Red Hat Drops the Desktop, iPhone Prices Take a Chop, and What Was Microsoft Thinking?

It's time again for another installment of Breaking News, with a look at the best and most broken — er, breaking — news from far and wide. And away we go!

Heading up today's news — as it so often does — is the madcap merger ménage à trois between Yahoo, Microsoft, and Google. Observers have started to wake up to the significance of last week's ad-swapping deal between Google and Yahoo, with outlets as venerable as the Wall Street Journal coming to believe a full-scale outsourcing is about to happen. Some have suggested the move is intended to taunt Microsoft, but Big Evil doesn't seem to be laughing, as they've already hired a high-profile lobbying firm to push the deal through the uphill regulatory battle. That's not to say the Empire doesn't have a sense of humor; when a show of hands from a crowd of Microsofties indicated a strong preference for Google's search over Yahoo, Satan's Little Helper was quick to quip "Wow. We offered 31 bucks a share." It's good to see they can laugh at their own megalomania.

Google, for their part, was busy pledging their love for Yahoo, with Chief Googloid Eric Schmidt telling reporters "It's nice working with Yahoo and we like them very much." Perhaps an application of the old adage "the enemy of my enemy is my friend." Or, it could have something to do with the near-80% dominance of the search advertising market that a deal would hand Google. Then again, it could have just been a result of the elation Schmidt — and the rest of the Googlesphere — was feeling after reporting first quarter numbers that trounced industry expectations and sent shares up over the $500 mark, a jump of more than $50 per share.

Over at Apple, the word of the day wasn't "jump" so much as "drop," as two European mobile providers currently offering the iPhone announced a $200 cut in the smartphone's price. The move is apparently aimed either at clearing out stock in anticipation of a rumored June-release of a 3G model or at picking up lackluster sales resulting from a far-less-enthusiastic reception of the device in Eruopean markets. It mirrors one taken shortly after the iPhone's release in the U.S., which sparked near-riots form torch-wielding early-adopters demanding a rebate — a rebate which came, begrudgingly, in the form of a $100 coupon for Apple's iTunes store. So far, the price-cut has failed to spark across-the-pond protests, but it remains to be seen if it draws much in the way of new business.

In the Linux market, enterprise-Linux behemoth Red Hat announced yesterday that they have no plans to develop desktop Linux offerings aimed at consumers. The move — which may or may not have been surprising, depending on ones view of the Linux market — is motivated by profitability, say Red Hat's leaders, as it is simply too "tough" to succeed in the desktop market. Red Hat will continue to focus its efforts on enterprise offerings, and will leave the desktop market to the community-driven Fedora project and the as-yet-unseen Red Hat Global Desktop.

Meanwhile, it looks like the founders of popular BitTorrent directory The Pirate Bay may be getting a little revenge on the European forces that have tried to hold them down. According to reports, the Bay is planning to sue the International Federation of the Phonographic Industry — the group responsible for having the site blocked by Dutch authorities in February — for unspecified damages resulting from the block, which one of the founders has pledged will be used to establish a grant program to support Danish musicians. The Swedes may see service of process too, as the Bay is rumored to be considering a similar suit over the May 2006 seizure of Pirate Bay servers by the Swedish government; something tells us they won't be doing anything until the criminal charges pending there have been resolved.

Finally, a little something to laugh at, though at whom will be up to you. The blogsphere was abuzz yesterday about an incredibly awful video promoting Microsoft's Vista Service Pack 1 which landed on YouTube back on April 10th. Uber-blogs including Gizmodo, Endgadget, and ChunchGear all ran bits about it, for the most part accepting it at face value and decrying Microsoft as being completely off the wagon. The amusing part? The video was indeed an internal Microsoft production, but was intended as a spoof of Big Evil's well-earned uptight reputation — so well-earned, in fact, that the big boys of breaking news couldn't help but fall hook, line and sinker. It's simply too priceless to miss — albeit our legal team insists we advise you to wear protective goggles — so we've included it below; if you can't view it, you can find it on YouTube.

And with that, we say goodnight.