It seems kind of strange to have Microsoft, long considered the open source “enemy,” to deliver a keynote at a conference about Linux, but that’s exactly what happened in Boston today. Microsoft Platform Technology Strategy Director Bill Hilf delivered a keynote on interoperability between Windows and Linux and discussed the maturation of the debate between the two operating systems.

He also detailed Microsoft’s own test efforts in its Open Source Software Lab and officially announced the launch of Port 25, the communications and blogging site that gives some additional character and personality to those efforts.

Knowing that he stood at the head of an audience that may not have been particularly enamored of Microsoft, Hilf took every opportunity to make sure the audience knew that he knew what they think about Microsoft.

“This is the first time that Microsoft has ever done a LinuxWorld keynote,” Hilf said. “Hopefully you won’t throw things at me.”

Hilf then detailed the scale and scope that Microsoft’s Open Source Software Lab entails.

“We focus heavily on scenarios that exist between Microsoft and open source and also test in development to see what will happen.”

The lab has over 300 servers and client systems running nearly every Linux, Unix and BSD distribution. Hardware includes IBM’s Power and Sun’s Sparc, as well as x86 based systems.

“We run nearly every operating system there is,” Hilf said. ” Diversity in our lab is super important, so we intentionally make it very complex.”

Beyond just an exercise in running operating systems, Hilf’s group also runs both commercial and open source applications across the lab’s servers.

Hilf noted colloquially that at the entrance to Microsoft’s Open Source Labs, there are three penguins: one with hands over his ears (hear no evil), eyes (see no evil) and mouth (speak no evil).

“Its a reminder that we do technical research, and we don’t get caught up in hype or systems; we deal with technical systems.”

Microsoft’s Open Source Labs efforts are all about helping to figure out interoperability. He noted that Microsoft isn’t all about vendor lock in and there it recognizes there is choice in the market.

“Sometimes we have to compete and co-operate in the same breadth,” Hilf said. “We do that with many partners today including IBM, SAP, Oracle and others.”

Hilf said that the laws of physics do not apply to the software business, and that it is infinitely malleable.

“Standards should be adaptive to market conditions,” he said.

A key to figuring out those market conditions is getting feedback, which is what Microsoft is doing with its Port 25 initiative.

Port 25 is a play on the fact that port 25 is typically used for SMTP (define) for e-mail communication.

The site contains blogs, interviews and technical analysis from Microsoft’s Open Source Software Lab. The goal is to open the feedback loop so that Microsoft can “communicate” better with the open source community.

Hilf expects the feedback will be productive and not like some of the anti-Microsoft arguments of the past.

“I’m very proud to see the evolution of this industry that we’ve done away with the childish squabbling of ‘mine is better than yours,’” Hilf said.

“Commercial and open source can co-exist and it’s a maturation of what’s going on in our industry.”

Amid a flurry of announcements at CTIA today, PayPal officially rolled out PayPal Mobile, calling the SMS payment system the first of its kind.

Then they corrected themselves, admitting there may be some smaller companies with similar services already available.

But they don’t really matter, PayPal said. And analysts agreed.

First introduced last month, PayPal Mobile allows users to send a text to “PayPal” (729725) from their phones and enter the dollar amount they want to send to a particular vendor, charity or user ID number.

PayPal will then contact the mobile user to confirm and complete the transaction.

Forrester Research analyst Sucharita Mulpuru is enthusiastic about the service.

“Conceptually, it’s a great idea,” she told internetnews.com. “It’s the easiest system I’ve seen. Before if you were going to pay on your cell phone, you’d have to get a lot more pieces involved.”

Dana Stalder, PayPal senior vice president of business operations, gushed at praise like that.

“Nobody has really built or offered the product that PayPal is bringing to the market today,” he told internetnews.com, but soon remembered that TextPayMe started offering SMS payments in December.

“I think from a basic function standpoint, there are some similarities [between the two products],” he said.

Then he presented the differences.

“The fundamental difference with PayPal comes in first and foremost with the power of the network,” he said, “[Our] 100 million accounts fundamentally change the utility of the payment system.”

It’s true that TextPayMe does not have 100 million accounts.

“It’s not near 40 million,” TextPayMe spokesperson Phillip Yuen told internetnews.com. “We have a decent amount of users and it’s growing at a nice rate.”

Mulpuru said the disparity in subscriber numbers is enough to make PayPal different.

“PayPal has 100+ million accounts. It’s got eBay. And it’s got that name recognition,” she said.

What’s more, Mulpuru said, 100 million accounts is enough to make a mobile payments system matter.

But right now, they don’t. At least not in the United States. Here, consumers think of their mobile devices as phones alone.

But by offering PayPal Mobile for free, Mulpurua said, PayPal can change those habits.

“They are leveraging their backbone, the 100 million accounts they already have,” she said. “They are getting people used to this technology on a very small scale.”

Exactly, Stadler said.

“I think that [perception] is changing, has been changing, and will continue to change,” he said. “I think that it is great customer-oriented use cases like PayPal Mobile that are going to be the driver behind those changes.”

And that’s something even underappreciated TextPayMe can appreciate. Sometimes it takes a big player with 100 million accounts to change consumer expectations.

“They’ve done some good things,” Yuen said, acknowledging competition. “They’ve actually brought us a lot of attention through this.”

Microsoft unveiled its plans to release a free, mobile version of its SQL Server database at a customer event here today. SQL Server Everywhere Edition is scheduled for release in the second half of this year. The stripped down mobile version of Microsoft’s enterprise class SQL Server database software will be free to download and use. Microsoft also said it plans to embed “Everywhere” in mobile devices by making it part of the Windows Mobile services already includes in many PDAs and other portable computers.

“We’ve had a lot of requests for a lightweight, very small database that can be truly embedded in mobile applications as one file, and we’ve addressed that here,” Illya Bukshteyn, SQL Server Marketing Director at Microsoft told internetnews.com. “It’s pretty unique to have a free database with reporting capabilities and BI [business intelligence] and runs applications.”

SQL Server Everywhere is free to use, but to access or synchronize with a Microsoft SQL Server database users need a client license. Microsoft offers both individual client and per processor licenses.

The real key to SQL Server Everywhere’s growth will be third party applications. Microsoft already offers a free database, SQL Express, released in November. Since its release, Bukshteyn says there has been over two million downloads of Express, and what he called a “booming community” of developers. But the small footprint and mobility of SQL Server Everywhere promises even broader appeal . “We think we’ve taken it up a notch with SQL Everywhere,” said Bukshteyn.

Ron Lichty, VP for product engineering at Forensic Logic, said he was impressed by Everywhere’s potential. Among other applications, Forensic Logic develops database software for police departments.

“For a police officer to be able to open a mobile device out in the field and quickly access the data and analytics he or she needs instead of waiting for a dispatcher would be very valuable,” Lichty told . “Government clients are also going to like the fact that it’s free.”

SQL Server Everywhere will run on any current version of Windows for servers, desktops tablets or mobile devices. It requires only between one or two megabytes of storage, according to Microsoft.

Separately, Microsoft announced its SQL Server AlwaysOn certification program. Essentially, Microsoft said it will certify the high availability features in its database for use by OEMs such as server manufacturers. Those server makers will be able to use the AlwaysOn certification branding in their marketing. Microsoft plans customer roll out announcements at its TechEd conference this June in Boston.

“We’re seeing customers like the NASDAQ stock exchange use SQL Server 2005 for the most demanding applications,” said Bukshteyn. “There’s no work load they won’t trust to it.”

The price of a free citywide wireless network planned for San Francisco may be increased advertising for users.

A patent application filed recently by Google details a method of pushing highly targeted advertising to users of wireless hotspots, and sharing the ad revenue with the wireless service provider.

On Wednesday a San Francisco city commission approved a bid by Google and Internet service provider EarthLink to provide free wireless access throughout the city. The Department of Telecommunications and Information Services will now begin contract negotiations with EarthLink and Google.

What makes the Google patent potentially attractive to service providers is the search giant’s ability to serve up personalized ads. According to the patent, the advertising a wireless user would see is based on the “geographical location of the WAP, an operation of an entity providing the WAP, selected by the entity providing the WAP, and a profile of the WAP.”

In other words, such a system would allow, for example, a bookstore in New York city to push ads for newly published novels that appeal to their local customers, or perhaps even ads that suit the shoppers buying habits as gleaned from his or her customer loyalty card profile.

Providers of wireless hotspots could also sell advertising for stores in a specific vicinity, allowing retailers who run businesses not conducive to wireless use to market themelves.

Technically the process works like this: The wireless access point directs all traffic to Google through a virtual private network. Google’s servers process the information and insert the correct ads into the datastream that is sent to the end user.

The advertising could be displayed on browser’s toolbars, on separate interstitial pages, or as part of the content of a Web page.

The patent states that a Web browser’s appearance could also be altered to display logos or other brand information associated with the wireless access provider. It also notes that customers would be asked to agree to receive the ads in exchange for free wireless access.

According to the patent, which was filed in 2004 and published by the U.S. Patent Office in mid-March, the advertising can be refreshed and changed even when the user is not moving from Web page to Web page.

But Todd Kort, an analyst at Gartner, doesn’t expect to see ads sprawled all over users’ screens. He thinks the Google ad display interface will resemble Google.com, with advertising tucked into a sidebar. Kort also believes that the ads will be targeted sufficiently to make them unobtrusive.

“As long as there is that linkage with the kinds of searches people are doing, it will be tolerable,” Kort said. “I’m no more anxious to see this stuff happen than you are, but it’s probably going to happen, and we’ll have to deal with it.”

He added, “They know that people aren’t clamoring for this so they better not make it too intrusive or they’re going to get complaints. People might even stop using some devices if it becomes a painful experience.”

Greg Sterling, principal analyst with Sterling Market Intelligence in Oakland, Calif., echoed Kort’s thoughts.

“There’s considerable evidence that users are either ambivalent about ‘mobile advertising’ or don’t want it at all,” Sterling said. “Companies are going to need to be cautious and much more thoughtful about mobile marketing than its online counterpart. Users are going to be much less tolerant of advertising on mobile devices that isn’t opt-in or highly targeted to their interests.”

Access to wireless hotspot service is sometimes offered free by businesses hoping to woo customers; hotels, for example, have been in the forefront of offering free wireless access to users. Other providers charge for the service, either by the hour, day or via a subscription plan.

The stated goal of Google’s patent is to allow businesses to offer free wireless connectivity to consumers while still recouping some of the cost of providing said service.

Will the patent be put to use in San Francisco? Google isn’t saying.

“At this point we aren’t sure how we’ll monetize this service,” said Google spokeswoman Megan Quinn.

“Like many companies, we file patent apps on a variety of ideas that our employees come up with. Some of those ideas later mature into real products or services. Some don’t. Prospective product announcements should not be inferred from patent applications.”

“However, like Web search, our goal is to create services that satisfy the information needs of users while also creating new markets for advertisers and local businesses.”

There is something about Punjabi brand of humor that makes it larger than life. From the large volume sales of Khuswant Singh’s joke books, to Jaspal Bhatti’s Laugher Factory to the Santabanta (it is a registered brand!) jokes, the commercial proposition is no laughing matter.

Virtual carnations, memorial messages and tribute songs are some of the online services available to China’s Web surfers too busy on Wednesday to pay proper respects at the graves of their ancestors.As China passes Tomb Sweeping Day — a traditional festival where people pray, offer food and burn paper money at relatives’ graves — authorities are urging people to care for the environment and honor relatives online instead, Xinhua news agency said.

Several cemeteries and funeral companies in China have heeded the call, establishing online memorial halls promising access to relatives within seconds, 365 days a year.

Shanghai Funeral Service Center claims to have had 40 million visits from respectful relatives grateful to pay respects at the click of a mouse since the service was introduced in 2001.

The Qing Ming festival is a public holiday in Hong Kong and Taiwan, and members of China’s parliament have urged the government to reintroduce the holiday after it was scrapped in 1949 when the atheists Communists swept to power.

Online DVD rental company Netflix Inc. on Tuesday sued rival Blockbuster Inc. for patent infringement, asking a federal judge in Northern California to shut down Blockbuster’s 18-month-old online rental service and award Netflix damages, according to a copy of the filing.Blockbuster declined to comment, saying it had not received a copy of the lawsuit.

Netflix, which was founded in 1999, holds two U.S. patents for its business methodology, which calls for subscribers to pay a monthly fee to select and rent DVDs from the company’s Web site and to maintain a list of titles telling Netflix in which order to ship the films, according to the patents, which were included as exhibits in the lawsuit.

The first patent, granted in 2003, covers the method by which Netflix customers select and receive a certain number of movies at a time, and return them for more titles.

The second patent, issued on Tuesday, “covers a method for subscription-based online rental that allows subscribers to keep the DVDs they rent for as long as they wish without incurring any late fees, to obtain new DVDswithout incurring additional charges and to prioritize and reprioritize their own personal dynamic queue — of DVDs to be rented,” the lawsuit said.

The lawsuit says No. 1 U.S. rental chain Blockbuster, which launched its online rental service in 2004, was aware that Netflix had obtained a patent for its business method and was seeking a second, but willfully and deliberately violated the existing patent.

Netflix, which is represented by the San Francisco law firm of Keker & Van Nest, is demanding a jury trial and asks that Blockbuster Online be enjoined from using Netflix’s business method and be forced to pay damages and court costs.

“We felt it necessary to take this action to protect our rights as inventors of the very unique business methods that Netflix offers,” Netflix spokesman Steve Swasey said on Tuesday.

“Netflix created a very unique service, from the dynamic queue, to the idea of letting subscribers keep movies as long as they want with no late fees, to the idea of allowing customers to get new DVDs as soon as they return old ones,” Swasey said.

Since launching its online rental service in August 2004, Blockbuster has poured more than $300 million into setting it up and marketing it.

But a debt load of more than $1 billion and weakness in its primary business of store-based movie rentals forced the Dallas-based company to cut back its marketing investments this year in Blockbuster Online, which has 1 million subscribers, compared with 4.2 million for Netflix.

Shares of Netflix closed down 72 cents to $27.41 a share on Nasdaq before the suit was reported, while shares of Blockbuster fell 8 cents to $3.80 on the New York Stock Exchange.

Wedbush Morgan analyst Michael Pachter, who also is an attorney, said it was unclear whether Netflix’s challenge to Blockbuster’s online service would be upheld by the federal court.

“It’s my opinion that it won’t be,” Pachter said. “Blockbuster detrimentally relied on their silence as consent. If in fact (Netflix) feels so damaged they should have sought injunctive relief before Blockbuster rolled out its service.”

Some might call it an auction to die for, as the Chinese observe their traditional Qing Ming festival honouring the dead.A man in his late 20s in Jiaxing, a city near Shanghai, has attempted to sell his soul on Taobao, China’s top online auction site, attracting bids from some 58 soul-searching buyers before the posting was pulled.

“We reviewed Taobao’s policies and realized we had no specific policy on the selling of souls,” said Porter Erisman, spokesman for Taobao’s parent, Yahoo-backed Alibaba.com. “After reviewing our policies, the posting was taken down last Friday.”

Erisman said Taobao wasn’t opposed to the idea of soul selling online, but wanted more proof that the seller could provide the goods.

“After some discussion, we decided that we will allow the member to sell his soul on Taobao, but only if he can provide written permission from a ‘higher authority’,” he said.

Taobao made its decision as Chinese around the world on Wednesday observed Qing Ming, a traditional holiday where many travel to their ancestors’ graves to clean them and offer gifts to the spirits.

Taobao is no stranger to odd items being put up for auction, with past sale items including advertising space on one member’s forehead.

The firm’s chief rival, eBay, has also hosted its share of strange items for auction, including a second-hand Volkswagen once owned by Pope Benedict and a mangrove island in Florida.

Research In Motion will put such Yahoo Inc. Web offerings as search, e-mail, instant messaging, and news on its BlackBerry devices, and will start rolling out the service in 60 countries in about two weeks, the two companies said on Wednesday.The deal greatly expands RIM’s relationship with Yahoo, the operator of one of the Web’s most-visited sites. Waterloo, Ontario-based RIM is seeking to widen its sales to include everyday consumers and enhance services to its existing, mostly corporate, base.

“Our job is to create a rich user experience for our community so that they want to use Yahoo on it, and hopefully we create such a rich experience for the Yahoo community that they want to buy a BlackBerry and run Yahoo on it,” RIM co-CEO Jim Balsillie said in an interview with Reuters.

The two companies, who already offer a limited Yahoo service, did not say how much the deal is worth, but Marco Boerries, senior vice-president of Yahoo Connected Life, described it as “significant”.

“We have 200 million mail users worldwide, and we’re using that user base of Yahoo to connect them to the premier device today,” Boerries told Reuters.

Parts of the service, including Yahoo’s instant messaging and communications service, will be rolled out to new and existing BlackBerry users over the next two weeks, as RIM starts making it available to 160 carriers in 60 countries.

The Yahoo Go service, which includes real-time access to Yahoo’s community information and content services, will follow later this year, Boerries said.

“This is killer,” Boerries said. “The cool thing about this is that in the same way we now seamlessly connect personal communications, your personal address book to the BlackBerry, we also connect personal information you are already using on Yahoo, like sports, news or weather.”

He warns that it could make the BlackBerry, dubbed the “crackberry” because it is so addictive, even more habit forming.

Some new devices will have Yahoo preinstalled, and existing users will use a bookmark on their BlackBerrys to install the application.

The deal adds to Yahoo’s ongoing program to extend its services beyond the personal computer to mobile customers and into homes.

The California-based company announced a similar deal with wireless phone maker Motorola last year, and is working on others with U.S. phone partners AT&T Inc. and Cingular Wireless.

U.S. lawmakers plan to propose fines of up to $500,000 for violating regulatory principles aimed at preserving consumers’ ability to freely surf the Internet, a senior House of Representatives Republican said on Tuesday.The House Energy and Commerce Subcommittee on the Internet and telecommunications will consider legislation on Wednesday that would authorize the Federal Communications Commission to enforce its principles on Internet network neutrality.

Those principles call on Internet service providers to permit consumers unfettered Internet access and allow them to run any Internet-based applications. The bill would also make it easier for telephone companies to get into the subscription television business.

Content companies like Amazon.com Inc. are worried that network providers like AT&T Inc. and Verizon Communications would create a fast Internet lane for their preferred clients who pay more, while leaving the public on a slower road.

AT&T and Verizon have said they have no intention of blocking where consumers surf on the Internet or the use of Internet-based applications. However, they want the ability to offer private networks for faster services like movie downloads.

Rep. Fred Upton, a Michigan Republican and chairman of the subcommittee, said he worked with Rep. Eliot Engel, a New York Democrat, on the fines provision and will offer it as an amendment to the bill on Wednesday.

“I believe that authorizing the FCC to enforce its broadband policy statement — on a case-by-case adjudicatory basis — is a better framework to ensure that the public Internet remains open and dynamic,” Upton said.

He said adopting more stringent regulations “would have a dramatically chilling effect on broadband deployment and the development of exciting new services.”

Michigan Rep. John Dingell, the senior Democrat on the full House committee, said the legislation would allow companies to control the Internet, calling them “tax collectors”.

“Private tax collectors could single out certain consumers and content providers to pay extra fees,” Dingell said. “They could also single out others for preferential treatment.”

It is unclear whether the legislation will move forward this year, particularly because of the differences. Additionally, the Senate is considering a broader measure that would overhaul more communications laws.

Congress has relatively few work days in 2006 because of the November election, which could make it tough to work out differences between any bills the House and Senate may approve.