for an interview with the Housers, bristles at such suggestions. "If this was a movie or TV show and was the best in its field, you'd give it loads of awards and put those awards shows on television," Dan Houser told Variety.

(Editing by Adam Tanner, Richard Chang)

News : Second Life gets Organic CEO

Linden Lab founder Philip Rosedale explains why he has chosen online marketing executive Mark Kingdon to succeed him as CEO.

Rosedale dropped by the Thomson Reuters building in London to discuss his vision for Second Life with Technology Correspondent

Matt Cowan, Reuters.

SOUNDBITE: Philip Rosedale, Founder and Chief Executive, Linden Lab

News : Microsoft issues final threat to scotch Yahoo deal

By Eric Auchard and Daisuke Wakabayashi

SAN FRANCISCO/SEATTLE (Reuters) - Microsoft Corp gave Yahoo Inc no hope of a higher takeover price, saying it was ready to go hostile or even call off its bid if Yahoo maintains "unrealistic expectations" of a better deal.

"Speed is of the essence for the deal to make sense," Chief Financial Officer Chris Liddell said on a conference call on Thursday. If no deal is reached by this weekend, Microsoft will reconsider its offer and reveal new plans next week, he said.

"Unfortunately, the transaction has been anything but speedy and has been characterized by what would appear to be unrealistic expectations of value," he said of Yahoo's moves to frustrate Microsoft's unsolicited merger proposition.

Microsoft sees Yahoo as a way to compete with arch-rival Google Inc in the Internet search and advertising arena, but company executives have repeatedly said they have limits to what they are willing to pay to get a deal done.

"We have yet to see tangible evidence that our bid substantially undervalues the company," Liddell said, referring to Yahoo. "In fact, we see the opposite."

Liddell reiterated a threat Microsoft made three weeks ago to Yahoo's board of directors that it would consider cutting its bid, now worth about $44 billion, and take its case to Yahoo shareholders if a deal is not reached by this Saturday.

"As outlined in our recent letter to the Yahoo board, unless we made progress with Yahoo towards an agreement by this weekend, we will reconsider our alternatives," Liddell said.

"These alternatives clearly include taking an offer to Yahoo shareholders or to withdraw our proposal and focus on other opportunities," either from internally generated growth or growth through acquisitions, the Microsoft executive said.

He was echoing a public threat made by Chief Executive Steve Ballmer at a conference near Milan on Wednesday that Microsoft would withdraw its cash-and-stock offer, originally for $31 a share, if Yahoo does not start negotiating.

Ballmer also said Yahoo's better-than-expected first-quarter results, reported on Tuesday, had not changed Microsoft's view of its value.

The tough talk appeared to be a final public attempt to bring Yahoo to the negotiating table before the nearly three-week-old deadline expires. Yahoo has said it is open to considering a deal with Microsoft, among other alternatives, but only if Microsoft boosts its offer.

"A proxy battle seems increasingly likely," William Blair analyst Troy Mastin said. "It sounds (like) Yahoo's got a price in mind somewhere north of $35 and Microsoft has a price in mind somewhere south of $35."

Stanford Group financial analyst Clayton Moran said Microsoft appears ready to walk away if Yahoo does not act: "In a sense Yahoo, by playing hardball, is really playing with fire because they have limited alternatives," he said.

Earlier on Thursday, Microsoft reported weak Windows sales for its fiscal third quarter ended in March and gave a forecast for the fourth quarter ending in June at the low end of Wall Street expectations, sending its shares down nearly 5 percent.

During the conference call, which principally focused on a discussion of Microsoft's own quarterly results, Liddell noted that two times as many callers were listening and he speculated that this was tied to widespread interest in the Yahoo deal.

In regular session trading on Nasdaq ahead of the results, Microsoft shares closed up 1.1 percent at $31.80 while Yahoo fell 2.8 percent to close at $27.30. After the report, Microsoft stock fell 5.1 percent to $30.18 while Yahoo dipped a further 1 percent to $27.01.

In order to regain the bid's full $31-a-share value, Microsoft's stock would have to rise to $32.60, the closing share price on January 29, a day before Microsoft presented its unsolicited offer to Yahoo's board.

(Additional reporting by Nichola Groom in Los Angeles and Michele Gershberg in New York; Editing by Braden Reddall)

News : Nintendo: no plan to cut Wii, DS prices this year

TOKYO (Reuters) - Nintendo Co Ltd (7974.OS: Quote, Profile, Research) said it has no plan to cut the prices of its Wii console and DS handheld players this year, underscoring its confidence in continued demand for the Japanese videogame maker's two growth engines.

"Our earnings projection for the year is not based on hardware price cuts, and I don't think we are going to need them," Nintendo President Satoru Iwata told an analyst meeting on Friday.

Nintendo, which competes with Microsoft Corp (MSFT.O: Quote, Profile, Research) and Sony Corp (6758.T: Quote, Profile, Research) in the global videogame industry, currently holds the leading position both in the console and the portable game markets.

Iwata's comment came one day after the creator of game characters such as Mario and Zelda said its operating profit more than doubled in the year ended March, and forecast a further 9 percent gain this year to 530 billion yen ($5.08 billion).

The outlook fell short of market expectations but analysts said the company forecast is believed to be on the conservative side. Nintendo, Japan's third-largest company in market value, revised up its earnings outlook three times in the year just ended.

Sony Corp (6758.T: Quote, Profile, Research) slashed the price of its PlayStation 3 with a 20-gigabyte hard drive by 20 percent to 49,980 yen ($479) before the product launch in late 2006, and lowered it further to 44,980 yen last year to spur demand, while Nintendo has kept the Wii price unchanged since its launch at 25,000 yen.

(Reporting by Kiyoshi Takenaka)

By Tarmo Virki

HELSINKI (Reuters) - Handset makers sold 14 percent more phones in January-March than a year ago, growing at the fastest pace in five quarters, research firms said on Friday.

In 2006, market growth was at over 20 percent level throughout the year.

"Global handset volume continues to increase at a healthy pace. Recent annual growth rates have actually gone up, not down. Emerging markets continue to surge," said Neil Mawston, analyst at Strategy Analytics.

The world's largest phone maker Nokia (NOK1V.HE: Quote, Profile, Research), and Korean vendors Samsung Electronics (005930.KS: Quote, Profile, Research) and LG Electronics (066570.KS: Quote, Profile, Research), won further share of the market, helped by attractive designs and wide offerings.

The world's two largest vendors, Nokia and Samsung grew twice as fast as the market, research firms IDC and Strategy Analytics said.

Struggling Motorola (MOT.N: Quote, Profile, Research), Swedish-Japanese Sony Ericsson (6758.T: Quote, Profile, Research) (ERICb.ST: Quote, Profile, Research) and Apple (AAPL.O: Quote, Profile, Research), a newcomer to the industry, could not keep up with continuing fast growth on the market.

Sony Ericsson saw its profits halved in the quarter and its fourth spot in the market lost to LG, as demand slowed for its more expensive camera and music handsets.

"We see that the demand on the high end has softened," Sony Ericsson sales chief Anders Runevad told a conference call, adding that consumers were becoming more cautious.

However, the 14 percent growth shows the market has been relatively little hurt by worries over global economy, so far.

"Disposable income is being eroded by rising food and fuel prices and worries about global financial markets and slow economic growth are creating a cautious outlook for the months ahead," IDC analyst Ramon T. Llamas, said in a statement.

(Editing By Ovais Subhani)

News : Nintendo profit doubles

Nintendo's profit more than doubled last year on red-hot demand for its Wii and DS game machines.

Earning around $4.7 billion, Nintendo predicted 9% growth this year from consoles and the broader international launch of the Wii home fitness.

Dan Sloan reports.

News : Wheelchair-accessible motorbike

A UK-based company fine tunes its vehicle that allows a disabled person to ride a motorbike whilst sitting in a wheelchair.

Martin Conquest Limited delivered its first bike to a customer in continental Europe in mid 2007.

Peter van Nooy from the Netherlands became disabled after an accident 18 years ago.

Since receiving his bike van Nooy has become a developer for Martin Conquest Limited, advising the company on how to develop specific features aimed at making the riders experience more comfortable.

Soundbite:

Peter Van Nooy, Martin Conquest Developer (English).

News : China becomes world's largest Internet population

BEIJING (Reuters) - China has surpassed the United States to become the world's largest Internet-using population, reaching 221 million by the end of February, state media said on Thursday.

The number of Internet users in China was 210 million at the end of last year, only 5 million fewer than the U.S. Internet users then, Xinhua news agency said, quoting the China Internet Network Information Centre.

"Despite a rapidly increasing Internet population, the proportion of Internet users among the total population was still lower than the global average level," Xinhua quoted the Information Ministry as saying.

The proportion was 16 percent at the end of 2007, compared with 19.1 percent for the world average.

Internet censorship is common in China, where the government employs an elaborate system of filters and tens of thousands of human monitors to survey surfing habits, surgically clipping sensitive content.

But the Internet has most recently become an important tool in countering anti-China protest dogging the Olympic torch relay with an outpouring of nationalism and indignation.

(Reporting by Nick Macfie; Editing by David Fox)

News : Microsoft could keep XP if customers want it: CEO

By David Lawsky

LOUVAIN-LA-NEUVE, Belgium (Reuters) - Microsoft could re-think plans to phase out its Windows XP operating system by June 30 if customers show they want to keep it but so far they have not, Chief Executive Steve Ballmer said.

"XP will hit an end-of-life. We have announced one. If customer feedback varies we can always wake up smarter but right now we have a plan for end-of-life for new XP shipments," Ballmer told a news conference on Thursday.

Microsoft (MSFT.O: Quote, Profile, Research) has announced that it will stop licensing Windows XP to computer makers and end retail sales by June 30.

Ballmer said most retailers sold computers with Vista, the latest version of its Windows operating system, and most consumers were choosing to buy Vista.

Some consumers have complained they were unable to buy XP at retail stores, or as consumers. They say that in order to get XP they must buy their computers as small businesses.

"In the business environment, we still have customers who are buying PCs with XP" because information technology departments often have to work with old machines, Ballmer said.

Vista requires high-speed central processing units installed only in newer machines.

Ballmer was also asked whether the company would appeal against an 899 million euro ($1.42 billion) antitrust fine imposed by the Brussels-based European Commission in February.

"I really have nothing to say about that today, sorry," he said.

The company must decide by early May whether to appeal to the European Court of First Instance against the fine, imposed because the Commission found Microsoft had charged rivals high prices to discourage software competition.

The court upheld a 497 million euro fine and other antitrust penalties against Microsoft in a landmark decision in September.

Ballmer was speaking at a news conference called to announce the establishment of an "innovation centre" in the Belgian city of Mons, near where rival Google (GOOG.O: Quote, Profile, Research) has a data centre.

Ballmer, asked whether Microsoft had decided to locate in Mons because Google was there, said it had not.

He reiterated Microsoft's plan to go to Yahoo (YHOO.O: Quote, Profile, Research) shareholders if that company turned down its takeover offer of $43.6 billion.

"We've sent them a letter that says, 'it's a good price, please let us know. If you don't let us know, maybe your shareholders will think it's a good price.'"

(Editing by Dale Hudson)

News : Eco-friendly channel set to launch

Discovery is gearing up to launch Planet Green, a 24-hour original programming eco-friendly television network.

Planet Green is hoping to tap into corporate America's new focus on eco friendliness. The channel will launch June 4th and its programming will be seen on Discovery channels around the world.

Bobbi Rebell reports.

News : Peter Gabriel on 'The Filter'

Musician and digital entrepreneur Peter Gabriel talks about the 'discovery service' aimed at simplifying life in the age of unlimited choice.

Originally a music recommendation service, The Filter is widening its scope to include films and web videos when it completes the beta stage in May 2008. Reuters Technology Correspondent Matt Cowan visited Peter Gabriel's Real World Studios in Box, England to hear the vision behind the service.SOUNDBITE:

Peter Gabriel, Investor, The Filter

Jon Hobley, Algorithm Overseer, The Filter

News : Web criminals fuel big rise in "trojans"

By Peter Griffiths

LONDON (Reuters) - Cyber-criminals are behind a dramatic rise in stealthy programs called "trojans" that infect computers to sell rogue software, send unwanted email or steal personal data, a study has found.

In a report released in London, Microsoft said the number of trojans removed from computers around the world in the second half of 2007 rose by 300 percent from the first half.

The figure has risen so sharply because more computers are fitted with software that detects malicious programs and because criminals had come to see trojans as their "tool of choice", the report said.

"The numbers have simply exploded, it's huge," said Vinny Gullotto, general manager of the Microsoft Malware Protection Center. "There is a lot of criminal intent there."

Trojans can log keystrokes to gather passwords, send spam from private computers or harvest email addresses or personal information for criminal purposes.

The most common family of trojans last year was "Win32/Zlob", a piece of malicious software, or malware, that people unwittingly download from the Internet.

Its designers trick people into saving it by telling them they need a new piece of software to watch video online.

Once installed, it bombards people with pop-up messages and bogus flashing warnings that their computer is infected.

The messages say: "Your computer is infected! Windows has detected spyware infection. Click here to protect your computer."

The trojan then sends adverts offering to sell rogue anti-spyware on sites that could expose customers to credit card fraud. Microsoft said the problem is global and linked to organized criminal gangs.

"The majority (of trojans) come from the (United) States, China, Russia and South America," Gullotto said on the fringes of the Infosecurity Europe trade conference on Tuesday.

Microsoft said the number of computers around the world that were made safe after being infected with trojans rose from one million in the second half of 2006 to 19 million in the second half of 2007.

The report is online: here

(Editing by Steve Addison and Paul Casciato)

News : Microsoft links data on phones, PCs in "Live Mesh"

By Daisuke Wakabayashi

SAN FRANCISCO (Reuters) - Microsoft Corp has begun testing technology that brings together a person's pictures, documents and other data scattered across a growing number of machines with the goal of allowing people to access their information from anywhere and at any time.

Microsoft's "Live Mesh" program, which uses the Internet as a data hub, synchronizes files across computers, phones and other devices so a digital picture frame at home could show a picture minutes after it was taken by a cell phone.

Initially the program will be limited to 10,000 U.S. testers and computers running its Windows operating system, but Microsoft said it plans to extend Live Mesh over the next few months to mobile phones, computers from Apple Inc and other devices connected to the Internet.

The project is the brainchild of Ray Ozzie, who replaced Microsoft co-founder Bill Gates as chief software architect, and underscores the company's carefully balanced online strategy, which aims to capitalize on the reach of the Internet without cannibalizing its cash cow software business.

Microsoft, the dominant force in software that runs on a computer's local hard drive, has seen rivals like Google Inc and Salesforce.com encroach on its turf with competitive offerings delivered over the Internet.

"As our industry has evolved because of this Web-catalyzed services transformation, so too has Microsoft," Ozzie wrote in a memo being sent to the company's employees on Wednesday.

Live Mesh embraces the industry trend toward "cloud computing" in which information is centrally stored on Web sites rather than on local devices, giving users easy access from any computer.

Industry analysts said the product may signal a watershed moment within Microsoft to embrace a technology that the company viewed as a threat in the past.

"We may be seeing signs of a Microsoft that is newly focused," said Jonathan Yarmis, a vice president and analyst at AMR Research. "This is exciting because it has as much to do with who is doing it as what Microsoft is doing."

The software will also let friends and colleagues collaborate and share documents more easily. For example, if a shared document is changed on a work computer, those changes will be instantly updated and available on any device or computer that the user has registered with Live Mesh.

Microsoft plans to release Live Mesh in a widely-available test, or "beta" version before the end of 2008.

(Editing by Louise Heavens)

News : Georgia: Russia shot down our drone

Ex-Soviet Georgia has accused a Russian air force jet of shooting down an unmanned Georgian reconnaissance drone over Georgian territory.

Georgia's air force supplied to Reuters video footage which it said was recorded and transmitted by the drone's on-board camera before it was shot down.

No identification markings are visible on the aircraft that fired the missile.

Colonel David Nairashvili, commander of Georgia's air force gave Reuters his assessment of what happened.

News : Nokia signs Sony BMG for free music offering

HELSINKI (Reuters) - Nokia will offer free 12-month access to music from artists of Sony BMG, the world's second-biggest label, to buyers of its particular music phones, the world's top cellphone maker said on Tuesday.

Last December, Nokia unveiled a similar deal for its "Comes With Music" phones with the top record label Universal.

"Comes With Music is expected to launch in the second half of 2008 on a range of Nokia devices in selected markets," Nokia said in a statement.

Nokia gave no financial details.

Sony BMG, home to artists including Beyonce, Bruce Springsteen and Celine Dion, is jointly owned by Sony Corp and German media group Bertelsmann AG.

The new music offering from Nokia -- the first cellphone maker to push heavily into content -- would differ from any other package on the market as users can keep all the music they have downloaded during the 12 months.

Such unlimited download models could offer a shot in the arm to the music industry, which is struggling to find ways to make up for falling CD sales.

Nokia said it expects all top labels to sign up for "Comes With Music" offering.

"We are quite confident that we will have all the labels at the table for Comes With Music. We are progressing in those negotiations," said Liz Schimel, head of Nokia's music business.

(Reporting by Tarmo Virki; Editing by Paul Bolding.)

News : Murdoch leaves door open to joint Yahoo bid

WASHINGTON (Reuters) - News Corp's (NWSa.N: Quote, Profile, Research) Rupert Murdoch left the door open on Monday to a joint bid with Microsoft Corp (MSFT.O: Quote, Profile, Research) to buy Yahoo Inc (YHOO.O: Quote, Profile, Research), a day ahead of Yahoo's quarterly financial report.

In response to a reporter's question about his interest in pursuing a bid with Microsoft for Yahoo, he said "Depends on the deal."

Murdoch also repeated earlier remarks about not having the financial fire power to top Microsoft's bid. "I certainly can't afford to bid against Microsoft (for Yahoo)," he told attendees at a speech he gave at the Atlantic Council, an international affairs group.

The 77-year-old media mogul said Google is gaining influence in the advertising world. "Is Google really going to get control of the advertising world, and should Microsoft be supported in their attempt to try and stop that?" he asked.

Yahoo is expected to report its first quarter results on Tuesday. Strong results could force Microsoft to raise its estimated $43 billion offer, some analysts have said.

Separately, sources have said Yahoo is pursuing a deal to merge with Time Warner Inc's (TWX.N: Quote, Profile, Research) AOL Internet division. Yahoo is also set to complete tests this week with Google Inc (GOOG.O: Quote, Profile, Research) on whether Google should run a piece of Yahoo's Web search ad sales.

Yahoo faces a Saturday deadline to respond to Microsoft, after which Microsoft has said it would launch a proxy battle to unseat Yahoo's board.

(Reporting by Peter Kaplan; Editing by Tim Dobbyn.)

News : Sony to delay "Home" online service for PS3 again

TOKYO (Reuters) - Sony Corp's game unit said on Tuesday it was delaying the launch of its "Home" 3D virtual online community service for the PlayStation 3 game console to autumn of this year, the second such delay.

Sony last year postponed the launch of the "Home" service, which is aimed at giving users a place to interact with other PS3 users, to early this year from last autumn.

As in the "Second Life" virtual world, Home users create online characters or avatars. They can chat with other visitors, play games and customize their own rooms located in the virtual world.

Sony, locked in a three-way battle with Microsoft Corp and Nintendo Co Ltd in the global game industry, said it was delaying the launch to improve product quality, the same reason it cited for the first delay.

"We understand that we are asking PS3 and prospective PS3 users to wait a bit longer," Sony Computer Entertainment Chief Executive Kazuo Hirai said in a statement.

"But we have come to the conclusion that we need more time to refine the service to ensure a more focused gaming entertainment experience than what it is today."

Offering an innovative online service is important for the PS3, which has been running behind Nintendo's Wii and Microsoft's Xbox 360 in total unit sales.

The original PlayStation and PlayStation 2 sold more than 100 million units each worldwide, helping Sony dominate the game industry for a decade from the mid-1990s.

But its latest machine has had a slow start due to high prices and scarcity of strong game titles at the launch.

"I don't get the impression that 'Home' is something drastically new. There may be something hidden that is amazing, but I can't spot it at the moment," Okasan Securities senior analyst Masashi Morita said.

"This delay won't be a problem if it helps them offer something epoch-making, something totally different from the rest," he said.

Shares in Sony closed down 2.8 percent at 4,510 yen, underperforming the Tokyo stock market's electrical machinery index, which fell 2.2 percent.

(Reporting by Kiyoshi Takenaka; Editing by Hugh Lawson)

News : Clinton, Obama sharpen claws

U.S. Democrat presidential rivals Hillary Clinton and Barack Obama attack each other in new campaign ads.

Each has gone firmly on the offensive against the other in new commercials unveiled ahead of Tuesday's Pennsylvania primary.

Paul Chapman reports.

News : Pope prays at Ground Zero

Pope Benedict's visit to the site where the World Trade Center once stood comes on the final day of his U.S. tour.

The Pontiff used the occasion to pray for all those killed in the September 11th attacks of 2001 and for an end to hatred and violence.

Paul Chapman reports.

News : Woman pleads guilty in Craigslist murder-for-hire

SAN FRANCISCO (Reuters) - A Michigan woman who advertised online for a hitman to kill her lover's wife pleaded guilty to the murder-for-hire scheme, prosecutors said on Friday.

Anne Marie Linscott, 49, faces 10 years in prison for each of three federal charges, including intent to commit murder, the U.S. Attorneys for the Western District of Michigan and the Eastern District of California said in a joint statement.

In November 2007, three California residents searching job listings on Craigslist.com found an advertisement for a "freelance" position posted by Linscott, according to court documents. The three job seekers contacted California police.

The defendant asked two of the respondents via e-mail to "eradicate" the victim and provided the victim's name, age and employment address. In one correspondence, she said she was looking for "silent assassins" and offered to pay $5,000 to kill the victim, who was not identified by the court.

"This IS a serious proposition," Linscott said via e-mail. Her account name was "bourne2run."

Linscott, a resident of Rockford, Michigan, met her lover while taking an online college course several years ago. Linscott and the man, identified in court documents only as Duane, carried on a sexual affair, meeting in Reno, Nevada, in 2005 and 2007. They spoke on the phone and corresponded by e-mail, filings said.

As part of a plea deal between the government and Linscott, prosecutors agreed to drop charges she had left an incendiary device outside her rival's house in April 2007.

Sentencing has yet to be scheduled.

(Reporting by Eric Auchard)

News : Web guru targets malaria with social network site

By John Joseph

LONDON (Reuters) - The British entrepreneur who sold a soccer Web site at the age of 17 for $40 million has switched his attention to help launch a social networking site on Sunday designed to fight malaria.

Tom Hadfield set up Soccer.net in his bedroom before selling it to U.S. sports network ESPN, but now hopes the power of sites such as Facebook can curb a disease that kills an estimated one million people a year, many of them in Africa.

"I believe in the power of friends telling friends telling friends," self-styled part-time student and full-time entrepreneur Hadfield told Reuters in an interview.

"Our dream is tens of thousands of people will use social networking tools to build a movement that eradicates malaria."

Now 25 and a fourth-year political science student at Harvard university, Hadfield came up with the idea for www.MalariaEngage.org after a trip to Zambia last summer that gave him a close-up look at the mosquito-born disease.

"Traveling across Africa and seeing the devastation caused by malaria made me realize there was more to life than putting up soccer scores," said Hadfield.

"Everyone I met at an aid project making mosquito nets in Zambia had either lost a child to malaria or knew someone who had."

Hadfield then traveled to Dar es Salaam in Tanzania where he met researchers working on malaria treatments and discovered that their efforts were being held back by a lack of resources.

"It's shocking that thousands of people are dying every day from a preventable disease," said Hadfield, who was honored as Global Leader of Tomorrow by the World Economic Forum in Davos, Switzerland, in 2001.

"When I came back from Africa last summer, a lot of people asked me what they can do to help."

The site encourages people to donate $10 or more to help support seven different research projects in Tanzania, such as developing plants like lemongrass to repel mosquitoes. But Hadfield sees MalariaEngage.org as more than a fundraising tool.

"MalariaEngage.org increases the return on investment of donors by connecting them directly with researchers working on malaria prevention treatment," said Hadfield.

"It's about more than about giving money -- it's about creating connections. By encouraging individual participation and involvement, we will create international communities of common interest. This is the essence of social networking."

The seven projects were recommended by Tanzania's National Institute for Medical Research and once those have been funded, MalariaEngage.org will look to support new schemes across developing countries.

Due to marry in November, Hadfield co-founded the site with health professors Peter A. Singer and Abdallah S. Daar at Canada's McLaughlin-Rotman Centre for Global Health at University Health Network as well as the University of Toronto.

"We feel young African scientists have very good ideas that end up in the dustbin," said Singer. "This is about helping committed young researchers with good ideas to help themselves create a better future."

(Reporting by John Joseph; Editing by Giles Elgood)