NORTHWEST: INTERNET SERVICE TO APARTMENTS LANDS FUNDS.(Business)

Interquest Communications, which provides broadband Internet service to apartment buildings in seven states, has landed $5 million in venture capital financing from Chrysalis Ventures and ComVentures. Total financing in the 2-year-old company now stands at $9.8 million.

The Seattle company, which has grown through acquisitions of bankrupt Internet service providers, last week acquired the assets of Dallas-based BroadBandNow! Network for less than $1 million. The venture capital round, which gave the company a positive valuation, will be used to fuel Interquest's expansion, Chief Executive Glenn Meyer said.

The 47-person company plans to enter the Florida market this summer and is considering a move into Chicago. Interquest also is evaluating two more acquisitions, Meyer said.

Critical vulnerability found in Windows

Microsoft Corp. acknowledged a critical vulnerability in nearly all versions of its flagship Windows operating system software, the first such design flaw to affect its latest Windows Server 2003 software.

Microsoft said the vulnerability could allow hackers to seize control of a victim's Windows computer over the Internet, steal data, delete files or eavesdrop on e-mail. The company urged customers to immediately apply a free software repairing patch available from Microsoft's Web site.

The disclosure was unusually embarrassing for Microsoft because it demonstrated the first such serious flaw in the company's powerful new computer server software, billed as its safest ever. The software is aimed at large corporate customers and was the first product sold under a high-profile "Trustworthy Computing" initiative organized last year by Microsoft founder Bill Gates.

Chief technology officer at Charter quits

Charter Communications Inc., the cable operator controlled by Microsoft Corp. co-founder Paul Allen, said Chief Technology Officer Stephen Silva resigned, citing personal reasons. Silva had held his position since October 2001, the St. Louis- based company said in a filing with the Securities and Exchange Commission.

Silva is among several top executives who have been fired by Charter or have resigned amid investigations into the company. Charter's accounting practices are under review by federal prosecutors and the SEC.

State argues Microsoft settlement isn't helping

Microsoft Corp. can't cite any evidence its antitrust settlement with the Bush administration will restore competition or undo the effects of its illegal conduct, Massachusetts said in a court filing seeking tougher sanctions.

Massachusetts, the last holdout among nine states that rejected the 2001 settlement, told an appeals court the agreement doesn't prevent the world's largest software maker from pressuring manufacturers to keep its Internet browser and media player on personal computers, 95 percent of which run on Microsoft's Windows operating system.

Microsoft offers cash to instant messenger users

Microsoft Corp. has a secret weapon in helping it gain more users of its new MSN instant-messaging service: Cold, hard cash. MSN, which is expected to release the finalized version of its MSN Messenger 6.0 program today, will run a promotion offering $1,000 in cash to 10 users each Friday, starting July 25.

The lottery will award $1,000 an hour from 9 a.m. to 7 p.m. PDT to randomly selected users. The weekly $10,000 giveaways will run for four Fridays, ending Aug. 15.

To qualify, people must fill out contest entries and upgrade to MSN Messenger 6.0. They also must be logged on to the service, where winners will be notified.

Snippets ...

Microsoft Corp.'s MSN Network will include apartment and new-home listings from Homestore Inc. under an agreement announced between the companies yesterday. The Election TRUST, a Seattle firm that specializes in balloting, will resell online voting technology from Bellevue-based VoteHere Inc. to companies, associations, trade unions and other organizations. AQuantive Inc., a Seattle online marketing company, lost the online business of AT&T Wireless Group and lowered its 2003 earnings forecast to as little as 15 cents a share.

Quick Hits is written by P-I reporters Todd Bishop, John Cook and Dan Richman. Send comments to johncook@seattlepi.com. This report includes information from The Associated Press and Bloomberg News.