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Yahoo is closing the Yahoo Publisher Network, its rival to Google's AdSense program for delivering ads to third-party websites, according to an email sent to publishers today. As TechCrunch notes, Yahoo is referring those publishers to an alternative service, Chitika -- which seems strange on the surface given that Yahoo's new partner, Microsoft, has its own AdSense rival, dubbed Content Ads, that could certainly use the help.

[Follow-up, Thursday: Microsoft considered but declined Yahoo's self-serve ad biz]

There's no official comment yet from Yahoo, but the move to shutter the Yahoo Publisher Network as of April 30 appear to be the latest step in the company's effort to narrow its focus under CEO Carol Bartz. The move means that the company will focus more on selling ads for its own online properties.

We're wrapping another busy month here at TechFlash. And, in case you missed out, here are the top stories on the site for March. Thanks to everyone for reading, commenting and being a part of the TechFlash community.

"WA seeks new tax revenue from software, but not from Microsoft"

"Amazon.com's 1-Click patent confirmed following re-exam"

"The 2005 email that spawned Picnik, Google's latest buy"

"What Microsoft learned from Jerry Seinfeld and Bill Gates"

"Notes on Project Natal, including how much space you'll need"

"Video: Microsoft's Project Gustav"

"Microsoft sends flowers, card for Internet Explorer 6 funeral"

"PlayStation's Project Natal spoof: Hilarious, and a little misleading"

"Classmates to pay up to $9.5M to settle suit over phantom friends"

"Mexico's Carlos Slim knocks Bill Gates off his top billionaire perch"

"Workers say they're more productive away from the office"

"Picnik CEO: Google deal comes with a 'very happy number'"

"Video: Microsoft Mobile Surface"

"Top 5 worst Google Fiber pitches"

"RealNetworks' Rob Glaser on why Apple's model must be stopped"

We knew it was coming, thanks to an inadvertent leak from Microsoft itself, but the company this morning confirmed plans for a high-capacity version of its Zune HD portable media player, with 64GB of storage, at a price of $349.99. Microsoft also announce a $20 price drop for each of the existing Zune HD models, lowering the 16GB version to $199.99 (from $219.99) and the 32GB version to $269.99 (from $289.99).

Combined, the moves make the Zune look pretty good compared with Apple's iPod lineup -- although direct comparisons between the two product lines are a little misleading given all the capabilities (i.e., apps) available on the iPod touch these days. That said, Apple sells the 64GB iPod touch for $399, and the 32GB version for $299.

The Focus Electric is expected to be the first vehicle to use Microsoft's Hohm service for energy management. (Ford photo)

Microsoft and Ford this morning announced plans to expand their partnership with a "joint solution" to help drivers and homeowners deal with the energy demands of electric cars, based on the Redmond company's Hohm online energy management service.

The companies aren't being specific about how the Hohm service would be integrated into Ford vehicles. The solution is still into the design phase, scheduled to roll out beginning with the Focus Electric next year. They say a primary goal is to help people figure out the best time to charge their electric cars.

Most of the time when big Internet companies talk about online privacy, it's in response to questions about how they're using personal data as part of their advertising systems. But companies including Microsoft, Google, AOL, eBay and others are raising the subject on their own this week, seeking a modernization of U.S. privacy laws to clarify the rules for police and government access to information about their users.

The group, dubbed Digital Due Process, also includes the American Civil Liberties Union, the American Library Association, the Electronic Frontier Foundation and others. They contend that the Electronic Communications Privacy Act of 1986 has been outpaced by technology and left courts struggling to figure out how to apply the law to location-based services, cloud computing and email archives.

It's a big day for old lawsuits involving Novell, and it's looking like a split decision for the Linux vendor.

Novell said today that it won a jury verdict in a longstanding dispute with the SCO Group over the copyrights to Unix. And in a separate blast from the past, a federal judge dismissed the remaining counts in Novell's antitrust complaint against Microsoft, which involved allegations dating to the mid-1990s.

Of the two cases, Novell's victory in the SCO Group copyright litigation has the most relevance to the present day, because the Unix copyrights are pivotal to patent claims against Linux. Open-source advocates are celebrating the ruling. See Groklaw.net and Ars Technica for more details on the ruling.

Microsoft Research's 'virtual receptionist' prototype, an early application of the personal agent concept.

Microsoft executives talk a lot about the potential for computers and devices to be smart, proactive assistants -- monitoring a person's environment, gathering relevant data, anticipating the user's needs, providing helpful information and recommending particular actions. And now the company has a patent on the concept.

Bill Gates and Ray Ozzie are among the inventors listed on the patent for an "intelligent personalized agent," issued this morning by the U.S. Patent and Trademark Office. It's not a new initiative: The company applied for the patent in September 2006, and the application made news two years ago. But the granting of the patent could put Microsoft in an interesting position if the world heads in this direction.

The title of the patent is "Dynamic environment evaluation and service adjustment based on multiple user profiles including data classification and information sharing with authorized other users." These excerpts from the patent filing do a better job of describing the potential.

We've known since last year that Microsoft's Mac software team was making a native version of Outlook for Apple computers, shifting away from its Entourage email client, but Boy Genius Report today has the first glimpse of Outlook for Mac, and other Office 2011 programs. They're slated for release later this year.

Apple is working on two new iPhones, including one that would work with Verizon Wireless' CDMA technology, the Wall Street Journal reports, fueling another wave of speculation about the future of the popular device. Engadget says the next-generation iPhone, dubbed the iPhone HD, is slated to be unveiled in June.

This week marks the 15th anniversary of the release of Microsoft Bob, and Technologizer looks back on the milestone with a retrospective on the "legendary software flop." For more on the subject, Monica Harrington wrote a great guest post on the subject on TechFlash last year: Innovation: The lessons of Bob.

PAX East, the Boston version of Seattle's homegrown Penny Arcade Expo video-game event, looks to have been a big success over the weekend -- so much so that organizers are planning to hold it in a bigger venue next year. Don't worry, the Seattle version is still very much in business, scheduled for Sept. 3-5.

A sign of the improving economy? Employee perks are making a comeback at Silicon Valley tech companies, according to this Los Angeles Times story today.

Seattle-based journalist Glenn Fleishman has a great piece today in Ars Technica: The state of 4G: It's all about congestion, not speed.

Vancouver's skyline. (Flickr photo, RickC)

Over the weekend we were alerted to a blog post last week on the BCBusiness Magazine website that previewed a "memorandum of understanding" in the works between DigiBC, the Digital Media and Wireless Association of BC, and EnterpriseSeattle's Washington Interactive Network.

We've put out messages to the groups to find out more about their agreement, which doesn't appear to have been officially announced yet. On the surface, at least, it seems like an interesting idea, although these types of regional economic alliances tend to come and go, with varying degrees of effectiveness.

The idea, as explained by BCBusiness blogger Tony Wanless, is to "explore how they can leverage the region into a kind of supercluster of games and interactive entertainment companies," in part to better rival Silicon Valley as a hub for the industry.

A screenshot from Foundem's FCC filing, showing Google's Universal Search box redirecting users to the search giant's own Google Product Search price-comparison feature.

British price comparison site Foundem, one of three companies pursuing antitrust complaints against Google in Europe, explains its position in a story this morning by Cade Metz of The Register. One of the key points: Foundem says its complaint doesn't really focus on the way Google's algorithms rank the Foundem site. Instead, it questions the "Universal Search" feature at the top of those algorithmic results that often sends users to Google's own services.

And one of the words Foundem uses to make its case against Google will sound very familiar to anyone who has followed Microsoft's antitrust disputes over the years.

Subjects covered this week: TechFlash Live takeaways; Former Expedia chief Rich Barton launches stealth online travel company; Google wins love from U.S. municipalities, disdain from the Chinese government; Jerry Seinfeld and Bill Gates, finally explained; Startup Weekend recap; and more.

Listen below or subscribe to the TechFlash Podcast using this RSS feed (http://feeds.feedburner.com/techflashpodcast), or via iTunes or Zune. Call 206-876-5465 to leave a message for next week's podcast, and continue reading for links related to this week's episode. Access the archive of past episodes on our podcast category page.

TechFlash Podcast 008 sound bite  TechFlash sound bites

Larry Engel, a 20-year veteran of Microsoft, announced Friday that he's leaving the company to become chief product officer at Seattle startup Cozi. Engel most recently served as general manager of Microsoft Pinpoint, and before that held the GM title for the Microsoft Store and Marketplaces group.

Cozi CEO Robbie Cape said that Engel is a "phenomenal" executive who will help the company as it enters a new phase.

Image via Microsoft's Major Nelson

Microsoft this morning confirmed earlier reports that Xbox 360 gamers will be able to use generic USB flash drives to store profiles, game saves and other data after an April 6 system update.

The Xbox 360 already has USB ports for plugging in media devices, and the expanded support means that gamers won't need to rely on proprietary memory units to store their data. Those proprietary units, which plug into different ports, are the subject of ongoing litigation between Microsoft and Datel Design, although the Redmond company didn't draw any connection to that situation in its announcement.

Washington state legislators, searching for ways to resolve a $2.8 billion budget shortfall, aren't making many friends in the software industry these days. Except, perhaps, for one.

A proposed sales tax on "custom software" is raising objections from software firms and consultants that work on web sites, business applications, and other specialized programs. They say the tax would make it tougher to land business and recover from the recession.

The provision could affect more than 2,500 firms that have traditionally been considered service providers, not developers of products subject to sales tax. The fact that legislators would consider such a move -- aiming to raise an extra $250 million over the next three years -- underscores the severity of the financial crisis.

Rep. Ross Hunter

Rep. Ross Hunter, a former Microsoft general manager and author of the broader House tax package, acknowledged in an interview this week that the custom software provision is the most undesirable element of the bill, in his view. He offered a glimmer of hope for opponents, saying he hopes to find a way to avoid it before the legislation is finalized.

Microsoft's programs, such as Windows and Office, are already subject to sales tax, so the company is not directly embroiled in the custom-software debate. But critics of Microsoft's licensing practices say a separate provision of the financial overhaul -- changing the way the state taxes royalty income on software licenses and other intangible goods -- would all but eliminate a $100 million yearly tax obligation that they believe Microsoft is wrongfully avoiding by routing large chunks of business through an office in Nevada.

And in that way, they say, the state is targeting the wrong part of the software industry in its quest for new revenue.

Having followed Microsoft for a few years now, I like to think that I've figured out some of its mysteries, but there's a big one that I've just never been able to crack: What in the heck was the company trying to accomplish with those ads starring Bill Gates and Jerry Seinfeld a couple years ago?

Well, mystery solved, I guess. Today I sat down for a surprisingly entertaining discussion with David Webster, the chief strategy officer in Microsoft's central marketing group. We talked about lots of interesting and wonky tech business stuff, such as how the company is attempting to make its advertising more persistent and true-to-life, and how it's trying to shape its overall brand image not through a broader corporate campaign but instead by aiming to project a consistent personality through the advertising for its individual products.

But at one point I just had to ask: Please, can you explain the whole Gates-Seinfeld thing to me? Churros and shoe stores and moving in with some random suburban family? And Bill Gates adjusting his shorts? Come on, seriously?

OK, so those weren't my exact words, but you get the point, and Webster was good-humored enough to play along by giving a detailed explanation that actually provided some deeper insights into how the company thinks about marketing its most valuable brand. Continue reading for edited excerpts.