Update: Check out a hands-on video of Windows Mobile 6.5 from Gizmodo!

Microsoft has just officially announced Windows Mobile 6.5 at the Mobile World Congress conference in Barcelona. The new OS is expected to arrived in the second half of 2009 boasting a new interface and a new version of Internet Explorer mobile that promises desktop-like browsing. Adobe also announced MWC the support for Flash for Windows Mobile 6.5. Read the full story

Facebook says 13% of its users use the service from their mobile phones. Facebook is getting ready to launch a significantly revamped mobile app to better accommodate mobile users. One of the most significant features will be the ability to easily sync your Facebook contacts with your mobile phone book and add Facebook profile pictures as your caller ID. However, recently, tech blogger Robert Scoble tried to use Plaxo to export his 5,000 Facebook contacts to Outlook, only to have his account disabled for apparent terms of service violations. Now, this certainly raises ethical questions here, especially because not all people on Scoble’s friend list would want their personal information stored, especially because they don’t even personally know him. Should data portability on the social web be really open? What are the implications for Twitter accounts that have 55,000+ followers (including Robert Scoble with 58,000+ followers), should they be able to mine the data out? Read the full story

As people cut back on spending, it seems more of us are staying home and playing video games. According to a report by market research firms NDP Group, Enterbrain, and GfK Chart-Track, video game sales are up 11% in the US, the UK and in Japan. More specifically, video game sales were up 15% in the US, with sales up 26% in the UK. Video game sales were down in Japan by 26% year over year. The drop in Japanese sales can largely be attributed to less games being developed. Japan is a massive market, and a result promoted Nintendo to slash expected earnings by 33% in 2008. Aggregately, video game sales in the US, UK, and Japan totaled 409.9 million units, up from 368 million units in 2007. Console game sales in the US were up 22% from 2007, and general video game software sales were up 36% to 268.4 million units in the US alone. The top video game worldwide in terms of sales was Nintendo’s Mario Kart Wii with 8.94 million sales. The popular video game franchise GTA IV totaled 7.29 million sales.

Microsoft has applied for a new patent for a “Smart Interface System for Mobile Communications Devices” The patent is aimed at allowing users to dock a mobile phone with a small device and is aimed at eliminating different barriers that prohibit ease of use and productivity on a small mobile phone. Once the mobile is connected to the cradle, the phone can easily be connected with various peripherals including a keyboard, mouse, and printer, among other hardware. Read the full story

A new patent application (20090022510) from Sony reveals the company has plans to develop a touch-screen based printer much like Microsoft Surface. With Microsoft Surface, you simply place your digital camera on the touch-screen surface, and then it is able to automatically download the photos and display them on the touch-screen. Sony essentially wants to do just this for its own printer where you can put your camera on the display surface where the photos are then automatically downloaded to the Sony printer, which then lets you browse the photos on the touch-screen and simply choose which photos to print. Very interesting feature, it will be fun to see if their product infringes on any Microsoft patents here.

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Microsoft has just announced today the company will merge its Office Live and Windows Live products under one brand and product. Essentially, Office Live products are productivity extensions that include programs such as Office Live Workspace, Office Live Groove, and Office Live Small Business. Windows Live products are more geared towards consumers and include services such as Windows Live Messenger. The merged software packages will be available by the end of the year and should coincide with the release of Windows 7. Microsoft says the move comes to simplify the user experience.

In other news, Microsoft has just announced the closure of its ACES Studios division, which is the same team that develops one of Microsoft’s oldest offerings, Microsoft Flight Simulator X, which firstly debuted in 1982. Microsoft declined to provide details regarding the future of the product, but affirmed Microsoft is committed to the Flight Simulator franchise despite the closing of ACES Studios. The closure comes as a broader plan by Microsoft to cut costs, including the announced layoffs of up to 5,000 Microsoft employees.

In other news, Microsoft also reported revenue for its Zune portable media player is significantly down. Microsoft said Zune revenue was down $100 million (54% down) from Read the full story

Microsoft has already confirmed it is developing SkyMarket, which is essentially a direct competitor to the Apple App Store, where people can purchase third party software for their Windows Mobile powered devices. Microsoft is also expected to launch its SkyBox service, which is essentially a direct competitor to Apple’s MobileMe. SkyBox will essentially sync and allow you to access your contacts, e-mail, calendar, SMS, pictures, and your files from a centralized system. Importantly, it is believed Microsoft will not limit SkyBox to only Windows Mobile device, instead allowing almost any newer handset to take advantage of the service, including Symbian and iPhone handsets, which would be a big competitive edge over Apple’s MobileMe. Microsoft is also expected to launch an enterprise version of SkyBox called SkyLine. It is unclear how the two will differentiate. Microsoft should launch these products in February at the Mobile World Congress in Barcelona. In related news, Blackberry maker, RIM, has just announced it is accepting submissions for its own Application Storefront for developers who want to sell their Blackberry made applications. Note: Windows Mobile 7 Pictured Above

Microsoft is warning users of the new Windows 7 Beta of a flaw that can permanently impair your MP3 files, including purchased MP3 tracks. Microsoft said, “every time that metadata is edited in an MP3 file that already contains lots of metadata in the file header, some audio at the beginning of the track may be lost permanently,” Microsoft is urging users to download a simple fix for Windows Media Center and Windows Media Player for Windows 7 to avoid compromising your music collection. Microsoft just recently uncapped downloads for Windows 7 until Jan 24 2008. You can download it here. At CES, Microsoft CEO Steve Ballmer said, “we are on track to deliver the best version of Windows ever…and working hard to get it right.” Windows 7 should hit shelves by late 2009 at the earliest, or early 2010.

Microsoft at CES has just unveiled its second iPhone app, Microsoft Tag. The program lets users take snapshots of almost anything then the program retrieves information including media, contact information, special offers, and so on. Microsoft Tags is based on Microsoft’s High Capacity Color Barcodes system, which is a high capacity barcode system that stores more information, as seen in the image below. The system is similar to the QR Code matrix. You can get Microsoft Tag now Read the full story

Update:  See this Google post regarding the allegations from The Wall Street Journal Google is changing its positive stance on net-neutrality. The Google post notes “The Journal story also quoted me as characterizing President-elect Obama’s net neutrality policies as “much less specific than they were before.” For what it’s worth, I don’t recall making such a comment, and it seems especially odd given that President-elect Obama’s supportive stance on network neutrality hasn’t changed at all.”

In addition, Google has now not made the Top 10 Trust companies on the San Francisco Chronicle list.

The Wall Street Journal is reporting that it has received documents citing Google has approached ISPs and Cable companies to strike a deal to get priority in traffic, which violates net neutrality. Google has always been an advocate of this principal. The WSJ says “One major cable operator [is] in talks with Google says it has been reluctant so far to strike a deal because of concern it might violate Federal Communications Commission guidelines on network neutrality.”If we did this, Washington would be on fire,” says one executive at the cable company who is familiar with the talks…” Google responded by strongly denying the allegations saying “Google remains strongly committed to the principle of Net neutrality, and we will continue to work with policymakers in the years ahead to keep the Internet free and open.” More recently, Microsoft and Yahoo quietly broke a coalition part about two years ago. President Elect Barrack Obama strongly supports net-neutrality.