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November 30, 2007

Microsoft creates new chief environmental strategist position

Posted by Benjamin J. Romano at 3:18 PM

... and fills it with company veteran Rob Bernard.

Most recently a general manager in Microsoft's developer and platform evangelism team, Bernard's new job is "defining and implementing a global strategy for the company's environmental efforts." He'll report to Scott Charney, corporate vice president of Microsoft's Trustworthy Computing (TwC) Group within the Core Operating System Division.

Microsoft said in an e-mail this afternoon that it created the new position "to assess the company's environmental impact and opportunities at all levels, including: working with product groups to create technology innovations in software and hardware that can help enable customers to minimize their impact on the environment, assuring responsible business practices that work to reduce the company's direct and indirect environmental impact, and working with partners in industry, government and non-government to engage on global environmental issues."

Bernard worked with the Clinton Foundation to develop a tool to measure cities' greenhouse gas emissions, something former President Bill Clinton talked about during his recent stop at the Microsoft campus. Bernard also has experience in construction and building management, which will come in handy when assessing the environmental impact of the company's growing physical footprint.

Several of the new and remodeled buildings going up on Microsoft's Redmond campus have or will attain some level of LEED certification from the U.S. Green Building Council. But the main campus still consumes close to 50 megawatts of electricity.

On first anniversary, Vista headlines not so good

Posted by Benjamin J. Romano at 10:39 AM

Microsoft and its partners say the adoption cycle for Windows Vista is still in the early stages, particularly for businesses -- many of which are likely waiting for the release of Service Pack 1. Likewise, many businesses need to upgrade their hardware to run Vista, which is a major proposition. For consumers, this holiday season is the first in which Vista-loaded computers will be on store shelves.


Still, one year after Vista and Office were launched for businesses, some headlines today might have some people at Microsoft cringing.

There's this, from CNET, on a Qualys study that shows a major increase in Microsoft flaws between 2006 and 2007. "We have seen a huge jump in the vulnerabilities in Microsoft Office products," Amol Sawate, manager of Qualys' vulnerability-management lab, told CNET. "These charts show growth of nearly 300 percent from 2006 to 2007, primarily in new Excel vulnerabilities that can easily be exploited by getting unsuspecting users to open Excel files sent via e-mail and instant message."

And the AP's locally based correspondent covering Microsoft, Jessica Mintz, has this report on tests showing that an updated Windows XP will perform faster next year than Vista. Key passage:

[The testers] found the original Vista performed 50 percent to 100 percent slower than the prevalent XP Service Pack 2, or SP2.

Vista SP1, due out in the first quarter of 2008, barely improved the operating system's performance.

But XP SP3, scheduled for the first half of 2008, did improve on XP's earlier performance, running 10 percent faster than SP2.

Microsoft says its too early to make such comparisons.

Google throws hat into spectrum auction

Posted by Tricia Duryee at 10:33 AM

The list of participants wasn't supposed to be out until Monday, but Google beat everyone to the punch by saying today that it will apply to participate in the FCC's upcoming auction of wireless spectrum in the 700 MHz band.

The airwaves in that band are good for wireless Internet access. But it is unclear what technology the winning bidder would choose to use it for. The options include WiMax, LTE (an evolution of GSM) or others.

Earlier this year, Google lobbied the FCC to ensure the winning bidder would be required to allow their users "open access," meaning those users could download any software application they want on their mobile device, as well as use any mobile devices on that wireless network.

For more background, check out a story I wrote in August.

Verizon Wireless announced this week that it planned to open up its network by the end of 2008.

The winner of the auction will have to follow through with the open access requirement if it meets the reserve price of $4.6 billion for this swath of spectrum.

"We believe it's important to put our money where our principles are," said Eric Schmidt, Google's chairman and CEO. "Consumers deserve more competition and innovation than they have in today's wireless world. No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet."

Adobe, Yahoo teaming up on ad-funded software experiment

Posted by Benjamin J. Romano at 6:15 AM

As more software functions move to the Internet, where the traditional software licensing business model has limitations, companies are experimenting with new business models such as subscriptions and advertising-supported software.

Microsoft is trying it with its Works suite, which comes standard -- and free to the user -- on many new computers. Likewise, Google Docs and Spreadsheets -- online versions of the productivity apps dominated by Microsoft -- are advertising supported. Now Adobe, a leader in rich Internet applications with its Flash player and nearly ubiquitous PDF reader and writer, is getting into the act with help from Yahoo.

On Thursday, the companies announced a partnership to allow publishers to serve contextual ads into PDF documents. Like all of these early ad-funded software efforts, this is a test program for starters and it's opt-in.

From the release: "The new service allows publishers to generate revenue by including contextual, text-based ads next to Adobe PDF content, with Yahoo! providing access to its extensive network of advertisers to match a broad range of subject matter. For advertisers, Ads for Adobe PDF Powered by Yahoo! extends reach by delivering advertising across a new channel of content, while also providing the ability to track advertising performance, just as they can today with ads placed on Web sites."


This in-PDF advertising seems clearly targeted at the long tail of the Internet, as this excerpt from AdWeek's coverage of the news illustrates:

The program will open up new real estate for its advertisers, according to Todd Teresi, svp of Yahoo!'s publisher network, especially among small-time customers that don't even have Web sites. Example: Local youth soccer leagues that create weekly e-mail newsletters could generate funds through contextual placements for soccer equipment and jerseys -- and even minivans, he said.

"The primary users long term are going to be down the tail," Teresi said.

The program is offered as a free service to US-based publishers who produce English content. Early adopters include IDG InfoWorld, Wired, Pearson's Education, Meredith Corporation and Reed Elsevier.

November 29, 2007

NetMotion Wireless is on the upswing

Posted by Tricia Duryee at 4:21 PM

The Seattle-area is known for its expertise in the wireless industry.

It is and has been the home of the biggest in the game, including AT&T Wireless, T-Mobile USA, Western Wireless, Nextel Partners, Clearwire and more.

Although T-Mobile and Clearwire are the only remaining wireless operators here, it's no less of a wireless town. Tthe focus is changing instead from infrastructure to software. There are Microsoft and RealNetworks, and a host of smaller venture-backed companies doing everything from search, gaming, photo sharing and social networking.

One company that gets a little less ink, but has been around for years and is making some headway is NetMotion Wireless.

I had a chance to catch up this week with Tom Johnston, NetMotion's senior vice president of product and marketing, to get a status report.

The Seattle-based company isn't doing anything flashy. It is solely focused on the behind-the-scenes of the enterprise workforce. It focuses on helping businesses run efficiently on wireless networks. It does so by helping workers keep their applications up and running even if they momentarily drop their wireless data connection, whether they are traveling through a canyon or repairing an elevator.

What does this mean?

It means that an employee who is using ar laptop or a handheld device in the field won't be kicked out of business applications, such as a billing system, when a cell signal fades. Similarly, police or fire personnel could continue to search driver's license databases when a connection is going in and out.

Without NetMotion, it's often the case that the application will shut down and freeze when a connection is lost. We're not talking about e-mail here, but large billing, expense, sales or other systems. If this happens, an employee often has to call headquarters to report the information, which can be a waste of time.

How does it work?

NetMotion places a server in a company's data center that fools an application into thinking the connection is maintained depsite what is going on in the field.

Johnston said demand for NetMotion products is increasing because more field workers have laptops with data cards or high-end phones.

Today, the company has about 1,000 customers using 200,000 devices. Its revenues for the first three quarters of this year are up 66 percent compared with the same period last year, and the number of licenses has jumped 71 percent.

It serves companies such as Cox Communications, the nation's third largest cable provide. It has 3,500 technicians using NetMotion. The Orange County Sheriff's Department has 400 officers using the software.

NetMotion has come a long way. The company was spun off from WRQ in 2001, and was backed by venture capitalists. In 2006, it had a patent-infringement tiff with Bethlehem, Pa.-based Padcom. They resolved their issues and decided to merge the two companies.

Today, the company has 90 employees.

EA boss calls in-game ad revenue forecasts 'wildly high'

Posted by Benjamin J. Romano at 3:53 PM

I'm thinking Alex St. John over at Wild Tangent would agree wholeheartedly with John Riccitiello, CEO of Electronic Arts, the biggest video game publisher, who said today:

"You can't be as bullish as analysts are on in-game advertising and be sane," he said. "In-game ad expectations are wildly high."

One widely reported forecast by the Yankee Group has in-game ad revenue reaching $971 million by 2011 up from just $77.7 million last year.


Riccitiello's comments came in an interview with Dow Jones.

Microsoft, for one, has been particularly bullish on in-game advertising, acquiring the Massive Network for as much as $400 million, according to unconfirmed reports, last year. Here's an in-depth look at Massive's business from earlier this year.

That deal and others helped build hype around the nascent in-game ad business, Riccitiello told Dow Jones. EA, which controls several top titles in the sports category that advertising leaders say are a natural fit for in-game promotions, is cranking out about $30 million a year from in-game ads -- a small slice of total revenue.

I spoke with St. John earlier this month. He says in-game advertising is much less efficient than other options his company offers in the category of around-game advertising. Particularly for casual games, more flexible models are working better at Wild Tangent. Some examples include giving advertisers the opportunity to sponsor game play sessions; and giving players the choice of viewing a short pre-roll ad while a game is loading, or paying for the game session.

Dual wireless standards will likely continue in U.S.

Posted by Tricia Duryee at 11:34 AM

Verizon Wireless is making headlines for the second time this week.

On Tuesday, I wrote about how it was going to open up its networks to unlocked cellphones and third-party developers.

Today, Verizon Wireless said it is testing out a fourth-generation technology known as LTE, or long-term evolution.

The Wall Street Journal noted that it was interesting Verizon was making this 4G choice because LTE evolves from GSM technology, the most-used standard worldwide. That differs from Verizon's CDMA technology, which is also used by Sprint Nextel in the U.S. but doesn't have a big global following.

The switch makes sense since Verizon Wireless is partly owned by Vodafone, which uses the GSM standard. As the WSJ noted, this will allow Verizon customers to roam more easily internationally. (Today, if its customers go to Europe, they have to get a global phone that has both CDMA and GSM chips.)

But I haven't seen a lot of discussion about what Verizon's decision to test LTE says about WiMax. I think it is a little bit of a black eye for this wireless broadband technology, which gained momentum in the past year. It can't get a break recently.

Sprint Nextel, which is rolling out WiMax, calls WiMax its 4G technology. A partnership with Clearwire to jointly develop a nationwide network dissolved with the departure of Sprint's CEO.

If Sprint Nextel and Clearwire build a nationwide network based on WiMax, and Verizon chooses LTE, it looks like we'll continue to see dual wireless standards in the U.S.

In addition, we are still waiting to hear what AT&T and T-Mobile USA will decide, and there's also the upcoming spectrum auction. It will provide a fresh chunk of airwaves that could throw a new player -- Google -- into the mix. Whoever wins that auction will also have a lot of choices to make.

To confuse the matters even more, Qualcomm is developing a third option based on the technology it acquired from Flarion.

I suppose this is the beauty of capitalism, where the market gets to decide. I'd argue it's worked out fairly well in the U.S. with competition pushing each other to roll out better and better technology. But it's also hard on the consumer, who may or may not have to get new equipment each time he or she changes carriers or travels internationally.

Microsoft not an Internet company, Nasdaq says

Posted by Benjamin J. Romano at 11:19 AM

The Nasdaq Stock Market on Tuesday launched an index tracking Internet companies, and, as the guys at Read/WriteWeb reported earlier this week, Microsoft -- despite its multi-billion-dollar investments in online services and infrastructure -- was not included.

Here's how Nasdaq described the purpose of the new index:

"The Index is a new benchmark designed to track the performance of companies engaged in a broad range of internet-related services including internet access providers, internet search engines, web hosting, website design, and internet retail commerce. The NASDAQ Internet Index is comprised of securities of companies that are at the forefront of internet technology. They are leading innovators in providing faster internet access, creating more intuitive e-commerce experiences, and developing the second generation Web."

I think there are at least a couple of people in Redmond who would say they're working on some of that stuff. I called Nasdaq to ask why Microsoft was not included. Spokesman Wayne Lee said:

"If you use most industry classification codes, Microsoft is generally classified as a software company, not an Internet one, so, we refer to various sources when determining which companies are indeed Internet and subsequently eligible for inclusion in the Internet Index."

Update: The Index, which is up slightly today and is up 35 percent for the 10-months ended Oct. 31 (compared with 27.4 for the Nasdaq 100), contains several Northwest stocks including: AMZN, EXPE, CLWR, NILE, DSCM, RNWK, MCHX and INSP. Here's the whole list (Excel spreadsheet).

Clearwire and Medio called worldwide tech pioneers

Posted by Tricia Duryee at 10:58 AM

The World Economic Forum announced today it has named 39 companies as Technology Pioneers of 2008.

Among the 23 based in the U.S. are two local companies: Kirkland-based Clearwire and Seattle-based Medio Systems.

The list was narrowed down from 273 nominees. To be selected, the World Economic Forum said, the company must be "involved in the development of life-changing technology innovation and have the potential for long-term impact on business and society."

Previous winners include Business Objects, Cambridge Silicon Radio, Corel, Encore Software, Google, Mozilla and Napster.

The Forum said Clearwire, founded by Craig McCaw, "clearly has tomorrow in mind." The company is building a high-speed wireless broadband network in the U.S. and in several markets abroad.

As for Medio Systems, run by Brian Lent, the forum said: "Medio Systems is the leading provider of mobile search and advertising solutions that help mobile operators implement the best customer experience and allow advertisers to reach their intended target audiences."

A complete list of winners can be found here.

Silverlight scores with NBA, getting a major update

Posted by Benjamin J. Romano at 9:47 AM

Microsoft today announced more customers for its new Web-video platform, Silverlight, and outlined plans to build out the product's rich Internet application capabilities.

The company's competitor to Adobe's dominant Flash technology for online multimedia was detailed in April. Silverlight is part of Microsoft's broad "software plus services" strategy, designed to allow developers to make more complicated applications that take advantage of the desktop's power and capabilities from the Internet.

Another big play in the software plus services strategy is the Windows Live suite, which Microsoft is backing with a reported $300 million advertising campaign, according to anonymous sources quoted by the New York Post.

Microsoft has amassed several high-profile users of Silverlight, including Major League Baseball and now, the National Basketball Association's Web site, When the product was officially launched in September, Microsoft touted sites for Entertainment Tonight and World Wrestling Entertainment.

New features being added to Silverlight 2.0, due out in test form by March 2008, include tools for developers who want to make better user interfaces, layouts and advanced controls such as sliders in their Internet applications. All the details are laid out on Microsoft Developer Division GM Scott Guthrie's blog.

Japanese firm builds robot running Microsoft software

Posted by Benjamin J. Romano at 9:29 AM

About a year ago, Microsoft trumpeted its new software for controlling robots. Now, ZMP is selling the e-nuvo WALK, a two-legged robot that utilizes that software. It's expected to go on sale in Japan in January for $5,345.


The Associated Press has the story out of Tokyo.

Here's my coverage of Microsoft's announcement of its Robotics Studio product last December. The software was designed to be a common platform so developers could write applications that would run on several different kinds of robots.

November 28, 2007

Startup Sotto partners up with established XO

Posted by Tricia Duryee at 4:54 PM

A little more than a year ago, I wrote a story about Bellevue-based Sotto Wireless, a startup founded by three experienced executives coming out of AT&T Wireless.

The business revolves around simplifying telecommunications for small- to medium-size businesses by selling them one service they can use outdoors on the cellular network and indoors on Wi-Fi. It eliminates multiple bills, phone numbers and voicemail boxes.

A year later, Rod Nelson says the company is in the thick of it, having launched services in Charlotte, N.C., and in Seattle.

Today, it announced it is partnering with XO Communications in Seattle. Sotto will bundle XO's broadband services with its offerings to small-and-medium-sized business, and XO has agreed to resell Sotto's services.

Sotto falls into the highly talked about wireless sector called "fixed mobile convergence," or FMC for short. FMC mixes both the luxuries of landlines with the flexibility of wireless phones.

For instance, someone calling an employee using one of the Sotto phones will have no idea if he is reaching that person in the office or on a mobile phone. Phone calls can be transferred between employees, and all voicemail goes into one inbox.

When the employee is in the office, the phone operates over Wi-Fi, saving minutes on the company's cellular plans, but then it automatically switches over to cellular when the person leaves the office, Nelson said.

He added that the increased attention and focus on FMC has helped the business in the past year. T-Mobile USA started offering a service called T-Mobile Hotspot@Home in that time. That service allows consumers to use a Wi-Fi network in the house for better indoor coverage and to save money.

At the minimum, Nelson said efforts such as those are encouraging more handset manufacturers to include Wi-Fi in phones. Right now, Sotto Wireless resells Nokia handsets, but in the next year he expects to start offering Windows Mobile and other smartphones.

Paul Merritt, general manager of XO in Seattle, said the partnership places XO six months to a year ahead of its competition. He doesn't know of any of his competitors that are reselling cellular services. Because of this, he's allowed all of his 12 sales reps to offer the service to new and existing customers.

"It was a natural fit, there's nothing close to this on the market," he said.

Nelson said if the trial goes well in Seattle, it will eventually will roll out to the 75 markets that XO serves around the country.

HipCricket's IPO raises money for wireless play

Posted by Tricia Duryee at 3:39 PM

Earlier this week, I drove to Bellevue to sit down with Ivan Braiker and Eric Harber, HipCricket's chief executive and president, respectively.

We gathered in Braiker's office, which was surprisingly bare of any decorations, artwork or anything.

Turns out everything is packed up. The company is expanding so fast it needs to move to a larger office. Braiker even joked that as soon as he takes off for a sales trip, the employees celebrate -- up to three employees can fit and work in his office.

They'll have about 50 employees by the end of the year and are expecting to add about four or five a month, Braiker said.

What's HipCricket doing that's driving so much growth?

It helps radio and TV stations make their one-way media become interactive by allowing listeners and readers to send text messages to the station in response to advertising. At the same time, the system is used to increase the effectiveness of the ads. In doing so, the stations' can charge more.

It's good to step back every once in a while and hear examples of what is actually successful and making it in these frothy wireless days, where everyone has an idea for cellphones.

HipCricket seems to be addressing something spot on.

In a report published Tuesday by Seattle-based M:Metrics, 94.9 million mobile subscribers said they sent a text message in the three months ended September, or about 44 percent of U.S. cellphone users.

Here's some of the examples of how HipCricket is being used:

-- KUBE 93.3, the radio station in Seattle, regularly uses the system. For instance, it aired a McDonald's commercial that asked listeners to text a five-digit short-code to get a two-for-one coupon for cheeseburgers.

-- In Los Angeles, a local coffee shop offered a coupon for two-for-one iced lattes.

-- In yet another market, a company holding a job fair said if people sent a text message, they would get a text reminder the day of the fair.

Braiker said that these offers are generating a response rate of about 40 percent, a much greater rate than traditional means of advertising.

"TV and radio has struggled over proving accountability [that people are indeed listening and watching]," he said. "By the end of the day, they now know how many people have replied."

In the case of the L.A. station, Coffee Bean became a HipCricket customer so it could use the technology across all radio stations in all of its markets, not just the one in L.A.

Braiker said this is why HipCricket is growing so fast. Sister radio stations, TV stations, newspapers and even the brands themselves are using its technology.

The company, almost 4 years old, has about 200 customers and has managed 16,000 campaigns.

HipCricket charges a flat rate and provides a number of ways for the stations to make money. The station usually charges an advertiser a premium to add a text message to its commercial, but ads can also be added at the bottom of a text message. For instance, people can text in to get a list of the last three songs that played on the radio. On the bottom of the reply would be a sponsorship ad.

HipCricket can also be used to boost a station's audience. People may be willing to sign up for alerts, telling them to tune in when a prize is about to be given away.

The company has been backed by a number of private investors, and is profitable. But for now, Braiker said profitability is not a goal -- it makes more sense to invest and grow.

"We are in the middle of a land grab," he said.

UPDATE: Late Monday night, HipCricket went public on the London Stock Exchange's AIM. It raised about $17 million and has a market capitalization of $155.4 million. In this press release here, Braiker said: "The additional funding puts us in an excellent position to capitalize on the increasing opportunities ahead of us, providing a strong base to grow the company organically and also fund expansion in US markets. Our AIM listing will significantly enhance our ability to serve our existing UK investors."

Microsofties' Capitol Hill restaurant scores good review

Posted by Benjamin J. Romano at 2:55 PM

I'd heard raves about Artemis Cafe & Bar from a few people at Microsoft. The new Capitol Hill restaurant is the effort of Microsofties Oscar Velasco and Boris Gorodnitsky.

In his review today, Seattle Weekly's Jonathan Kauffman is pleasantly surprised at the software guys' first effort in the restaurant biz, writing at some length about the "recipe for failure" that is "well-funded food lovers with no restaurant experience who chuck great careers to open their own bistro." That doesn't appear to be the case at this Mediterranean-themed spot.

Our own Karen Gaudette checked in with Artemis and Chef Chris Hunter in September (second item).

I wonder how long before Velasco and Gorodnitsky get on board with the Microsoft PRIME card to drum up more business. Though from Kauffman's description, it sounds like they hardly need it.

November 27, 2007

Activision CEO says console prices need to drop

Posted by Benjamin J. Romano at 4:04 PM

Activision today boosted its outlook for the December quarter and fiscal year on the strength of two hot games, "Call of Duty 4" and "Guitar Hero III: Legends of Rock."

CEO Bobby Kotick, perhaps feeling flush with that success, started dishing out advice to some other big players in the video game business.

At the Reuters Media Summit, Kotick suggested that Microsoft's Xbox 360 and Sony's PlayStation 3 will have to come down in price to $199 to gain the mass-market appeal Nintendo has achieved with the Wii.

"The Wii at its [$250] price point is now setting a standard and an expectation, and people say, 'Well, the Wii is less complex technically.' I don't think that really matters as much to the consumer. ... In the next 24 months they all will need to be at that $199 price point, and you can imagine Nintendo will be down to the $129 price point over the next few years," Kotick said, according to this Reuters story.

The PS3 is down to $400 for the 40 gigabyte version. The Xbox 360's least-cost alternative is $280.

Meanwhile, Nintendo executives are again banging the scarcity gong and reporting the best week of Wii sales since the console hit the market. Here's Reggie Fils-Aime from an AP story: "I couldn't find a single Wii system on the shelves -- literally as I was walking into a Wal-Mart at 11 a.m., someone was walking out with the last one."

I wonder if that shopper thanked Reggie.

Microsoft to employ 6,000 in China

Posted by Benjamin J. Romano at 9:57 AM

Microsoft's head count in China will grow 20 percent to 6,000, according to a Reuters report today. The news agency quoted Zhang Yaqin, Microsoft's chairman in China.

"There will be researchers, but most will be involved with product," Yaqin said.

The rapid growth of the company's work force in China fits with its real estate strategy there.

In an interview earlier this year about Microsoft's major Redmond campus expansion, Chris Owens, Microsoft general manager of worldwide real estate and facilities, described the scope of the expansion in China, as well as in India:

"We're building in Hyderabad. We're building in Shanghai right now and we're in design in Beijing. Those are all million square foot campuses. In Hyderabad, we already have three buildings out and it's the fourth building that takes us into the million-plus range."
November 26, 2007

For 'Cyber Monday' shoppers: Some video game notes

Posted by Benjamin J. Romano at 12:40 PM

A few interesting articles and tidbits from the gaming world today:

The New York Times has an interesting take and detailed history of the battle of the bands raging between "Guitar Hero III: Legends of Rock" from Activision and MTV's "Rock Band," two hot-selling, multi-platform titles.

Microsoft today announced another social-networking feature that will be added to the Xbox Live Dashboard with a Dec. 4 update. Gamers will be able to expose their friends lists to everyone or just their own friends. You know the old song, make new friends, but keep the old. That's the idea here. The company's press release on this feature noted there are now 8 million people on Xbox Live.

No big surprise here, but November online video game sales in the weeks before "Black Friday" were up 134 percent from a year ago, according to comScore. That's the fastest growing e-commerce category and outpaced the overall growth rate for retail e-commerce (excluding travel sales) of 17 percent in the period.

Update: Sony just crowed about its Black Friday sales. Here's the digits: PlayStation 3 sales up 245 percent from Black Friday 2006 (when the new console had been on the market only a matter of days and was significantly more expensive than competitors' consoles). Since dropping its prices and introducing a 40 gigabyte model Nov. 2, PS3 sales are up 298 percent.

Bad data banished to Siberian data center

Posted by Benjamin J. Romano at 11:36 AM

OK, not really. But according to this report from Data Center Knowledge, Microsoft is planning to build a very large data center in the Siberian city of Irkutsk. Reports suggest that at 10,000 servers, it will not be as big as some other projects the company has under way in Chicago, Ireland, San Antonio and, of course, Quincy.

These massive investments run the company's growing array of Internet services, such as the recently launched Windows Live Suite. Check out this story for details on Microsoft's services infrastructure strategy.

We saw the Siberia news first on Mary Jo Foley's blog.

Our intrepid Deputy Business Editor Rami Grunbaum recently visited Irkutsk and captured this image. He was told that's the opera house in the background. Maybe the data center is just around the corner.


November 21, 2007

High iPhone price in Germany is not what is shocking

Posted by Tricia Duryee at 1:31 PM

I've seen several bloggers write today about how T-Mobile in Germany is selling an unlocked version of the Apple iPhone for an outrageously high price of $1,477 (or 999 euros).

But the interesting part of the story is not the price.

You see, T-Mobile was forced to unlock the phone to comply with a court injunction issued after Vodafone challenged its exclusivity on the handset.

In fact, it's not the cost at all that's odd about the story.

As the International Herald Tribune story points out, the offer does fit generally with T-Mobile's pricing schemes. The popular Nokia N95, for example, sells for as little as 199.95 euros ($295.63) with a two-year contract, or 619.95 euros($916.60) without one.

What sticks out to me is that T-Mobile is getting in trouble for having an exclusive phone agreement.

Here in the U.S., AT&T has an exclusive on the iPhone -- and it's not just any exclusive. It lasts FIVE years!

And in Germany, T-Mobile only started selling the phone Nov. 9.

As far as I know, I don't know a single carrier in the U.S. that sells any unlocked phones, even at a higher price. The closest is T-Mobile USA, which after a certain time has lapsed will voluntarily unlock your phone.

I don't know if AT&T will ever unlock the iPhone you bought.

So the next time Google starts talking about "open access" this is one example of what it's talking about. If it's already going on in Europe, then maybe it's not as extreme as some of Google's detractors are claiming.

Microsoft's slice of search pie narrows

Posted by Benjamin J. Romano at 12:17 PM

It's the day before Thanksgiving and all I can think of is pie. Pumpkin. Apple. More pumpkin. And search market. Mmmm, delicious search market.

Microsoft saw its slice of the latter narrow from September to October, according to fresh-from-the-oven comScore stats.

In October, the company's Web sites accounted for 9.7 percent of the 10.5 billion searches conducted in the United States. That's down a bit from 10.3 percent in September -- definitely not the direction the company wants to be going in, especially if it hopes to achieve Platforms and Services Division President Kevin Johnson's "10, 20, 30, 40" goal. (The 30, as in percent, is the target for online search share.)

Yahoo also saw its piece of search pie get smaller, but it's still a comfortable second in the market with 22.9 percent in October, down from 23.7.

Google ate up 58.5 percent of the market in October, up 1.5 percent month-over-month -- just about the same amount that Yahoo and Microsoft, combined, were down.

November 20, 2007

The Kindle: A reviewer's first impressions

Posted by Mark Watanabe at 3:05 PM

You could say that Glenn Fleishman, one of the authors of the Practical Mac column, which appears in Personal Technology, is something on an early adopter. He was among the early purchasers of's Kindle electronic book reader, which was launched Monday. At least Glenn didn't have to wait in line.

Here are his first impressions of the device:

I put my hands on the new Amazon Kindle electronic book reader this afternoon, and my reaction is mixed. Amazon is trumpeting the always-networked device as solving both the problems of legibility and content delivery. It clearly has done both. But simplicity may have triumphed over usability.

Before getting into details, I should note that it's pleasant to read text on the Kindle. Despite having just four levels of gray to show images, the high density of the device's resolution -- it shows more than 160 pixels per inch -- and its clarity, stability and contrast all contribute to a very paperlike feel.

I could see Kindle replacing a stack of books and periodicals for a trip, although its monotonous text style, formatting, and justification could wear after a while. Though Amazon made good design choices, the Kindle's approach belies the importance of the 550-year tradition of typeface and book design in mechanical printing.

The Kindle is a bit of a technological marvel, I have to admit. The device is compact, and feels nice in the hands, although the design isn't up to par of its features. It feels precisely like a prototype for what the real Kindle will look like. The Kindle is full of angles, which I suppose are meant to make it easier to hold, but I find it a little awkward to use.

After plugging the Kindle into power and powering it up, I notice that I don't need to register it. I purchased it through my account, which is already preset in the Kindle.

The display takes a bit of getting used to for someone who has spent 16 years with luggables, portables, laptops, and handhelds avoiding reflection from lights. Rather, the E Ink display -- also used by the slightly cheaper, but unnetworked Sony Reader -- works best with more light on it. The 180-degree reading range is also remarkable: turn the thing nearly perpendicular to the plane of your vision, and it's still crisply readable.

I found the Kindle weighed on my hand or hands after holding it for a few minutes. The buttons for moving forward and back pages or jumping back to a previous action are large, well placed, and can be used while holding in one hand, two hands, or on a surface.

A nice touch: There's a previous and next page button on the left side, so if you hold the Kindle in your left hand, you have access to both. There's also a next page button on the right side, for two-handed operation.

I tried out a book sample (which was rather long), purchased a book, subscribed to a blog and a newspaper, and converted some documents from PDF. Purchases and conversions worked just fine.

Downloads are as fast as Amazon promised. Today's edition of The Seattle Times downloaded in its entirety -- before I had even navigated back to the home page. A several hundred page book was available in tens of seconds. Now, reading books, that's a different story.

You can't scroll on a Kindle as such. That took me by surprise; you page through it like a book and menus for bookmarking and navigation appear when you summon them.

The reason is that the E Ink display can't rapidly update. When you change pages, the "ink" is erased and then reset in a slightly disconcerting flash that the introduction to the Kindle on the device assures you is perfectly normal. It takes getting used to, and it prevents page turning from being seamless.

A nifty scroll wheel handles menu and item selection; it can be depressed like a mouse button to click on a selection. Because there's no live scrolling, a physical strip runs the height of the Kindle screen to the display's right. The bar is full of a reflective material that's selectively revealed.

As you use the scroll wheel, a section of the bar lights up as if you've scrolled to that point, next to links that are highlighted in the main page.

The interface is a bit troublesome. Navigation isn't easy. There's no button on the device to jump to the Kindle Store. Perhaps this is Amazon's nod to keeping the reader from being all about commerce. Still, I would have liked such a button.

Clicking the select wheel next to the Menu button at the bottom of the display brings up a set of contextual options, but there's a bit of a lack of streamlining to get where you need to go.

When the Kindle isn't in use for a few minutes, the display pops up an interesting screen saver: I've seen birds and Oscar Wilde so far.

(Disclosure: I worked for Amazon for six months in 1996-1997, received no stock options, left on marvelous terms, and own no stock in the company.)

November 19, 2007

Microsoft hires new sales boss for North America

Posted by Benjamin J. Romano at 4:28 PM

Robert Youngjohns, 56, most recently CEO of a sales-management software company called Callidus, has been named president, North American sales and marketing, and corporate vice president of Microsoft. Youngjohns will be in charge of 8,500 sales people and report to Microsoft Chief Operating Officer Kevin Turner.

Bill Veghte last held this position at Microsoft. Early this year, he moved to Kevin Johnson's Platforms and Services Division in charge of the new Windows Business Group marketing organization.

Johnson, too, held the North American sales lead before becoming head of global sales and then president of the Windows division.

Youngjohns was at Sun Microsystems for a decade before moving to Callidus. He spent 18 years at IBM before that.

Startups better see something Gates doesn't

Posted by Benjamin J. Romano at 2:55 PM

In addition to the somewhat controversial statements Microsoft Chairman Bill Gates made Friday about an engineering talent shortage, there were several other interesting tidbits from his speech and question and answer session with an audience of high school, college and professional members of the National Society of Black Engineers.

For starters, the atmosphere in the room at Microsoft's conference center in Redmond differed dramatically from that of Microsoft's annual shareholder meeting, at which Gates spoke earlier in the week. Gates noticed it, too. After waiting through a long and loud standing ovation -- "Thank you. Thanks for having me. Thank you. All right, thanks very much." -- to begin his speech, he said, "I've been at a lot of meetings in this room, but I think you may be the most energetic group we've ever had here."

Gates compared the software development process to a much more mundane pursuit: bread baking.

"The pace is really something because whenever you come out with software, customers love to tell you what's right, they love to tell you what's wrong, and you know you can go out and do something new. It's not like working at a bread company where they ... go back and tell you they don't like bread anymore, and great, well, we're a bread company, what do they expect? We're not going to change our product."

The question-and-answer session, as is often the case with a young, engaged audience, was the best part. There were lots of questions about how Gates got started and how one could emulate his success.

Gates dismissed the personal risk he took of dropping out of Harvard to start Microsoft, saying, "I could have always gone back to school. When I started hiring my friends, and they had kids and things, then it was more risky, could I pay them? So I had to be really sure."

For those wondering how to build a Microsoft-sized company today, Gates said the trick is finding a big opportunity based on a major change that the big players -- himself included -- are missing. "You'd have to have an idea that's revolutionary. ... You'd have to have a breakthrough in artificial intelligence or robots or something that was so big that the existing companies really somehow just weren't getting their minds around it, and doing it well. ... So, you'd better see something I don't see if you want to start a company now."

Study finds no shortage of science, engineering talent

Posted by Benjamin J. Romano at 2:30 PM

My story on Bill Gates' Friday evening speech to the regional conference of the National Society of Black Engineers elicited several responses from readers who think the shortage of engineering talent Gates described is a fallacy created by Big Tech in order to lobby for a raised H-1B visa cap and cut their labor costs.

Many readers pointed to this recent Urban Institute study, which says "U.S. student performance rankings are comparable to other leading nations and colleges graduate far more scientists and engineers than are hired each year." The authors note in a summary excerpt that the education pipeline in these fields could use improvement, but is not dysfunctional. Further, they wrote,

"Surprisingly few of the many students who start along the path toward [science and engineering] careers take the next steps to remain in an S&E career. If there is a problem, it is not one of too few S&E qualified college graduates but, rather, the inability of S&E firms to attract qualified graduates."

This caveat is offered: "The analysis of all S&E students and workers may not apply equally to the trends and problems faced in specific fields or by domestic minority groups. A fine-grained analysis of specific industries, occupations, and populations is needed to identify the weakness in the U.S. education system."

The study is interesting reading and provides a good counterpoint to the comments Gates made. (Here's a full transcript of his speech and Q&A with the NSBE.)

It seems to me that, as with any complex subject, there are plenty of credible studies supporting both sides of the debate for one to pick from.

Is Kindle a sign of WiMax's future?

Posted by Tricia Duryee at 12:00 PM

On today, Jeff Bezos writes a letter to customers, about reading books -- "I love slipping into a comfortable chair for a long read....The physical book is so elegant that the artifact itself disappears into the background. The paper, glue, ink, and stitching that make up the book vanish, and what remains is the author's world."

And what also remains is Kindle, the wireless portable reading device that Amazon has been secretly working on for more than three years.

With the launch of Amazon's Kindle comes the first-of-its-kind look at what could be a whole new category of wireless devices.

In the WiMax industry, which is attempting to roll out wireless broadband nationwide, there's a lot of talk about consumer devices, including cameras, MP3 players and other devices, always be connected. Sprint Nextel talks about this the most, with Kirkland-based Clearwire also saying that's a potential outcome of having always-on Internet access.

The problem with this is determining how the user should be billed. If Kindle reaches out over the wireless infrastructure for ane-book, who pays for that airtime? The user? In the form of a monthly bill that requires a two-year commitment?

At that point, adoption is almost completely ruled out.

This is why it will be interesting to see how successful Kindle is. It is adopting a new set of billing rules that Sprint Nextel talks about for its WiMax network.

In the press release, Amazon pays for the wireless connectivity for Kindle so there are no monthly wireless bills, data plans, or service commitments for customers.

The next problem is the device's cost: $399.

WiMax is also supposedly able to help with that over the long run. Its chipsets are to be more in line with Wi-Fi, rather than the costly cellular chips that the Kindle requires.

Of course, the WiMax networks still have to be built, and it has to get enough volume for this to happen.

What do you think of Android?

Posted by Tricia Duryee at 11:46 AM

I wrote a story today about Google's most recent efforts in the mobile phone space.

It recently unveiled a mobile software platform called Android, a free, open-source operating system supported by the Open Handset Alliance. The platform would allow developers to build new applications that the company thinks have been too difficult to develop on today's mobile operating systems.

I wanted to get a sense of whether developers were interested in making nifty, new aps for phones that won't start to be released until later next year.

I posed the questions: Will developers flock to the code? Will they build anything on Android immediately " or later? Does the platform generate excitement or is it a letdown?

By far and away, mobile-software developers in the wireless-heavy Seattle region, didn't have immediate plans to do anything. Many companies I spoke to, or attempted to interview on the subject, declined, saying they had nothing to contribute.

Did I miss anyone? Feel free to comment now, and give me a sense of whether the picture is different somewhere else, or for a different group of people.

What do you think of Android?

Back-end wireless infrastructure, not sexy

Posted by Tricia Duryee at 11:38 AM

Sometimes I think I'm one of the only reporters covering things like back-end billing infrastructure for wireless networks.

It started because Qpass, which provides services to many carriers, was based here in Seattle. But now, it's been more than a year since the company was bought by Amdocs, which must be prompting others to care, too.

Qpass still has a large presence in Seattle, along with another Amdocs subsidiary called OpenMarket.

The Washington Post (via PC World) today featured a story on the two divisions and how they ensure that transactions over mobile phones are secure.

The story explained that to get paid through SMS, mobile vendors need to get a numeric "short code" from a mobile operator for customers to text-message to a phone number. After the customer sends the message, what they bought typically shows up directly on the phone. A charge appears on the subscriber's next bill, and then the content provider gets paid.

But here lies the problem: The story said the process is full of holes, according to content providers and analysts.

Apparently, there are at least two companies trying to solve this problem: OpenMarket and

For more information, check out the article.

November 14, 2007

McCaw says he's not ready to sell Clearwire

Posted by Tricia Duryee at 3:26 PM

Clearwire's stock took a pounding, dropping 25 percent last Friday, after the company said it and Sprint Nextel were abandoning their plans for a partnership.

Since then, the stock has regained some ground, closing today at $15.92, up from $13.49 on Friday.

Perhaps that has something to do with a story in today's Wall Street Journal.

The story includes an interview with the company's founder and chairman, Craig McCaw. It details a lot of the background conversations Clearwire was having with Sprint that led to the letter of intent Clearwire and Sprint signed in July.

But the most telling remark in the whole story may have been McCaw's final comment.

There's so much rumor and speculation on what will happen -- whether print will spin off its WiMax unit; or Clearwire will be bought by Comcast or Google; or Sprint and Clearwire will merge.

The story doesn't answer any of those questions.

But McCaw seemed committed on one thing. True, he needs more money; true he's got a lot left to build, the least of which is confidence in Wall Street that WiMax has a future. But he's not willing to sell -- not yet.

He said: "You can't build to sell. If you build to sell, you're not building anything of sustained value."

For anyone who is familiar with McCaw, this probably isn't too much of a surprise. He is a serial entrepreneur, starting and running a number of communication companies over the years. He won big when he sold McCaw Cellular Communications to AT&T, but lost fairly big with the closure of Teledesic, a satellite venture.

But, for better or worse, he's gone along for the ride to the very end in most cases.

BP-Berkeley Clean Enery Deal Is Officially On

Posted by Angel Gonzalez at 2:45 PM

Despite having generated quite a bit of heat among reluctant students and faculty, a BP-funded alternative energy initiative at Berkeley has officially begun to function, the U.K.-based oil company and its research partners said today.

The Energy Biosciences Institute, as the partnership is known, has a $500 million commitment from BP to seek a long-term solution to the fossil fuel crunch. The money represents one of the largest investments ever made by Big Oil in alternative energy, and one of the largest collaboration deals ever signed between the private sector and academia. BP, one of the first major oil firms to recognize the threat of global warming, had its green credentials tarnished in recent years as its Alaska operations suffered damaging leaks and a Texas City refinery exploded, killing many workers.

BP's woes added fire to stiff opposition from many around campus who argued that signing the deal would render Berkeley's research hostage to BP's interests. Some prominent members of the faculty - such as environmental science professor Ignacio Chapela - also opposed the partnership on the grounds that biofuels could have serious social and environmental consequences for the tropical nations that are likely to grow the majority of energy crops.

But the institute got the green light from university authorities, and its research is now underway at the Berkeley campus. Other partners, besides the University of California and BP, include the University of Illinois at Urbana-Champaign and the Lawrence Berkeley National Laboratories.

November 13, 2007

Microsoft shareholders question insider sales

Posted by Benjamin J. Romano at 12:02 PM

Coming off Microsoft's best first quarter since 1999, one might have expected the company's shareholders, who met in Seattle today, to be more jubilant. And there were several kudos passed on to the company's leadership, in the persons of Chairman Bill Gates, CEO Steve Ballmer, CFO Chris Liddell and General Counsel Brad Smith, during the question-and-answer period that followed the meeting.

But more than one shareholder asked why executives cashed in shares in the days after that quarterly report, which boosted the stock to levels not seen in six years.

"Like all the shareholders in this room and elsewhere, we were delighted three weeks ago when the stock took a nice bounce up and exceeded its six-year high," said Peter Schroeder, a Seattle man who said he owns 60,000 shares and has been an investor in the company since 1986. "Curiously, after that, for about the next 10 days, the stock has been decreasing, falling down every day."

The fact that top management, including Gates and other board members, made significant stock sales in that period signaled to Scrhoeder -- and, he said, to Wall Street -- "a certain lack of confidence in the future of where the company was going."

Ballmer responded:

"Let me comment as a non-seller first, and I definitely respect people selling stock. Management, boards, people will buy and sell at different times for differing sets of reasons. Our board members, our top management, Bill and I, are all, and remain all significant shareholders in the company. It's a significant part of what we own and our net worth and there's a lot of confidence I think in the future of the company, but from time to time people will certainly sell shares.

"To remind all shareholders that the stock moves as it moves over time and it's never a perfect reflection of the actual performance of the company. Nothing magic happened three weeks ago. In a sense, we've been doing whatever we've been doing consistently over time."

Then Gates responded:

"As Steve said, the stock market is not predictable to us or explainable by us and I think over the last few weeks there are a number of factors having to do with the market as whole. You can see technology stocks have been affected by that. They tend to have a fairly high beta. In terms of any sales by myself, I have the majority of my net worth in Microsoft stock. I've sold the same number of shares every quarter for over five years, so that's a plan that I've been on, so that's a very predictable thing. I do think that if you look at the volume that, clearly there are factors in terms of overall market sentiment that are involved there, but I certainly agree with you we all want the stock to be as high as possible."

For the record, Gates sold 13,000,000 shares between Oct. 31 and Nov. 7, which brought him $476,682,276.50, according to SEC filings. He still owns 864,499,336 shares.

InfoSpace offers update on mobile search

Posted by Tricia Duryee at 10:52 AM

Bellevue-based InfoSpace said today it is launching technology that has the ability to incorporate banner advertisements and promotion links into its search platform. (As a reminder, InfoSpace's mobile division was sold recently to Motricity. The transaction is pending customary closing procedures.)

As part of today's announcement, InfoSpace also reported how its so-called mCore Managed Web solution is performing on Virgin Mobile phones in the U.K.

The findings are interesting given the growing hype surrounding advertising and search on the mobile phone. There's a big question as to whether the dominant Internet players such as Yahoo or Google will prevail, or if white-label search provided by InfoSpace, Medio Systems or JumpTap will fair well.

From what InfoSpace says, its not doing too shabbily.

InfoSpace said since deploying the search capabilities, Virgin Mobile UK has seen users increase their mobile search page views by 50 percent. That translates to an overall 60 percent growth rate of all of its mobile search traffic.

Virgin saw not only an increase in Web activity, but also a jump in the purchase of downloads of graphics and games to ringtones and video -- because InfoSpace combines both Web search and the content sold by the carrier into one platform.

"There is a lot of speculation about whether carriers can deliver a mobile Web experience that will compete with third party offerings," said Steve Elfman, InfoSpace executive vice president of the company's mobile business unit.."Our partner's success shows that by bringing the Internet into a unified mobile search solution, carriers can deliver a superior, more powerful user experience and boost traffic across all services,"

More information can be found on InfoSpace's Web site, where there's a white paper describing Virgin Mobile's experiences with search.

I found an interesting tidbit supporting what Elfman says above and adds to the Google vs. white label debate.

InfoSpace said search page views doubled in the two months following the launch of Virgin Mobile's off-portal search to 3.8 million from 1.6 milion a month.

And while those searches were up, searches on Google, Yahoo! and Windows Live decreased "dramatically in the first month after launch, indicating that users are finding what they need without leaving the portal." it said.

AT&T can now be found in bulk

Posted by Tricia Duryee at 10:43 AM

AT&T, the largest wireless U.S. carrier, said it will be selling its service through Wireless Advocates, which sells wireless phones exclusively in Costcos.

AT&T phones will now be sold in nearly 370 Costco locations nationwide, reaching 35 million Costco cardholders.

Wireless Advocates is a Seattle-based company and is a division of the Car Toys enterprise, which also sells wireless phones.

It also offers service from Verizon Wireless and T-Mobile USA

"Costco is near the top among retail outlets in mobile phone activations, so we are positioned to better deliver the benefits of wireless services to a larger group of consumers. Partnering with Wireless Advocates will ensure that our products are sold with care and expertise and that customer service will be a top priority," said Glenn Lurie, president of national distribution in AT&T's wireless division.

The Costco kiosks will sell such phones as the Samsung A437 and A517, as well as Nokia and Motorola models. The Samsung BlackJack will also be sold in select locations.

"The demand for wireless services in Costco stores continues to grow," said Wireless Advocates CEO Dan Brettler.

Zenzui -- no, wait -- Zumobi about to launch a beta

Posted by Tricia Duryee at 10:34 AM

That's right. Zenzui, which was spun out of Microsoft, has been renamed Zumobi.

The Seattle-based startup said the name better represents the business it's in -- mobile.

On Dec. 14, it plans to launch a beta version of its mobile-phone software.

Zumobi is building a platform that allows people to easily get information instead of having to search the Web. It includes a platform of 16 "tiles" that can be seen all at once or one at a time.

The tiles are sponsored by major brands, such as, which can kick back advertising revenue to Zumobi and the carriers. Users get to choose the tiles they want on their screen.

A video demo is available on the company's site.

Zumobi will be available on some Windows Mobile devices. Application and product details will be available at when the beta launches.

ZenZui was launched in March after spinning off from Microsoft and raising $12 million.

November 12, 2007

Will T-Mobile USA be a game changer?

Posted by Tricia Duryee at 11:13 AM

It's been a busy two weeks for T-Mobile USA in the news.

On Oct. 29, I wrote about the launch of Shadow, a new phone from the Bellevue-based company embracing a whole new concept of devices for the company.

T-Mobile said the Shadow is a key part of its initiative launched a year ago to change the carrier from a low-cost provider to a company that sells premium services. The Shadow embraces that because it makes functions easy to use for the common consumer.

Then, last week T-Mobile said that it was going to be one of the more aggressive carrier partners on the Android platform. I talked to T-Mobile USA Chief Development Officer Cole Brodman on that subject in this story.

Together, these events show how earnest the fourth largest U.S. carrier is being. It will be an interesting to watch over the next few years as it builds out its strategy.

The Wall Street Journal summarized these two news events in a story today.

The big question is whether the risks the company is taking will pay off.

Will we look back and say that T-Mobile was a game changer?

Google's Android specs are out

Posted by Tricia Duryee at 11:00 AM

Last week, Google announced it was launching the Open Handset Alliance, a consortium of companies working together to develop the Android platform, a mobile phone operating system based on Linux.

Today, the specifications for Android become publicly available. I'm guessing there were plenty of third-party developers that were eagerly awaiting the release of the software developer kit, more commonly known as SDK.

Here's a demo video from the SDK site:

Google said on its blog today that it is now available.

So it's official. Android is off to the races.

In addition, Google said that in order to get things rolling it was announcing the Android Developer Challenge, which will provide $10 million in awards to developers who build great applications for Android.

The first phone is expected to be built by Taiwan handset manufacturer HTC and be available in the second half of next year.

Still, Google optimistically wrote today on its blog: "with so many brilliant minds striving to design engaging, innovative applications, mobile users around the world (3 billion and counting!) can expect phones equipped with dynamic and unprecedented applications very soon."

Microsoft shares more details on real estate

Posted by Benjamin J. Romano at 10:35 AM

But wait, there's more.

Microsoft this morning announced an even broader expansion of its Puget Sound real estate holdings. In addition to the west campus expansion, detailed in Sunday's stories, the company gave shape to its leased property portfolio.

Microsoft intends to lease 21 additional sites in Bellevue, Issaquah, Redmond and Seattle, "which will provide a combined total of 5.5 million square feet and the capacity to house approximately 19,000 people," according to a press release issued this morning.

It was unclear how much of that includes already announced sites in Bellevue, where Microsoft has locked up about 1.6 million square feet of top-end space in Lincoln Square, Advanta and Bravern. The company also detailed its footprint in downtown Seattle earlier this year. Also, the tenant for a 1.5 million space Paul Allen's Vulcan development group is building in South Lake Union has yet to be officially confirmed, though it's widely believed to be (When I asked Microsoft real estate boss Chris Owens about this recently, he had no comment.)

The company also is planning additional new construction at the Redmond campus, including two new buildings on the Safeco campus it acquired in 2006 and additional new construction on the 26-acre parcel adjacent to its RedWest campus it bought from Nintendo for $42 million. The timing and size of these developments were not disclosed.

The company provided updated figures for its work force. Locally, it now counts more 36,000 workers, out of more than 82,000 globally.

November 9, 2007

Could Clearwire be partnering with Google?

Posted by Tricia Duryee at 9:17 AM

Is there something else in the works now that Sprint Nextel and Clearwire have officially said they are not going through with their partnership announced in July?

Despite the break-up, Clearwire's CEO Ben Wolff hinted in the third-quarter conference call this morning that something else may still be in the works.

He said that because of the spectrum auction coming up in January, there has been immense interest in the wireless broadband business, and a Sprint partnership would have precluded working with anyone else.

And who that might be?


It's no secret that Google has been really interested in the business, pledging billions to participate in the auction and lobbying the FCC hard to tailor the spectrum to its desires.

Wolff said that he can't talk about any transactions publicly until they are complete, but that in general "I would say that there are a number of factors that caused an increased focus on the space that we are in," he said. "We are looking and exploring all of our strategic options and there's a quite a bit of focus on this space right now."

Wolff said it was only in the past 48 hours that the partnership with Sprint had fallen apart, and that he and Gary Forsee, who was Sprint's CEO at the time of the letter of intent, thought it would have closed within 60 days of the partnership's announcement in July. But since then, Forsee resigned and Sprint Nextel has come under increasing fire for its poor performance on its cellular networks, and investors are saying its upcoming WiMax business is a distraction to that core business.

As I wrote in the blog item before, Sprint said in its quarterly filing with the SEC this morning:

"We recently agreed with Clearwire Corporation to terminate the non-binding letter of intent signed by us and Clearwire in July 2007 that provided, among other things, for the joint construction of a nationwide broadband network based on WiMAX technology."

In Clearwire's third-quarter press release, the company offered slightly more details, and sounded even optimistic, saying discussions with Sprint continue, but no partnership is guaranteed:

"Clearwire and Sprint Nextel continue their discussions regarding how best to collaborate for the deployment of a nationwide mobile WiMAX network. Over the course of the parties' discussions, Clearwire and Sprint concluded that the joint build transaction originally contemplated by the previously announced letter of intent was likely to introduce a level of additional complexity to each party's business that would be inconsistent with each company's focus on simplicity and the customer experience. Consequently, the parties have agreed to terminate their obligations under the letter of intent, although discussions continue regarding the best means to accomplish the benefits that were expected under the letter of intent. Notwithstanding the ongoing discussions, there can be no assurance that a transaction or agreement between Clearwire and Sprint Nextel will be concluded."

Wolff said: "We are continuing to discuss with Sprint on how to collaborate, but I can't tell you if we will ultimately have a partnership with Sprint or not, but I can tell you that all of our reasons to support the original reason to sign the letter of intent are still there. These opportunities may include other strategic transactions or partnerships, which may or may not include Sprint. There's more demand for the type of networks that Clearwire is building today."

Sprint Nextel severs ties with Clearwire

Posted by Tricia Duryee at 7:50 AM

I was expecting an update during Clearwire's third-quarter earnings conference call this morning on its partnership with Sprint Nextel to jointly build out a nationwide network.

But it came earlier than the 8 a.m. call.

In today's paper, we reported that the rumors were circulating that the partnership had ended. Sprint Nextel has come under increasing fire for having bad performance on its cellular networks -- and some investors find its upcoming WiMax business a distraction.

In Sprint's quarterly filing with the SEC filed early this morning it read:

"We recently agreed with Clearwire Corporation to terminate the non-binding letter of intent signed by us and Clearwire in July 2007 that provided, among other things, for the joint construction of a nationwide broadband network based on WiMAX technology."

The "other things" included access to Sprint's cellular network. That would have been valuable in providing a triple play (voice, TV, Internet). It would have also helped in branding efforts.

Clearwire's stock is falling, and is down about 20 percent based on the news. Here's the story from the AP.

In Clearwire's third-quarter press release, the company was slightly more optimistic, saying discussions with Sprint continue, but no partnership is guaranteed.

"Clearwire and Sprint Nextel continue their discussions regarding how best to collaborate for the deployment of a nationwide mobile WiMAX network. Over the course of the parties' discussions, Clearwire and Sprint concluded that the joint build transaction originally contemplated by the previously announced letter of intent was likely to introduce a level of additional complexity to each party's business that would be inconsistent with each company's focus on simplicity and the customer experience. Consequently, the parties have agreed to terminate their obligations under the letter of intent, although discussions continue regarding the best means to accomplish the benefits that were expected under the letter of intent. Notwithstanding the ongoing discussions, there can be no assurance that a transaction or agreement between Clearwire and Sprint Nextel will be concluded."
November 7, 2007

Potential rival to Enbrel on the horizon

Posted by Angel Gonzalez at 5:18 PM

An experimental arthritis therapy known as golimumab showed promising results in a late-stage clinical study for the treatment of psoriatic arthritis, Johnson & Johnson unit Centocor and Schering-Plough said Wednesday. The data signals the potential appearance of a new rival to Enbrel, the best-selling treatment developed in Seattle by Immunex and now sold by Amgen.

The compound is designed to be administered less frequently than Enbrel and Abbott Laboratories' Humira (one injection a month, instead of one a week for Enbrel and one every two weeks for Humira). The therapy constitutes an "incremental improvement" over Enbrel and other similar drugs, said Dr. Philip Mease, chief of the Swedish Medical Center's Division of Rheumathology Research in Seattle. Dr. Mease served as an investigator in the trial.

Private equity already breaks last year's record

Posted by Tricia Duryee at 12:04 PM

U.S. private equity firms, including buyout and venture capital funds, have raised $263 billion so far this year, already breaking last year's fundraising record.

Dow Jones Private Equity Analyst reported that the record-breaking money was raised by 364 private equity funds. Last year, $258 billion was raised.

"With the present momentum and a full seven weeks left in the year, we could well see fund-raising break the $300 billion mark for the first time," said Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst.

Buyout and corporate finance funds are attracting the lion's share of the money, accounting for about $203 billion, or roughly 77 percent of all capital raised this year.

Last month, Ignition Partners, a Bellevue-based venture capital firm, said it raised $675 million in capital.

Poll names Gates most influential in past 25 years of IT

Posted by Benjamin J. Romano at 8:15 AM

The Computing and Technology Industry Association surveyed 473 IT professionals to list the most influential people in the industry during the past 25 years. Microsoft Chairman Bill Gates topped the chart, with 84 percent of respondents placing him at No. 1. (The Web-based survey allowed people to mark more than one name.)

Here's the rest of the top 10:

2. Steve Jobs, CEO of Apple
3. Michael Dell, Chairman and CEO of Dell
4. Linus Torvalds, who wrote the code for Linux (tie)
4. Sergey Brin and Larry Page, founders of Google (tie)
6. John Chambers, chairman and CEO of Cisco Systems
7. Larry Ellison, CEO of Oracle
8. Vinton Cerf, known as one of the "Fathers of the Internet," co-designer of the TCP/IP protocols and architecture of the Internet
9. Steve Ballmer, CEO of Microsoft
10. Meg Whitman, president and CEO of eBay

November 6, 2007

ING Direct buys for $220 million

Posted by Tricia Duryee at 1:18 PM

Amsterdam-based ING Direct, which has a U.S. banking subsidiary, said today that it is acquiring Bellevue-based ShareBuilder, an online brokerage business.

ING is paying $220 million, or 152 million euros, for Sharebuilder, which was founded in 1996.

I wrote a story about the company in 2004. At the time, it had 120 employees, and had raised $67 million in venture capital. The company started off as Netstock Direct, and launched in 1999.

The company's business model included having co-branded relationships with more than 40 banks, 140 credit unions and other nonfinancial institutions, including Wells Fargo, National City Bank, Alaska Airlines, Costco and Safeco. It is also known for allowing people to individually invest by dollar figure instead of stock price. The end result is that the purchaser may own a partial share.

In 2005, I wrote about the company again, this time as part of a category of Northwest companies that were growing and had at least 100-plus employees -- and candidates for merger or an IPO.

Dick Harryvan, ING group executive board member and CEO of ING Direct, said in a press release:

"This acquisition is in line with ING Direct's aim to become the world's most preferred consumer bank by expanding geographically and developing its product range, while focusing on growing its mortgage business and investment services."

Microsoft CIO ousted

Posted by Benjamin J. Romano at 12:28 PM

Stuart Scott, who led Microsoft's internal IT department, which is "responsible for security, infrastructure, messaging and business applications for all of Microsoft, including support of Microsoft product groups, corporate business groups, and the global sales and marketing organization," was shown the door early this month.

An editor's note on Scott's Microsoft bio page, updated Monday, states, "Stuart Scott's employment at Microsoft ended in early November 2007."

Mary Jo Foley at ZDNet has more, including a statement from Microsoft confirming Scott's departure adding that he "was terminated after an investigation for violation of company policies." The statement says that's all they're going to say.

Goldman note knocks MSFT off high horse

Posted by Benjamin J. Romano at 10:13 AM

After an impressive run in the six trading days since it reported outsized first quarter earnings, a note to investors Monday from analysts at Goldman Sachs is weighing on Microsoft's stock today.

Goldman analyst Sarah Friar told clients she's removing Microsoft from the Americas Conviction Buy List because "[c]urrently we believe there is more
near-term upside in Oracle, now that Microsoft's 1Q earnings catalyst has

Friar noted that Microsoft shares are up 21.1 percent since Oct. 16, when she added the company to the Conviction Buy List, compared with the S&P 500, which was down 2.4 percent in that period.

She remains positive on Microsoft, and has a "buy" rating on the stock and a 12-month price target of $39, pointing to the company's strong product cycles, including Windows Vista and Office 2007 adoption by businesses and anticipation of strong Xbox 360 sales over the holidays.

"That said, the stock's 15% move since earnings has tempered the risk/reward somewhat, although in our view Microsoft also remains a good defensive play in a tougher spending environment given portfolio breadth, balanced international
exposure, discounted valuation and product cycle tailwinds."

Shares were down 66 cents to $36.07, 1.7 percent, in early afternoon trading today on the Nasdaq.

Microsoft pushing enterprise search software

Posted by Benjamin J. Romano at 6:00 AM

Microsoft aims to grab more of the enterprise search market -- searches done across company Intranets as opposed to the broader Internet -- with a pair of new products its announcing today.

The company's Search Server 2008 Express is free software to run internal queries that include internal databases. It can also be set up for external company Web sites used by customers and partners. The technology is the same as what's included in Microsoft's Office SharePoint Server 2007, but is limited to running on a single machine. The company is also preparing a full version of Search Server 2008, which will run on multiple machines.

Pricing for the full product was not announced. But Jared Spataro, a Microsoft enterprise search group product manager, said the company is trying to expand the market for enterprise search, which he said has been limited by the high price of existing software options. He pointed to products from Endeca and Autonomy, which he said cost up to $400,000.

"The biggest competition for us isn't necessarily any of those vendors, but that our customers will continue to do nothing," Spataro said.

Enterprise search, which has been around in various forms since the late 1980s, is reaching a tipping point, he said, pointing to the proliferation of information, greater public awareness of and comfort with search technology, and the improvement of server technology for enterprise search.

Search Server Express requires Windows Server 2003, he said.

November 5, 2007

Pro-Provenge group rides the bus

Posted by Angel Gonzalez at 5:48 PM

After placing an ad in the Washington Post and staging rallies in front of the Capitol and the FDA's headquarters, activists angry at the agency's decision to withhold approval for the prostate cancer drug Provenge have found a new way to voice their discontent.

Starting today, 25 Washington Metropolitan Area Transit buses will carry an ad headlined "Provenge Confidential." The month-long campaign, styled as a poster for a film noir, is sponsored by CareToLive, a group that has sued the FDA for allegedly conspiring against the prostate cancer drug, developed by Seattle-based Dendreon. CareToLive is composed of patient activists as well as investors caught on the wrong side of Dendreon shares' roller-coaster ride.

The ads make reference to "Machiavellian power grabs" and "undisclosed conflicts of interest" that supposedly led the FDA to request more data from Dendreon instead of approving it last May. An agency advisory panel had voted in favor of the drug.

The ads look like this:


Other investors blame the company instead, claiming it didn't communicate Provenge's real chances of getting approved. The Securities and Exchange Commission has started an informal inquiry on the issue.

No Google phone, but a new platform is coming with T-Mobile and others

Posted by Tricia Duryee at 8:01 AM

Rumors have circulated for months that Google is about to release a mobile phone.

And that could still be in the works.

But a much broader alliance, including Google and T-Mobile USA, Motorola and other mobile industry heavyweights, announced this morning that they are coming together to build what they are calling Android -- the first open and comprehensive platform for mobile devices.

"Today's announcement is more ambitious than any single 'Google Phone' that the press has been speculating about over the past few weeks. Our vision is that the powerful platform we're unveiling will power thousands of different phone models," said Google Chairman and CEO Eric Schmidt.

There's been some debate for a while on how the mobile phone industry can become more like the PC or Internet industry, where third-party developers can create either Internet or PC applications for consumers at their will. Today, the mobile phone industry is more closed, and most applications need approval by the carrier. I wrote a story about this very subject two weeks ago in San Francisco, where the founder of Facebook challenged the industry to operate more like a platform than a so-called walled garden.

Android is being developed by Google, T-Mobile, HTC, Qualcomm, Motorola and others through the Open Handset Alliance.

The news came out this morning, with a conference call at 9 a.m. I will have more details after that as to whether this is what the rumors of a Google phone have been about, or whether this is something separate and much broader that is in the works.

For now, a press release says the alliance shares a common goal of fostering innovation on mobile devices and giving consumers a far better user experience than much of what is available on today's mobile devices. In doing so, they expect to accelerate the pace at which new and compelling mobile services are made available to consumers.

What actually is Android?

The press release says it includes everything in a "software stack," which consists of an operating system, middleware, user-friendly interface and applications.

The first phones based on Android are expected to be available in about eight months, or the second half of 2008.

The Open Handset Alliance includes 34 companies. Of the founding members, big names such as Microsoft, Symbian and UIQ are noticeably absent. I think all three of those companies would argue that they have an open platform that developers are welcome to create applications for. I'll try to figure out the difference between Android and what already exists.

November 2, 2007

Life Sciences Discovery Fund money draws 75 applications

Posted by Angel Gonzalez at 6:42 PM

Tobacco money has a lot of friends.

The Life Sciences Discovery Fund -- an institution charged by the state to distribute the funds from the tobacco settlement -- said today that 75 Washington research programs are bidding for grants.

Applicants include hospitals, universities and research institutions, as well as collaborations between companies and non-profits.

Proposals include vaccines, preventive medicine, surgical robotics and treatments for various diseases, the fund said in a statement.

The LSDF will distribute between $18 million and $20 million among the programs selected.

Clinton at Microsoft

Posted by Benjamin J. Romano at 2:37 PM

Bill Clinton went before a crowd of "several thousand" Microsoft employees in person, and tens of thousands who watched via the company's intranet, Microsoft CEO Steve Ballmer said today in introducing the president to a gaggle of reporters earlier today.

After his remarks to the assembled employees, he took questions and waded into the crowd.

Clinton provided a somewhat unsatisfying response to the biggest question involving his presidency and Microsoft: How does he feel about the outcome of the U.S. antitrust case against Microsoft, initiated during his administration?

"I don't know enough about the outcome to know," Clinton told reporters. "You know, in our administration, we had no contact between the White House and the Justice Department over the enforcement of the law, so, I knew, the first time I heard about the Microsoft case is when I read about it in the paper, literally. I had no knowledge of it.

"And I guess, I'm not dodging, this question. If I knew enough to give you an answer, I would, but, then, since I'm so ignorant about this, there's no point in demonstrating it by giving you an answer that would only show that I don't know what I'm talking about."

Clinton also praised Microsoft for matching employee charitable contributions, which, according to Ballmer reached $72 million this year, up from $63 million last year.

"Companies that can afford to do so should follow this company's lead and match their employees' gifts," Clinton said.

He also thanked Ballmer and Microsoft for the company's support of causes he has championed, including, a United Nations effort to provide an education for 9 million refugee children by 2010.

Echoing themes from his presentation to the U.S. Conference of Mayors in Seattle Thursday night, Clinton also highlighted an effort to better measure improvements made to buildings to reduce their carbon footprint.

"The problem is that, believe it or not, even after all these years of dealing with climate change, there is no commonly accepted clear measurement of the impact of specific actions on the problem," he said. "So what Microsoft is doing for us, with Infosys and [the International Council for Local Environmental Initiatives], they're developing the baseline so that we can go into every major building and say, 'OK, here's what your carbon footprint is now and then we'll be able to measure every specific thing we do to say how much it's reducing.'"

Clinton devoted most of his comments to answering attacks on Sen. Hillary Clinton during Wednesday night's Democratic Presidential Debate, particularly an implication that President Clinton had attempted to delay releasing archived records from his administration pertaining to his wife.

"It was breathtakingly misleading," Clinton said of questions put to Sen. Clinton by Tim Russert of NBC's "Meet the Press" during this week's debate.

Bill Clinton's statements at Microsoft today provoked a response from the Republican National Committee, which alleged, in part, that the Clintons continue to distort the facts and hold back documents.

November 1, 2007

Bill Clinton to talk to Microsofties

Posted by Benjamin J. Romano at 6:00 PM

Former President Bill Clinton, in town this week for the Conference of Mayors, will pay a visit to Microsoft's Redmond campus Friday morning for a closed-door chat with employees there.

Afterwards, he's expected to meet the press with Microsoft CEO Steve Ballmer.

Check back here for coverage tomorrow.

Tricia Duryee
Tricia Duryee

Angel Gonzalez
Angel Gonzalez

Kristi Heim
Kristi Heim

Benjamin J. Romano
Benjamin J. Romano

Mark Watanabe