The Technophilez

Microsoft plans to pay software maker Novell Inc up to $100 million in additional subscription fees due to strong demand for Novell's open-source Linux software that partners with Microsoft's proprietary Windows software.

The payment to be made by November 1, announced by the companies on Tuesday, is in addition to a $240 million payment to Novell from Microsoft in 2006 as part of a broad set of business and technological agreements to make their products work together for corporate customers using both Linux and Windows servers.

Microsoft, the world's largest software maker, buys certificates from Novell and then sells subscriptions to Windows clients who want support in making their computer systems work well alongside Linux machines.

The agreement between the companies expires January 1, 2012.

Linux is the most popular variant of open-source software. Unlike proprietary software, open-source software lets developers share code and add functions, and users only pay for custom features, maintenance and technical support.

Novell said it will also spend an undisclosed sum of money to provide new tools, support, training and resources for subscribers.

Novell said it has already invoiced $156 million in revenue from the Microsoft certificates in the first 18 months since the November 2006 start of the five-year agreement.

The pact between Microsoft and Novell stirred up quite a controversy in the open-source community because it included among other things a clause saying that neither company would sue customers of the other for patent violations.

This clause was seen as an endorsement of Microsoft's claim that it holds patents to intellectual property behind some open-source software, a contention rebutted by Novell and others in the open-source community.

Critics said the deal undermined the patent position of Linux software and gave Microsoft an edge in persuading businesses to use Microsoft products over Linux and other types of open-source software.

A software group that own rights to much of the code behind Linux software threatened to punish Novell over the deal before opting not to take punitive action against the company.

Google continues to gain search market share in the United States at the expense of its rivals.
In July, according to Internet metrics firm ComScore, Americans conducted 11.8 billion searches at core search engines, a 2% increase from June.

Google sites accounted for 61.9% of July searches, an increase of 0.4 percentage points from the previous month. Yahoo sites accounted for 20.5%, a decrease of 0.4 percentage points. And Microsoft  sites accounted for 8.9%, a decrease of 0.3 percentage points.
In numerical terms, Google handled almost 7.3 billion core searches (a 2% increase). Yahoo processed 2.4 billion, and Microsoft fielded 1 billion.

Ask Network and AOL saw search market share increases of 0.2 and 0.1 percentage points respectively, giving them 4.5% and 4.2% of U.S. searches for the month of July.

Google's continued strength has to be particularly disheartening for Microsoft, which in May launched a new search program called Live Search cashback to lure new users to its Live Search service with the possibility of e-commerce rebates.

Live Search cashback appeared to be working, with Microsoft's search share in the U.S. rising from 8.5% in May to 9.2% in June. But with its search share dropping to 8.7% in July, Microsoft is almost back where it started when the program was introduced. Rebates may convince people to try Live Search but they don't appear to be turning the curious into repeat customers. Given the tightening economy, however, it's possible that Microsoft's monetary enticement will have more of an impact in coming months.

It what may be a related moved, Microsoft last month announced that its Platforms & Services Division will be divided into two groups -- Windows/Windows Live and Online Services -- and that Platforms & Services president Kevin Johnson will be leaving the company.

At the time, Microsoft said that its Live Search cashback program "is already generating strong momentum among online shoppers and advertisers."