Ballmer On Google: Same FUD, Different Day

Ballmer On Google: Same FUD, Different Day


Microsoft CEO Steve Ballmer yesterday bad-mouthed Google for being successful at only one business (even though it's a business Microsoft has been trying unsuccessfully to break into). But the target doesn't matter. It could have been Linux. Or Apple. I'm just worn out by the repetition. Ballmer's trash-talking is a tired routine. He needs to get a new act.
For a couple of years now Microsoft has been trying to figure out how Google does it -- how the world's premiere search company provides Web-based services and makes its money by selling advertising. Google has done extremely well at both, and its success has made it the darling of Wall Street.

By contrast, as hard as Microsoft has tried with MSN and its confusing Live announcements, it hasn't done very well at either: Its search services are mediocre, and its Live OneCare antivirus software has famously failed a couple of tests recently.

As far as I can see, Microsoft will never have any success in Web-based, advertising-supported services for two reasons. First, it doesn't trust the model -- Microsoft is unwilling to give away for free any service that might be really useful. And second, it doesn't trust its customers.
Look at Google. The Google search service crushes any competition in Web search, and the reason is simple. It is excellent. And that willingness to do whatever it takes to be excellent runs right through the company. Google's products (and there are many, despite Ballmer's sneers) are, for example, more open than anything Microsoft ever thought of doing. You want to do something clever with Google Maps? It's easy. There's a programming interface you can use. You want to create a blog or turn your photos into a slide show for your mother or share a calendar or create documents? Google's got a Web-based service for those things and many more.

And what's your relationship with Google? Simple. You use what you want. If you like the value you use more. If you look at the ads, fine, they never intrude. Google provides good service and says thank you with good value.

And Microsoft? It wants to compete with Google. So what does it make available on the Web that competes with Google Maps? Some nifty maps and aerial views, but they aren't nearly as usable as Google's; there's no API for building apps on top of them. (Update: Mea culpa. Of course there's an API. See comment below.) Microsoft publishes the most widely used text editor, spreadsheet, and presentation application on the planet. It should be able to do Web-based productivity better than anybody, but it doesn't. Google Docs & Spreadsheets wins by a mile.

And what's your relationship with Microsoft? You pay for its software, and then periodically it accuses you of stealing it and makes you prove you're not -- and eventually it quits supporting its products anyway and forces you to pay for new versions. And does it ever say thank you?
It's no wonder Steve Ballmer is trying to trash-talk Google to death. His rant yesterday seemed to be aimed at spreading conventional Microsoft FUD, perhaps to convince Wall Street that Google is just a flash in the pan, a one-trick pony. Or perhaps he's trying to taunt Google into doing something that's not in its game plan. Or maybe he's just trying to convince us all that Microsoft doesn't care about search or ad revenue after all. But all he succeeded in was convincing us that we've heard it all before.

Microsoft Pays Enterprise Customers To Adopt Windows Live Search

Microsoft Pays Enterprise Customers To Adopt Windows Live Search

CEO Steve Ballmer outlines the company's new initiative to become an Internet, information, and advertising company.

Microsoft's next big opportunity appears to be paying business customers to use its search products.

At a speech on Thursday at Stanford University's Graduate School of Business, Microsoft CEO Steve Ballmer described Microsoft's effort to build "two new muscles" by becoming a modern consumer electronics company and "an Internet, information, and advertising company."
"Google has obviously done a nice job with their search product, but frankly have had a hard time getting traction in some of the other areas," said Ballmer.

Having had something of a hard time getting traction in the search business itself, Microsoft has turned to paying Windows enterprise customers to use its Live search tools.
The program is called "Microsoft Service Credits for Web Search." Based on screenshots of a PowerPoint presentation about the program posted by entrepreneur and author John Battelle on his blog, Microsoft is offering enterprise customers between $2 and $10 in credit for Microsoft products and services per PC enrolled annually.

In an e-mail statement, Microsoft confirmed the existence of the program. "Currently, we are conducting a trial program through which Microsoft is providing service or training credits to a select number of enterprise customers based on the number of Web search queries conducted by their employees via Live Search," said a Microsoft spokesperson. "These customers, in turn, are providing valuable feedback to Microsoft on the use of Web search in an enterprise environment. As search evolves into more of a productivity tool, and revenue sharing becomes more commonplace across the industry, we are engaging in mutually beneficial partnerships such as this and our recently announced deal with Lenovo to more easily enable customers to choose Live Search."

Earlier this week, Lenovo Group said that it had struck a deal with Microsoft to preconfigure its PCs to use Windows Live. Google has entered into similar deals with PC makers to distribute its search toolbar and other software.

Microsoft's search credit program appears to have three tiers: "low," "moderate," and "high." The latter two reportedly involve the removal of all toolbars -- Google and Yahoo both use toolbars to drive search traffic -- and setting employees' browser home page to Live Search. The program requires Internet Explorer 7, which suggests Microsoft also aims to counter defections to Firefox and other browsers.

Microsoft remains a distant third in the search market, behind Google and Yahoo.
Earlier this month, it was widely reported that Christopher Payne, corporate VP of Windows Live Search, planned to leave Microsoft to pursue entrepreneurial opportunities. Among bloggers, Payne's departure was seen as a sign of Microsoft's dissatisfaction with its search efforts.

Google did not respond to a request for comment.

Google Out, Microsoft In As Default Live Search In Lenovo PCs

Google Out, Microsoft In As Default Live Search In Lenovo PCs

The deal puts Windows Live services in Lenovo-branded PCs, ThinkPad notebooks, and ThinkCentre desktops.

Lenovo Group on Wednesday said it has agreed to preload Microsoft's Windows Live online services in its PCs, giving a potential boost to the software maker's lagging search service.

The Chinese company plans to make Live.com, a customizable Web page for news, information, and search, the default home page in the Internet Explorer Web browser, which also will include Microsoft's toolbars. The deal replaces a similar agreement with Google.

The agreement matches the third-largest PC maker with the third-ranking search engine. Lenovo's worldwide PC sales are behind No. 1 Dell and Hewlett-Packard, and Microsoft is far behind search leaders Google and Yahoo, with less than 11% of the market as of January, according to comScore Networks.

While Lenovo customers will be able to change the browser settings to another search provider, people often keep the default settings, experts say.

Lenovo, which bought IBM's PC unit in 2005, is the first computer maker to agree to preload Windows Live services. The company plans to include the services in its Lenovo-branded PCs, as well as ThinkPad notebooks and ThinkCentre desktops.

Peter Gaucher, executive director for strategic alliances at Lenovo, declined to discuss whether Microsoft outbid Google to replace its rival, saying only that the decision was a "combination" of business and technology considerations. The deal with Microsoft, however, goes further than one the company had with Google, since the new agreement includes Live.com as the default home page for IE. The agreement with Google only involved its toolbar, Gaucher said.

In the future, Lenovo plans to incorporate support and other customer-focused services and information in the home page, Gaucher said.

Microsoft To Blast Google For Its Copyright Policy

Microsoft To Blast Google For Its Copyright Policy

SEATTLE - Microsoft Corp. is set to launch a blistering attack on rival Google Inc. Tuesday for what the software giant argues is the Web search leader's "cavalier" approach to copyright protection.

In prepared remarks to be delivered to the Association of American Publishers, Microsoft Associate General Counsel Thomas Rubin argues that Google's move into new media markets has come at the expense of publishers of books, videos and software.

The Microsoft attorney's comments echo arguments at the heart of a 16-month-old copyright lawsuit against Google brought by five major book publishers and organized by the Association of American Publishers, an industry trade group.

"Companies that create no content of their own, and make money solely on the backs of other people's content, are raking in billions through advertising revenue and IPOs," says Rubin, who oversees copyright and trade secret law at Microsoft.

"Google takes the position that everything may be freely copied unless the copyright owner notifies Google and tells it to stop," said Rubin, noting that Microsoft takes the position of seeking the copyright owner's consent before they copy.

Competition is heating up this year between Google, the world's dominant provider of Web search services, and software giant Microsoft, which recently entered the Web search market.
At the same time, Google has recently expanded into the business software market with a set of Web-based subscription services it sees as a major revenue generator which could chip away at Microsoft's 15-year dominance of computer software.

Rubin invokes criticism that Google has faced since its acquisition late last year of YouTube, which has come under fire from several major media companies for allowing widespread copyright infringement of professionally produced video.

"In essence, Google is saying to you and to other copyright owners: 'Trust us - you're protected. We'll keep the digital copies secure, we'll only show snippets, we won't harm you, we'll promote you,"' Rubin argues in his speech.
"But Google's track record of protecting copyrights in other parts of its business is weak at best," he said.

David Drummond, Google's senior vice president for corporate development and its chief legal officer, said in response that Google works with more than 10,000 publishing partners to make books searchable online and has recently added the BBC and NBA basketball league as YouTube video partners.

"We do this by complying with international copyright laws, and the result has been more exposure and in many cases more revenue for authors, publishers and producers of content."
Rubin cites anecdotal media reports that a handful of Google sales people were caught encouraging advertisers to capitalize on the demand for pirated software on the Web.

Rubin sides with publishers in criticizing Google's ambitious plan to scan millions of published works in the world's great libraries and make them available to consumers via its Google Book Search system. He said by scanning copies of published works without first seeking copyright holders' permission, Google opens the door to massive infringement.

The attorney also says Google's defense of 'fair use' is overly broad. "Concocting a novel "fair use" theory, Google bestowed upon itself the unilateral right to make entire copies of copyrighted books," Rubin argues.

Drummond replied: "The goal of search engines, and of products like Google Book Search and YouTube, is to help users find information from content producers of every size."

The publishers' lawsuit against Google, filed in October 2005 in the U.S. District for the Southern District of New York, remains in the discovery process with no trial date set.

Microsoft's move bears parallels to an attack five years ago by the Redmond, Washington-based company on so-called "open source" software, which has emerged over the past decade as the biggest alternative to Microsoft's Windows software franchise.

Microsoft Says Google Success Was 'Wake-Up Call'

Microsoft Says Google Success Was 'Wake-Up Call'

Ray Ozzie, Microsoft's chief software architect, talks about Windows Live and other efforts to mine the business potential of the Web.


SEATTLE -- The success of Google Inc. opened Microsoft Corp.'s eyes to the riches available in Web advertising, the chief technologist for the world's largest software maker said Tuesday.
"It was a wake-up call within Microsoft," company Chief Software Architect Ray Ozzie said at a Goldman Sachs investor conference in Las Vegas.

Google's success alerted Microsoft to the financial power of advertising and how it might complement revenue from subscriptions for its desktop software, he said.

"This very clearly caused an inflection point within our industry and within Microsoft of understanding advertising as an economic engine," Ozzie said in a question-and-answer session monitored online.

Ozzie stepped into the top technical position at Microsoft last year, replacing co-founder Bill Gates and spearheading an important transition for the $44 billion company to extend its reach beyond the computer desktop.

Google derives almost all of its $10.6 billion in annual revenue from advertising, while Microsoft's loss-making Internet arm generated $2.3 billion in sales last year. Microsoft makes most of its money from its dominant Windows operating system and Office software suite.
"It is critical for Ray Ozzie to rethink how Microsoft competes in the Web world, because it is a totally different landscape out there and if Microsoft doesn't adapt it will get left behind," said Morningstar analyst Toan Tran.

The challenge for Ozzie is to deliver a host of Web services alongside Microsoft's classic out-of-the-box software to remain competitive with online rivals like Salesforce.com , Yahoo Inc. and others without compromising its core business.

"In most cases it's not going to be cannibalistic, but on the fringes there will be some substitution of one thing for another," said Ozzie.

For example, Ozzie said some small businesses may opt for Office Live -- an online service that helps set up Web sites, company e-mail and Web applications for collaborative projects -- instead of a company server running on Windows.

Microsoft believes new Web services will work in tandem with software installed on the computer, a vision that differs from "software as a service" advocates who expect services delivered over the Web to eventually replace software that resides on local PCs.

"The services opportunity is ... really more than just taking what's on the PC and putting it up on the Web," said Ozzie, who gained respect as a technology guru by developing ground-breaking software including Lotus Notes and who has made only a few public appearances since taking over for Gates.

When Microsoft responded to a strong competitor in the past, the Redmond, Washington-based company discovered new, and sometimes unintended, business opportunities. Ozzie said he expects the Web services fight to be no different.

Out of Microsoft's competition with Sony Corp.'s PlayStation 2 video game console emerged the strategy for its Xbox Live online game platform, the backbone of its current entertainment strategy, according to Ozzie.

A side effect of its competition with Google, Ozzie said, is that Microsoft can now support businesses with advertising when traditional licenses wouldn't have worked. Also, the data centers and services platforms that Microsoft is building for itself could eventually be made available to customers.

"That's going to present tremendous business opportunities," said Ozzie, who joined the company in 2005 when Microsoft acquired Groove Networks, a company he started.
Shares of Microsoft closed down $1.20, or 4.1 percent, at $27.87 on Nasdaq in line with declines made by other major technology shares.

Is Microsoft's Impact On The Economy Bigger Than Google's?

Is Microsoft's Impact On The Economy Bigger Than Google's?


Donna Bogatin asks a thought-provoking question: Who has more impact on the economy, Microsoft or Google?

During his annual predictions for 2007, futurist Mark Anderson said that Google and Microsoft represent two very different types of money. Microsoft is plumbing money, Anderson said, while Google is ad money.

A Microsoft-commisioned study claims the following:
In New York, each dollar of Windows Vista-related revenue earned by Microsoft in 2007 will generate more than $19 in revenue for the ecosystem beyond Microsoft. We expect that in the first year of Windows Vista shipments, this ecosystem will sell more than $7 billion of Windows Vista-related products and services in New York.

That's pretty impressive and if cast against both the U.S. and world economies, it's obvious that Microsoft's Vista release will be good for the global IT market.

Looking back at the Anderson dinner last month:
On the technology front, Anderson differentiated between Microsoft, a company that is "making plumbing," and Google, a "river of money." This means that Microsoft makes technology that businesses and consumers need for everyday tasks while Google is sitting on top of a macro-trend as advertising dollars drift online.

Anderson stressed that "plumbing money" is different than ad money and that the differences in money would continue to define these two companies. Countering prevailing thinking, Anderson said that Microsoft isn't going anywhere. He also repeated an earlier warning about Google, calling it one of the "most fragile" financial structures ever.

Microsoft's impact on the economy is still bigger than Google's, but is Anderson right? Will Microsoft remain the backbone of the global IT market? Or will Google soon become the bigger player?