According to Microsoft, one in five email messages is a status update from a social networking site. To help you deal with that, they are teaching you how to turn off email updates. No! Wait! They are revamping Hotmail.

Microsoft can't convince customers that they need the new version of Office anymore, so they'e begun to sell it as software-as-a-service, bundled with security software. "Security is basically the No. 1 thing that gets attached with a PC," said Microsoft group product manager Bryson Gordon. The product, code-named "Albany" and now known as Equipt, will cost PC buyers an extra $20 a year over the $49 per year price Microsoft charges for its OneCare antivirus software. Why don't they just let users download the software? That might seem easier, but retailers like Circuit City move a lot of Xboxes and Windows PCs, and the software giant can't afford to leave them grounded as computing moves to the cloud.

Who's the man responsible for cuts to internal spending at Microsoft? Here's a hint: he's feared, hated and respected by Windows developers: Steven Sinofsky, the SVP of Windows and Windows Live development, who's been mooted as a successor to Bill Gates. Sinofsky used to run Microsoft Office development, where he earned a reputation for "making the trains run on time." That landed him in charge of making sure fiascos like Vista never happen again. One problem, though.