Microsoft Corp

The alleged ringleaders of a Chinese counterfeiting gang that sold at least $2 billion worth of bogus Microsoft Corp. software were sentenced Wednesday to prison terms of up to 6 1/2 years, believed to be the harshest penalties yet under China's tightened piracy laws.

Ratcheting up the pressure on Yahoo Inc., a major investor on Wednesday urged the Internet company to sell its Web search business to Microsoft Corp. and proposed a price: $15 billion. Ivory Investment Management, a Los Angeles firm that owns 1.5% of Yahoo's shares, said the Internet company and Microsoft needed each other to stand any chance of competing with Google Inc. in Web search.

Microsoft Corp. cut prices on some models of its Zune music player by as much as 24% amid a stalling economy and competition with Apple Inc.'s iPod. The 4-gigabyte version of the device will cost $99, down from $130, while an 8-gigabyte model will drop to $139 from $150, a spokesman said.

The most recent federal disclosure forms offer a stark reminder of Microsoft Corp.'s mighty Washington presence: The software giant's lobbying tab of almost $2 million for the third quarter alone nearly equaled the amount that rival Google Inc. spent in the first nine months of the year. But Google already has spent more on lobbying this year than it did for all of 2007 as the Internet search company starts to emerge as a formidable player in D.C. lobbying.

Microsoft Corp., a distant third in the search market, has signed a distribution deal with a former foe in a bid to increase its share of search traffic. U.S. Web surfers who are downloading Sun Microsystems Inc.'s Java software will be asked whether they would also like to download a toolbar featuring a Microsoft Live Search box, under the deal announced Monday.

The next version of Microsoft Windows, the software that defines the computing experience for most people, will nag users less than its much-maligned predecessor, Vista. PC users will be able to test the new edition early next year. The world's largest software maker also is making Word, Excel and other key elements of Office -- its flagship "productivity" programs -- able to run in a Web browser. The move is meant to help confront rivals such as Google Inc.

Two years ago, California public schools received an unexpected gift: a grant of $250 million for new computers, software and training. The windfall was part of a $1.1-billion settlement of a class-action lawsuit against Microsoft that alleged the company had plotted to monopolize a portion of the computer industry. At the time, state Supt. of Public Instruction Jack O'Connell said the funds provided "a wonderful opportunity to close the digital divide in many of our schools."

Chaos in the money markets gave Microsoft Corp. an opening Monday to announce that it would take on debt for the first time, launch a new $40-billion stock buyback plan and raise its dividend. The moves indicate that for all the credit problems plaguing the financial sector, cash-laden technology companies with good credit ratings are still borrowing money on favorable terms and otherwise enjoying flexibility. The largest information-technology company, Hewlett-Packard Co.

After six months of fireworks as a takeover battle for Yahoo Inc. raged, the Internet company's annual meeting Friday produced little spark and few questions about the board's controversial decision to spurn Microsoft Corp.'s advances. Despite deep disappointment in the management and direction of Yahoo, investors voted overwhelmingly to re-elect the board, with 85% of ballots supporting Chief Executive Jerry Yang and 80% backing Chairman Roy Bostock.

Microsoft Corp. executives ruled out an acquisition of Yahoo Inc. on Thursday, even as they acknowledged that the Internet company would have provided a needed boost in online search, where the software giant trails leader Google Inc. Chief Financial Officer Chris Liddell told Microsoft investors assembled for an annual day of presentations that the odds of a takeover were "so small as to be essentially negligible," because the two sides continue to disagree about how much Yahoo is worth.