NEW YORK (AFP) - Microsoft’s failed attempt to buy Yahoo will send it searching for new allies and likely see Yahoo’s share price plummet, leaving Internet giant Google the big winner, analysts said.

Microsoft announced Saturday that it had given up its quest for the struggling Internet pioneer Yahoo, which rejected Microsoft’s offer even after it raised the original bid by five billion to more than 46 billion dollars.

The announcement ended three months of overtures by the software giant, which wanted to merge its Internet resources with Yahoo’s worldwide offerings to gain ground on undisputed online advertising juggernaut Google.

Google meanwhile has increased its share of the Internet search engine market and multiplied its innovations. The firm recently also announced a way to refine its image searches, based on technology that recognizes images, not text.

Analysts believe moreover that the Microsoft-Yahoo talks have benefited Google, and suggest Microsoft did well to cut them short.

“Microsoft did the smart thing — they walked,” said Silicon Valley analyst Rob Enderle. “Yahoo’s stock price is going to come down like a rock on Monday.”

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The BBC’s technology programme Click has exposed a security flaw in the social networking site Facebook which could compromise privacy.

Using a simple malicious application could open up yourself and your friends (who do not need to install the application) to ID fraud. The BBC has compiled a video to demonstrate the flaw and if you are an avid Facebook user I suggest you watch it and take note. It’s not clear whether the techniques described by the BBC are currently in use on Facebook but if one of your friends only has to add the application and this opens your Facebook profile up this is a serious flaw.

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Concerned that customers are confusing the impending end of Windows XP retail availability with the end of support, Microsoft Corp. has reminded users that the aged operating system will be supported until early April 2014. Jared Proudfoot, a manager in Microsoft’s support life cycle group, reiterated the final support dates for Windows XP in a post to a company blog.

“Recently, there have been a number of posts in the blogosphere about Windows XP and the upcoming end of direct OEM and retail license availability,” said Proudfoot. “Some people are interpreting this as the end of support for Windows XP.”

Not so, Proudfoot said. Windows XP will remain in what Microsoft calls “mainstream support” to April 14, 2009, and continue in “extended support” though April 8, 2014, he added. The former delivers free fixes — for both security patches and other bug fixes — to everyone. During the latter, all users receive security updates, but nonsecurity hot fixes are given only to companies that have signed support contracts with Microsoft.

Those are not new dates, Proudfoot reminded customers last week. In early 2007, for instance, Microsoft extended support for Windows XP Home and XP Media Center to the 2009 and 2014 dates to match those already set for Windows XP Professional.

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Saturday May 3, 9:33 pm ET

SAN FRANCISCO (Reuters) - Microsoft Corp (NasdaqGS:MSFT - News) withdrew its offer for Yahoo Inc (NasdaqGS:YHOO - News) on Saturday as negotiations fell through on price, even after the software giant raised its bid by about $5 billion to $47.5 billion.

Microsoft Chief Executive Steve Ballmer said his company increased its offer to $33 per share, from the $31 per share cash-and-stock bid that it initially made on January 31. But Yahoo was looking for $37 a share, Ballmer said.

“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer,” Ballmer said in a statement.

“After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” said Ballmer.

Yahoo was not immediately available for comment.

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In the last few days, we have uncovered a compatibility issue between Microsoft Dynamics Retail Management System (RMS) and both Windows XP SP3 and Windows Vista Service Pack 1 (SP1). In order to make sure customers have the best possible experience, we have decided to delay releasing Windows XP Service Pack 3 (SP3) to the web.

To help protect customers, we plan to put filtering in place shortly to prevent Windows Update from offering both service packs to systems running Microsoft Dynamics RMS.  Once filtering is in place, we expect to release Windows XP SP3 to the web.

We are also testing a fix, and will make it available once that process is complete.  Once they have installed the fix, Microsoft Dynamics RMS customers should be able to run both service packs.

Until then, we advise Microsoft Dynamics RMS customers to not install either service pack.  Microsoft Dynamics RMS customers running Windows XP SP3 or Windows Vista SP1 should contact Microsoft Customer Support Services for additional information.

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SEATTLE - Microsoft Corp. may go hostile in its bid for Yahoo Inc. as soon as Friday, according to a published report.

Citing unnamed people familiar with the matter, the Wall Street Journal reported early Friday that the world’s largest software maker may be preparing to go straight to Internet pioneer Yahoo’s shareholders.

An announcement was “likely” to come Friday, according to the report, though the newspaper said its sources cautioned that Microsoft may delay.

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