Some people at Microsoft have admitted that one of their biggest challenges in continuing to expand the Windows business is the impression among some customers that older Windows versions are good enough. Windows 95, which is ten years old, is a good example of the loyalty factor — or should that be inertia?

On August 24, 1995, thousands of people queued to buy the first copies of Windows 95, Harry Potter-style. About 1% of the user base still has it installed, including many small businesses. Microsoft regards this as a challenge to Windows Vista when it goes public later this year. The company has even likened the Vista release to the launch of Windows 95.

Since 1995, Microsoft has released at least six new Windows versions, plus interim updates, such as Windows 95 OSR2. The versions include, Windows 98, Windows 98 Second Edition, Windows 2000 desktop, Windows Millennium Edition (ME), Windows XP and Windows XP Service Pack 2.

Microsoft Watch quotes Mark D. Stotzer : “Who still runs these ‘old’ operating systems? Home or small business users that can’t or won’t upgrade. If all you require is email, the Internet and word processing, all you need is Win3.x or higher, MSIE [Microsoft Internet Explorer] with Outlook and Word 6 or higher.”

Many industry insiders consider XP, introduced in 2001, to be the best version of Windows to date. Tough call.

Despite some early promotion of this feature, Jim allchin, Co-President of Microsoft’s Platform Products and Services Division, said in an interview that although safety and security will be key elements in Windows Vista, there will be no anti-virus protection.

It seems that this os for unspecified business reasons, not technical. The company has been promoting Vista as a landmark improvement in Windows security since its inception.

The Register comments: “Microsoft will sell anti-virus protection to consumers through its OneCare online backup and security service.”

As we reported earlier Microsoft has offered to license part of the Windows source code to ensure it complies with a European Commission antitrust ruling from March 2004. A key element of the order is to share more information about the operating system with rivals.

Now Neelie Kroes, the European Union Competition Commissioner, has questioned the value of Microsoft’s latest concession, suggesting that Microsoft still faces an uphill battle to resolve the confrontation.

Plus ca change …

MSN Spaces is to allow advertising on its hugely expanding network of blogs. I hesitate to pin a number to the millions of blogs within the space, as it’s out of date almost immediately.

The Official blog, The Space Craft (too cute, or what?) says:

Great news for those of you living in the US, UK, Canada, Germany, France or Japan. You can now make money with MSN Spaces. You heard me. Make Money! With Amazon.com if you sign up for an associates ID, whenever anyone buys a book from Amazon.com by linking through from your space, you get a portion of that. So make sure to put up all of your favorite and maybe not so favorite books online.

In the same vain if you live in the US or Canada, you can earn money by allowing Kanoodle ads to run in your space.

Well, it might be a bit vain to write in that vein, but … well, it is only for kids, isn’t it?