Tech Law Prof Blog

Microsoft Walks Away From Yahoo!

So, it's come to this.  Microsoft negotiated with Yahoo!.  It offered to raise the bid from $31 to $33 a share.  That's $47.5 billion.  Steve Ballmer earlier made the statement that he knew how much Yahoo! was worth to Microsoft and would offer a dime more.  Yahoo! wanted $37 per share, or $51 billion.  Microsoft dropped the bid and walked away from the deal.  For now.  Cue the inevitable shareholder lawsuits.  (Some lawyer somewhere must be thinking about it.)  Lets see how conditions play out in the coming months.  Who knows?  These two may still cozy up now that the initial shock is over.

Here's the brief announcement from the AP via the Chicago Tribune.

MS Quietly Talks More to Yahoo!, Maybe

It's Friday and still nothing really on the Microsoft - Yahoo! front.  One story in CNET notes that there are reports that the two sides are actively talking about what it takes to do an amicable deal.  That's nice.  Beyond that, nothing has changed.  Stay tuned. 

MS Still Trying to Figure Out What to do With Yahoo!

I wasn't sure if I should have waited on that headline until after Microsoft buys Yahoo!.  In spite of all the press accounts about the proposed Microsoft purchase, very little is new.  Last Saturday was the deadline Microsoft gave Yahoo! to roll over.  Yahoo! didn't, and now everyone wonders what's next.  Makes you wonder why Microsoft hasn't pounced on Yahoo! with some pre-determined strategy once the deadline passed.  The answer to that is probably because Microsoft isn't sure what to do either. 

Steve Ballmer told MS employees that there are three options:  go hostile, pay more than already offered, or walk away.  Someone immediately handed him the 2008 Stating the Obvious award.  Sorry, made that one up.  A report in the Wall Street Journal said the Microsoft board authorized Ballmer to go hostile or walk away from the deal.  So was the option of paying more discussed?  Of course, no one wants to tip their hand over strategy.  It's not as if Yahoo! won't let itself be bought.  The company wants more money for the shareholders.  The next move is with Microsoft.  What's it going to be Steve?  The pundits can't take much more and the lawyers need to know who to sue over the deal/failed deal.

Microsoft Has a New Forensic Device for Windows Computers

Microsoft is working with law enforcement by creating a USB jump drive that can extract forensic evidence from a computer at the scene of a crime.  It's called COFEE, or Computer Online Forensic Evidence Extractor.  The item was distributed to selected law enforcement agencies last June.  The device has 150 commands available to the examiner, including those which can decrypt passwords, analyze hard drives and list Internet activity.  More details are in the Seattle Post-Intelligencer.  An update to some capabilities is here.

Not much is known about the technical capability of the device in terms of evidence gathering.  One of the reasons why computers are seized is not only to preserve evidence, but to create a chain of custody that avoids spoliation.  Every time a computer starts some basic files change during the initialization.  Automatic processes create or edit log files, as an example.  Of course, any cursory examination of a hard drive has the potential to change contents, whether in the Internet cache, or other locations.  That's why complex forensic systems use processes that duplicate a hard drive and examine it without changing its contents.  How Microsoft's device approaches this problem is not reported.

Microsoft's General Counsel, Brad Smith, says Microsoft's motivation is to make the Internet safe and not to make money.  Laudable, but will it stand up in court?  More details will likely come out when the first prosecution based on the device's evidence collection goes to appeal.

XP and Vista Service Packs Pulled from Update

XP Service Pack 3 and Vista Service Pack 1 have been pulled from automatic updates because of a glitch with the Microsoft Dynamics Retail Management System.  Customers of this software should not upgrade to either Service Pack for the time being due to compatibility issues.  Both service packs remain on the Microsoft Download Center as manual downloads for other users.

FBI Wants Power to Monitor Most Internet Traffic

FBI Director Robert Mueller is proposing legislation that would give the FBI the ability to monitor the content of Internet traffic.  The Internet is a fertile place to facilitate crime, and monitoring it would prevent that.  Crime takes many forms.  There's terrorism, whether it be physical plots or cyber attacks on infrastructure.  Then there's obscenity and pornography, piracy of intellectual property, fraud, conspiracy, and political dissent (whoops, made that last crime up).

The problem with that, of course, is that warrantless monitoring by the government may run afoul of existing laws.  Just ask AT&T about that one.  Or the Bush administration.  Of all the things with which it can get Congress to go along, future and retroactive immunity for telecoms in the pending domestic spying cases is not one of them.  So far.

Right now the proposal is no more than a concept gleaming in the eyes of Mueller and Representative Darrell Issa (R-Oceania).  Since no legislation is actually pending, there are no details, merely desire.  With a pending presidential election some six months away, Congress is unlikely to touch this issue before then, if at all.  Then there's that pesky sentimental value people attach to the First and Fourth Amendments.  That seems to be the prevailing sentiment in the CNET commentary on the story.

Should this ultimately go through in any form, we can expect massive sales of encryption software (presumably without a government back door) to protect communications, unless that is made illegal.  Industry sectors that have a duty to protect customer information such as banking, insurance, medical, and others to get mightily uneasy over how something like this may affect them.  For those who remember, in 1972, Richard Nixon had to send thugs to the Watergate Hotel to spy on the Democratic Party.  Fast forward some 36 years later, all he would have to do is get the FBI to hand him printouts.  Somewhere, Nixon's ghost is laughing.

A webcast of the Judiciary Committee hearing is available here.