Many developers are reluctant to spend their time and money creating an app for a small and unproved market and he hundreds of thousands of apps that work with Apple or Android devices will not work on phones that use Microsoft’s Windows Phone software.  Adapting the most popular apps to the Windows phone could cost the developers anywhere from $60,000 to $600,000, depending on the complexity of the app.  Google and Apple do not pay developers to make apps.

Holger Luedorf, Foursquare’s head of business development, did not hesitate to say yes when Microsoft offered to underwrite a Windows Phone version of the mobile social network.  Foursquare has engineers developing iPhone, Android and BlackBerry versions of its service, but had Microsoft not offered to pay the company to do the work, Foursquare would “probably not” have developed an app for Windows Phone, Mr. Luedorf said.  He said, “We have very limited resources, and we have to put them toward the platforms with the biggest bang for our buck.  But we are a social network and it is incredibly important for us to be available on every platform.”

Microsoft now has more than 70,000 apps in its app store.  Offerings in the Windows Phone store include big names like Netflix, YouTube, the Weather Channel, Amazon Kindle, and Fruit Ninja.  The Windows Phone store also has a version of Angry Birds, but not the sequel, Angry Birds Space, which has also been very popular.  A number of popular applications are missing from the store, including streaming music service Pandora; Instagram, the photo-sharing application; and Zynga games.

The company reported net income of $6.62 billion for its second quarter, a decline from $6.63 billion for the same quarter a year earlier.  The anemic results were attributed to weak economic conditions and shortages of hard disks caused by flooding in Thailand.  The company continues to profit from its core products, like Windows and Office.

The company reported a revenue increase of 5% for the quarter, rising to $20.89 billion, but revenue from Windows fell 6%, to $4.74 billion for the quarter.  Microsoft’s earning results beat the expectations of Wall Street analysts but the revenue results fell short of the analysts’ forecasted $20.93 billion.

Pacific Crest Securities analyst Brendan Barnicle said most analysts were bracing for poor Windows sales but the actual numbers were worse than most expected.  He commented, “We were negative 4 percent and they still missed.”  According to the International Data Corporation, this is the worst showing from the industry since 2001.

Redmond, Washington-based Microsoft has struggled to adapt to the considerable changes that have occurred in the technology industry over the past few years.  The company must now create innovative new products for newer mobile technologies such as smartphones and tablet computers.  Microsoft has software products for mobile phones and tablets that are winning positive early responses from the technology industry but they have not yet begun to produce big sales for the company.

Its redesigned mobile operation system, Windows Phone, was released in the fall of 2010, but smartphones using the operating system were bland and did not have enough support from wireless carriers.  Microsoft is betting that a partnership with Nokia will help turn around its mobile business and make its smartphones competitive with rivals like Apple’s iPhone and smartphones based on Google’s Android operating system.

HTC, which supplies phones to all four major carriers in the US is leading the pack with an unnamed phone making a splash on AT&T’s network with an as-yet unnamed phone that will be the first in the country to feature a 16-megapixel camera. While this new feature might not have much practical use (more megapixels doesn’t necessarily improve picture quality) this staggering new statistic should help further convince consumers that smartphones can be used to replace point-and-shoot digital cameras much like they replaced traditional MP3 music players.

Microsoft will also release two phones in the first half of 2012 on AT&T’s network and came on stage during their CES presentation to re-affirm their newfound partnership with the carrier. These phones also haven’t been named and details were scant, but more should be revealed during Microsoft’s presentation at CES.

Rounding out AT&T’s lineup are phones from Samsung, Nokia and Pantech. At&T also announced that it will begin selling a low-cost Pantech tablet bundled with a phone from the same brand. This tablet will be the first waterproof tablet and will be sold for $250 when bundled with the Burst smartphone.

Though AT&T continues to lose market share, they seem confident that new hardware and network improvements (AT&T recently finished a $20 Million network upgrade) will keep current customers happy, and perhaps lure a few customers away from market leader Verizon.

Messagenet, an Italian competitor to Skype, had asked that the deal be blocked unless Microsoft opened Skype’s 124-million user network to competitors.  In voicing no objections to the deal, Mr. Almunia chose not to act on the complaint.  According to a statement by his office, the commissioner said he was approving the purchase “because the deal would not significantly impede effective competition.”

The commission concluded that, in the consumer communications business, Microsoft and Skype overlapped only in video communications, offered separately by Microsoft through its Windows Live Messenger program.  The commission found no competition concerns in the growing consumer communications market where, it said, numerous players, including Google, are present.  Skype had only “a limited presence” in the sale of Internet communications to businesses and did not overlap with Microsoft’s Lync Internet communications software.

Microsoft’s distribution of Skype through its Windows operating system could improve the image of Internet calling and, with Skype’s huge user base; Microsoft will be able to significantly expand the availability of low-cost Internet telephone service.  This will position Microsoft as a direct competitive threat to Cisco Systems and Avaya, the two largest companies selling Internet-based telephone service software for businesses.  Whether Microsoft will be able to generate a profit from the purchase of Skype remains unclear, but some experts believe that direct revenue is not the main reason for the purchase.

This will not be the final antitrust hurdle for the transaction.  Regulators in Russia, Ukraine, Serbia, and Taiwan are still deliberating on whether to approve the deal.  The U.S. Federal Trade Commission voiced its approval of the transaction in June.

Bringing on-demand and live television content to the Xbox is not expected to replace the set top cable boxes and satellite dishes that most households use to access television programming, but is expected to be very beneficial to families that would like to be able to access television content from different rooms in the home.  If the family has an Xbox, they will not need to obtain, and pay a monthly fee for, an additional set top box.

In order to access the content from their Xbox, the individuals will need a subscription to Comcast or one of the other pay-TV services and, in some cases, will need to purchase a subscription to the Xbox Live Gold online service at a cost of $60 per year.  HBO shows will be available, but the subscriber will still have to pay for them.

Verizon will be bringing a selection of live television channels to the Xbox through Verizon’s FiOS service.  The device is already capable of streaming Netflix content and offering television content brings something extra to the Xbox experience.  The partnership allows Microsoft to promote the Xbox 360 as more than a gaming device and places it in a better position to take on competitor devices such as the Nintendo Wii and the PlayStation 3 by Sony Corp.

Since the introduction of the Xbox 360 console in 2005, nearly 55 million units have been sold and around 35 million members have signed up for Xbox Live.  The new content for the Xbox 360 will be available beginning this holiday season, although an exact date has not yet been announced.

In addition to the request that Microsoft be forced to unbundle Skype from Windows, the complaint also requests that European competition authorities require Microsoft to open Skype’s internet phone network to the services of rivals.  This would be accomplished by requiring Microsoft to disclose confidential computer coding, enabling rival services to connect calls to Skype users.

Legal experts have differing opinions on whether the complaint, filed by Messagenet, a Milan-based rival to Skype internet’s phone service, would cause difficulties or prevent European support of the deal.  Arguments such as these have been levied at Microsoft in Europe for close to two decades and, in past years; the European Commission has been sympathetic to complaints about Microsoft’s strategy of bundling applications that are popular with its Windows systems.

Denis Waelbroeck, an antitrust lawyer at Ashurts in Brussels, commented, “These types of complaints from competitors are to be expected.  I would expect that the commission will look at this seriously, but I think that in the end, the officials will reach their own independent decision. This doesn’t mean the complaint will be upheld.”

A decision on the acquisition will reportedly be made public on Oct. 7 by E.U. competition commissioner Joaquin Almunia.  A spokeswoman for Mr. Almunia, Amelia Torres, said the commission considers every submission from competitors in antitrust cases, but declined to comment specifically on Messagenet’s complaint.  Mr. Almunia’s office approved Microsoft’s takeover of Yahoo’s search business in February 2010.

Microsoft may try to delay an immediate decision and obtain more time by making a request for an extension to prepare an answer to the complaint.  Jesse Verstraete, a spokesman for Microsoft in Brussels, said, “The proposed acquisition is still undergoing regulatory review and we are working closely with the agencies.  Until all regulatory approvals are obtained, it is business as usual at Microsoft and at Skype.”  Skype’s internet phone network had 124 million regular users in June 2011.

In response to Google’s recent increase in efforts to dominate the display advertising market, executives with Microsoft, Yahoo, and AOL met in a private meeting in Manhattan to discuss a plan of action.  Officials from the three technology companies and executives from the advertising industry that created the deal are hoping to draw other online publishers into the partnership to sell advertising for one another.  The projected display advertising revenues for Microsoft, AOL and Yahoo combined would total $2.7 billion.

If the partnership is successful, it would reduce the need for third-party ad networks to sell the less desirable advertising spaces on their websites.  The deal between the companies focuses on the sale of remnant advertising inventory, the cheap ads that run at the bottom of web pages or secondary pages.  This advertising space is traditionally sold by third-party ad networks, but selling the ads for each other would allow the companies to deal directly with ad agencies, gain more control over the advertising on their websites, and increase their advertising revenue substantially.

Online publishers are relying heavily on private exchange technology, giving the publisher more control over the data collected on their users.  The partnership deal by Microsoft, Yahoo, and AOL attempts to replicate the growth of the private exchanges and gives advertising agencies and media buyers a single place to purchase advertising space for each of the three companies’ websites.  This will allow the companies to offer advertisers accurate targeting, good pricing, an extended reach, and brand safety.

The new operating system includes features that are specifically designed to be used with tablets and touchscreens and was installed on tablets powered by Intel Corp i5 chips.  Microsoft hopes that the new software system will appeal to developers and encourage them to create the thousands of applications needed to lure a young, technologically savvy audience to its devices.  Michael Silver, an analyst for Gartner who was attending the developer conference, commented, “Kids today are seeing more Apple logos than Microsoft logos, and Microsoft needs to change that if they are going to continue being the force that they have been.”

Microsoft intends for the new operating system to decrease the tide of consumers switching to the iPad, made by rival Apple Inc.  Microsoft’s software applications are currently used to run more than 90% of the personal computer market, but the company has been steadily losing market share to Apple and its line of innovative tablet computers.  Microsoft also wants to attract the established applications development community that has been so successful at creating unique applications for Google’s Android and Apple’s iOS software platforms and has made the process simpler for developing applications for Windows 8 in a variety of computer languages.

Windows 8 is considered to be an improvement on Windows 7, using less memory to run and booting up in seconds.  The software features a home page with colorful tiled shortcuts that take users directly to the applications they prefer, including Facebook, news feeds, or messaging applications.  Developers worldwide can download a preview of the new operating system from Microsoft and tablet computer manufacturers are expected to begin selling tablets running the new software system by summer of 2012.