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Brier Dudley's Blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

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October 31, 2007 2:59 PM

Startup catch-up: Widgets, wireless and more

Posted by Brier Dudley

Here's a batch of company announcements I've been meaning to get to. In random order:

Avnera, a Beaverton, Ore.-based semiconductor company, emerged with new wireless technology competing with Bluetooth in the consumer electronics market. Its new products are a chip that enables transmits uncompressed CD-quality sound for applications such as wireless headphones and speakers -- some of which are already on sale at Best Buy -- and a wideband voice chip for gadgets such as VoIP handsets. It has a Seattle presence in its VP of product development, Mats Myrberg, who left Microsoft for Avnera but still lives in town.

Lots of activity in online real estate, including ChoiceA, a Vancouver, Wash., startup that has plans for a national database of for-sale-by-owner home listings to compete with the Multiple Listing Service. So far most of the listings are in Portland and Seattle, but founder Jeffrey Summerson said the venture's starting to get national exposure.

Just in time for the holidays, Seattle cooking community site BigOven added a free video sharing and tagging feature so budding Rachael Rays can flaunt their stuff or broadcast grandma's gravy-making technique. Founder Steve Murch, a former Microsoft and Expedia exec, reports traffic is up 400 percent year over year.

In the social network widget world, iLike's reportedly part of the new Google-backed social network API project. Will the APIs help iLike replicate its Facebook success on other networks, or was just good timing?

Meanwhile, Mpire is reporting more big numbers for its WidgetBucks ad service -- in its first 30 days, 25,000 publishers and bloggers signed up and 200 million ad impressions were registered. That's double Mpire's six-month growth projection. I wonder how independent ad services like Mpire's will work on a Google-let platform. (Update: Mpire's spokesman informed me today that he erred and didn't give me the full count yesterday. Including signups via some ad network partnerships, WidgetBucks actually has 30,000 publishers and bloggers signed up. The company posted an update at its blog today.)

Veteran tech recruiter Colleen Aylward launched InterviewStudio in Bellevue. It's a Web site/service where executive-level job candidates can compile video interviews, resumes, assessments and other materials for hiring managers who may use the site to evaluate pontential hires.

Another local video startup hopes to become the destination for amateur sports video created by players and fans. Seattle-based includes a site where users can create channels for their favorite team and of course a player widget and Facebook application. Founder Chris McCoy, 24, previously started baseball instructional company

Comments | Category: Startups |Permalink | Digg Digg | Newsvine Newsvine

October 31, 2007 10:47 AM

Word's out: Leopard's fine for many, but not 100 percent

Posted by Brier Dudley

Lots of spicy feedback to my post about Leopard being still too buggy.

If the commenters accurately reflect the experience of Leopard users, most people are perfectly happy with the system.

But those folks sound like enthusiasts and early adopters. I still think average users and companies that can't afford snags should hang back awhile until the bugs and drivers are sorted out, just as IT types did with Vista. That was the TUAW advice I referred to in the original post.

I probably could have been more specific, and said there are bugs to be sorted out and compatibility issues because key applications aren't yet ready for Apple's new operating system. Just like most every other new operating system.

It that smells like FUD reeking of the Microsoft taint befouling the Puget Sound region, so be it.

People considering a Leopard upgrade who use Adobe applications should probably ignore all the politics and go straight to the source for the final word on whether the applications they're using (Acrobat 8 Pro and Reader 8?) will work with the new operating system. (Adobe issues were part of TUAW's great advisory but it was deemed FUD by some, so who can you trus?.)

Adobe's support site said it's been working with Apple on compatibility but some apps won't get Leopard compatibility updates until December and January. Here's the source material and an excerpt:

Thanks to close collaboration between Adobe and Apple, most of the CS3 applications and associated technologies, such as Adobe Bridge CS3, Version Cue CS3, and Device Central CS3, are compatible with Mac OS X Leopard without requiring additional updates. However, the following CS3 applications will require updates for full compatibility with Leopard: Adobe Acrobat 8 Professional and our professional video applications, including Adobe Premiere Pro CS3, After Effects CS3 Professional, Encore CS3, and Soundbooth CS3. We expect to publish free Leopard compatibility updates for the video applications in December 2007 and for Acrobat 8 Professional and Adobe Reader 8 in January 2008. For a complete overview of compatibility between Adobe creative applications and Mac OS X Leopard, see the chart on page 2 of this FAQ.

Q. Will older versions of Adobe creative software -- such as Creative Suite 2 and
Macromedia Studio 8 software -- support Mac OS X Leopard?

A. While older Adobe applications may install and run on Mac OS X Leopard, they were designed, tested, and released to the public several years before this new operating system became available. You may, therefore, experience a variety of installation, stability, and reliability issues for which there is no resolution. Older versions of our creative software will not be updated to support Mac OS X Leopard.

Comments | Category: Apple |Permalink | Digg Digg | Newsvine Newsvine

October 31, 2007 10:31 AM

Microsoft names new China research boss

Posted by Brier Dudley

Filling a position created by Harry Shum's promotion to VP and chief search and ads scientist, Microsoft named Hsiao-Wuen Hon to be managing director of its Beijing lab, Microsoft Research Asia.

Hon, a speech technology expert, joined Microsoft Research in Redmond in 1995 after working as an architect and manager on Microsoft product teams. Before that he worked at Apple, developing its Chinese dictation kit.

In 2004 he moved to China to become deputy managing director of MSR Asia, where he oversaw search, speech, natural language and Internet media research. He also managed a joint seach lab with the Live team.

The 9-year-old Beijing lab now has 300-plus researchers.

Comments | Category: Asia , Microsoft |Permalink | Digg Digg | Newsvine Newsvine

October 30, 2007 3:57 PM

Inslee and rockers for net neutrality

Posted by Brier Dudley

In advance of Wednesday's FCC hearing on localism and media ownership rules, U.S. Rep. Jay Inslee joined Seattle music industry and advocacy group representatives on a teleconference calling for net neutrality principles.

The call was also a prelude to a sold-out fundraising Rock the Net concert tonight at the Crocodile.

Here's Inslee's statement:

We can't allow phone and cable companies to hijack the Internet, which has been such a success due to its open architecture. Telecom companies shouldn't be picking winners and losers among online content. That has been, and always should be, up to Internet users.

Here's a link to Reclaim the Media (the flag of which is now planted in this tiny corner of the media world ...), which will post the call at its Web site.

A great resource on the topic is The Democracy Papers, a Times editorial page project that includes a series of articles and essays.

Here's the FCC hearing notice, with a list of speakers.

Comments | Category: Public policy |Permalink | Digg Digg | Newsvine Newsvine

October 30, 2007 2:47 PM

UW: New computer science progams, lab

Posted by Brier Dudley

Growth and new programs are happening at the University of Washington's Computer Science & Engineering Department, Chairman Hank Levy said this morning at the annual "industrial affiliates" meeting with tech companies, investors and school supporters.

Starting in 2008, the department will try a new five-year program that will give graduates both bachelor's and master's degrees.

Levy said the goal is to have 30 students a year in the "industrially focused" program that's geared toward preparing students for jobs at companies such as Microsoft and Google. "These students will be really productive and sought-after and interesting," he said.

Similar programs combining undergrad and graduate engineering are in place at schools such as MIT and even my alma mater, Whitman College in Walla Walla.

There for the update, and research presentations by students, were representatives of Microsoft, Apple, Google, Yahoo, Cray, Sony, Madrona Venture Group,, DreamBox Learning and other companies.

Levy isn't just pitching to the private sector. The school's also seeking legislative support for the five-year Master's program.

Another initiative Levy outlined is already under way: a new "Experimental Computer Engineering Lab" created as a partnership of the computer science and electrical engineering departments.

Six new faculty positions, three from each side, are allocated to the effort, including two now being filled.

Computer science is also taking more Ph.D. students and overall, Levy's planning for "25 percent growth across the board" in the department.

Altogether it's getting 10 new professors, including two through the Experimental Computer Engineering Lab.

Ed Lazowska, former department head, now Bill and Melinda Gates CSE chair, paticipated after returning from a summer back surgery with a body reinforced by titanium bits.

Lazowska pointed out that CSE graduates should have no problem finding jobs, based on strong IT workforce projections by the state and federal governments.

"There's plenty of opportunity in this field,'' he said.

We'll see what the current situation is like tomorrow, when the affiliates meeting morphs into a daylong recruiting event at the school's Paul G. Allen Center.

Comments | Category: Education , Public policy |Permalink | Digg Digg | Newsvine Newsvine

October 30, 2007 2:18 PM

Zillow rolls out its new ad platform

Posted by Brier Dudley

Zillow just announced an impressive new ad platform that targets homeowners using the site. I wonder if we're seeing the company's master plan unfold.

Called Zillow Home Direct Ads, it's aimed at companies that want to reach a lucrative bunch: homeowners, homebuyers and potential homesellers.

A highlight is the platform's own sort of Zestimate: It guesses when homeowners are preparing to sell or upgrade their homes, presumably by watching for an increased level of attention to the information Zillow provides about their home.

Advertisers can tap into the detailed database of 70 million homes that Zillow has built, targeting people by address, home value, neighborhood characteristics, or as Zillow put it in its news release, "by psychographic cluster such as urban families with children."

Zillow claims this is the first time such targeting has been available to online advertisers.

From the release:

"What we're offering advertisers is pinpoint accuracy on the purchasing intentions of homeowners, including the ability to forecast that they are highly likely to move or remodel well before they start the process," said Greg Schwartz, Zillow vice president of ad sales.

The timing of the announcement is interesting. It came just after a potential competitor,, was written up in the New York Times after receiving $1.5 million in funding to expand to more cities. That's probably less than the interest Zillow earns on its war chest, but they're both going after the same national advertisers.

I'll refrain from ranting this time about how Zillow is going after newspapers' bread and butter.

Comments | Category: Startups |Permalink | Digg Digg | Newsvine Newsvine

October 30, 2007 2:08 PM

Sorgatz sayonara: "I'll miss ya, Seattle"

Posted by Brier Dudley

In case you missed it, Rex Sorgatz said goodbye -- and made sure to clarify my snark about Newsvine -- in a comment to the entry on his departure from

I know you're parenthetically joking, but of course Newsvine will continue to grow independent of any major involvement by big media. And itself is growing staff every day -- quite the opposite of needing fewer producers, we're hiring new people left and right.

And regretfully, I will cease using the Royal We when talking about in a couple weeks. I'll miss ya, Seattle.

Comments | Category: Microsoft |Permalink | Digg Digg | Newsvine Newsvine

October 29, 2007 5:59 PM

Fishkin on Live vs. Google, SEO issues and more

Posted by Brier Dudley

As promised, here are more excerpts from my interview with SEOmoz Chief Executive Rand Fishkin. They've been edited a bit for space and clarity.

Q: How long will the SEO industry be this important, if search engines get more precise and start giving people exactly what they're looking for?

A: There's big limitations to search engines. Some folks in the industry will say search engines will never advance to the point where you won't need to have some sort of [SEO] strategy. I would agree with that to some degree.

One, there's a competitive side to it -- not everyone can have the top one to three ranking, the search engines have to order those results by something. There are always going to be people who are attempting to push the envelope in what they can do to make those things happen. It's the same way the offline marketing world works ... so there's going to be competition, and because of the competition, there's going to be people engaged in whatever the competitive practice is that helps you do better.

However, a ton of search engine optimization work right now is accessibility, right? Just making sure that you're not hiding content from the search engines, that you're putting it in ways that they can access.

It's estimated that Microsoft thinks they've got around 20 billion pages in their index, and the estimate is that the Web contains more than 100 million pages. What's the difference? ... There's limitations to how content is presented -- there's content in Flash, there's content in images, there's content in Java applets, there's content that's only in Ajax ...

When folks talk about search engines advancing their technology, maybe that's what they-re thinking -- that much more of the Web will become accessible and crawlable. But as far as never needing someone to help with that competitive angle, that's tough for me to imagine. The guy who is ranking No. 4 is always going to want to be ranking rank No. 1, and there's got to be some way for him to do that, and someone who will help him do that.

Q: I wonder if business models of the search companies will change that minimizes the importance of SEO, maybe a hybrid of paid and unpaid results.

A: Depending on the search query, you're getting between 15 and 30 percent of the traffic clicks on paid vs. organic, so organic's always going to be the lion's share there

Q: What's to stop Microsoft, Google and Yahoo from saying to companies, instead of putting all this effort into SEO, why not work directly with us?

A: Yahoo has their search-submit program, which is a paid inclusion program, so you pay them for organic listings. But all you get is the fact that they promise to spider and index you. They don't promise any particular rankings. The search engines have all found, the more they move away from paid relationships, the more relevant and the better experiences their searchers have. ... The search engines are probably unlikely to switch back to that paid-only or more-paid system because they'll lose market share to their competitors where their users are having a better experience.

Q: What about SEO -- do you expect them to offer more SEO services?

A: We've almost seen it go the other way.... An engineer friend of mine with an unnamed search engine, we were hanging out> He said, dude, I had to take this call with some big Fortune 500 company because they spend so many hundreds of millions on advertising. Of course the ad guys are like, "Hey, get on the phone with these guys and tell them why they're not ranking for any of these terms." He's like, "Gosh, I don't have to do this, this isn't my job."

Q: So they're providing some premium service on the side?

A: It wasn't premium service. He had to take the call and talk to them: "Well, we can't reach any of your content because it's behind this board. You should go work with an SEO who can help you, you need to make your Web site more accessible." Which is not all that different from someone saying blind people can't access your Web site, go find a usability expert who can make it readable on a screen for them.

Q: What's your prediction for the future of Microsoft's Live Search?

A: Tough call for me. I get to see things from Live that other people don't get to see so I'm not sure I feel entirely comfortable or safe giving my two cents there. I really like a lot of people on the team. I think the latest upgrade they did with the searchification program and all that is a significant step forward. By my estimation they still have a long way to go to catch with Google from the relevancy side. But I could see them getting close to even if not even with Google's relevancy and search experience. The biggest problem they're going to continue to encounter is branding and whether they can have people think of them the same way people think of Google.

Q: How many SEO guys are really focused on Microsoft or Yahoo?

A: It's not that you're not focused on them. What we all try and do is say what are the reasons I might be ranking on Google but not Microsoft or Yahoo.

Q: Are there any hot topics in SEO besides Google's PageRank?

A: I think paid links is going to be a hot topic for many months to come. It depends on who you're talking to.... For clients or for companies who are trying to break into the field, one of the big things we talk about now is vertical search. It used to be you do any search at Google, you get 10 blue links. Now you get images, you get maps, you get instant answers, You get the weather with these little pictures. So there's all sorts the folks saying, "Gee, the search engines are trying to fill so much more of their results with other kinds of information, information that's coming from other sources." So inclusion in local, in maps, images.

Q: So you have to optimize for each one of those search silos bundled into universal search results?

A: Depending on who you are and what you're doing, you're probably going to have to do at least some. It has become a huge part of what you do.

Q: It almost seems like Google's universal search has become it's own take on SEO -- you're searching for, say, "Transformers," and it gives you standard search results plus images plus showtimes. Can you compete with that because it seems like they've basically claimed the top of the first pag. Are you going to be then fighting for the bottom of the first page, or the top of the second?

A: No, you're going to be fighting in product search results or in map search results or in image search results as opposed to just in Web search results.

Q: Because those are the ones Google is going to grab and put at the top?

A: Right.

Comments | Category: Web |Permalink | Digg Digg | Newsvine Newsvine

October 29, 2007 1:27 PM

Rex "Fimoculous" Sorgatz leaving

Posted by Brier Dudley

The Redmond-based news site is losing its executive producer, and Seattle is losing one of its finer pop culture bloggers.

Rex Sorgatz said today on his Fimoculous blog that he's moving across the country.

When I asked what's up, and he said it's too early to provide details, but he's leaving to start a "media venture that includes video and community."

(Maybe won't need as many producers since it bought Newsvine, a Seattle news site/service that lets readers choose the day's top stories.)

Comments | Category: Microsoft |Permalink | Digg Digg | Newsvine Newsvine

October 29, 2007 11:41 AM

Experimenting with Hulu, here's The Simpsons

Posted by Brier Dudley

I haven't spent much time yet with Hulu, the new video venture from NBC and News Corp. that's now taking names from people who want to help test the service, but it's obviously a game changer.

People will gravitate to the best free stuff they can find, and they only have so much time to spend watching video content.

How much time are they going to spend scouring YouTube, trying to find a chuckle among all the junk, when Hulu's offering recent episodes of shows like "The Simpsons," "Heroes" and "The Office" for free, on-demand, legally and in high quality straight from the source? Hulu's got ads, but so does YouTube.

It's also no wonder NBC feels confident enough to start talking trash about iTunes.

Hulu lets you embed its content in your blog, so let's try it out. Here's a clip from the Oct. 14 episode of The Simpsons:

One of the coolest tricks is built-in editing software that lets you embed just a snippet. On the playback progress bar there are two slider bars, and you put one at the start and one at the finish of the clip and you're ready to go, right to the poignant bits:

UPDATE: Beta note - there's a sound synchronization issue with the second clip. Audio isn't tracking with the video now. It worked when I posted it, but a few hours later someone noticed the glitch.

Comments | Category: Digital media |Permalink | Digg Digg | Newsvine Newsvine

October 29, 2007 10:58 AM

WSA board broadens with gamer, device maker

Posted by Brier Dudley

The tech association named three board members today: casual gaming exec Paul Thelen, founder of Seattle's Big Fish Games; Physio-Control President Brian Webster; and Susannah Malarkey, executive director of the Technology Alliance.

Comments | Category: Public policy , Tech work |Permalink | Digg Digg | Newsvine Newsvine

October 29, 2007 9:52 AM

Word's out: Apple's Leopard still too buggy

Posted by Brier Dudley

A reader in Texas made an interesting comment on last week's post about Apple being rushed to finish Leopard:

Very disappointing. Leopard has bugs, bugs and more bugs. No print drivers survived the upgrade. Photoshop CS3 and InDesign CS crash when working together. ICC profiles are gone. Mail has no stationary [sic] as proclaimed, and if there is something to do to make it appear in the interface I can't find it, nor find documentation about it. I have had the system less than a day and am still exploring. Bottom line: I want my old system back, and I want to return the family pack of 5 licenses for a single license. It will not be installed on my notebook or children's computers.

I didn't call the comment out at first, because I wasn't sure if it was a firebomb. But now even the Apple priests are saying Leopard's buggy -- so much so they're advising people to hold off upgrading.

The Unoffical Apple Weblog summed it up on a podcast, then posted highlights today:

If you have only one computer and it's your production machine, don't upgrade. The 10.5 upgrade is a big one -- not a small update, not a few bug fixes. Lots of stuff gets broken and if you need to keep getting your work done, just wait. Let a few dot releases ease things out.

If you work with Adobe software and need your software to work reliably, don't upgrade. Apple didn't get its gold master out to third party developers in time for the upgrade path to proceed smoothly. Everything was rush, rush, rush. Developers simply did not have the time to work with the final product and make sure their apps would be compatible. If you need Acrobat (and I do) or In Design, you need Tiger. Don't upgrade to Leopard.

That makes it just embarrassing that Apple built a nasty jab at Windows into Leopard -- the visualization of a PC as a dowdy old monitor displaying a crashed system that Anil Dash ripped into Sunday, and he didn't even note the bugs or Leopard's own "blue screen" issue.

Comments | Category: Apple |Permalink | Digg Digg | Newsvine Newsvine

October 29, 2007 9:35 AM

More from SEOmoz's Rand Fishkin

Posted by Brier Dudley

Here's one of the explanatory videos shared by Rand Fishkin, chief executive of SEOmoz, a Seattle search-optimization company I wrote about in today's column.

I'll post more from an interview with Fishkin shortly.

Comments | Category: Entrepreneurs , Web |Permalink | Digg Digg | Newsvine Newsvine

October 25, 2007 3:24 PM

Vista-Office wave finally pays off, MSFT over $35

Posted by Brier Dudley

MSFT seems to be settling just under $36 in extended trading.

Is this a new peak, or is there more to come now that it's busted past $30?

Comments | Category: Microsoft |Permalink | Digg Digg | Newsvine Newsvine

October 25, 2007 10:26 AM

Pogueberg on Apple's Leopard

Posted by Brier Dudley

Walt Mossberg and David Pogue both like Leopard, Apple's new operating system going on sale Friday, but they weren't blown away and they each had a few niggles.

It's not surprising that the OS is considered evolutionary and not revolutionary -- and that Pogue found a few bugs -- since Apple struggled over the past year to get both the software and the iPhone done on time. It diverted engineers from Leopard to get the phone done on schedule, and it's releasing the OS too late for the back-to-school season.

For a change, Leopard doesn't seem to be creating any significant gap between the capabilities of the operating systems from Microsoft and Apple.

Still, it sounds like there are enough new features to persuade Apple users to upgrade.

There's also enough of a cloud around Vista that Leopard will probably lure more potential Windows buyers.

Here are some highlights from the two influential reviewers' Leopard reviews.


While Apple claims the new system includes more than 300 new features, there is nothing on the list that could be considered startling or a major breakthrough. Some of Leopard's features are unique, but many others -- such as backing up data and quickly viewing files -- have been available on both Windows and the Mac via third-party programs or hard-to-find geeky methods buried in the operating systems. Leopard has made them easy to find and use.


Apple's Web site lists 300 new features in Leopard. They're not all earth-shattering; they include a Braille font, a "Word of the Day" screen saver and a Danish spelling checker. (Settle down, folks.)

Fortunately, others really do make you slap your head and say, "Of course!"

Both were surprisingly critical of Leopard's interface design. They said its transparent menus can be hard to read depending on the background, and Mossberg said the icons aren't as nice as Vista's or the previous Mac OS.

Pogue's take:

Often, Apple's snazzy graphics are justifiable because they make the Mac more fun to use. In this case, though, nothing is gained, and much is lost.

But both reviewers are still fans, though, and they contrasted Leopard with weak spots of Vista PCs.

Pogue noted that Leopard doesn't come cluttered with trial software and nagging notification balloons. Mossberg did side-by-side speed tests that highlighted Vista's slow startup -- nearly two minutes -- vs. Leopard's speedy 38-second Le Mans start.

Both liked the Time Machine backup program. Lots of people are using a variety of backup programs and extra hard-drives for backup nowadays. Dell in particular has a fairly standard option that adds a second drive to constantly and automatically mirror your data.

I haven't used it yet, but the big advance in Time Machine seems to be the simplified process of recovering files after a crash -- you visually skim through snapshots of your backups and choose where you'd like to resume.

Pogue also found glitches that I'm guessing resulted from the stress Apple's engineering team faced, trying to develop Leopard simultaneous with the iPhone.

Graciously acknowledging the challenges of building today's super complicated operating systems, Pogue noted "the usual minor set of 1.0 bugs" and "a few programs and add-ons that will need updates to run in Leopard."

The story I'd like to read, though, is what Apple would have included in Leopard if it had more time.

In particular, Apple still hasn't built in features for recording televisionlike premium versions of Vista. That could have revived the AppleTV product and led to some interesting playback options with the iPhone and iPod.

Comments | Category: Apple , Apple |Permalink | Digg Digg | Newsvine Newsvine

October 24, 2007 8:05 PM

Microsoft's Facebook coup

Posted by Brier Dudley

Inventory is the word I kept hearing when Microsoft and Facebook announced their deal today.

Kevin Johnson, president of the Platforms and Services Division, twice mentioned how much inventory the deal was providing for Microsoft's AdCenter business.

"This deal brings more inventory and more value to that ad platform. At the same time it enables both parties to collaborate as Faceook looks to develep new ad type as it relates to the social experience."

By inventory he was referring to space where Microsoft can place ads for clients. It may seem like there's an infinite number of Web pages, but there's actually a limited amount of premium real estate for companies to hang their billboards.

That's why the online ad titans are so aggressively pursuing contracts like the one Microsoft made to be Facebook's exclusive ad platform.

It's also one of the great tricks of search advertising - every time you click search, you're helping Google or whoever create a page with inventory that can be sold to advertisers. But that's high-volume, low-rent stuff.

Facebook is like a prosperous new suburb, a place with lots of opportunities for a developer like Microsoft to build and rent space to companies.

What I have trouble reconciling is the scarcity of inventory and the difficulty Web startups have breaking into the major leagues. I guess users are limited in the amount of personal-time inventory they have, and hot sites like Facebook are allegedly where they spend more of that time.

People are quick to write off Microsoft's ad business because Google seems to have it all. But Facebook helps Microsoft's inventory build critical mass, and it's a great place for Microsoft to develop and show off its new, post-search ad technologies.

The companies didn't share other details, but Microsoft has to have access to Facebook user profiles, at least as much access is needed to target ads.

Facebook and other social networks are like honey pots. They attract users who share their interests and friends' contact information. This creates a detailed list of profiles that can be used to target advertising.

Combine that with all the profiles Microsoft gathers through other ad partners and its own sites, and it's pretty formidable (and spooky).

Maybe Microsoft will finally have a chance to show in the great online ad race. But how long will it take? A decade ago the company invested billions in telecom companies, hoping to win a seat at the table. It's hard to measure when and how those investments paid off, but in comparison the $240 million it put into Facebook is less than pocket change.

Comments | Category: Digital media , Microsoft , Web |Permalink | Digg Digg | Newsvine Newsvine

October 24, 2007 6:28 PM

Benioff on Neil Young and Visual Basic

Posted by Brier Dudley

The real reason Chief Executive Marc Benioff was in Seattle today wasn't to pitch his company's new development platform.

It turned out he and co-founder Parker Harris wanted to catch the Neil Young concert here Tuesday night, so they decided to stay over and update local journalists on the company's progress.

In particular, they wanted to highlight Visualforce, an interface development tool first unveiled at a developer conference in September.

"Think of it as Visual Basic as a service,'' Benioff said.

Comments | Category: Enterprise |Permalink | Digg Digg | Newsvine Newsvine

October 24, 2007 1:45 PM

Microsoft exclusive Facebook ad platform

Posted by Brier Dudley

That's what it scored for $240 million.

From the release:

Facebook and Microsoft Corp. today announced that Microsoft will take a $240 million equity stake in Facebook's next round of financing at a $15 billion valuation, and the companies will expand their existing advertising partnership. Under the expanded strategic alliance, Microsoft will be the exclusive third-party advertising platform partner for Facebook, and will begin to sell advertising for Facebook internationally in addition to the United States. Financial terms were not disclosed.

"We are pleased to take our Microsoft partnership to the next level," said Owen Van Natta, vice president of operations and chief revenue officer at Facebook. "We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to the more than 49 million active users of Facebook."

Comments | Category: Microsoft |Permalink | Digg Digg | Newsvine Newsvine

October 24, 2007 1:29 PM

Microsoft buying Facebook stake, details at 2

Posted by Brier Dudley

AP's already reporting that Microsoft is paying $240 million for a 1.6 percent stake in Facebook, which turned down a competing offer from Google.

An announcement is coming shortly.

Comments | Category: Microsoft |Permalink | Digg Digg | Newsvine Newsvine

October 24, 2007 12:19 PM

Zillow's real estate deal: Watch out, newspapers

Posted by Brier Dudley

First it was Craigslist, then it was Google and Yahoo.

Now Zillow is emerging as the latest big threat to newspapers, which are watching a series of Internet companies go after their dominant share of advertising and undercutting them with free services.

At least that's how I'm reading today's announcement that Zillow has signed a deal with ERA to display the realty firm's listings on Zillow's site.

ERA is just the first announced user of Zillow's Listings Feed sevice. The Seattle Web company is also in talks with other brokerages about Zillow Feeds.

The feeds could increase the usefulness of Zillow by adding more "real" information about properties, but I wonder if it will also diminish one of the original promises of the company: To upend the real estate market by giving consumers new tools to independently search for and evaluate the value of homes, similar to the self-service effect Expedia had on travel.

Those tools are still there and Zillow has added more, including neighborhood discussion features, but the chances of Zillow leading to a self-service revolution in real estate seem lower as the company cozies up to brokerages and sharpens its focus on advertising.

With Listing Feeds, Zillow is providing free exposure to brokerages. In return, they're helping Zillow build and refresh its property database and providing traffic that will help Zillow sell more ads.

This is the Craigslist strategy: Offer free listings that lure advertisers from newspapers, then take the community of users that have relied on newspapers' classified ads.

Newspapers blew it by responding with lower classified prices and by taking that community for granted, but they have done a great job with categories such as real estate that are a cornerstone of their business.

Remember they're not just paper products -- virtually all newspapers are providing online services for brokerages to list properties online, as well as local Web sites where buyers and search for homes.

A consortium of newspapers also operates major real estate sites such as HomeGain and Homescape, which provide listing services and search and valuation tools for buyers.

It's hard to compete with free, which is what Zillow is offering, but the site also has a long, long way to go before it has papers' reach and market penetration.

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October 22, 2007 10:44 AM

The PS3 as media center, and the Xbox response

Posted by Brier Dudley

Apparently Sony isn't the only company accelerating plans to turn its game console into a digital media center, the subject of today's column.

A Toshiba executive dropped a big hint that Microsoft's taking the Xbox in the same direction, adding a TV tuner and an internal high-def HD-DVD drive.

On Friday I asked Microsoft if it has plans for an internal HD-DVD drive to respond to Sony. A spokeswoman said no, there are no plans to do this with the Xbox 360, but I asked the question the wrong way: I shouldn't have said "360."

I think the Toshiba guy is talking about something beyond the 360, perhaps a next generation Xbox that probably won't be called the 360. It will naturally incorporate the latest technology, which would include a high-def DVD player and more video features.

One place Microsoft would have an edge is in the program guide that it has licensed for the Media Center. I don't think Sony has anything comparable.

Here's the quote from Molly O'Donnell, the top spokeswoman for the Microsoft group that includes Xbox:

Microsoft has no plans to integrate an HD DVD player in to Xbox 360. Offering the HD DVD player externally is the best way to give consumers the ultimate choice to create their own high definition experiences.

Here's the Toshiba Xbox story uncovered by Smarthouse, an Australian publication. An excerpt:

The new Xbox device, while allowing for extensive gaming capability, will be positioned as an entertainment hub that includes gaming and extensive wireless networking capability as well as 1080p playback. There is also talk of it including a dual HD TV tuner and EPG capability and a docking port for an MP3 player. For Toshiba, the device is critical if it is to be successful in beating Sony and the Blu-ray promoters.

But what if we're not hearing about a new Xbox, per se?

I wonder if it really is a new Xbox or instead a hard-drive-based DVR that includes an HD-DVD drive and also Xbox gaming capabilities.

Microsoft has licensed its Media Center interface to other DVR manufacturers -- LG, a few years ago -- but it hasn't yet licensed core Xbox features to consumer electronics companies.

Licensing the Xbox platform to CE companies makes sense though -- it's software, really -- and other companies would share the marketing and distribution costs and Microsoft would still get the cream from selling games. It's drastic, but the group is under huge pressure to get profitable.

It may also be payback for Toshiba, which helped get the first Zune off the ground.

Some say the Toshiba announcement is imminent, but I wonder if we'll hear about it at CES in January with plans for a 2008 launch. The show is the perfect place for Microsoft to announce plans to license parts of the Xbox platform.

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October 22, 2007 10:34 AM

The 747 chopper: Another plea for Boeing Surplus

Posted by Brier Dudley

This 24-year-old physics student built a working helicopter out of old car parts and chunks from a crashed 747.

Imagine what he could do with access to Boeing Surplus. I still can't believe that place is closing. It's worse than Warshal's turning into a hotel.

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October 19, 2007 1:05 PM

Windows' elegant new core, coming in 2010

Posted by Brier Dudley

Eric Traut, a Microsoft distinguished engineer, showed off the company's new crown jewels at the University of Illinois last week.

Computerworld has the story and a link to a video of Traut's presentation here.

Traut gave the first public presentation on a new kernel called MinWin that will be the basis of the next generation of Windows, debuting in 2010. He's part of a team of 200 working on reducing the kernel.

From the story:

Traut showed off MinWin and bragged about how much leaner the microkernel is than the current core of Windows. While Vista uses 5,000 files for its 4GB core, MinWin weighs in at just 100 files and 25MB.

So instead of plastering new stuff onto the bloated kernel, Microsoft took a fresh approach and produced a tiny core that will presumably be more efficient and flexible.

The article talks about how MinWin seems tailored for virtualization, but it also sounds like it would better position Microsoft to compete with open-source software mobile devices, starter PCs and consumer electronics.

Maybe I'm reading too much into this, but it must be a morale boost for the whole Windows engineering team to know that the foundation they're building on is finally getting sorted out.

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October 19, 2007 10:04 AM

Yahoo finally confirms plan: It's going big in Bellevue

Posted by Brier Dudley

Sometimes tech companies open little satellite offices because they recruited a hotshot who doesn't want to move to the mother ship.

On the surface, it looks like Yahoo did that when it hired Dave Sobeski away from Microsoft last November and set him up in a Bellevue office.

It also seems like a Googlesque tactic to lure more talent from Microsoft.

But Sobeski, while finally confirming today the company's expansion here in the Puget Sound region, said there's much more to the story.

Yahoo's going big in Bellevue, where it will work on one of the three pillars of the company's new strategy, according to Sobeski, senior vice president of platforms and architecture:

"We want to build a big presence up here. We want to be one of the top employers up here and have people excited about Yahoo up here."

Sobeski wouldn't provide growth projections, but he confirmed that the 115,000 square feet on three floors that the company leased in the One Twelfth@Twelfth building can accommodate 500 to 600 people:

"We wanted to ensure we had space to grow. We'll figure out how to grow it and what the plan will be.''

What will the office be like two years from now?

"We should be able to grow that talent pool rather rapidly.''

Yahoo now has about 50 employees in another floor, while the former Nortel Networks space it leased are given the funky Yahoo touch. "We are Yahooizing the workspace," Sobeski said.

Those 50 employees mostly come from a previous Seattle sales office and a small Eastside data-mining company that Yahoo acquired.

Sobeski said he's hearing from former co-workers at Microsoft, where he worked nearly 14 years on products ranging from Visual Basic and Internet Explorer to Windows Vista.

But he's also hoping to attract stars from, Adobe, the University of Washington and smaller companies in the area.

Exactly what he'll do in Bellevue is sort of secret, but Sobeski's enthusiastic about the opportunity to help further transform Yahoo into a platform for developers.

Sobeski noted that reaching out to developers is one of the major priorities outlined by Chief Executive Jerry Yang, along with serving as a great launching point for the Web and connecting advertisers and publishers.

From Sobeski:

"One of the things we definitely think about is how do we turn things into a platform, how do we go build that great ecosystem. You want to go build great software for your customer. How do you enable that? You enable that by allowing us to build that stuff but (also) by enabling third parties, publishers, to go build that stuff."

Yahoo can also do that by "having a platformy like guy like myself come in and say we definitely want to go look at everything we do and make sure we do it at great scale, we standardize it, we expose it to people ... getting that mentality throughout the company."

Will Yahoo provide hosted developer services similar to Amazon's Web Services? Sobeski's answer sounds like a strong maybe:

"We won't say no and we're not officialy saying yes but we believe it's interesting."

Bellevue should thank Sobeski's girlfriend, by the way.

When he was being recruited by Yahoo, he considered moving to its headquarters in Sunnyvale, Calif., but he wanted to stay close to her. They've been together for four years and she has a good job at Microsoft, so he chose not to relocate.

But it turned out there were already people at Yahoo pushing to expand in the area.

"It wasn't actually me coming that got the ball rolling, there were other people that said hey, there's talent."

He reiterated that point several times: the main reason for a Bellevue office is to attract software developers who can help build the Yahoo platform:

"We're going to go build the right technologies up here and the right services. What is up here is just the talent that we care about, which is really technical people who can solve problems fast and efficiently. That's what you want."

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October 18, 2007 12:13 PM

Mukilteo hacker busted for SWAT hoax

Posted by Brier Dudley

Just in time for Halloween, a scary story that a reader passed along:

A teenager in Mukilteo was arrested for allegedly spoofing authorities in Orange County, Calif., into sending a team of heavily armed police into a randomly picked family's home.

The Los Angeles Times reported Wednesday that Randal T. Ellis, 19, was arrested Friday, eight months after the prank.

Ellis allegedly manipulated AOL and Verizon systems and pretended to report a killer on the loose at the home, where a SWAT team accompanied by dogs and a helicopter stormed a house and handcuffed at gunpoint the parents of two toddlers.

Police allege he's done the same thing in Washington, Arizona and Pennsylvania since 2005. From the story:

He was in the process of being extradited to California on Tuesday and was charged with false imprisonment by violence and assault with an assault weapon by proxy.

The crimes carry a possible prison sentence of 18 years.

I didn't know we had laws protecting us from that sort of violence and assault, and I especially didn't expect to learn of them from Los Angeles.

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October 18, 2007 12:02 PM

Social networking: Essential or not

Posted by Brier Dudley

Social networking is fun but people must not think it's essential, judging from a new Parks Associates survey.

It found that 72 percent of Internet users would stop using a social networking site if they had to pay a $2 monthly fee.

The survey also found that 39 percent would flee if the site had too many ads.

Currently 80 percent of broaband users aged 18 to 25 use social networking sites "on a monthly basis," the firm said.

Other findings of the survey of 2,000 Internet users ages 13 and up:

-- 6 percent are tired of their current networking service and ready to switch.
-- 26 percent want all social networking sites to be connected.
-- 26 percent "would stop using this site if it were not for the fact that most of my friends are using this site."

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October 18, 2007 10:19 AM

China playing petty, but scary, Internet games?

Posted by Brier Dudley

I hope we're not seeing a trend.

First Myanmar cut Internet connectivity so the world wouldn't see as much of its brutal crackdown on protesters.

Now there are indications that China may be redirecting Internet traffic over Google, Microsoft Live Search and Yahoo and routing it to Baidu, apparently in retribution for the U.S. honoring the Dalai Lama.

Just what the world needs, another petulant superpower throwing a tantrum.

Why would China redirect search traffic? It doesn't seem like an economic strike as much as a ham-handed attempt at censorship.

Time to turn up the volume on Voice of America, and keep up the pressure on companies like Verizon and AT&T that interrupt the flow of information for political reasons.

It's also a terrible day for the FCC to propose rules that would further concentrate the media in the U.S.

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October 17, 2007 4:56 PM

Touching on Apple's big news today

Posted by Brier Dudley

The big surprise isn't that Apple's going to open the iPhone up to application developers, as Steve Jobs announced today.

Jobs said in May that the company would figure out a way to give developers iPhone access without compromising the device's security:

"Sometime later this year we will find a way to do that,'' he said at a Wall Street Journal conference.

What's really new today is Jobs' mentioning, in a postscript, that he'll also let developers write applications for the new touchscreen iPod. I'll bet people will do amazing things if Apple lets people really tinker with the wireless gadgets.

You've got to wonder how that's going over in Redmond. Microsoft hasn't had much luck rallying developers around its handheld, touchscreen computing platform, the Ultra-Mobile PC.

Five years ago Microsoft was way out in front with mainstream, touchscreen computing when it introduced the Tablet PC, but that's sort of fallen off the radar, even though Tablet features are built into Windows Vista.

The Zune could also be a nifty playground for developers, but in trying to build a seamless, Apple-like experience around the players, Microsoft hasn't given them any tools to work with the software.

Maybe Microsoft's more focused on mobile phones and Web services nowadays. But I can't imagine it will stand by and let Apple become the platform of choice for developers writing mobile, touch-computing applications.

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October 17, 2007 3:48 PM

Clarity on Microsoft's average pay

Posted by Brier Dudley

I should have used a better word in Monday's column when I described the average pay at Microsoft.

In the column, I said it's no wonder the local housing market held strong for so long, since salaries at the company average more than $145,000.

That figure came from Dick Conway's study of Microsoft's economic effect on the region. It said annual labor earnings at Microsoft averaged $145,000 in 2004, not including stock option income. If you count options, "average Microsoft employee compensation came to $188,900."

A lot of Microsoft employees e-mailed me and asked about the figure, presumably since they're making less, so I went back to Conway and asked for more detail.

Conway said the "annual labor earnings" include salaries, wages and "non-wage benefits" such as bonuses, insurance, retirement contributions and healthcare.

Microsoft wages and salaries alone averaged $115,500 that year, Conway said. That's based on data Microsoft gave him: In 2004, the company paid salaries and wages of $3,262,137,743 to 28,237 employees.

For comparison, wages and salaries throughout the state's software industry averaged $104,700 that year.

I should have said compensation instead of salary, although it's a little tricky because compensation would include stock options and stock awards. The company shifted from options to awards, and awards can be counted as annual labor earnings while options are counted separately.

The point was, and remains, that the housing market has benefited from Microsoft's pay.

Apologies for any confusion. If employees read the column and demanded a raise, I hope the conversations were productive. The local economy's counting on you....

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October 17, 2007 12:37 PM one-click patent may be nullified?

Posted by Brier Dudley

That's what a blogger/activist said may happen, leading to some chatter.

This could be a seismic event, now that patent reform is on the front burner.

Amazon's one-click patent was the prime example of the patent system gone awry.

I asked an Amazon spokeswoman for its side of the story and whether it's going to fight this and haven't heard back yet.

So much for old-school balanced reporting, here's a link to the original post.

Update: Amazon did respond to and said it believes the patent will be upheld on the review granted the blogger, Peter Calveley.

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October 17, 2007 10:39 AM

Better than dogfood: Microsofties get Social.FM

Posted by Brier Dudley

Social.FM and Microsoft announced an interesting deal.

All Microsoft employees worldwide can have free lifetime subscriptions to use the new version of Social.FM for Windows Mobile devices.

Sunnyvale, Calif.-based Social.FM gives users remote access to their digital music collections and the music libraries of friends and family.

It's also a showcase application for Windows Mobile devices, since it turns them into powerful music players capable of playing your entire music collection on the go.

For everyone else, the service will cost $19.95 a year after an introductory period expires in November 2008. (Maybe by then, Social.FM will have merged with iLike and they'll both be owned by Viacom or Yahoo ...)

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October 17, 2007 12:00 AM

iLike's next splash on Facebook, and now Windows

Posted by Brier Dudley

Get ready for the next wave of iLike.

The Seattle music startup is expanding its offerings today with a new sidebar for Windows Media Player, giving the WMP crowd the same free music referral and sharing features of iLike's iTunes sidebar.

Also rolling out today is an expanded iLike presence on Facebook, where iLike is already the poster child application developer.

The company is enabling users to incorporate the iLike sidebar into their Facebook profiles, in addition to the iLike widgets that made it the social network's dominant music service.

That means iLike users can display and share their entire iTunes and Windows Media Player libraries on Facebook, and not just a hand-picked sample of their favorite music. Friends can then copy playlists and listen to samples of the music.

The company is planning to release the upgrades around 9 p.m.

Simultaneously, iLike is ramping up its artist platform, which helps musicians tap into the company's huge database of fans' music preferences.

Co-founder Hadi Partovi said 40 percent of major artists are already using the platform.

"We're getting to the point where it will soon be everybody,'' he said.

Examples he shared: Faith Hill recently used the platform to post a video taken offstage by a cameraphone before her "Good Morning America" performance, and 50 Cent released a new music video exclusively on iLike for a few days.

The startup's breakthrough came when it pounced on the opportunity to develop Facebook applications, after the social network opened itself up as a developer platform in May.

Unlike his former boss, Steve Ballmer, Partovi is bullish on the longevity of Facebook.

But it looks like iLike is putting itself in a position to keep growing even if Facebook tapers off. Now that it's in the limelight, it's being approached by other companies interested in having iLike widgets on their sites.

Its services are also becoming more prominent at Ticketmaster, iLike's major investor, and its brand is more widespread in the music industry.

Partovi said the goal is to have iLike become the equivalent of MTV for the digital music era. Maybe it will end up selling to Viacom.

A closer rival is Microsoft, which has incorporated iLike-ish social networking features into the next version of its Zune music service.

Zune's even using the tagline "I Like My Zune" in its marketing, although it hasn't given iLike any APIs to plug the iLike sidebar onto the Zune software jukebox.

Here are screenshots of the new stuff from iLike. Here is the Windows Media Player sidebar:

Source: iLike

iLike's Windows Media Player sidebar.

Here is a Facebook page including the full library and playlist data pulled from the iLike sidebar:

Source: iLike

iLike sidebar data added to Facebook.

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October 16, 2007 10:01 AM

Bill Gates' wild $3,000 phone

Posted by Brier Dudley

Sir Bill now has a RoundTable.

That's the name of the far-out conferencing phone that Gates and other Microsoft executives unveiled in San Francisco this morning, where they're announcing a renewed push into telecommunications.

Communications -- voice, video and text messaging -- could be the next big thing for Microsoft if it takes off and beats back competition from other huge tech companies.

I wonder how many people will pay $3,000 for the RoundTable, though. Maybe it's a giveaway for big companies that buy a lot of communications software.

The technology is cool -- it's stuffed with microphones, recording hardware and a 360-degree camera that are supposed to improve the experience of videoconferencing -- and Microsoft's been researching and improving this thing for years.

But it looks pretty breakable. Like something that fell off of an alien starship.

Source: Microsoft

Microsoft's RoundTable.

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October 15, 2007 4:17 PM

More details from the Microsoft economic study

Posted by Brier Dudley

I've been getting questions about the Conway study today, mostly about compensation. Here's the key passage, referring to 2004 pay:

Not counting stock option income, annual labor earnings at Microsoft averaged $145,000 per employee, more than three times the state mean of $46,200. Including stock option income, average Microsoft employee compensation came to $188,900.

A few other stats, also from 2004:

-- Microsoft was the state's second largest private employer in Washington, behind only Boeing.

-- While Microsoft employed only half as many people as Boeing, its total compensation was nearly equal -- $5.3 billion, including stock options, vs. Boeing's $5.9 billion.

-- Microsoft bought $1.2 billion worth of goods and services from Washington producers to support operations.

-- In-state purchases were $43,600 per employee, "well above average for businesses in Washington."

-- Combining compensation and spending on local goods and services, "Microsoft pumped $6.5 billion into the Washington economy."

-- Every job at Microsoft supported 4.1 jobs elsewhere in the economy, "mostly in trade, services and government."

-- Microsoft accounted for 5.2 percent of the state's personal income, or $11.2 billion.

-- The company raised the state's per capita income by $520. (Conway didn't make a joke about Highway 520 ...)

From 1990 to 2004, "Microsoft was the single largest contributor to economic growth in Washington ... accounting for more than one-fifth of the total gain in state employment."

The effect is bigger within King County, where the company generated 9 percent of the county's total income and rasied the per capita income by $1,551 in 2004.

It gets even crazier if you look at the effect within the city of Redmond, where Microsoft increased per capita income by $12,939 or 21.4 percent in 2004.

Conway estimated that nearly a third of the people in Redmond were directly or indirectly dependent upon Microsoft, and the company generated an estimated $19.2 million of the city's $48.8 million in tax revenue.

But don't forget that Redmond doesn't get as much tax benefit as you'd expect, because of generous tax breaks the state gives Microsoft and other high-tech companies.

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October 15, 2007 10:40 AM

Microsoft's effect on the local economy

Posted by Brier Dudley

As someone who grew up in Seattle, I've always been curious about the effect Microsoft has had on the region.

Today's column revisits the subject and draws on a new report that Dick Conway produced for Microsoft, updating a 2003 study that I wrote about here and when Microsoft stopped issuing stock options.

The column was also a chance to more fully discuss something I touched on last week in a short presentation to the Bellevue Chamber of Commerce -- where Jim Stanton spoke -- and on CNBC.

Here are samples from two of the responses I've received this morning. The upbeat:

Thank you for the article about Microsoft.... In many ways Microsoft has taken Boeing's place with all the economic benefits and risks associated with a major regional employer. But there are many differences with Boeing; Microsoft pays more, the industry is more dynamic, there are many other companies here because of Microsoft, the quality of the people they have brought in is very high and has provided outstanding community leadership, the absolute value of the money is staggering and the overall wealth of the community has risen considerably because of it.

And the other perspective:

Think what it would be like if Microsoft were to go "belly up"and disappear. Housing prices would be more reasonable. Traffic congestion would would be minimal. We wouldn't need billions for new bridges and roads. We wouldn't see all the trees of the suburbs bulldozed down so more houses could be put in their place. Then if Boeing would decide to move to Kansas we would really have something!

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October 12, 2007 3:19 PM

Yacking about the local economy on CNBC

Posted by Brier Dudley

Bill Virgin and I were part of the CNBC roadshow that came to town this morning to report on the Seattle-area economy. Also interviewed on the Space Needle's observation deck was a passel of chief executives and the governor.

Here's our chat and Blue Nile Chief Executive Mark Vadon's segment.

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October 11, 2007 5:18 PM

Perrin Kaplan nunchuks Nintendo exec post

Posted by Brier Dudley

As several game sites predicted, Perrin Kaplan, Nintendo of America's longtime marketing vice president, is leaving the company.

Kaplan's the latest to quit since the company pulled a Boeing and chose to move various headquarters operations to New York and San Francisco.

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October 11, 2007 4:20 PM

Yahoo's new storage platform, coming from Bellevue

Posted by Brier Dudley

At least that's what the job descriptions say.

Since May, Yahoo has been hiring software engineers for its new Bellevue office that was first reported here on Aug. 16.

Several more stories came out in September when Yahoo signed preliminary papers leasing the 500- to 600-person office and its plans became fairly well known in the community. But now there's another blip of news as the lease has been finalized.

Yahoo's PR department has been coy about its plans, but its HR side has been more forthright.

To fill its digs in the One Twelfth @ Twelfth building, Yahoo has been looking since May for software engineers "to join the team building the framework for the next generation of Yahoo!'s internet platform,'' one job listing says.

Another listing, for a software development engineer in "Tech Yahoo," details a project that will be done in Bellevue. Here it is, with the original capitalizations:

"The Query and Storage platform team with DataOS is building World class products to support high performance next generation Database technologies to store and query Peta bytes of data and tables with trillions of rows. The project involves architecture, design, software development, quality assurance, performance and reliability evaluation of such systems."

As pat of the "storage system development team," these engineers will "design and implement high performance distributed storage platform" and "maintain and improve existing storage system technologies to meet the needs of exponential growth in data."

Yahoo could also use the location to diversify into outdoor display advertising, since the company can hang a sign on the building that will be visible from I-405 on the edge of downtown Bellevue.

The previous tenant, Nortel Networks, cut back after leasing the big space during telecom's heady dotcom days.

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October 10, 2007 6:09 PM

Mpire boss learns it pays to sing

Posted by Brier Dudley

Here's a sweet little Seattle tech story.

It starts with Matt Hulett, chief executive of online shopping site Mpire, singing Beatles karaoke at a retreat for executive types awhile back.

A woman in the audience was impressed and approached him after he put down the microphone. She works at Expedia, where he was president of the corporate travel group before he left to do the startup thing.

The woman had a proposition: She said Hulett seemed perfect ... for her daughter, Anne Griffith, who also works at Expedia.

Apparently mothers do know best, because Matt and Anne hit it off and are now engaged. Maybe they'll honeymoon on a yellow submarine. Can you book one at Expedia?

A footnote: The trip may be paid for by WidgetBucks, the ad network Mpire launched Oct. 2.

Hulett said it blew past expectations, with more than 5,000 publishers and 25 million impressions in the first week.

(By the way, he's my inside source on the karaoke story - I heard him telling it at the WidgetBucks launch party).

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October 10, 2007 5:52 PM

Watch out for The Orange Box, Halo3

Posted by Brier Dudley

Hot on Master Chief's armored heels is The Orange Box, another blockbuster game from the wilds of the Eastside.

Bellevue's Valve released the game on Tuesday and it's already looking like one of the year's top games on the Xbox 360, PC and PlayStation 3.

Valve isn't sharing sales details, but spokesman Doug Lombardi said it's the fastest selling title ever on Steam, the company's PC game network.

The Orange Box includes the landmark Half-Life 2, two extensions of HL2, the multi-player Team Fortress 2 and Portal, a quirky single-player puzzle game.

From IGN's review: "If there's one must buy game of the year, it is, without a doubt, The Orange Box."

I was a big Half-Life fan but had to cut back. After a few marathon sessions, I caught myself yearning for a crowbar when I walked by big air vents on buildings near the Times.

(In the game, you play a scientist who sometimes uses a crowbar to whack open vents and crawl in, hunting for aliens).

UPDATE: IGN called out Orange Box in its research newsletter yesterday. An excerpt, provided by analyst Nick Williams:

Based on the latest awareness and purchase intent data generated by visitors to, we expect that the Xbox 360 version of The Orange Box will move between 750,000 and 850,000 units in the U.S. by the end of November, making it our fourth highest Xbox 360 projection of the year behind Madden NFL 08, BioShock, and Halo 3.

Williams said they projected Halo 3 would sell about 4 million units in its first two months, about five times what it expects for The Orange Box in its first two months, so Master Chief may actually have some breathing room.

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October 9, 2007 2:52 PM

Samsung's big gift to TAF

Posted by Brier Dudley

With all the excitement around the Bungie spinoff, I missed this news last week out of the World Cyber Games in Seattle.

It turns out the big winner was Technology Access Foundation, the Seattle nonprofit that gives kids more opportunities to learn computing.

Samsung, a sponsor of the games, gave TAF 600 19-inch LCD monitors used in the games. It also gave the organization 47 42-inch and 50-inch plasma displays.

The "amazing additions" will replace the overworked CRT monitors at the TAF Academy and TechStart sites, Trish Millines Dziko, executive director, said in a newsletter today.

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October 9, 2007 9:40 AM

Blendables: IdentityMine's product play

Posted by Brier Dudley

One of the biggest beneficiaries so far of Microsoft's Windows Presentation Foundation (WPF) may be Tacoma's IdentityMine.

The Web and software development company built early demos of WPF and .Net 3.0 such as newsreaders and applications that Microsoft used to show off its platform.

Now IdentityMine has taken the big step from services to products by releasing a set of tools called Blendables for designers and developers. The company has been developing the kit with its user community for months. It released the kit on Oct. 3 and formally announced the launch today.

IdentityMine was an alpha and beta tester of Microsoft's XAML-based presentation technologies, said Kurt Brockett, director of product manager:

"We had all these tools laying aound that we had built ourself. Once it shipped, there was a natural market out there for components - it was just a matter of productizing our components."

The kit includes tools such as Zoombox, which "allows content to be panned in any direction or zoomed in or out using a multitude of user inputs" and ElementSnapshot that "enables greater designer creativity by alleviating performance degradation when exploiting advanced visual effects."

Blendables starts at $395 and the company is offering a downloadable 60-day trial.

IdentityMine has about 50 employees, mostly in Tacoma. It also has offices in the San Francisco and Los Angeles areas and about 20 in Kochi, India.

(Updated with Brockett's comment and details about employees)

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October 9, 2007 8:44 AM

With S3, Amazon calls out the fine print

Posted by Brier Dudley

The main shortcoming of Amazon's S3 online storage service - a cornerstone of its hot Web services platform - was that it didn't guarantee uptime through a service level agreement (SLA).

Companies used to such agreements were wary of storing crucial files with Amazon, limiting its appeal. The company hopes that will change with a new SLA, retroactive to Oct. 1, that services evangelist Jeff Barr announced on the Amazon Web Services blog:

We know that many of our customers, including a multitude of teams within Amazon, are using S3 in mission-critical ways and need a formal commitment from us in order to make commitments to their own users and customers.

The company will "commit to 99.9% uptime" and customers can apply for a 25 percent credit on their monthly bill if uptime falls below 99 percent. They can apply for 10 percent credit if uptime is between 99 percent and 99.9 percent.

Barr's advice:

As is the norm with agreements like this, there's some fine print and you should definitely read it yourself to learn more.

I wonder if the service assurance, combined with the cost and ease of use, will attract bigger companies to the service.

(I'm also waiting to see if Amazon blends S3 with its MP3 store somehow, giving consumers the option to buy and store music in an S3 vault that's accessible anywhere - and now most anytime - with a Web connection. The company wouldn't say if that's in the works when I asked while reporting Monday's column.)

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October 8, 2007 4:35 PM

Will Adam Bosworth moon another giant?

Posted by Brier Dudley

In his return to blogging on Friday, Bosworth confirmed that he's starting a company and hiring people but he didn't say what, where or who.

How isn't too mysterious. He said he's already written prototype code, and he can probably fund a company himself after all the time he spent with Borland, Microsoft, Crossgain, BEA and Google.

Even without providing details, Bosworth had a few people ask in the comments area how they could submit resumes.

A health-related startup seems obvious since that was what he was doing at Google's New York office and he's passionate about the subject, after helping his mother during a long battle with cancer.

There was a sense of urgency in his blogging last year about the need for better systems to share, access and manage personal health records. I wonder if he wanted to move faster than Google could in this area.

But would he dare moon another giant?

If you don't recall the story about Bosworth's last startup, it was an Overlake software company that Microsoft hobbled by invoking non-compete agreements with Bosworth and other ex-Microsoft people involved.

Maybe Microsoft was mooning him back last week when it announced the HealthVault, a promising service that sounds a lot like the sort of healthcare information project that Bosworth was working on at Google's New York office.

Here's an excerpt from his Nov. 2006 entry on the official Google blog:

Patients also need to be able to better coordinate and manage their own health information. We believe that patients should control and own their own health information, and should be able to do so easily. Today it is much too difficult to get access to one's health records, for example, because of the substantial administrative obstacles people have to go through and the many places they have to go to collect it all. Compare this to financial information, which is much more available from the various institutions that help manage your financial "health." We believe our industry should help solve this problem.

Here's a quote from Microsoft's HealthVault press release:

"People are concerned to find themselves at the center of the healthcare ecosystem today because they must navigate a complex web of disconnected interactions between providers, hospitals, insurance companies and even government agencies," said Peter Neupert, corporate vice president of the Health Solutions Group at Microsoft. "Our focus is simple: to empower people to lead healthy lives. The launch of HealthVault makes it possible for people to collect their private health information on their terms and for companies across the health industry to deliver compatible tools and services built on the HealthVault platform."

I'm not saying Microsoft took Bosworth's ideas from the Google blog, just that they were working on the same stuff in parallel.

Now he's starting his own company. Maybe he found an angle that Google's not pursuing, or maybe he's mooning two giants at once?

Either way, I'll bet he gets resumes from Seattle, Redmond and maybe even Kirkland.

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October 8, 2007 12:14 PM

Amazon's MP3 store, watermarks and fair use

Posted by Brier Dudley

I'm not the only one on a fair use jag today.

Jeff Atwood's "Coding Horror" has a great piece today on You Tube: The Big Copyright Lie. It goes much deeper on fair use than I did in today's column on Amazon's new MP3 store.

Channeling Viacom boss Philippe Dauman, Atwood rips YouTube/Google for its hypocrisy:

What I don't understand is why YouTube continues to get away with the big copyright lie they've perpetuated from day one. They pay lip service to copyright, while building their business on an empire of unauthorized, copyrighted content. It's so brazen -- so blatant.

I wonder if music stores are doing the same thing by offering DRM-free music that they know is likely to be used in ways that violate its licensing rules. But it's different, because YouTube is giving stuff away while music stores are charging for content, making contracts and linking buyers to content.

It could get interesting if those links are used for enforcement, and not just to cover the backsides of distributors.

Could a record company figure out it if you were the one who bought the copy of a song that was copied a few times and ended up being distributed to millions of people online?

Some, but not all, of the songs sold at Amazon's MP3 store are traceable by music studios even though they don't have DRM software.

Instead, some have digital watermarks that identify their origin. This is what Pete Baltaxe, Amazon's director of digital music, told me when I asked about watermarking last week:

"Amazon does not apply any watermarking so in some cases the labels have asked, or are interested in providing files that would indicate that Amazon was the retailer."

It seemed like a sensitive subject to Baltaxe, who stressed that Amazon isn't doing this, but record labels are:

To be clear, we don't apply any watermarking ... In some cases labels can deliver us sound files that have a watermark that indicates Amazon is the retailer. Amazon doesn't apply any watermarking.

Still, Amazon's music store is a leap ahead in useability. It's so good, consumers probably won't care about watermarking or terms of service.

It could inspire other music vendors to follow suit. At least that's the advice of Yahoo Music's Ian Rogers, who helped build the company's music store around Microsoft's DRM technology.

Amazon's MP3 store got it right, he said in a presentation ("Convenience wins, hubris loses ...") that he made to other music business-types and then posted on his blog. An excerpt:

But now, eight years later, Amazon's finally done what was clearly the right solution in 1999. Music in the format that people actually want it in, with a Web-based experience that's simple and works with any device. I bought tracks from Amazon (Kevin Drew and No Age), downloaded them, sync'd them to my new iPod Nano, and had them playing in my home audio system (Control 4) in less than five minutes. PRAISE JESUS. It only took 8 years.

8 years. How much opportunity have we lost in those 8 years? How much naivety and hubris did we have when we said, "If we build it they will come"? What did we spend? And what did we gain? We certainly didn't gain mass user adoption or trust, two prerequisites to success on the Internet.


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October 8, 2007 12:00 AM

Google and IBM scaling up UW program

Posted by Brier Dudley

A computer science study program that Google and the University of Washington developed last year will be rolled out nationally in cooperation with IBM, the companies are announcing today.

It's an effort to "promote new software development methods which will help students and researchers address the challenges of Internet-scale applications in the future,'' the release said.

Specifically, the companies are providing hardware, software and services to help schools teach students about "highly parallel computing practices to better address the emerging paradigm of large-scale distributed computing."

They are dedicating a cluster of hundreds of computers -- Google systems and IBM servers -- and will eventually give students access to more than 1,600 processors to test parallel programming projects. The servers "will run open source software including the Linux operating system, XEN systems virtualization and Apache's Hadoop project, an open source implementation of Google's published computing infrastructure, specifically MapReduce and the Google File System,'' the release said.

Quoting Ed Lazowska, Bill & Melinda Gates Chair of Computer Science & Engineering at the UW:

"In 2006, when I helped Christophe Bisciglia, a former UW student now a senior engineer at Google, to develop the program, our goal was to understand the challenges that universities face in teaching important new concepts such as large scale computing and develop methods to address this issue. A year later, we've seen how our students have mastered many of the techniques that are critical for large scale-internet computing, benefiting our department and students."

The program is expanding beyond the UW to Carnegie-Mellon University, Massachusetts Institute of Technology, Stanford University, the University of California at Berkeley and the University of Maryland.

CEO quotes in the release:

"This project combines IBM's historic strengths in scientific, business and secure-transaction computing with Google's complementary expertise in Web computing and massively scaled clusters," said Samuel J. Palmisano, chairman, president and chief executive officer, IBM. "We're aiming to train tomorrow's programmers to write software that can support a tidal wave of global Web growth and billions of secure transactions every day."

"Google is excited to partner with IBM to provide resources which will better equip students and researchers to address today's developing computational challenges," said Eric Schmidt, CEO of Google. "In order to most effectively serve the long-term interests of our users, it is imperative that students are adequately equipped to harness the potential of modern computing systems and for researchers to be able to innovate ways to address emerging problems."

Online resources include a curriculum that Google and the UW developed that's available here, and open-source software IBM designed to help students write programs for clusters running Hadoop. It's an Eclipse plugin available here.

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October 5, 2007 2:02 PM

More on Bungie and Seattle's smoking game industry

Posted by Brier Dudley

When it rains it pours game news in Seattle, apparently.

A few hours after spinning off Bungie, Microsoft Games Studio Vice President Shane Kim was at Qwest Field for a panel discussion about the economic effect of the Seattle area game industry.

Kim didn't mention the spinoff during the panel, but made a pointed comment about the priority Microsoft places on developing its own games, saying "internal development is a priority for us":

"What we try to do is ensure we're the best home for the best creative talent in the world."

Interesting, because some might say Bungie has had the top gaming talent recently -- from a business perspective at least -- and it's looking for its own digs.

I asked Kim about this afterward, and he emphasized how Microsoft is trying to accommodate the wishes of Bungie and they maintain a close relationship:

"This is all about Bungie returning to its creative roots.''

We can hop it will stay in the area, which is now one of the top four or five cities for game development, according to data presented at Enterprise Seattle's Economic Update Lunch, during the World Cyber Games taking place at the stadium this week.

The group hired Chris Mefford, an economist who also does work for the Gates Foundation, to quantify the industry's local effects. Mefford shared some early highlights:

-- 150 companies in the area are in the games business.
-- Their sales were $4.1 billion in 2006 and expected to reach $4.9 billion in 2007, driven mostly by Microsoft's games business.
-- Those companies create 15,000 jobs
-- Average wages are $77,700, above average for the sector.
-- Game jobs have grown 33 percent a year since 2004.
-- Seattle has the nation's fourth highest concentration of programmers and engineers and third highest concentration of multimedia artists and animators, behind San Francisco and Los Angeles.

"It's easily one of the top places to recruit and bring people in for game development,'' said moderator Jeff Pobst, chief executive of Hidden Path Entertainment.

Other panelists were FlowPlay's Derrick Morton, PopCap's John Vechey and Samantha Ryan of Warner Brothers Interactive Entertainment, which bought Kirkland's Monolith game company in 2004 and is now expanding here with a new production unit.

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October 5, 2007 9:12 AM

Creative differences behind Bungie split?

Posted by Brier Dudley

We've had plenty of time to speculate on why Microsoft's spinning off Bungie Studios.

Even before "Halo" became a movie, Microsoft's flagship game franchise was suffering from a Hollywood fate: Sequel after sequel, using the same characters and plotlines.

It's a profitable formula but it eventually stifles the creative types who dream these things up in the first place.

If I spent 10 years working on the same story, I'd be ready to do something else when it was finally published.

So the big question is how much pressure the team was under to keep churning out "Halo," at the cost of trying something new. Did Microsoft give them enough leeway to try new things?

You can read a lot into the quote from Microsoft game studios boss Shane Kim in the press release:

"Our collaboration with Bungie has resulted in 'Halo' becoming an enduring mainstream hit. ... While we are supporting Bungie's desire to return to its independent roots, we will continue to invest in our 'Halo' entertainment property with Bungie and other partners, such as Peter Jackson, on a new interactive series set in the 'Halo' universe. We look forward to great success with Bungie as our long-term relationship continues to evolve through 'Halo'-related titles and new IP created by Bungie."

At first I thought divesting Bungie was a bad idea, because it sends a message that successful, creative types may be limited at Microsoft.

But maybe I had it backward. By allowing Bungie to spin off, Microsoft is encouraging the team to try new things and flex its entrepreneurial muscles.

It could be the best for both sides, since Microsoft's still first in line for Bungie games. As a part-owner, Microsoft will also share Bungie's success.

This is a little harsh, but I wonder if a factor in Microsoft's decision making was that it's a longshot chance that Bungie will hit another mother lode like "Halo." Especially for a studio operating within a big, conservative company with broad business objectives that are influencing its game projects.

Or maybe Microsoft thought the Bungie people were too good to lose to competitors, and knew it couldn't hold onto them much longer, especially since it no longer can use the golden leash of stock options.

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October 4, 2007 5:00 AM

iLike announces platform play

Posted by Brier Dudley

Leveraging its remarkable 13 million users, Seattle-born social music startup iLike is introducing a platform of services to help musicians promote their music and concerts and communicate with fans.

The free Artists Services Platform launching today gives artists a dashboard for artists and managers to control iLike tools for distributing messages, blogs and videos to their fans using iLike.

"Our overall directional statement is that we think we can become the largest and dominant fan community site,'' co-founder Hadi Partovi said.

Among the tools, a broadcasting application called iCast stands out. It's for posting music, video, audio and text messages. For instance, it lets musicians take videos on their cellphones and send them to a personal iLike e-mail address that forwards them to fans.

Partovi said big bands such as U2 now have more fans using iLike on Facebook than they do on the bands' own Web sites and MySpace pages.

"We think it's about 40 percent of all artists that have more fans in their iLike community than they have on their MySpace community,'' he said.

Partovi said the 28-person company, which is divided between Seattle and San Francisco, has been so focused on its Facebook-driven growth that it hasn't done a lot to monetize the service with ads. It plans to get to that in about six months, probably by adding banner ads and sponsorships to start.

A new "social music" widget coming this fall from Microsoft's Zune sounds a lot like iLike's service, which displays users' recently played songs and favorites and enables friends to discuss music they're listening to.

Partovi isn't too worried about the challenge from his former employer, though.

"My main thing is that we've demonstrated enough success in the space that a lot of people try to copy [our] success,'' he said. "At the size we're at and the growth we're seeing, I'm not worried about somebody catching up with us."

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October 3, 2007 3:23 PM

Zune Tattoo Guy on new models and tats

Posted by Brier Dudley

It can really hurt to get scooped by a competitor.

Like when Laptop magazine tracked down Steve Smith, the Zune Tattoo Guy, for his take on the new lineup and an update on his body art.

Smith's claim to fame are three Zune logo tattoos that drew a mention on the Fake Steve Jobs blog. Of course, the 22-year-old Sioux City, Iowa, resident is enthused about the new models:

"I'll buy an 80GB Zune on day one and for Christmas I'll buy my friends 4GB Zunes and my really good friends 8GB Zunes."

But Laptop's golden nugget was the discovery that Smith's getting an Apple logo tattooed on his butt cheek and the Zune tagline, "Hello from Seattle," tattooed on his neck.

Maybe he should be the spokesmodel for the city's "metronatural" tourism campaign.

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October 2, 2007 4:50 PM

Is Microsoft divesting Bungie?

Posted by Brier Dudley

A provocative posting by a Seattle area blogger suggests Microsoft is spinning off one of the crown jewels of its Xbox business, Bungie Studios.

Based on an e-mail from an alleged insider, the post says Microsoft will retain the rights to the Halo franchise that Bungie developed and Bungie will presumably continue to develop Xbox games.

The post, which appears on the community site of another Seattle paper and is being recognized mostly for its appearance on the 8BitJoystick gaming e-zine, posted the e-mailed tip:

"So heres my big secret. You should google Bungie + Microsoft + separation this week. You know that big ol BILLION dollar franchise Bungie has created for Microsoft, to show their appreciate Microsoft is letting Bungie leave. Of course Microsoft gets to keep all rights to the Halo franchise, but as today Bungie no longer part of Microsoft. Ask anyone who works there to search the global address book, they're no longer in there. Microsoft was supposed to release the press release today but if they wait till the 10/6 the impact wont effect the quarterly results. However today is the actual official date and the day the NDAs expire, however you still didn't hear this from me."

"Apparently MS just wants Bungie to make Halo for the rest of their natural days, and Bungie doesn't like how MS is constantly trying to 'handle' everything they do; the way they market their games, the way they interact with their fans (basically the fact that they do appreciate their fans), and how stingie they are with the profits (comparable to the rest of the industry). So as of today they are their own independent entity. They'll probably make Halo 4 for Microsoft, however hey are also free to create new intellectual properties for whatever system they want. (Even though they prefer the xbox platform)"

"What a way to say thank you."

It's a shocker if true, especially since Bungie management has recently been talking about the studio's autonomy and positive relations with the mother ship.

But Microsoft's also pushing hard to make the Xbox business profitable so it's probably looking at all sorts of ways to shave costs. Running a studio is expensive, and Microsoft would still benefit from its creativity since Bungie would continue to develop Xbox games.

Microsoft did the same thing just after it released Halo 2, in late 2004. That's when it cut its sports game studio, laying off nearly 80 people, then sold a Utah studio that had made snowboarding games to Take-Two Interactive.

Here's what Xbox boss Robbie Bach said that year, back when he was expecting the division to be profitable in fiscal 2007:

"When we got to that point, we started looking around and started realizing, wait, we've got tons of third-party support. We shouldn't be the bulk game provider."

Maybe this was all part of a plan that would unfold as the Xbox hit critical mass. Microsoft's a platform company, not a content company.

What I'm wondering, though, is whether Microsoft would divest Bungie to be run as a standalone or selling it to a big game publisher like Electronic Arts.

The blog post by Jacob Metcalf prompted tons of chatter, including comments about locks being changed at Bungie's offices in Kirkland.

You wouldn't lock people out unless there were going to be big layoffs or a sale. Could it be routine maintenance? Or is it really bad planning/HR messaging on Microsoft's part?

Besides, can't Microsoft's IT people change the door's access codes with a few keystrokes in a directory server?

As for the timing, I wonder if Microsoft would make an announcement under the cover of the pending launch of new Zunes. Consumers would be more interested in the new digital media players than the gyrations in the Xbox business, especially if there's no interruption in the flow of Halo.

But what about the message a divestiture would send to other hustling teams at Microsoft? Halo, Xbox and Xbox Live are one of the best and most Applesque end-to-end consumer experiences to come out of Redmond.

How would Xbox game developers interpret the news that Microsoft is getting rid of the platform's most successful studio because it's not profitable enough? On the other hand, they may be relieved to not be competing anymore with a deep-pocketed insider.

I guess Bach has to figure out a way to make money with the Xbox or he could be the one divested.

I asked him for a comment and haven't heard back. Apparently his PR people told the blogger "There's been no such announcement," which isn't much of a denial.

Update: Jake pointed out in comments that the locks were indeed being changed as a maintenance thing, to make them ADA compliant. Still strange that employees would be jumpy about something like that.

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October 2, 2007 2:25 PM

Get Microsoft to update your PC, in person, for free

Posted by Brier Dudley

A limited number of people can take their Vista PCs to Microsoft for an update and an early copy of the upcoming Vista service pack.

The company will also give participants food, beverages and a gift for parcticipating in the day-long "install fair" on Oct. 27 at Microsoft Building 33.

It's intended to get feedback and generate enthusiasm about Vista SP1.

To register, send an e-mail to But first you may want to check and see if your system meets the criteria listed on the Vista team blog.

If you're interested I'd jump on this one; the blog invited Microsoft employees to register this morning and it's first-come, first-serve.

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October 2, 2007 2:11 PM

"Maniacal" Ballmer on Facebook and free software

Posted by Brier Dudley

Here's the Times of London interview with Steve Ballmer that has Facebook fans in a tizzy today.

Ballmer was coy about Microsoft's rumored investment in the social networking company, which may be part of his strategy to "surprise" investors with a foray into advertising.

Facebook's networking effect has value but the site is faddish and its technology isn't revolutionary, Ballmer said:

"There can't be any more deep technology in Facebook than what dozens of people could write in a couple of years."

That was the money quote, but he said some interesting things later about Microsoft's new take on free software and services. I wish the article kept going; it ends just after it turns to this topic. A few excerpts:

Mr Ballmer suggests that there lies a new formidable force behind the drive into advertising. "My general rule of thumb today is that anything the consumer doesn't have to pay for, they won't," he says.

I'm surprised he didn't use the opportunity to plug the new Office Live services, but maybe the interview was done before Monday's launch. The story almost reads like a set-up for the new services:

The admission beckons towards a trend of free online software and services that has the potential to decimate Microsoft. Google and IBM, for example, recently launched free alternatives to Microsoft Office, Mr Ballmer's biggest earner by far. The stalwart suite of office tools, which includes Word and Excel, accounted for revenues of $4.6 billion -- a third of Microsoft's total sales -- in the company's most recently reported quarter.

Microsoft is in danger of losing licence fees that it has milked for decades as customers depart for free alternatives. The answer: Microsoft will also offer free services -- e-mail, photoshare, instant messaging and the like -- and reap revenues through advertising.

"There is no way to play in broad consumer services unless you're going to use advertising," Mr Ballmer says, "and you only have two choices for advertising: one, you do it yourself, or you outsource it to Google. In our case, that's probably not going to happen."

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October 2, 2007 12:01 AM

Mpire gets widgety with new ad network

Posted by Brier Dudley

Mpire is launching a new venture today that could be bigger than the company's original shopping search service, according to Chief Executive Matt Hulett.

Called WidgetBucks, it's a contextual shopping/advertising service for bloggers and Web publishers. The inspiration came from work Mpire did for eBay on shopping features.

"What we found out with eBay is, my gosh, if you show contextual products on a page, people actually click on it and they buy stuff,'' Hulett said.

WidgetBucks places a widget displaying a list of products keyed to the content on a Web site. A camera site may have a widget featuring top-selling cameras, for instance. Viewers clicking on items are taken to merchant sites.

Mpire produces the widgets and refreshes the list daily. The lists draw on the data Mpire's comparison shopping service compiles, so they display top-selling items and deals from a mix of online stores including, eBay and others.

InfoSpace and Marchex are among the local companies that have been testing WidgetBucks for about six weeks. It took Mpire, an 11-person company on Westlake Avenue, about seven months to build.

Hulett said it should be particularly appealing to bigger Web publishers generating lots of pages dynamically, because WidgetBucks figures out the optimial product mix to display on each page.

Like a few other entrepreneurs, Hulett's also eyeing Facebook's growth. The widget is designed to work on Facebook pages, despite the site's restrictions on outside ad services, though kinks were still being worked out late last week.

The Flash-powered widgets are also advertorial content. They display reports pulled from Mpire, such as top-selling products in a particular category.

I'm curious to see if the widgets feel as useful as Mpire, a site that's a nifty way to compare prices across different shopping sites. Will a preselected list of shopping options feel as helpful? It probably doesn't matter -- they're ads, not search results, and their utility will lie in how much money they make Web publishers.

If it works as promised, WidgetBucks could make Mpire a more likely acquisition target.

Hulett said he's focused on making ads perform better for publishers, but he's also thinking about options.

"There's so much happening in advertising and everyone's looking to see what they need for an arms race; an ad network makes us more attractive,'' he said.

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October 1, 2007 10:50 AM

Office Live: A mix of catchup and Tabasco

Posted by Brier Dudley

Tons of coverage today about Microsoft's Office Live announcements, but not many reporters are warbling about antitrust.

A lot of the focus is on Workspace, the consumerish new service that lets Office users store, access and share documents online.

Sure it's partly a response to Google, but it's also just catching Office up to 2007. Workspace is belated acknowledgement that Office has been too tethered to the desktop for too long and lacked a lightweight way for users to share and access documents remotely.

You could install a Sharepoint server and add those capabilities to your business, but that's overkill for most people.

So users were forced to craft workarounds. Then Google and Office 2.0 startups built products that started to fill this need, while Microsoft futzed with its online strategy.

Here's what I'm talking about. Let's say you're composing a Word document at work, and want to continue working on it from home.

Unless your company has a fancy (expensive and complicated) system for providing remote access to your desktop, you probably e-mail the document to yourself -- via Hotmail, Gmail or a Yahoo Mail account most likely. You even e-mail to a work address, if you access remotely through Exchange.

When you get home, you open up the attachment, do the work and send it back. If you want to share, you probably just e-mail the attachment around. It's easy, but now the company is storing the original, the edited version and the copies in its e-mail system and documents are spread all over the Web at different sites.

Others may move documents around on a portable memory device, like a USB stick, but that's more complicated than it should be -- why can't you just turn on a computer, any computer, and be able to reach your stuff? That's how it works with online applications like Google's, but they're not as powerful as Office and don't work so well when you're offline.

The same goes for sharing. Most people probably still e-mail stuff around. Another option is to set up a Web page, use a Wiki service or try one of the various online storage and collaboration tools that are out there.

Microsoft's late to the game, but I think a lot of people will still opt to use a service that feels like an extension of the Office application they're already using. Workspace will also appeal to people who haven't embraced the early solutions.

I've tried several online storage and backup services and they're always too complicated. It would be great to have a built-in, simple option in Office to "Save to Workspace" alongside "Save to disk" -- or even both, so you're constantly backing up documents online.

From that perspective, Workspace is catching Microsoft up to Gmail more than Google Docs. Ever since Gmail pioneered vast, free online storage, millions of people have used it to access, share and archive mail. It's free, easy, reliable and searchable. The only downside is that you're giving up some privacy to Google, but you were probably doing that anyway by using free e-mail.

If you're already using Gmail as your workspace, it's easy to start using Google's applications as well, even though they're not as powerful as Microsoft's. To head off this challenge, Office Live Workspace should have been there two or three years ago.

Where Microsoft is spicing things up is in the enterprise offering, the hosted services that it's offering to companies with 5,000 or more employees.

That's got to be firing up Microsoft partners who provide similar services. It could also signal a new direction for Microsoft's enterprise push.

It may also add some zing to licensing conversations with big customers. I'll bet some will be asking why they should pay extra for the service, since they're already paying for Microsoft's all-you-can-eat licenses.

I asked Andy Lees about that during a dinner last week at Daniel's, where he, Jeff Raikes and other Microsoft executives introduced the online services to about a dozen reporters and analysts.

Lees said the additional charge for the online service is justified because Microsoft isn't just providing software, it's also assuming the cost and complexity of running the servers.

That makes sense, but as the Reuters correspondent next to us suggested, it will be interesting to see what happens to Microsoft's margins.

I'm also curious to see how much servicing Microsoft does in-house. Will it end up offloading the back-end hosting to low-cost, offshore service vendors such as Wipro, or will it compete with the hosted services they provide?

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Gadgets and games | Fun stuff I've written about lately includes Apple's iPhone, Hewlett-Packard's HDX laptop and Microsoft's Halo3. Also on the radar are new digital video boxes such as the Tivo HD and the Vudu.