Originally, an O2 spokesperson was the first to reveal the upcoming fix, noting that the patch would be available Saturday through iTunes.

"We will be communicating to customers both through the website and proactively.

"We always recommend our customers update their iPhone with the latest software and this is no different."

Apple delivered the fix sooner than expected, however, with the new OS version, 3.0.1 becoming available by mid-day in the U.S.

Security researchers Charlie Miller and Collin Mulliner released their findings the Black Hat conference in Las Vegas on Thursday. Further reports indicate that the flaw exists in most, if not all, GSM devices based on the way they handle SMS messages.Miller and Mulliner also found a hole in the iPhone's Safari browser way back in 2007 when it was first launched.

Microsoft is less than thrilled with the news, but cracks of this sort have appeared in every generation of Windows since WGA was invented, and they've not deterred the company from pushing ahead with the program. Getting an illicit copy of Windows to activate and run permanently might be a bit more trouble than it was in the days of Windows 98, but it's by no means difficult. Ironically, this new discovery could spur early adoption of Win 7 among enthusiasts, particularly if said users are sick of Vista and/or XP.

"I was myself kind of surprised by the market reaction," Ballmer told a meeting for financial analysts at Microsoft's headquarters near Seattle. "Nobody gets it. It's a little bit complicated. Nothing got sold [Wednesday] and nothing got bought…It's a win-win deal from my perspective."

Yahoo CEO Carol Bartz, whose future is now tied to the success or failure of the partnership, has criticised investors for focusing on the lack of an upfront payment. When Microsoft tendered its original $44.6 billion dollar offer for the company, Yahoo stock shot from $19.18 to $28.98 within a week. According to Bartz, punishing Yahoo's stock is downright shortsighted. "I think the market hasn't figured out that there's not much I can do with an upfront payment," she said in a Wednesday interview. "What am I going to do with it? Collect interest on it every year? That doesn't help me."

The fluctuations in Yahoo's stock may reflect worries over whether or not the two companies can effectively compete with Google rather than concern over hypothetical increased risk to the company as a result of the deal. As Ballmer pointed out, Yahoo is substantially slashing its expenses while risking nothing in the short term. "On the Yahoo side—this is the one that stuns me that people haven't figured it out—Yahoo gets 88 percent of the search revenue they have today," Ballmer said. "They have zero percent COGS (cost of goods sold) and they have no R&D (research and development) expense and no ongoing capex (capital expenditure). It's sort of unbelievable."

 

The financial terms of the deal definitely favor Yahoo, particularly in the first 18 months. During that time period, as Yahoo converts its global search service to Bing, Microsoft has guaranteed Yahoo's RPS (Revenue per Search) rate. Even once that guarantee expires, Yahoo will receive 88 percent of its RPS rate, with the remaining 12 percent going to MS. For Redmond, the deal represents an opportunity to expand the reach of its nascent search engine, Bing, and substantially expands its user base. At present, Google accounts for about 65 percent of Internet searches, with Yahoo a distant second at ~20 percent and Microsoft in third place at about eight percent. Partnering with Yahoo more than triples Microsoft's share of the search market and gives potential advertisers a unified option for paid search rather than two also-rans.

Microsoft won't earn a profit off the partnership in the short-term; it expects the early phases and consolidation to require an investment of "millions" of dollars. For Redmond, the value lies in raising Bing's visibility, while simultaneously gaining access to any valuable search IP Yahoo may possess. According to Ballmer, expanding the number of searches Bing handles leads directly to a better search engine. ""The more queries you see, the more you can tune your product. The more scale you have, the more advertisers advertise on your system, and the more relevant they make their ads for your users," said Ballmer. "Because we have more bidders in our advertising marketplace, we will get higher bid prices, probably, and more liquidity in the marketplace. That will improve monetization."

Given current investor trepidation, Yahoo may have to wait up to a year before it can announce concrete financial gains from the partnership. So long as the deal passes federal scrutiny, the company should be able to wait.