No news is bad news
Gaming website Kotaku have received a response from Microsoft regarding the rumour of a new Microsoft handheld.
The reply says, "The recent reorganizations (both company-wide and within E&D) sought to bring more focus to Microsoft’s efforts in entertainment. While the BusinessWeek story is highly speculative and we will not comment on it specifically, Microsoft is committed to innovate and invest in technologies, products and services that enhance the digital lifestyles of our customers. Microsoft is strongly committed to its partners, as evidenced by its investments in driving increased sales of PlaysForSure devices at retail and partnerships like MTV Networks and Verizon Wireless."
Microsoft's response makes the issue no clearer, a 'yes' or 'no' would have done the trick.