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Microsoft Corp. picked two well-respected technical minds to fill the void from founder Bill Gates’ pending departure in two years, but it also identified a next tier of leaders charged with reinventing the software giant to compete against younger, agile rivals.Grabbing headlines in Thursday’s announcements were Ray Ozzie, 50, who assumes the company’s top technical mantle as chief software architect, and Craig Mundie, 56, who takes over some of Gates’ role as long-term visionary.

But Microsoft also tapped a next tier of technical talent in J Allard, Steven Sinofsky and Bob Muglia — executives in their 30s and 40s — to play a larger role in shaping the company’s future business and technology strategy.

Analysts said all three have won the respect of Microsoft’s rank-and-file programmers with deep technical knowledge and an understanding that technology improvements cannot come at the expense of delays to new products, a problem that has plagued the company’s mainstay Windows division.

“They have really good technical minds and really good experiences about what kind of decisions you have to make in order to ship a product,” said Rob Horwitz, an analyst at independent research firm Directions on Microsoft.

“Those are the guys with their feet on the ground and not as much pie in the sky.”

An ability to ship new products in a timely manner seems all the more important in light of investor perceptions that Microsoft has been outmaneuvered by aggressive and more agile competitors like Google Inc. and Yahoo Inc.

“Microsoft is at a crucial inflection point,” said Jupiter Research analyst Joe Wilcox. “The technologists are important for the company’s future.

The decision by Gates to step back from Microsoft in two years follows longtime Windows guru Jim Allchin’s plan to retire after Windows Vista ships in 2007, representing a changing of the guard at the Redmond, Washington-based company.

“The world has had a tendency to focus a disproportionate amount of attention on me. In reality, Microsoft has always had an unbelievable strong depth and breadth of technical talent,” Gates said at a news conference on Thursday.

WHO’S NEXT

Sinofsky, 40, earned his stripes as the head of product development for the Microsoft Office business software team, gaining a reputation as a tough taskmaster with an ability to meet targeted release dates.

Earlier this year, he took on the role of leading the team of developers creating the next version of Windows after Vista. Sinofsky’s responsibilities include integrating the operating system with a set of Windows Live Web-based services.

Allard, 37, gained prominence with a note he sent to Microsoft leaders about the looming importance of the Internet, which became the basis for the company’s change of strategy to embrace the Internet in the mid 1990s.

An avid video game player, Allard now oversees the engineering and design of the Xbox game console. He pushed Microsoft into online gaming well before rivals Sony Corp. and Nintendo Co. Ltd.

Muglia, 46, has the longest track record of the three at Microsoft, having joined the company in 1988. As the senior vice president of Microsoft’s server and tools business, Muglia needs to keep outside developers happy with its tools and technology professionals using its servers.

All three executives were already considered stars in the company, but analysts said granting them more say over strategy and keeping them happy and motivated is a smart move.

Navigating government bureaucracy is not easy, but it may become faster with Google Inc.’s new search site for U.S. federal, state and local government.Google U.S. Government Search, http://usgov.google.com, was launched on Thursday by the search leader.

Google said the site should make finding U.S. government information easier for government employees and contractors. For example, a search of the word “highway” on the site returned links to the Federal Highway Administration and the California Highway Patrol.

Another for “Iraq” returned links to Library of Congress documents and The World Factbook, a collection of country profiles published annually by the Central Intelligence Agency.

The site can be personalized and also offers news from the White House, the armed forces and even provides a weather report for Washington, D.C.

It is the latest in a series of specialized content sites developed by Google, which launched a search engine devoted to Shakespeare on Wednesday.

Al Losey, a corporate trainer at a Detroit auto parts maker, lost his job six weeks ago in what could be another down-and-out story from a hard luck corner of the American economy.Instead, Losey, and his wife Peggy, a devoted part-time seller of odds-and-ends on eBay, flew to Las Vegas this week trying to change their fortunes by hitting the jackpot as full-time sellers on the online auction site.

They joined thousands of other hopefuls who made the pilgrimage to eBay Inc.’s annual user conference to learn how 1.3 million people worldwide support themselves, in whole or in part, through online auctions.

“This is a great opportunity to kind of do our own thing,” said Al, who, after being downsized from two jobs in the auto industry in six years, is ready to join his wife of 35 years in building a small business online.

“We’ve had it with corporate America,” says Peggy. “I’m tired of relying on other people,” echoes her husband.

Since 1998, she’s created a sideline to her day job as a medical assistant by scouring garage sales for items many people might consider junk, but collectors on eBay covet. Now, the couple are gearing up to become full-time eBay sellers.

“No more mom-and-pop operation. It’s time to move up to the next level,” Al enthuses during a break in courses on how to incorporate a small business and become trading assistants by helping manage other people’s eBay sales.

The middle of Middle America — retirees, stay-at-home moms and school teachers — are learning how to support themselves by the detailed work of turning items they buy on the cheap into profitable sales.

EBay sellers are protected from what to outsiders might seem like the latest in a long line of get-rich-schemes because they control the sale price and how payments are received, minimizing the risk of fraud.

TURNING JUNK INTO GOLD

Trainers at the event estimated there are 12 million eBay sellers, including those who sell the occasional unwanted item on eBay’s vast market. EBay recently signed up its 200 millionth registered user worldwide.

“It’s pretty much my life,” says Nancy MacGillivray, 49, of San Marcos, California. She turned to eBay four years ago, after her employer went bankrupt.

Her schooling 30 years ago in fashion merchandising came in handy. She sells extra large-sized clothing for young people under the eBay seller name Plus Size Fashions and More.

Her daughter, Kristi Roller, 22, a fashion student, started out helping her mother, but now runs her own eBay business, called KLR Couture, which specializes in clothing for juniors.

MacGillivray says she sells 35 to 50 packages of clothing a day, which at an average price of $20, translates into around $700 to $1,000 in gross sales. Among eBay sellers, she ranks as No. 8,904 in volume, company figures show.

“Last year it started to feel like a real business,” Nancy says. “But I’m still waiting to hit the jackpot.”

“You’re happy, mother. Don’t be greedy,” chides Kristi

Peggy Losey believes she hit the jackpot three weeks ago, when she found some old plates shaped like lettuce leaves. She recognized the markings a type of Majolica pottery she’d seen on an antiques television show.

Because they had tiny chips on the edges, she paid just $10 for 15 pieces. When listing the items for auction on eBay, she acknowledged the defects, fearing the wrath of buyers and the harm to her all-important user feedback rating if she did not.

She auctioned off the plates for $1,419. Coming just weeks after her husband’s lay-off, it amounted to winning a jackpot.

“I was just running around the house yelling, ‘Oh, my God! Oh, my God!’”

Christian Godfrey is more sanguine about eBay.

“There is no jackpot,” Godfrey said. “It’s just another way to sell.”

Still, he drove 12 hours with his wife, Kathy, 37, from their home in Idaho Falls, Idaho. The 39-year-old teacher of Web site development at a technical college has been on eBay since 1998. He says he sells $2,000 a month of merchandise, mostly home furnishings.

“Everyone thinks that people can sell junk on eBay and make lots of money,” Godfrey said. “It’s way more work than people let on,” he said between checking on inquiries. “That’s the problem,” he says. “You are on call all the time.”

Skype, the Web telephone company, said on Monday it would allow consumers in the United States and Canada to make free phone calls, a promotional move that marks a new blow to conventional voice calling services.The offer, which extends through the end of 2006, covers calls from computers or a new category of Internet-connected phones running Skype software making calls to traditional landline or mobile phones within the United States and Canada.

Previously, users of Skype, a unit of online auctioneer eBay Inc., were required to pay for calls from their PCs to traditional telephones in both countries. Calls from North America to phones in other countries will incur charges.

Skype already offers free calling to users worldwide who call from computer to computer.

The company is seeking to accelerate usage in the North American market, where adoption of its voice-over-Internet technology has lagged other regions of the globe. Based in Luxembourg, it counts more than 100 million registered users globally, including 6 million in the United States.

Henry Gomez, general manager of Skype North America, said he believes the move would rapidly accelerate adoption of the service. Skype will pick up the interconnection costs of making calls to phone networks owned by other carriers, he said.

“Skype anticipates that completely free calling in the U.S. and Canada will expand Skype’s increasing penetration in North America and solidify Skype’s position as the Internet’s voice communication tool of choice,” Skype said in a statement.

The offer is likely to put price pressure on rival voice-over-Internet phone service Vonage Holdings Corp., which is expected to go public later this month. A spokesman did not return calls seeking comment.

Although Vonage and Skype serve somewhat different markets — with Vonage acting as a full replacement service for traditional phones over Internet lines, and Skype considered by most as a complement to existing service — the free offer could siphon customers away from Vonage.

“In one stroke, Skype simplifies the choice to try Skype,” said Phil Wolff, an editor at Skype Journal, an independent consulting group that publishes an online news site on Skype developments. “This promotion targets Skype’s hardest market: North America.”

The move puts pressure on rival Internet services such as Microsoft Corp., Yahoo Inc., AOL, Earthlink and Google Inc., which charge small per-minute fees for computer-to-phone services, Wolff said.

Skype, which allows free Web-based calls between members, said the offer to U.S. and Canadian consumers is made feasible by the low cost structure of North American telecom markets relative to other countries, where phone tariffs are higher.

“The structure and efficiency of the telecommunications industry in the U.S. and Canada make it possible for Skype to offer free calls,” Skype said on its Web site.

In October, eBay CEO Meg Whitman signaled that Skype users could eventually expect to make telephone calls for free, with no per-minute charges, as part of a package of services through which carriers make money on advertising or transaction fees.

“In the end, the price that anyone can provide for voice transmission on the ‘Net will trend toward zero,” she said.

The company is betting that by combining electronic markets, online payment systems and Web-based communications, eBay can emerge as a leader in all three businesses.

Gomez said the free phone service promotion will not alter the company’s plans to generate more than $200 million in revenue during 2006, up from roughly $60 million last year. Skype will promote the offer via online advertising, radio spots and ads in selected local cable TV markets, he said.

Yahoo today said it plans to roll out a redesigned search advertising platform, which spokeswoman Gaude Paez said will help Yahoo compete with rivals Microsoft and Google.

The platform is the transaction point between Yahoo and its advertisers who buy space next to search results. Yahoo said the new simplified platform will mean advertisements will hit the Web faster than ever before.

The company will also help advertisers by rotating multiple versions of ads and, over time, adjusting the rotation times so that the ones generating the most clicks go up more frequently.

Yahoo promised the new service will automatically help users find the least expensive way to maximize their “Return on Ad Spend” and “Cost Per Acquisition.”

The platform will also track the full value and contribution of every ad campaign by allowing advertisers to see beyond the last click that led to a conversion.

Analysts say the new platform will help Yahoo leverage its millions of registered users by helping advertisers target specific audiences.

That’s the idea, Paez told internetnews.com.

For example, she pointed to Whereonearth, technology Yahoo acquired last October, which will be included in the new platform.

Paez said Whereonearth understands colloquial descriptions of geographic locations, such as “restaurants near Fenway,” thus helping marketers target specific local audiences.

“We decided to move forward with enhancing our geo-targeting capabilities,” Paez said, “because that’s what we heard from advertisers was on the top of their list.”

And that’s why the new platform is a good move for Yahoo, Forrester Analyst Shar Vanboskirk told internetnews.com.

She said that by helping marketers target specific audiences, Yahoo can close its Google gap.

Google dominates in terms of revenue dollars and the sheer number of consumer searches, Vanboskirk said.

“But Google is a little bit behind in terms of its consumer data stores. Yahoo has a lot of information about its users because a consumer on Yahoo uses a myriad of different properties. They store all of that information to get a really deep profile.”

Yahoo’s announcement comes a week after MSN announced adCenter, a competing advertising platform for its own search engine.

Like Yahoo, MSN trumpeted the demographic-targeting capabilities of its new platform.

Previously, Microsoft depended on Yahoo’s Search Marketing for its advertising revenue.

But Paez said the timing of the announcement was meant to coincide with the release of application program interfaces (API), which are building blocks of code for third-party developers.

Though the platform will not be online till the third quarter of this year, Yahoo “needed to give the ecosystem adequate time,” Paez said.

Two partners introducing competing products in consecutive weeks isn’t so strange in an Internet ad industry that grew by 30 percent last year.

Apple Computer is not liable for trademark infringement against Apple Corps, the music company owned by the Beatles, a judge in London’s High Court ruled on Monday.Apple Corps, owned by Paul McCartney, Ringo Starr, John Lennon’s widow Yoko Ono and the estate of George Harrison, argued the computer company has violated a 1991 trademark agreement by moving into the music business through its market-leading iTunes online store.

Apple Computer argued in court hearings in London earlier this year that iTunes was primarily a data transmission service, permitted by the agreement.

The 1991 out-of-court settlement, which included a $26 million payment by Apple Computer, set out areas in which each party would have exclusive use of their respective fruit-shaped logos.

Intel Corp. said on Tuesday it plans to spend $1 billion to promote Internet use and computer training in developing countries, the latest move in the No. 1 chip maker’s effort to break into new markets.The program, which Intel has dubbed “World Ahead,” aims to bring high-speed wireless Internet access to 1 billion people who can’t get online, while training 10 million teachers to use technology in education.

The Santa Clara, California-based company said it would back those goals with $1 billion of spending over five years.

“Decades of providing technology in growing volume and at decreasing costs have driven great gains for developing nations, communities and people worldwide, but there is still much to do,” Intel chief executive Paul Otellini said in a statement.

Otellini is expected to give details of the initiative at a technology conference in Austin, Texas, on Wednesday.

The program includes Intel’s ongoing effort to promote cheap PCs that it hopes will find enthusiastic buyers among schools and villages in developing countries where most people cannot afford to buy their own personal computers.

It also extends Intel’s push to popularize a new wireless technology called WiMax, whose fast speed and long range has led many companies and industry groups to think it is ideal for poorer regions.

Intel, which makes the microprocessors that power the vast majority of personal computers around the world, has grappled with slowing growth in PCs as wealthy markets in the United States, Europe and Japan become saturated.

Microsoft Corp. scored an important win against rival Google Inc. over the weekend, as Amazon.com began using its technology to power the Internet retailer’s A9 search unit.Microsoft’s new Windows Live is at the core of the company’s efforts to win online advertising dollars away from Google Inc. and Yahoo Inc.. A9 had previously been powered by Google.

Amazon’s search engine, A9, breaks down searches into various categories, such as Web searches, book searches, and blog searches. It is a stand-alone search site, www.a9.com, as well as the search technology used on the www.amazon.com Web site.

A9 Chief Executive David Tennenhouse told Reuters that Windows Live presented a “very interesting, powerful Web search option” that had previously been featured on the A9 site.

Tennenhouse said the Google search was removed from the site on Sunday, following the expiration of that contract. He would not comment on the terms of the Microsoft deal, or whether a new contract with Google had been an option.

Microsoft’s new search engine and user interface consolidates a variety of the software giant’s Web services such as search, e-mail, instant messaging and security at its Live.com site.

Senior product manager at Microsoft’s MSN Internet unit, Justin Osmer, confirmed that Google’s contract with Amazon.com had expired, but did not elaborate on what was behind the switch.

“It’s another opportunity to reach a new segment for us and get people acquainted with the Windows Live search brand,” Osmer said.

Google and Yahoo built multibillion-dollar businesses supported mainly by online ad sales from search, while Microsoft lagged behind. But Microsoft now aims to close the gap with Windows Live and a new pay-per-click advertising system called adCenter.

“We view this as more of a marathon than a sprint,” said Osmer.

MSN’s search engine lost market share again to Google and Yahoo in March. Its U.S. share fell to 11 percent from 14 percent, while Google and Yahoo each gained, rising to 49 percent and 22 percent of the search market, respectively, according to Nielsen//NetRatings.

Google did not return a phone call seeking comment.

Nick Lachey and Jessica Simpson are back together. In the wireless world, anyway. Both are participating in a new mobile blogging service offered by Sprint called BlogStar, which also counts Wesley Snipes, the Game and Bam Margera as contributors. The rich and famous stars are documenting their lifestyles with camera phones and posting pictures, text and, eventually, video to their personalized mobile blogs. Access to each blog costs $5 per month. Subscribers receive alerts when new posts are uploaded, to which they can leave replies as well as discuss content with other subscribers. It’s just one example of how the blogging and social networking that have taken the Internet by storm are going wireless. At a time when ringtone and wallpaper image sales are beginning to flatten, the music industry is looking for new mobile revenue streams and promotional opportunities. MySpace has a tremendously strong impact on the music industry, and now the pieces are in place for a wireless version to do the same. BlogStar CEO Keith Yokomoto — founder of the original ArtistDirect service — says he and ArtistDirect co-founder Ted Field formed BlogStar to better capitalize on MySpace’s promise. “Just imagine if 100,000 of your fans were all connected,” Yokomoto says. “You send out a blog that goes straight to their cell phone, and you’ve got an army of folks out there blogging back in real time. How powerful is that?” On paper, the marriage of blogs and mobile phones seems like a perfect match. Everyone seems to have a mobile phone, and increasingly these devices have photo and video cameras included. Supporters say the ability to blog on the fly rather than hold off until reaching a computer adds a more intimate, real-time element to the experience.

Yet mobile blogging is no slam-dunk. Camera phones may be ubiquitous, but only the most expensive actually take decent pictures, and video phones are even more expensive. What’s more, carriers face a herculean task in convincing subscribers — who for years have been trained to view their mobile devices as a tool for making voice calls — to start thinking of their phones as a mobile computer.

Companies like Text100, MyMMSBlog.com and SMS.ac pioneered the mobile blog space by providing wireless subscribers a means of posting camera phone pictures and text messages online. But their services never grew much beyond their novelty factor.

Sprint’s BlogStar service is one of many attempts to put a recognizable face on mobile blogging to generate interest and awareness among mobile phone subscribers — in this case by relying heavily on star power.

In the last two months, however, the 800-pound gorillas of the online social networking scene began muscling their way into mobile as well. In March, MySpace — by far the most influential service, with 36 million unique visitors and more than 60 million members as of March — struck a deal with startup youth-oriented wireless operator Helio. Users will be able to update their MySpace profiles with text and photos, as well as access the profiles of others, from their mobile phones. It’s expected to go live later this spring.

At the CTIA Wireless 2006 industry conference in early April, MySpace rival FaceBook — with about 10.5 million monthly unique visitors — rolled out a mobile extension to its service with Cingular, Sprint and Verizon Wireless. Members initially will only be able to post text updates to their FaceBook profiles, with photos expected over time.

Others are following their lead. Intercasting’s Rabble mobile blog service now runs on Cingular and Verizon Wireless, which charge subscribers $3 per month to join. Los Angeles-based startup Juice Wireless launched its Juicecaster blog service at CTIA as well. Unlike online blogs now creating wireless extensions, Juicecaster was built from the ground up to integrate online and wireless posting and access.

Buzznet has been doing the same for the past two years, and recently won a contract with concert promoter Goldenvoice to power the integrated online and mobile social networking site of the upcoming Coachella music festival in Indio, Calif.

Wireless operators could not be more thrilled. The wireless industry has long believed that the successful mobile content and applications will be those that best take advantage of the communication elements of wireless. For years, the industry has been throwing everything it had at consumers to see what would stick.