Research firm IDC predicts that ultra low-cost notebooks sales will touch nine million units in 2012. The extension, which Microsoft granted to XP for netbooks or the low cost laptops, covered machines with less than 1GB of RAM; a screen no larger than 10.2in (25cm), a processor not running faster than 1GHz; a hard drive up to just 80GB in size; a screen no larger than 10.2in (25cm) and no touch screen.

Till now Microsoft has laid down no specifications for nettops, the low cost desktops, but it stated it was working with around 20 PC makers on these machines.

According to Microsoft’s licensing arrangements terms with PC makers, they must stop giving XP as an option on new machines after 30 June, a deadline that has been extended for cheaper machines till June 2010.

Meanwhile, Microsoft is also experimenting to make it financially lucrative for users of its Live Search engine. The firm is not going to give them any money, but it would credit their Cashback account with a discount on some of the things that they buy via Live Search. This is something similar to swapping a cashback credit card.