BRIEFCASE MICROSOFT SHIFTS FOCUS TO SECURITY.

Byline: - Staff and Wire Services

WASHINGTON - Microsoft Chairman Bill Gates announced to employees Wednesday a major strategy shift across all its products, including its flagship Windows software, to emphasize security and privacy over new capabilities.

In e-mail to employees obtained by The Associated Press, Gates referred to the new philosophy as ``Trustworthy Computing'' and called it the ``highest priority'' to ensure that computer users continue to venture across an increasingly Internet-connected world.

Gates said the new emphasis was ``more important than any other part of our work. If we don't do this, people simply won't be willing - or able - to take advantage of all the other great work we do.''

The dramatic change comes after the discovery of major security problems in Microsoft products, such as a flaw in the latest versions of Windows that allows hackers to seize control of a user's computer.

Compact lets Hulk star in video game

UNIVERSAL CITY - Universal Interactive Inc. announced Wednesday that the company has signed an agreement with Marvel Characters Inc. for the rights to create video games based on The Incredible Hulk.

The license agreement enables Universal Interactive to build a video game franchise based on the popular Marvel Comics character.

Hewlett out to kill HP-Compaq deal

PALO ALTO - Dissident Hewlett-Packard Co. director Walter Hewlett ramped up his campaign against the $24 billion acquisition of Compaq Computer Corp., sending letters to more than 750,000 stockholders Wednesday and asking them to veto the deal.

Hewlett, who plans a proxy fight with HP management over the Compaq deal, said he does not want HP merely to maintain the status quo, but rather to ``change and grow organically, with targeted tactical acquisitions.''

Hewlett, the eldest son of HP co-founder William Hewlett, believes Compaq would increase HP's exposure to the weak personal-computer and low-end server businesses and subject the company to a risky, difficult integration effort.

HP spokeswoman Rebecca Robboy ridiculed Hewlett's letter as a rehash of Hewlett's ``faulty financial assumptions, based on a static view of the industry and the company.''

Managers work at home the most

WASHINGTON - People who work from home tend to be executives or managers. They're also better educated than many Americans and make more money.

Raising a child, though, does not seem to be a big factor when it comes to working out of the house, according to a Census Bureau report being released today. Fifty-seven percent of home-based workers have children younger than 18, equal to the proportion of office-based workers with kids.

Overall, nearly 9.3 million Americans age 16 and older worked from home at least once a week during a typical week in 1997, the report said. That was down from 10.9 million in 1995, but the two years could not be directly compared because of differences in the way survey questions were asked.

Settlement starts $4.75 million fund

As many as 300 musicians and their families who claimed they were owed royalties from Vivendi Universal's music branch could receive part of a $4.75 million settlement.

Superior Court Judge Victoria Gerrard Chaney signed settlement papers Monday and gave her preliminary approval of the pact. Universal will establish a $4.75 million trust fund to pay musicians or their heirs who agree to accept the settlement, according to court documents.

Universal admitted no wrongdoing in the settlement. Attorneys for both sides declined to comment.

IRS plans revised audit procedure

WASHINGTON - Aiming to target its audits better, the IRS intends a special random check this year of about 50,000 individual tax returns but will subject fewer people to the intense, face-to-face questioning that drew heavy criticism in the past.

IRS Commissioner Charles Rossotti said Wednesday that the goal is to collect an up-to-date snapshot of the taxpaying public so that audits get better results.