Ballmer on Bing, Xbox, Apple...oh, and Yahoo, too

Steve Ballmer at the 2011 Web 2.0 Summit

SAN FRANCISCO--Microsoft CEO Steve Ballmer isn't one to mince words, and he certainly offered many candid opinions while speaking at the Web 2.0 Summit this evening.

Here's a rundown of Ballmer's thoughts on a number of topics involving Microsoft and its competitors:

Bing
Bing still has a small slice of the search market share pie, but Ballmer stood strong that Bing has seen a nice rise in the last few years.

"We went from the number three player to the number two player," Ballmer said happily, attributing part of that rise to the search deal with Yahoo.

Ballmer challenged audience members to test searches between Google and Bing, positing that Bing "sets the foundation" reestablishing the search category.

"The core notion in Bing is about understanding the world in a variety of different ways," Ballmer said, explaining understanding extends to geography, time and people while respecting their privacy.

Xbox Live
Although the shift in conversation might have been unintentional, Ballmer stated that Facebook "defines social," but that there are many aspects that need to be addressed in helping people communicate with the people they love.

Xbox Live, for example, is different, but it seems highly social--as well as valuable--to Ballmer.

"You want people to be able to connect with each other. You want them to be able to have an identity," Ballmer said, adding that Xbox Live personas can be connected to Facebook, LinkedIn and other social networks that focus on user identities.

Kinect, in particular, has proven to be a huge success for Microsoft, basically breathing an entire new life into the Xbox 360 console with new powers for everything ranging from social to education.

This holiday season, Ballmer said we can expect a whole lot more innovation revolving around Kinect and Xbox Live.

The Cloud
"We're all in," Ballmer said simply. But that didn't stop him from naming Microsoft's chief rival in this field: Google. But Ballmer made it seem that the Goog presents competition mainly when it comes to cloud-based apps more than anything else.

"Apps is the leading edge. Customers are far more mature about accepting apps in the cloud than platforms in the cloud," Ballmer argued.

Windows Phone 8
John Battelle, founder and chairman of Federated Media Publishing, asked Ballmer during the sit-down interview to sell him on why someone should buy a Microsoft device over an Apple product.

Focusing on smartphones, Ballmer said that consumers are going to see two phones this holiday season (without specifying either). Besides seeing first-rate, beautifully designed smartphones on the outside, he argued that they'll find something much more enticing with Windows Phone 8 when they can grab the phone, use it, and realize the notion of putting your information front and center.

"It's not seas of icons. Add a button. Click," Ballmer said. "Bing is there to help you get things done."

Apple has done nice things with Siri, Ballmer conceded, but he argued that technology touches on projects Microsoft has been working on for years.

Yahoo
One topic that Ballmer wouldn't offer a direct response about was Yahoo--especially as the Redmond, Wash.-based corporation is announcing quarterly earnings on Thursday.

"You can ask me that question any week and get the same answer," Ballmer replied, about whether Microsoft was interested in buying Yahoo again.

When asked how he felt about not buying Yahoo before, he replied coyly that any company, in retrospect, would be happy that it did not make a huge acquisition right before the economic downturn started in 2008.

Ballmer concluded, "Sometimes, you're lucky."

This item first appeared on ZDNet's Between the Lines blog.

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Microsoft halts another botnet: Kelihos

Microsoft has put a halt to the Kelihos botnet and is accusing a Czech resident of hosting the botnet and using it to deliver spam and steal data, the company said today.

Kelihos, also known as "Waledac 2.0" after a previous botnet that Microsoft shut down last year, comprised about 41,000 infected computers worldwide and was capable of sending 3.8 billion spam e-mails per day, according to Microsoft.

The complaint filed last week in the U.S. District Court for the Eastern District of Virginia accuses Dominique Alexander Piatti, Dotfree Group SRO and John Does 1-22 of infecting victim computers with malware to create the Kelihos botnet, using it to send unregulated pharmaceutical and other spam, harvest e-mails and passwords, conduct fraudulent stock scams and, in some cases, promote sites dealing with sexual exploitation of children.

Meanwhile, subdomains were allegedly used to infect Mac computers with MacDefender scareware, according to the complaint. Piatti could not immediately be reached for comment.

In addition to filing complaints, Microsoft also is using a relatively new tactic of filing restraining orders to get court permission to sever the connections between the botnets and the individual infected computers, known as "zombies." This stops the botnet from continuing to operate and grow.

Microsoft also plans to work with ISPs and Community Emergency Response Teams (CERTs) to help clean up computers that were infected and used in the botnet. As part of that process, the Microsoft Malware Protection Center will add the Win/32 Kelihos family in a second release of theMalicious Software Removal Tool later today.

"Without a domain infrastructure like the one allegedly hosted by Mr. Piatti and his company, botnet operators and other purveyors of scams and malware would find it much harder to operate anonymously and out of sight. By taking down the botnet infrastructure, we hope that this will help deter and raise the cost of committing cybercrime," Richard Domingues Boscovich, senior attorney with the Microsoft Digital Crimes Unit, wrote in a blog post today.

The case also highlights an industry-wide problem related to the stealth use of subdomains, he said. "Under U.S. law, even pawn brokers are more effectively regulated to prevent the resale of stolen property than domain owners are to prevent the use of their digital properties for cybercrime. For example, pawn shop operators must require a name, address and proper identification from customers, while by contrast there are currently no requirements necessitating domain hosts to know anything about the people using their subdomains--making it easy for domain owners to look the other way."

This is the third botnet--following Waledac, and Rustock earlier this year--that Microsoft has taken down using these same legal and technical measures, but it's the first time a defendant has been named in one of the company's civil cases involving a botnet.

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Alleged LulzSec member arrested in Sony breach

The FBI arrested a 23-year-old Arizona man today on charges of stealing data from Sony Pictures Entertainment earlier this year.

Cody Andrew Kretsinger of Phoenix was indicted September 2 by a federal grand jury on charges of conspiracy and unauthorized impairment of a protected computer, the FBI said in a statement. Kretsinger could not be reached for comment.

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Meanwhile, Fox News reported that a hacker who is believed to be homeless was arrested in San Francisco on charges of participating in attacks allegedly carried out by activist group Anonymous on Santa Cruz County government Web sites, and that search warrants were being executed in New Jersey, Minnesota, and Montana. An FBI spokesman told CNET that the agency does not typically comment on search warrants. FBI officials in San Francisco did not immediately return a call seeking comment.

Kretsinger is accused of using proxy services via the hidemyass.com site, designed to offer anonymous Internet access, to probe Sony Pictures Entertainment's computer systems in May, according to the indictment, which was unsealed in U.S. District Court in Los Angeles today.

He and others co-conspirators looked for vulnerabilities and exploited them by means of a SQL injection attack between May 27 and June 2, the indictment says. They then allegedly compromised the Sony system, making "tens of thousands of requests for confidential data," and released the information from Sony on a public Web site and on Twitter.

Kretsinger permanently erased the hard drive of the computer he used to conduct the attack, the indictment alleges. He is due to make an initial appearance in federal court in Phoenix today. The U.S. government will request that he be transferred to Los Angeles to face prosecution. He faces up to 15 years in prison if convicted.

He is alleged to have used the hacker handle "recursion" and is believed to be a member of the LulzSec hacker group.

The LulzSec group, believed to be a spin-off of the Anonymous group of online activists, had bragged about breaking into Sony Pictures' system, posting a statement on the Pastebin on June 2 and proof of their attack. "We recently broke into SonyPictures.com and compromised over 1,000,000 users' personal information, including passwords, email addresses, home addresses, dates of birth, and all Sony opt-in data associated with their accounts," the statement said. "Among other things, we also compromised all admin details of Sony Pictures (including passwords) along with 75,000 'music codes' and 3.5 million 'music coupons.'"

A week later, Sony said that actually personally identifable information of 37,500 customers had been exposed in the breach. The breach was one of a series of attacks targeting Sony and its affiliate sites globally that started in May following a legal spat Sony had with a hacker who had modified his Sony PlayStation 3.

Arrests of people accused of being part of Anonymous or LulzSec have taken place globally, including 16 in the U.S. in July, as well as in the United Kingdom and Spain.

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