Meanwhile, Apple Inc.‘s Mac OS X posted a record gain that brought it close to a 10% share for the first time since Net Applications Inc. began tracking operating system use.

In December, 88.7% of the people who browsed the Web sites that Net Applications monitors did so using machines powered by Windows, a 0.94 percentage point drop from November. The slide was Windows’ largest in the four years that Net Applications has collected operating system data, and the second record-setting monthly loss in a row for Microsoft’s software.

During November, Windows’ market share slipped 0.84 percentage point, dropping the operating system under 90% for the first time since Net Applications has been tracking operating system use.

The combined decline of November and December totaled 1.8 percentage points, Windows’ biggest two-month dip ever, nearly double that of its previous record, a 0.92 percentage point fall in December 2007 and January 2008.

Microsoft’s operating system ended the year down 3.1 percentage points, a 3.4% drop in its share from the same time last year.

Meanwhile, Apple’s Mac OS X’s market share continued to grow at Windows’ expense. For the second month in a row, Mac OS X posted a record increase, growing by 0.76 of a percentage point to end the month at 9.6%. December was the first time that Net Applications had pegged Apple’s operating system above the 9% mark.

And just as Windows set a record for a two-month drop, Mac OS X set a record for a two-month increase during November and December. Those months’ combined gain of 1.4 percentage points was substantially larger than the earlier record, a 0.9 percentage point boost the operating system received in September-October 2006, and almost double the 0.73 percentage point increase of November-December 2007.

Mac OS X’s market share was up 2.3 percentage points during 2008, an annual growth rate of 31.7%.

Net Applications again attributed some of the decline of Windows and the corresponding growth of Mac OS X to special circumstances. “The December holiday season strongly favored residential over business usage,” the company said on its Web site. “This in turn increases the relative usage share of Mac … and other products that have relatively high-residential usage. All December usage statistics should be read in that context.”

Last month, Vince Vizzaccarro, Net Applications’ executive vice president of marketing, said November’s drop in Windows share was because of the higher-than-average number of weekend days and the Thanksgiving holiday in the U.S. Net Applications has consistently reported that Windows’ share slips during times when browsing is conducted from nonwork computers, where Microsoft’s operating system dominates even more than in homes.

Even so, Windows’ market share fall for November-December 2008 was more than twice that of any similar period in the preceding three years. During the same two months of 2007, for example, Windows lost 0.7 of a percentage point, while in 2006 and 2005, Microsoft’s operating system dropped 0.45 of a percentage point and 0.51 of a percentage point, respectively.

As has been the case throughout most of the year, Windows XP accounted for the bulk of Microsoft’s downturn. During December, the seven-year-old operating system lost 1.1 percentage points. Windows Vista‘s share, on the other hand, increased slightly to finish the year just above 21%.

Net Applications’ operating system market share numbers can be found on the company’s Web site.

When users of IE6 reach Gmail.com, a “Get faster Gmail” message appears in the Web-based service’s menu bar. The message, in turn, links to a page on Google’s Web site that touts Chrome and Firefox 3 as being “twice as fast” at running Gmail.

Last week, the Gmail site also displayed the message to users browsing with Microsoft’s IE7, but Google has since discarded that version of the notice. Users running other browsers, including Apple Inc.’s Safari and Opera Software ASA’s namesake browser, haven’t been shown the speed-up message.

Google currently lists IE7, Firefox 2.0 and later releases, Chrome and Safari as the only supported browsers for Gmail. Others, including Opera and older editions of IE, Firefox and Safari, can be used to access the e-mail service but aren’t able to handle some of its features.

More than 21% of users who browsed the Internet last month ran IE6, according to Web metrics company Net Applications Inc. IE7, meanwhile, accounted for about 48% of the browser market during November, with Firefox 3 in third place with nearly 16%.

Google has been aggressively marketing Chrome since it stripped the browser of its beta label earlier this month. A day after doing so, for example, Google dropped Firefox as the default browser in its Google Pack application bundle and added Chrome in its place.

Google, Mozilla and WebKit — the open-source project that provides the engine for Apple’s Safari — have spent much of the second half of this year trumpeting JavaScript performance improvements, a necessary move, they say, to make Gmail and other Web applications run at speeds similar to those of traditional desktop software.

The flaw is a “reliability issue with no security risk to customers,” Microsoft researchers said.

According to researcher Laurent Gaffi, the vulnerability could be used by hackers armed with malformed .wav, .snd, or .mid audio files to compromise a PC running Windows XP or Vista.

Several editions of Windows Media Player, including Versions 9, 10 and the newest, 11, are vulnerable, Gaffi reported in a Dec. 24 disclosure to the Bugtraq security mailing list. Gaffi also included proof-of-concept attack code that he said would allow remote code execution.

Microsoft disputed Gaffi’s findings and took him to task for publishing information about the vulnerability before he reported it to company security researchers.

“[Gaffi's] claims are false,” said Christopher Budd, a spokesman for the Microsoft Security Response Center, in a post this afternoon to the MSRC’s blog. “We’ve found no possibility for code execution in this issue.”

Budd acknowledged that Gaffi’s sample exploit crashes Windows Media Player, but he said that the program can be restarted without affecting the rest of the system.

Microsoft researchers with the company’s Security Vulnerability Research and Defense (SVRD) group spelled out the impact of Gaffi’s exploit in more technical detail in a separate blog entry today.

“This bug cannot be leveraged for arbitrary code execution,” said Jonathan Ness and Fermin Serna of the SVRD team. Ness and Serna said company researchers had found the bug earlier and had fixed it in at least one version of its server software.

“We found this already through our internal fuzzing efforts,” they said. “It was correctly triaged at the time as a reliability issue with no security risk to customers.”

“We do like to get these reliability issues fixed in a future service pack or a future version of the platform whenever possible. This particular bug, for example, has already been fixed in Windows Server 2003 Service Pack 2,” Ness and Serna said.

Microsoft has been wrong before when it has denied that a flaw can be exploited. Last April, for example, the company had to backtrack, and issue a security advisory, about a Windows vulnerability it had denied was a bug just three weeks earlier.

Although that vulnerability has been actively exploited since mid-October, Microsoft has yet to plug the hole.

Instead of three business units focused on the Far East, the Americas, and Europe, Africa and the Middle East, Dell will have a large enterprise unit, a public unit, and a small and midsize business unit. The changes will help Dell better respond to customer requests and give it a global perspective instead of regionally run businesses, the company said in a press release.

“This puts us even closer than we are [now] to our customers,” said Dell spokesman David Frink.

Dell’s consumer business is already organized on a global level and won’t be affected by this reorganization, the company said.

“Customer requirements are increasingly being defined by how they use technology rather than where they use it,” Michael Dell, the company’s chairman and CEO, said in a statement. “That’s why we won’t let ourselves be limited by geographic boundaries in solving their needs.”

Dell did not announce major changes in the size of its workforce as part of the reorganization. However, the company is “always looking for ways to improve our cost structure,” Frink said.

The company did announce that Mike Cannon, president of global operations, will retire effective Jan. 31. Cannon will be succeeded by Jeff Clarke, who, in addition to being head of Dell’s Business Client Product Group, will become vice chairman for global operations. Cannon will serve as a consultant to Dell.

Also, Chief Marketing Officer Mark Jarvis will leave Dell this fiscal quarter while remaining a consultant.

Dell has begun the reorganization process. The company plans to align its financial reporting with the new structure during the first half of its fiscal 2010, which begins in February.

December 30, 2008 (IDG News Service) Apple Inc.’s stock fell abruptly on Tuesday, but later recovered some ground, after an online report said that CEO Steve Jobs bowed out of next week’s Macworld Expo keynote address because of declining health.

In a report it labeled “rumor,” the gadget blog Gizmodo quoted an unnamed source as saying Apple “is choosing to remove the hype factor strategically” by holding the keynote without Jobs, whose “health is rapidly declining.” Gizmodo said the source had been correct in the past, though only about Apple products and not about Jobs. Apple did not comment for the Gizmodo post and did not immediately respond to IDG News Service requests for comment.

Apple’s Nasdaq stock, which had closed at $86.61 on Monday, fell as low as $84.72, a drop of about 2%. But shares ended the day at $86.29, down just 32 cents, or 0.37%.

Apple announced on Dec. 16 that Phil Schiller, senior vice president of worldwide product marketing, would deliver the keynote at Macworld Expo in San Francisco on Jan. 6. For many years since he returned to Apple in 1997, Jobs has given that speech and used it as a launch platform for important products, including the iPhone in 2007 and the MacBook Air in 2008.

At the same time, Apple said it would stop exhibiting at Macworld Expo after the January event. The company said trade shows had become a minor part of its marketing strategy.

Concerns have been raised about Jobs’s health since his appearance at Apple’s Worldwide Developers Conference in June, when some observers said he appeared gaunt. Jobs said in 2004 that he had undergone surgery for pancreatic cancer. On Oct. 3, Apple shares fell more than 10% after a report that Jobs had suffered a major heart attack. The stock recovered after Apple said the report — from a so-called citizen journalist on an unfiltered section of CNN’s Web site — wasn’t true.

The company’s Aspire 8930G-7665 notebook computer is designed as a gaming laptop or a desktop replacement. Powered by Intel Corp.’s Core 2 Quad mobile processor, it sports four cores, runs at up to 2.53 GHz and includes 12MB of cache, according to Acer.

With a starting price of $1,799, Acer’s new offering could be a bargain compared to expensive quadcore laptops from the world’s top PC vendors. Hewlett-Packard Co. and Dell Inc. both offer quadcore laptops as either gaming laptops or mobile workstations with prices starting at over $2,000. Acer is the world’s third-largest PC vendor — behind HP and Dell, according to analyst firm IDC.

The Aspire 8930G-7665 includes an 18.4-in, screen that can display high-definition images and video. It also includes 4GB of RAM, Nvidia’s GeForce 9700M GT graphics card with 512MB of video memory, a 500GB hard drive, a Blu-ray Disc drive and Wi-Fi wireless networking. It comes with the 64-bit version of Windows Vista Premium.

The laptop is now available in the U.S. through retailers, according to Acer. The company could not be immediately reached for comment about when the new Aspire model would be available worldwide.

According to Mary Landesman of ScanSafe, the recent Federal Trade Commission (FTC) injunctions against two companies accused of distributing fake antivirus programs is a step in the right direction but against a backdrop of widespread abuse.

Landesman was referring to the recent case against U.S. outfits Innovative Marketing and ByteHosting Internet Services, both of which were said to have peddled bogus antivirus programs designed to tempt users into paying to clean their PCs of nonexistent malware.

The problem is that piecemeal action is fighting against a rising tide of such scams, fueled by the release of automated tools in 2007 that made it simple for criminals to set up such cons.

“Large numbers of users are trusting ‘scareware’ scams as fraudulent companies are using increasingly sophisticated techniques to lure users into downloading the software. Some of the scams we have seen are branded Antivirus 360 and look extremely convincing,” said Landesman.

Part of the problem dated from the de-regulation of Internet registration nearly a decade ago with the removal of the monopoly enjoyed by Network Solutions, she agreed. That had allowed a multitude of unregulated companies to decide who was and who wasn’t allowed to set up shop, making official oversight almost impossible.

“Hosts and registrars need to be held accountable. [At the moment] security researchers report sites but get no response,” she said.

Researchers would complain about rogue ISPs and find that it was taking months to get them de-peered or even investigated, mainly because it was not the responsibility of any individual body to carry out such investigation.

Global regulation looks to be a nearly impossible task in today’s Internet, though more informal action by ISPs could still form part of the answer. The recent takedown of spam-spewing ISP McColo is a case in point. It was nobody’s job to put a stop to McColo, but that didn’t stop ISPs from deciding to de-peer the company as a last resort.

“The FTC should be applauded for their recent progress; however, there is still a considerable amount of work to be done in the regulation of these bogus scams,” said Landesman.

The fact that Microsoft, and not the Chinese courts, disclosed the sentences is not unusual. Lawyers are the only source of information in many cases in China because rulings often are not publicly announced. Court officials usually refuse to disclose details to reporters.

Microsoft calls the counterfeit software operation — which was headquartered in the southern Chinese province of Guangdong and busted by Chinese authorities with FBI help in 2007 — the world’s biggest phony-software syndicate.

The counterfeit software was found in 36 countries and 11 different languages. It was so sophisticated that it contained legitimate computer code written by Microsoft for programs such as Windows XP and Vista and Microsoft Office, but also had touches of the criminals’ own coding as well. That was allegedly added to mimic security programs and fool users into believing the product was authentic.

Microsoft contends that much of the bogus software was detected by its Windows Genuine Advantage program, which is automatically installed on users’ machines. It scans computers for pirated software and alerts people if it believes their products aren’t properly licensed. The counterfeits were also discovered through customs seizures, test purchases by Microsoft, and resellers who alerted authorities to suspicious competitors.

“There were a number of things that made this case unique and striking, and among them are the fact that customers provided information, the reach of the syndicate was so international, and that Chinese law enforcement partnered so well with American law enforcement,” David Finn, Microsoft’s associate general counsel for worldwide anti-piracy and anti-counterfeiting, said in an interview.

Software piracy is still rampant despite individual countries’ attempts at cracking down. Research commissioned by the Business Software Alliance, an industry trade group, found that 82 percent of the software used in China in 2007 was not legitimately purchased, more than double the worldwide piracy rate of 38 percent.

___

AP Business Writer Joe McDonald contributed to this story from Beijing.

Microsoft expected the problem to clear up as the clocks ticked over to Jan. 1, though users will have to jump through some hoops to get their Zunes back to normal, including letting the batteries die down completely before the devices will restart successfully. The crash of so many Zunes at once drew comparisons to the Y2K programming problem that stoked fears about a widespread computer meltdown in 2000 when the machines ticked over to the new millennium.

Zunes have paltry popularity compared the iPod, which owns nearly three-quarters of the MP3 market, compared with Zune’s single-digit market share, according to statistics from the NPD Group. But some users are fiercely loyal, and newer Zunes have gotten positive reviews.