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In March, Microsoft and federal law enforcement jointly took down the spam giant Rustock botnet, seizing computers, servers, and other equipment from hosting providers in Denver, Dallas, Chicago, Kansas City, Seattle, Scranton, Pa., and Columbus.

The devices were "command-and-control" machines, from where operators of the botnet controlled over one million infected PCs, globally.

Microsoft, at the time, called the seizures a "decapitation" of the botnet, which was sending out as many as 30 billion spam emails every day.

The software giant is now offering "$250,000 for new information that results in the identification, arrest and criminal conviction of such individual(s)," meaning anyone involved with the botnet.

Says the company:

This reward offer stems from Microsoft’s recognition that the Rustock botnet is responsible for a number of criminal activities and serves to underscore our commitment to tracking down those behind it. While the primary goal for our legal and technical operation has been to stop and disrupt the threat that Rustock has posed for everyone affected by it, we also believe the Rustock bot-herders should be held accountable for their actions.

Borders Group has cancelled its bankruptcy auction and will begin liquidation, winding down its remaining 399 stores and sending 11,000 employees to the unemployment line.

Says President Mike Edwards:

We are saddened by this development. We were all working hard towards a different outcome, but the headwinds we have been facing for quite some time ... have brought us to where we are now.

Earlier this month, a deal with invester Jahm Najafi fell apart after months of talks. Najafi had offered $215 million for the company, plus the assumption of $220 million in liabilities, assuming publishers would give him normal trade terms. They did not, and Najafi withdrew his bid.

There were no other bidders or proposals for the struggling book chain.

Borders will now sell itself to the Hilco liquidation firm, which will begin liquidating on Friday. All stores will be closed by September and the liquidation is expected to bring in $280 million.

Over the years we have posted many, many cases of Americans being sued over unauthorized BitTorrent sharing.

A few of these cases, however, have been so ridiculous that there are little redeeming factors for the groups that brought them, such as the RIAA, MPAA and others. Some of those cases involved grandmothers, others involved kindergartners, one involved a networked printer and one even involved the recently deceased.

Today, another such case has hit the media, with a 70-year old widow being accused of sharing hardcore porn via torrents.

The group that brought the case will allow her to settle for $3400, or she will have to go to court and risk a fine of $150,000.

Without giving into the horrendous suit, the grandma (who admits she does not even know what a torrent is) will not settle and will fight the case, defending herself.

The Jane Doe says she has a quick line of defense (via TF)

Microsoft will soon change its Hotmail password policy, banning common passwords like "password."

Outside of blocking passwords like "password" and "123456," Microsoft will also block common terms like "ilovecats."

For now, the new policy will only be for new accounts but will likely extend to all existing accounts in the future.

Additionally, Hotmail will add a new feature that allows you to report if your friend's account has been hacked (if say, perhaps they send you spam). Their account will then be blocked to stop the hacker from using and your friend will go through an account recovery process to regain access to the account.

For more information on passwords, read our report from February: How secure is your password?

Earlier today, Sears inadvertently made 16GB/Wi-Fi iPad 2 available for $69, a healthy $430 of its retail price, and over $600 cheaper than Sears normally sells it through third-party vendor "GSM on Sale."

After seeing at least hundreds of purchases, Sears fixed the ad, cancelled all orders and apologized to buyers.

Said Sears:

Unfortunately ... one of the Marketplace third party sellers told us that they mistakenly posted incorrect pricing on two Apple iPad models on the Marketplace portion of the website.

If you purchased either of these products recently, your order has been cancelled and your account will be credited. We apologize for any inconvenience this may have caused.

The second model that was selling was the 32GB/Wi-Fi version, with a $179 price tag.

Angry consumers took to Twitter and Sear's own marketplace review page to vent frustrations but there is little they can do except accept that they aren't getting a $500 device for $69.

Developers have already jailbroken Apple's latest firmware, 4.3.4, although if you own an iPad 2 you are out of luck, for the time being.

The new jailbreak will require a PC, unlike browser-based hacks of the past, but an untethered jailbreak is expected to replace the current one, soon.

Apple released 4.3.4 last week to close the exploit used to jailbreak 4.3.3 (as seen here).

If you want to jailbreak your new 4.3.4 device, get out the USB cable and use the latest versions of redsn0w and PwnageTool.

For iPad 2 owners, if you update to 4.3.4 and lose your jailbreak, you will not be able to downgrade so the developers behind the jailbreaks warn to stay away from the latest firmware for the time being.

After just one month of availability, and mixed critical reviews, sales of the Google Chrome OS-based Chromebooks are still strong, at least on Amazon.

In Amazon's best selling laptops section, Acer's $349 Chromebook is in fourth place, and has been for most of the 40 days of availability. Samsung's $500 Chromebook is in 11th, likely due to its higher pricetag.

Apple's new MacBook Pro and a couple of powerful Toshiba books are in first-third.

Following their release, many critics boldly stated the books would be a flop, but it appears that there is a least some demand for the new netbooks.

Based on Google's Chrome OS operating system, each of the netbooks must always be connected to the Internet to work but have outstanding battery life and powerful enough hardware to run without any issues.

Chrome OS is still evolving and Google sends out new updates at least once a week to my Googlebook.

According to IBtimes, Google will have launched Android 3.2 Honeycomb by very early next month, with production partners likely receiving at that time or very late July.

3.2 will optimize Qualcomm's Snapdragon chips, popular processors in tablets and smartphones and will generally improve compatibility with Android apps.

Additionally, 3.2 will upgrade or add Movie Studio, Movies, Music and Widget.

Over the next few months a plethora of tablets are expected to be released running Android 3.2, and HTC is even said to be updating their Gingerbread HTC Flyer to Honeycomb soon.

During their quarterly earnings this week, Google said the Android Market has 250,000 apps and has seen 6 billion apps installed since 2008. 550,000 Android devices are activated every day now, with 135 million active Android devices around the world.

According to Reuters, Apple has begun using TSMC to manufacture its upcoming A6 processing chips, potentially dumping long time partner Samsung in the process.

Fubon Securities analyst William Wang believes that Apple will remain with Samsung but diversify its manufacturing with TSMC:

Apple is trying to diversify its orders but it will still maintain some kind of relationship with Samsung. I think TSMC will get the new chip orders, the issue however is allocation. Apple won't give the whole 100 percent to TSMC. Maybe it'll allocate only 20-30 percent.

TSMC is the world's largest chip maker.

Moving completely away from Samsung would be near impossible, say industry analysts, as Samsung has designed the current chips and owns the intellectual property on system design and memory packaging.

Cellrderm, a Florida-based novelty company has sued Microsoft this week, claiming the company copied their ads with their Windows Phone 7 ad campaign.

The ads in question are the "Really?" ads, "Bedroom Really" and "Bathroom Really."

Says the suit:

The Microsoft Commercials copy both the sequence of events and the character interplay found in the Cellrderm Commercials. The Microsoft Commercials also copy other copyrightable expression, including but not limited to clothing, gestures, character appearance, camera angles, and other visual elements from the Cellrderm Commercials.

Added in the suit is Microsoft's marketing firm, Crispin Porter + Bogusky.

Cellrderm is looking for an injunction, and a part of the profits derived from the ads.

Judge for yourself:

According to multiple reports, Motorola is already testing a prototype for the tablet that will succeed the Xoom.

The device is allegedly much thinner than the Xoom and will include the same 10-inch display as its predecessor.

Additionally, the new tablet will run on Android 4.0 Ice Cream Sandwich, have a 2048x1536 resolution and be powered by a quad-core Nvidia Tegra 3 processor.

Speculation is the tablet will hit in time for Christmas, but there is the possibility Motorola will release it in February, a year after the launch of the Xoom.

We will keep you updated.

Ubisoft has announced their "Uplay Passport" this week, a system similar to EA's and Sony's "online passes."

The online passes work to profit from used game sales, a market the publishers have been looking to act upon for over a decade.

EA started the online pass system in 2010 with the introduction of Mass Effect 2. The first owner of the game pays full price from retail and has access to online and all features. If that consumer then wants to sell the game online or back to the store, the second buyer will need to pay $9.99 to the publisher to access online multiplayer and other features, on top of the price they paid for the game.

In this way, the publisher can "double dip" on their games, leading to extra revenue.

Ubisoft's first title to use the system will be "Driver: San Francisco."

Uplay will "provide players with access to bonus content, exclusive offers, and online multiplayer play for many of Ubisoft's popular core games," for a price of $10.

Google reported their quarterly earnings tonight, blowing away estimates with revenue coming in at $6.92 billion.

Additionally, Google says it now has $39 billion in cash.

For Android, the search giant says it is activating 550,000 users each day, a number that is 50,000 higher than Google's last announcement on the matter, just two weeks ago.

The company expects to be activating 1 million devices per day by the end of the year (if current growth continues).

Google also confirmed there are slightly over 250,000 apps in the Android Market, with 6 billion downloads. There are also 130 million Android devices now out there.

Despite rumors that Google+ was approaching 20 million users already, CEO Larry Page said the social network has over 10 million users, sharing 1 billion items and 2.3 billion +1 clicks each day after launching just two weeks ago.

Google has updated its Android Market platform this week, allowing U.S. users to rent movies or purchase books right to their smartphone.

As long as you have Android 2.2 or later you can now rent movies through Google's Videos app.

The app has been around for Android 3.1 Honeycomb users for some time but less than 2 percent of all Android users have 3.0 so the store saw little popularity.

Renting costs between $2 and $4 for new releases and purchases stay in the cloud, so you can play it on any of your Android devices.

Says Google (via EWeek):

There's no more waiting for downloads, syncing, or worrying about storage space. Simply sign into Android Market with your Google account, and you can rent movies from anywhere—the Web, or your Android phone or tablet—and start watching instantly.

The rentals can also be played while offline after downloaded, not requiring any type of authentication.

According to Piper Jaffray analyst Chris Larsen, the upcoming iPhone 5 (whenever it comes out) will be released to Sprint and T-Mobile, as well, making it available on all four of the largest U.S. carriers.

This is the second time an analyst has claimed such, with one saying in May that an "iPhone 4S," (slightly updated iPhone 4) would hit the two carriers in time for the holidays.

Earlier this week, ChipHazard reported that Apple was testing its iPhone 5 on AT&T's networks and once all tests were passed, the phone would given to manufacturers to move into mass production.

That rumor coincides with the expected September launch for the device.

The smartphone, by all accounts, will have a thinner redesigned body, a dual-core processor and 8MP camera.