Microsoft has announced their quarterly earnings, and one number stood out: the company managed to sell 175 million copies of Windows 7 in just 9 months, a number that will surely reach 200 million by the 1-year mark. Compared to Vista, Windows 7 is doing 240% better — and thus is the fastest selling OS in Microsoft’s history.

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Microsoft has decided to put its money where its mouth is and give each of its 90,000+ employees a free Windows Phone-based smartphone. The new mobile OS, which was renamed to “Windows Phone 7″, has had a lukewarm reception during the first reviews of the OS.

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At E3, which is well underway now, Microsoft announced integration of ESPN HD on the Xbox 360, which will offer live streaming of sports in HD directly on the console. Best of all, this is coming free of charge to all Xbox Live owners. Just another reason to cancel your cable subscription.

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Microsoft’s Internet Explorer browser has been lagging behind for years when it comes to features, speed and security, but Microsoft thinks otherwise. They’ve released a new ad touting the “security” features of IE8, which you can see above.

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Here’s something noe-one would have predicted just ten years ago: that Apple would surpass Microsoft in market capitalization, making Apple now the most valuable tech company in the world.

Apple’s stock has risen almost 90% over the past year, pushing its market cap to an astonishing $222 billion, effectively making it the second most valuable company in the world, second only to Exxon Mobil.

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Microsoft has filed a lawsuit against CRM provider Salesforce for allegedly breaching several of its patents. According to TechCrunch, the patents in question are:

• Method and system for mapping between logical data and physical data
• System and method for providing and displaying a web page having an embedded menu
• Method and System for staking toolbars in a computer display.
• Automated web site creation using template driven generation of active server page applications
• Aggregation of system settings into objects
• Timing and velocity control for displaying graphical information
• Method and system for identifying and obtaining computer software from a remote computer
• System and method for controlling access to data entities in a computer network

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Earlier this week we reported that Yahoo was interested in buying Foursquare, and now the big guns, Facebook and Microsoft, have joined the fight for Foursquare as well. Foursquare was founded only a year ago, and has raised a total of $1 million in VC capital. The reported acquisition price is north of $100 million.

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Depending on how you look at it you just have to GRAB opportunity when you see it. And apparently that is the case for the Microsoft Windows 7 development team which decided to develop apps for the Window Phone 7 rather than constrain themselves under Microsoft’s wing.

A lot of them, mostly programmers have sent in their resignation letters to either join other companies or develop apps for the Windows Mobile 7 on their own.

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