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Analysts talk about where the 4 million Excite@Home broadband customers will go if the company shuts down service Friday.

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Microsoft's Xbox video game console is part of a "broader concept," the software giant's Chief Executive Steve Ballmer said Thursday, hinting at an oft-guessed-at strategy by the company to turn the machine into a wired entertainment hub.

Microsoft originally intended to pitch an all-in-one device that could handle games, interactive TV and computer functions, but that concept was slapped down by software makers, Ballmer told analysts at an investment conference in Phoenix.

"We went and said, 'Hey, we have some ideas for an all-purpose box, kind of a PC, kind of a video game machine, kind of a set-top box.' You know what they said? They said, 'Get outta Dodge, we're not going to write software for that thing,'" Ballmer said.

Microsoft's opponents see the European Union's antitrust case as their last, best hope to get tough sanctions against the U.S. software giant for allegedly rigging its Windows software to damage competitors. They had been preparing to make their case next month at a hearing on European Commission allegations against Microsoft, but the company--fresh from settling its U.S. antitrust case--decided to dump that hearing. "There is very little point in reiterating the points you made in writing at a hearing where lots of people are shouting at you," said a Brussels lawyer, who asked not to be identified.

Hours before a bankruptcy court judge is expected to decide the fate of Excite@Home on Friday, analysts are betting that the high-speed Internet access provider's service will not be shut down. Bankruptcy court Judge Thomas Carlson will hear creditors' arguments Friday in San Francisco. Carlson will decide whether Excite@Home has the right to shut down its cable access service and, if so, how long the transition period should be to allow its cable partners to migrate customers to another network. Analysts put the odds at about 35 percent that Carlson will rule that Excite@Home can shut down, leaving 4.1 million customers and cable partners such as AT&T, Cox Communications and Comcast in the lurch.

The possibility that Excite@Home could block service Friday has forced cable companies to scramble to come up with alternative plans for their high-speed Internet access customers. Excite@Home, which filed for bankruptcy last month, said earlier this week that it could shut off its service to cable companies as early as Friday. Sources say Friday's potential end game was forced by creditors who are trying to get AT&T to raise its $307 million bid for Excite@Home. These bondholders fall later in the creditor food chain and are trying to salvage the best return they can, sources say.

US District Court Judge J. Frederick Motz said Wednesday that he would issue his ruling in the Microsoft class action settlement by the end of December, with hearings scheduled over the next few weeks. As reported previously, Microsoft had reached a controversial proposed settlement with most of the 100+ plaintiffs who had launched Windows price gouging class action lawsuits against the company; the $1 billion settlement would see Microsoft supplying refurbished computers and software to the nation's poorest schools. Opponents of the settlement say that it does nothing to address the issues raised by the lawsuits, however, and instead rewards Microsoft by giving it free reign to extend its market domination to the education market.

A new email worm targeting Outlook users is making the rounds on the Internet this week, causing the same sorts of problems as earlier Trojan-style hacks such as SirCam. Dubbed W32/BadTrans-B, the new worm doesn't take advantage of a new Outlook vulnerability, but instead attacks known vulnerabilities that were patched months ago. And though most corporations are protected against this kind of attack, the W32/BadTrans-B worm seems to be causing considerable problems for home users, many of whom aren't aware of the relevant security updates. For this reason, security experts now consider W32/BadTrans-B to be high risk.

Bally Gaming, Compaq, Fujitsu Siemens, National Semiconductor, NCR, Neoware, Olivetti, QuesCom, Retalix, Siemens, VenturCom and ViewSonic Announce Products Based on New Embedded Operating System

Microsoft Corp. today announced at the launch of the Microsoft Windows XP Embedded operating system that more than 15 industry-leading companies have committed to shipping their next-generation devices based on Windows XP Embedded within the first half of 2002. The industry leaders are taking advantage of the latest Windows technologies to build robust, full-featured devices in a variety of areas including retail point of sale, self-service kiosks, thin clients, industrial automation, advanced set-top boxes, gaming and residential gateways.

Microsoft launched on Wednesday a version of its Windows XP operating system for devices such as automated teller machines, cash registers and slot machines. As previously reported, Windows XP Embedded offers hardware makers the opportunity to pick and choose from 10,000 components of the new operating system to help power a range of devices. Among the initial customers of the operating system are Bally's, which is using the software for a new slot machine, and NCR, which will use it in a next-generation ATM.

"These non-PC devices are becoming smarter and much more connected," White said. "That ties in nicely to our .Net vision," he added, referring to Microsoft's effort to allow people to access software and services over multiple devices, including PCs, cell phones and personal digital assistants.

Microsoft Corp. fresh from settling the U.S. government's antitrust case, said on Tuesday it is interested in settling European Commission allegations the company violated antitrust laws in Europe. The U.S.-based company also said it would forgo a December hearing with European regulators on charges it abused the dominant power it holds through its Windows computer operating systems.

"(Microsoft) would welcome an opportunity to meet (with the Commission) to discuss whether there is an amicable way to resolve this," Paris-based Microsoft Associate General Counsel John Frank said in a telephone interview.