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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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May 10, 2010 5:39 AM

Office 2010: Microsoft makes a free version of its cash cow

Posted by Sharon Chan

office2010prof.jpgIn case you missed it, this story ran in Sunday's Seattle Times on Office 2010. When Microsoft launches its latest business and personal software suite Office 2010 on Wednesday in New York, it will introduce a free version, Office Web Apps, to compete with Google. I will be covering the launch event in New York. Follow my updates here at Pri0 or via Twitter at

In the beginning, there was word processing.

Then, simply, Word.

Spreadsheets became Excel. Presentation software, if it was ever known by such a name, was simply PowerPoint. Long before Google's preeminence in search, Microsoft dominated business and personal software with a suite known as Office.

The company launches its latest version, Office 2010, on Wednesday in New York â€" and the stakes couldn't be higher.

The lucrative franchise is threatened by a changing market spouting a four-letter word: free. The biggest threat comes from Google, specifically Google Docs, Web applications accessible from any computer.

Because of Google, Microsoft has been forced to make a free ad-supported version called Office Web Apps.

Google's software is unlikely to depose Office, especially among heavy business users who write reports, draw up corporate budgets and put together sales presentations. But Office 2010 does represent a slow tipping of the entire technology industry, from a PC world Microsoft long has dominated to a cloud-computing world, where software roams free on the computer, phone, tablet and television, and the old ways of making money are changing.

"We think it's actually an opportunity for us," said Stephen Elop, president of Microsoft Business Division, which makes Office. "We have an opportunity to draw in many, many people who today are not engaged in the Office experience, or have not paid for software along the way, or are on very old software."

Wednesday's event at NBC Studios in New York will mark the first day business customers can buy copies of Office 2010 that gets installed on PCs. The software will start selling in stores to small businesses and consumers sometime in June. The free Office Web Apps also will be available to consumers in June.

Microsoft's challenge

Free is not a part of Office's history. The Business Division, whose chief product is Office, brought in $19 billion in sales in fiscal 2009, more than a third of Microsoft's $58 billion in sales for the year. It generated more than half of the company's operating profit â€" $12 billion of the overall $20 billion.

But Microsoft's ability to sustain these numbers is being challenged by the new way people use technology.

"As the world goes increasingly more and more mobile, the way people want to access and use applications is increasingly shifting to the Web," said Sarah Friar, an analyst at Goldman Sachs who follows Microsoft. "Google becomes the face of that beast, but I think it's a broad industry shift, not just Google, that is bringing Microsoft around to this."

Instead of selling copies of Office, the company may have to find other revenue streams, including advertising to underwrite free software.

Much is riding on the company's next steps. Microsoft estimates 500 million people use Office, many of them still chugging away on Office 2003 or even older versions. About half the users are believed to have paid for it. The others have not, many of them using pirated versions.

Microsoft is less worried about piracy, more worried about people who choose Google Docs instead.

Four years ago, Google began offering the stripped-down Web-based word-processing, spreadsheet and presentation software to compete with Office.

Google Docs saves each file on a Google server so people can access it from any PC or device rather than saving it to a thumb drive, e-mailing it back and forth as an attachment or physically being at a specific computer to open a file.

The public version of Google Docs is free to individuals, and Google sells the software to businesses for $50 per user each year in a suite called Google Apps. The paid version has more security, privacy controls and customer support, and it runs on a network with guaranteed service levels. Google says that, combined, more than 25 million people are using the free and paid versions.

"The way people work today is not reflected in the tools they have at their disposal," Google spokesman Andrew Kovacs said. "Office was built 20 years ago for someone sitting at a desk on their own. ... Google Docs, launched four years ago, it was about collaboration."

Chris Vander Mey, senior product manager at Google, called Office a great tool. "Every business should have two or three copies," he added. "We don't think everyone needs it. It's like Photoshop â€" not everybody needs it."

Spreading competition

To counter Google Docs, Office Web Apps will offer more features and what the company claims is a better visual presentation than its competitor. But Office Web Apps will not have all the features of Office 2010, which is being priced from $119 to $499, depending on the version.

"We've had a long history of lots of competition," said Chris Capossela, senior vice president of Microsoft Business Division. "We have to focus on a really great product our customers will love. We think that if we do that, we'll continue to be the leader."

That competition has spread on the Web. A month ago, Microsoft launched Docs for Facebook, building a free Web-based version of Office that works inside the social network. Microsoft also recently laid claim to the URL

Capossela said the Office team has been building its new version since Office 2007 came out in 2006, with a focus on working across the PC, the browser and the phone. Seven million users have downloaded the test version of the software, the company reports.

The free version of Office Web Apps will have advertising; Google says it has no plans to add ads to Google Docs.

New Office features

As always, Microsoft has put much effort into building new features for the software.

Office Web Apps, for instance, allows users to create, edit and share Office docs with people who have Office and those who don't. Two people could simultaneously edit the same spreadsheet, Word document or PowerPoint presentation from different locations through a PC, the Web or a Windows Mobile phone.

"It's nice to be able to walk to any PC connected to the Internet and you can use Office Web Apps to create docs. You can round-trip the files from the PC to the phone to the browser," Capossela said. "Nothing is gone. The pictures, footers, headers will all be there."

The Office team also built a new social-network feature into Outlook, the Outlook Social Connector, so users can pull up contact information from Facebook and LinkedIn without leaving Microsoft's e-mail software.

A new video-editing feature was added to PowerPoint, and the new Word has a photo-editing feature.

Google dismisses the new Office features. "We're not about new features," Vander Mey said. "We're about new behavior."

Embracing the cloud

Observers say an Office that embraces the cloud is just the beginning for Microsoft. As Chief Executive Steve Ballmer has said, "we're all in" when it comes to the cloud. Microsoft has built large data centers in Houston, Chicago, Ireland and other locations to launch cloud services.

In January, the company launched its cloud-computing platform, Azure, which is courting software developers to build Web-based applications on a Microsoft-hosted platform.

The big question now is how the move to the cloud will affect the Office sales.

"Not all of it is going to be at risk, but you could see $1 billion being at risk over a couple-year period," said Goldman Sachs' Friar.

The customers Microsoft stands to lose most are consumers who now buy Office for personal use. Friar estimates that Office made $1.8 billion in fiscal 2009 from consumers. Consumers who already are adopting cloud-based software such as iTunes and Facebook are more likely to move to free Web versions than business customers.

Business customers, who Friar estimates make up 90 percent of Office customers, are unlikely to immediately make the jump, given that the free Web version will have online advertising, less security and privacy, no guarantees that the service would always work, and far fewer features than the PC version. These customers sign long-term contracts with Microsoft, paying an annual fee per worker with automatic upgrades to the latest version. It's slower, steadier income.

They eventually may move to the cloud, and Microsoft has to figure out how to bridge the PC past and the cloud future.

"It's going to force them to think through very different business models from how they get paid today," Friar said.

Sharon Pian Chan: 206-464-2958 or Follow me on Twitter @sharonpianchan

Comments | Category: Google , Microsoft , Office |Permalink | Digg Digg | Newsvine Newsvine

June 17, 2009 4:35 PM

Google Apps software disables Microsoft Outlook features

Posted by Sharon Chan

Microsoft and Google are having compatibility issues. Microsoft says Google software disables some features in Outlook, the company's e-mail and calendar software.

In a blog item posted by the Outlook team at 1:56 a.m. today, Microsoft developers said the Google Apps Sync, a plug-in, disables the search function in Outlook, making it difficult to search through the 1,000 e-mails in your inbox.

The Outlook team has complained to Google, according to the blog item. Google says in its enterprise blog that it's working to fix the issue, but so far the solution it is suggesting is to uninstall Apps Sync.

Update 11:06 a.m.: The incompatibility issue is between Google Apps Sync and Windows Desktop Search, which runs the search function in Outlook behind the scenes. If the user gets under the hood in Outlook and disables the Windows Desktop Search function in Outlook, then Outlook data will be searchable.

It's like I work for tech support. Did you try restarting?

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

June 15, 2009 2:34 PM

Microsoft news roundup: Bill Gates tie-less, cell phones cut, Google on Bing

Posted by Sharon Chan

Some bits and bytes on Microsoft from around the country:

New York Post says Google's co-founder Sergey Brin has a team of engineers dissecting Bing, Microsoft's newly upgraded search engine. Early data after Bing's launch at the beginning of June show that traffic numbers have improved for Microsoft's search operation.

MocoNews says Microsoft has stopped reimbursing employees for their BlackBerry and iPhone plans, unless they switch to a Windows Mobile device. We ran a New York Times story today on how even discretionary spending shrinks elsewhere, smartphone sales are projected to go up by 25 percent this year. And on the other end of the spectrum, here's another story we ran today about how the poor are using a federal government telecom subsidy for cell phones.

Seattle Examiner reports that Bill Gates shocked Cambridge when he showed up to receive an honorary degree without a tie. Which would make news only in England.

Comments | Category: Bill Gates , Bing , Employee benefits , Google , Microsoft , Mobile , News roundup , Windows Mobile |Permalink | Digg Digg | Newsvine Newsvine

June 8, 2009 11:47 AM

Blind testing search from Microsoft, Google and Yahoo

Posted by Sharon Chan

Would a rose by any other name smell sweeter? blindsearchscreen.jpg

Silicon Valley Insider found this site over the weekend: BlindSearch. It compares search results in a blind test, then reveals which search engine the results came from: Microsoft's Bing, Google or Yahoo. The site says it was built by Microsoft employee Michael Kordahi as an experiment.

Kordahi previously posted the survey results but says on the site that someone was gaming the system and he had to take it down.

Microsoft rebranded its search engine as Bing last week, and many company executives kept repeating that in their market research, customers who were given Microsoft search results disguised as Google results preferred Microsoft search.

Try it yourself.

Comments | Category: Bing , Google , Microsoft , Search , Yahoo |Permalink | Digg Digg | Newsvine Newsvine

May 28, 2009 9:25 AM

Can Microsoft get a big bang out of Bing?

Posted by Mark Watanabe

As expected, Microsoft took the wraps off its overhauled search engine this morning, introducing a new brand name, Bing.

The Wall Street Journal reported online that Chief Executive Steve Ballmer was demonstrating Bing at the Journal's D: All Things Digital conference in Carlsbad, Calif. Here's Microsoft's release on the introduction.

The Journal's report said the search engine, which has been called Live Search, will sport a new look next week when it goes online. In addition, it is being designed to give users "access to a range of categories of search" and that Microsoft is targeting four distinct categories: shopping, local, travel and health.

Whether Bing can cut into Google's overwhelming lead in search will be one of the most closely watched issues in tech.

Bing will attempt to accomplish this by adding more features to Microsoft's search. Among other things, Microsoft is adding Bing Travel to the site -- a combination of technology from Farecast and content from MSN Travel designed to help people in making travel plans. Microsoft acquired Seattle-based Farecast, an airfare prediction Web site, in April 2008.

Separately, BusinessWeek has an interesting interview with Qi Lu, president of Microsoft's Online Services Division who came to the company from Yahoo. In it, Lu gives a broad outline of where Microsoft thinks there are opportunities to advance search beyond what Google has accomplished:

"When you see a query box, you type in it. [The assumption is that] it will give you what you want. But [consumers'] expectations have increased. They are using that search box for all kinds of things: to purchase product, to plan a vacation, to research a particular organization, to study a particular concept."

Lu also says he came to Microsoft because the company has the resources to invest in infrastructure and "a world-class R&D team that has top-notch experts in all the critical disciplines."

Oh, yes, one more thing: Fortune magazine columnist Stanley Bing has a few words to say this morning on brands and brand names, including his own.

Update, 4:36 p.m.: The Live Search team (presumably that now becomes the Bing team?), responded to Stanley Bing's call to work out their differences by accepting Bing's (the person's) offer of services. The team's blog said:

After an emergency meeting (three people were invited, all declined), we've decided to take you up on your offer. We're not certain what exactly this would involve. We're not certain it would pay much (nothing, actually) but we look forward to starting a dialogue and hope we can work together soon. Let's do lunch.

Listen up and you can hear the badda bing.

Comments | Category: Advertising , Branding , Digital media , Google , Microsoft , Search , Steve Ballmer , Windows Live |Permalink | Digg Digg | Newsvine Newsvine

May 26, 2009 9:10 AM

Get ready to hear a lot about Bing, says Ad Age

Posted by Mark Watanabe

It looks like Microsoft's long-awaited revamp of Live Search is about to unfurl.

Last week, word leaked out that the company would be unveiling its updated search engine, code-named Kumo, at The Wall Street Journal's D: All Things Digital conference, which takes place this week in Carlsbad, Calif. Steve Ballmer is on the roster of speakers.

Today, Advertising Age is reporting that Microsoft is launching the update, to be called Bing, with an $80 million to $100 million advertising campaign. Compare that with what Ad Age says is considered a "sizable budget" for a national consumer product launch, $50 million. JWT, one of the ad industry's major players, is handling the campaign.

One prominent part of the upgrade is expected to be a branding change. Speculation has centered on the code name, Kumo, but last week a leading search analyst, Danny Sullivan, said he thought the new brand would be Bing.

Despite the typical big-budget effort Microsoft appears to be setting up, the company faces a monumental challenge in going after a market leader whose name is virtually a generic term for Internet searching. In the latest monthly reports Google continued to hold a commanding 64.2 percent of the U.S. search market in April. Microsoft's Live Search remained languishing in third at 8.2 percent, behind Yahoo with 20.4 percent.

Whether the campaign can equal or better the impact that Microsoft's ads appear to making in the company's battle with Apple over laptop PC sales will be one of the closely watched issues in tech for a spell.

Comments | Category: Advertising , Apple , Branding , Digital media , Google , Microsoft , Search , Windows Live |Permalink | Digg Digg | Newsvine Newsvine

April 22, 2009 7:54 AM

Microsoft morning news roundup: Google's netbook pops up, tidbits on social networking in Windows Live

Posted by Sharon Chan

  • Computerworld has some early info on Google's Android software for netbooks, which would compete with Microsoft's Windows software for the low-cost laptops built for basic computing like e-mailing and surfing the Web. Built by SkyTone in China, CW says, the new device undercuts most netbooks out there on cost, and should end up costing $100 to $200.
  • Techcrunch has some tidbits on social networking in Windows Live. It reports that Microsoft plans to announce a number of partners today that would stream social feed updates onto the Windows Live page. Facebook and Digg are on their list, but no Twitter. Update 10:37a: Twitter feeds are already available on Windows Live.

Comments | Category: Facebook , Google , Microsoft , Windows Live |Permalink | Digg Digg | Newsvine Newsvine

April 2, 2009 2:45 PM

Microsoft news roundup: Ad campaign in works for Microsoft search; Office on iPhone?; Inside Google's data centers

Posted by Benjamin J. Romano

Advertising Age reports that JWT, which has been getting more business from Microsoft of late, has landed an $80 million to $100 million advertising campaign for the company's Internet search service, which is expected to undergo a major rebranding later this year. The story says the campaign is expected to begin in June. Microsoft's search team had some April Fool's fun Wednesday, poking at its branding troubles with a post announcing the debut of "MSN Windows Live Search on"

Stephen Elop, president of the Microsoft Business Division, indicated an Office application that would let Apple iPhone users edit documents could be in the works. Asked at the Web 2.0 Expo today about a mobile edition of Office for the iPhone, Elop said, "Not yet -- keep watching," according to this eWeek story.

Continue reading this post ...

Comments | Category: Advertising , Data centers , Google , News roundup , Office , Search |Permalink | Digg Digg | Newsvine Newsvine

February 25, 2009 10:50 AM

Microsoft news roundup: OEM exec says Windows 7 in September, October; Google wants to join EC antitrust proceedign against Microsoft; wrapping up TechFest

Posted by Benjamin J. Romano

"According to current planning, it should be late September or early October." That's what Ray Chen, president of a Tapei OEM, Compal Electronics, told Bloomberg about when Microsoft may begin shipping Windows 7. That would put it ahead of Microsoft's officially stated schedule, which has the new OS due by January 2010. But it would match some observers' expectations that Microsoft will have Windows 7 available in time for the 2009 holiday season.

Continue reading this post ...

Comments | Category: Google , Internet Explorer , Legal issues , Natural user interface , News roundup , Research , Search , Windows 7 |Permalink | Digg Digg | Newsvine Newsvine

February 24, 2009 6:15 AM

Microsoft Strategic Update: Ballmer tells Wall Street more dramatic cost cutting would be 'imprudent'

Posted by Benjamin J. Romano

With Microsoft's Redmond campus largely emptied out for the winter holidays, CEO Steve Ballmer crunched the numbers on the proper level of spending for his company against the current economic climate, which he has repeatedly referred to as a "reset" rather than just a recession. Ballmer said his own estimates for the weakness and duration of the downturn tend to be more severe than those of other business leaders he meets.

With that in mind, he settled on $27.5 billion of operating expenses -- a level the company aims to hold relatively steady through the current fiscal year, which ends June 30, and during its 2010 fiscal year. Ballmer made clear to financial analysts meeting in New York this morning for the company's annual strategic update that cutting back even more significantly -- say to $20 billion -- would be "imprudent."

"I think this is right," Ballmer said.

That should give some comfort to those wondering if the modest layoffs Microsoft announced last month were the beginning of a more significant reduction. Wall Street analysts and investors are pressuring companies in every industry to continue cutting costs as sales and profits slow dramatically.

The strategic update call just came to an end. Ballmer gave a detailed look at seven major business areas for the company. Check back here later this morning for more details.

Update, 7:50 a.m.: As he told Congressional Democrats earlier this month, Ballmer said Microsoft's corporate strategists have been evaluating past downturns -- particularly those driven by "deleveraging." The team read company annual reports from 1927 to 1938 to determine who did a good job managing through the Great Depression. "RCA, God rest them in peace, became our role model," Ballmer said. The company was able to dominate the television business because it continued to invest during bad times, he said.

Then he broke down how Microsoft plans to invest.

Continue reading this post ...

Comments | Category: Advertising , Apple , Enterprise , Financial , Games & entertainment , Google , Microsoft layoffs , Mobile , Office , Online services , Open source , Search , Server and tools , Steve Ballmer , Strategy , Tech Economy , Windows , Windows 7 , Windows Azure , Windows Mobile , Xbox 360 , Yahoo acquisition , Zune |Permalink | Digg Digg | Newsvine Newsvine

February 18, 2009 5:31 AM

Microsoft news roundup: Obama's antitrust nominee calls Microsoft 'so last century'; Google sued for starving 'nascent competition'

Posted by Benjamin J. Romano

President Barack Obama's nominee to head the antitrust division at the U.S. Department of Justice isn't interested in Microsoft, according to comments she made last summer. "For me, Microsoft is so last century. They are not the problem," Christine Varney said during a June 19 American Antitrust Institute panel discussion, according to Bloomberg. The U.S. economy will "continually see a problem -- potentially with Google" because it already "has acquired a monopoly in Internet online advertising," she said.

Continue reading this post ...

Comments | Category: Advertising , Google , Legal issues , Public policy & issues , Search |Permalink | Digg Digg | Newsvine Newsvine

February 9, 2009 10:38 AM

Google licenses Exchange ActiveSync from Microsoft for new mobile service

Posted by Benjamin J. Romano

mobile sync logos.JPG Google today launched Google Sync, a service that allows people to easily move and synchronize contacts and calendar items between devices. The company is licensing patents from Microsoft "covering Google's implementation of the Microsoft Exchange ActiveSync protocol on Google servers," according to a Microsoft statement.

Continue reading this post ...

Comments | Category: Cloud computing , Devices , Google , Mobile , Online services |Permalink | Digg Digg | Newsvine Newsvine

January 29, 2009 5:18 PM

Microsoft has posted 72 job openings in Washington since layoffs announced

Posted by Benjamin J. Romano

A week ago, Microsoft announced its first companywide layoff, letting go 1,400 people as part of a plan to cut up to 5,000 jobs in the next 18 months. But the company made clear it would continue hiring, perhaps 2,000 to 3,000 people, in strategically important areas. And judging by its U.S. online jobs site, it intends to. A search of the site for positions in Washington state brought back 72 openings posted since Jan. 22, the day the layoffs were announced.

Continue reading this post ...

Comments | Category: Advertising , Coming and going , Google , Halo , MSN , Microsoft layoffs , Mobile , Online services , Recruiting , Search |Permalink | Digg Digg | Newsvine Newsvine

January 14, 2009 2:07 PM

Speculation swirls on timeline for next version of Microsoft Office; test version of Web apps due this year

Posted by Benjamin J. Romano

With documentation and early code going out to select testers this week, another Microsoft guessing game is gaining favor: When will the company ship the next version of Office, known as Office 14?

Earlier guesses had the company aiming for a dual Office-Windows release, as it has in the past. But speculation today points to a 2010 Office release. (Windows 7 is expected by many pundits to ship sometime later this year -- despite Microsoft's official position that January 2010 is the target.)

I had a chance to ask Justin Hutchinson, group product manager for the Office client team, about the schedule for the product last Thursday at the Consumer Electronics Show.

Q: Is there any kind of goal to have Office in step with Windows 7 as Microsoft has done in the past?

Continue reading this post ...

Comments | Category: Apple , Google , Office , Online services , Strategy |Permalink | Digg Digg | Newsvine Newsvine

December 10, 2008 3:15 PM

Data center construction delays?

Posted by Benjamin J. Romano

InternetNews has a thorough report today pointing to several signs that Google and Microsoft are slowing construction on their expensive data centers to save costs against the backdrop of recession.

Continue reading this post ...

Comments | Category: Cloud computing , Data centers , Google , Tech Economy , Windows Azure |Permalink | Digg Digg | Newsvine Newsvine

December 10, 2008 7:39 AM

Profile: Qi Lu, Microsoft's incoming Online Services Group president

Posted by Benjamin J. Romano

Check out this profile of Qi Lu, the former Yahoo search executive who is taking over a critical group at Microsoft in January, from today's paper. Also, after the jump, Microsoft has published its own Q&A with Lu, covering his reasons for coming to Microsoft, how Steve Ballmer recruited him, what opportunities he sees for Microsoft in search and more.

If Microsoft has to climb over or through Yahoo to get to Google in the Internet search business, there are few people better positioned than Qi Lu to lead the way.

Named last week as president of Microsoft's Online Services Group, Lu brings with him practically the entire history of Yahoo's search efforts.

"Qi was there from the very beginning," said a former Yahoo colleague who worked closely with him for several years and agreed to speak about Lu and his role at Yahoo only on condition of anonymity.

Continue reading this post ...

Comments | Category: Coming and going , Google , Personalities , Recruiting , Search , Yahoo |Permalink | Digg Digg | Newsvine Newsvine

November 26, 2008 9:44 AM

Microsoft Internet search share stable in October; Fortune scrutinizes online business

Posted by Benjamin J. Romano

Microsoft held stead in October with 8.5 percent of the U.S. Internet search market, according to figures released today by comScore. Its rivals, Google and Yahoo, both gained slightly from their September positions.

Meanwhile, Fortune has taken a stab at answering the question, "Why can't Microsoft make money online?"

Continue reading this post ...

Comments | Category: Advertising , Google , Online services , Search , Yahoo , Yahoo acquisition |Permalink | Digg Digg | Newsvine Newsvine

November 5, 2008 9:08 AM

Will Microsoft jump in as Google scraps ad partnership with Yahoo?

Posted by Benjamin J. Romano

At 7 a.m. today, Google announced on its official blog that it was scrapping its partnership with Yahoo on search advertising:

"[A]fter four months of review, including discussions of various possible changes to the agreement, it's clear that government regulators and some advertisers continue to have concerns about the agreement. Pressing ahead risked not only a protracted legal battle but also damage to relationships with valued partners. That wouldn't have been in the long-term interests of Google or our users, so we have decided to end the agreement."

Continue reading this post ...

Comments | Category: Google , Legal issues , Steve Ballmer , Strategy , Yahoo |Permalink | Digg Digg | Newsvine Newsvine

November 3, 2008 4:02 PM

Microsoft news roundup: Salesforce beats the cloud drum; GOOG-YHOO revamp search ad deal, while Icahn says a Microsoft search deal still makes sense; MSN vet goes to Yahoo

Posted by Benjamin J. Romano, the software as a service company that loves to put Microsoft's business model in its cross hairs, today announced a Web hosting service for enterprise clients called Sites. It was one of several Salesforce announcements Monday, including partnerships with and Facebook, all of which elevate the company's cloud computing offerings as competition for these services continues to intensify. (See Microsoft's cloud platform expansion from last week.) Here's coverage from Reuters.

Continue reading this post ...

Comments | Category: Carl Icahn , Cloud computing , Coming and going , Google , Miscellaneous , News roundup , , Yahoo |Permalink | Digg Digg | Newsvine Newsvine

October 29, 2008 10:33 AM

Updated: Microsoft's September U.S. search share

Posted by Benjamin J. Romano

Update, 2:42 p.m. Thursday: Turns out Bloomberg got its figures wrong, mistaking August numbers for July. So, where this post originally said Microsoft's Internet search share declined from August to September, it actually increased a bit.

Microsoft's share of the Internet search market in the U.S. declined again increased slightly in September, according to stats released today by comScore and reported here by Bloomberg.

Continue reading this post ...

Comments | Category: Google , Search , Yahoo |Permalink | Digg Digg | Newsvine Newsvine

October 28, 2008 9:00 AM

PDC: Microsoft to sell Office as a Web service, competing with Google Docs

Posted by Benjamin J. Romano

LOS ANGELES -- In addition to the online services components of Windows 7, Microsoft is announcing plans to provide online versions of its other highly lucrative products: Word, PowerPoint, Excel and OneNote that will run in a Web browser.

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Comments | Category: Google , Office , Online services , Strategy |Permalink | Digg Digg | Newsvine Newsvine

October 16, 2008 6:25 AM

Microsoft news roundup: Cramer doubts MSFT will bid for RIMM; Android a challenger to Windows Mobile; Yahoo sub-$12 pile-on

Posted by Benjamin J. Romano

Yesterday, Jim Cramer, CNBC's bombastic Mad Money stock picker, answered a viewer's question about rumblings that Microsoft may make a play for BlackBerry maker Research in Motion. Here's Cramer's take:

"I just think categorically it's not true. if it happens, I'm just dead wrong. ... I don't think Microsoft, after what it did with Yahoo, is going to be in there buying anybody."

Continue reading this post ...

Comments | Category: Google , Mobile , News roundup , Yahoo |Permalink | Digg Digg | Newsvine Newsvine

September 18, 2008 11:24 AM

Tech moguls claim upper tier of Forbes list of richest Americans

Posted by Benjamin J. Romano

Forbes published its annual list of the 400 richest Americans yesterday. Microsoft co-founder Bill Gates is on top with an estimated $57 billion fortune. Forbes notes that Gates has more than half his fortune outside of Microsoft stock and that his pile has declined 5 percent in the last 12 months. Another interesting note: "Inflation-adjusted net worth would top $90 billion if he hadn't given away any cash."

Continue reading this post ...

Comments | Category: Bill Gates , Facebook , Financial , Google , Personalities , Steve Ballmer |Permalink | Digg Digg | Newsvine Newsvine

September 17, 2008 9:57 AM

U.K. press reports: Google buying Valve; former Xbox boss Peter Moore speaks

Posted by Benjamin J. Romano

A few buzzworthy video games items out of the U.K. press this morning.

As my colleague Brier Dudley has noted, the Inquirer is reporting that Google is going to buy Kirkland-based Valve "any second now." Valve is a video game company with an industry leading distribution platform called Steam. (Update, 12:53 p.m.: Turns out that it ain't happening, according to MTV Multiplayer, which quoted a Valve spokesman saying, "complete fabrication." Oh, and Valve is now in Bellevue, not Kirkland.)

The U.K. Guardian Games blog has an interesting interview with former Microsoft Xbox boss Peter Moore, who left the company last summer to head EA Sports. Moore, who started at the Redmond company in January 2003, provides some candid assessments of life inside the Microsoft games business. Here are the bits I found most interesting.

Continue reading this post ...

Comments | Category: Games & entertainment , Google , Microsoft , Xbox 360 |Permalink | Digg Digg | Newsvine Newsvine

September 9, 2008 1:43 PM

WSJ: Justice girding for possible battle with Google

Posted by Benjamin J. Romano

Antitrust scrutiny of the Google-Yahoo search advertising deal is heating up. The Wall Street Journal reported online Monday afternoon that the Department of Justice has hired a top-notch litigator, possibly in preparation for an antitrust battle with the Internet search giant.

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Comments | Category: Google , Legal issues |Permalink | Digg Digg | Newsvine Newsvine

September 2, 2008 2:19 PM

Browser back talk: IE8 and Chrome

Posted by Benjamin J. Romano

With last week's release of Microsoft Internet Explorer 8 beta 2, and today's Chrome browser from Google, the Web browser has been front and center in tech circles. Here's a collection of links and to help answer a few questions I've received from readers and to put the Google vs. Microsoft vs. Firefox vs. Safari browser rumble in context.

Continue reading this post ...

Comments | Category: Chrome , Firefox , Google , Internet Explorer , Web browsers |Permalink | Digg Digg | Newsvine Newsvine

July 17, 2008 1:11 PM

Google sees sequential profit dip, misses estimates, gets a beating

Posted by Benjamin J. Romano

Microsoft's top Internet rival, Google, saw a slight, sequential decline in profit in the second quarter, posting non-GAAP net income of $1.47 billion, compared with $1.54 billion in the first quarter of 2008. Non-GAAP earnings per share were $4.63, missing the average analyst estimate of $4.74 a share. The company's stock was tumbling in the after-hours market.

Next up Microsoft.

Comments | Category: Financial , Google |Permalink | Digg Digg | Newsvine Newsvine

July 16, 2008 10:39 PM

Microsoft Q4 earnings preview

Posted by Benjamin J. Romano

Microsoft reports earnings for the fiscal 2008 fourth quarter and full year Thursday. It will also sharpen its forecast for the current quarter and fiscal year against a backdrop of grim developments in the broader economy.

At the same time, the ongoing pursuit of Yahoo could be coming to a climax in two weeks at Yahoo's shareholder meeting. But the drama that has unfolded in the last five and a half months has put an anchor on Microsoft's stock and called the company's online strategy into question.

So what are analysts expecting and watching for Thursday?

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July 2, 2008 10:11 AM

Microsoft selling Office on subscription basis for $70 a year

Posted by Benjamin J. Romano

Microsoft in July will begin selling a package of subscription services for consumers and small businesses, including the latest version of its widely used Office suite, previously only available for purchase as a one-time license.

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June 2, 2008 4:34 PM

Google search ad auctions explained, criticized

Posted by Benjamin J. Romano

With Microsoft attempting to undermine Google's incredibly lucrative search advertising business model through its cashback and engagement mapping efforts -- which seek to change how search ads are purchased and valued -- now comes criticism of Google's model from other quarters.

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May 27, 2008 3:23 PM

Gates to tease with Windows 7 features tonight

Posted by Benjamin J. Romano

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April 17, 2008 11:47 AM

Microsoft's Ballmer gives unvarnished take on Windows, online businesses

Posted by Benjamin J. Romano

Microsoft CEO Steve Ballmer spoke in Seattle this morning to one of the friendliest, but also most knowledgeable and critical audiences he faces: Microsoft's Most Valuable Professionals. In a jocular, hourlong speech and conversation, Ballmer gave some unguarded assessments of his company's position in online search; its bid for Yahoo; the success of Windows Vista; and its market acceptance vs its predecessor. Here are some of the highlights:

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March 26, 2008 3:17 PM

Yahoo, Microsoft search share declined in February, Nielsen reports

Posted by Benjamin J. Romano

Matching the trend reported last week in comScore's Internet search market share figures, Nielsen Online is out with its February report showing Google built on its enormous lead while Yahoo and Microsoft gave up ground.

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March 19, 2008 3:12 PM

Google, gained Internet search share as Microsoft, Yahoo slid in February

Posted by Benjamin J. Romano

In February, the total volume of U.S. Internet searches declined from a month earlier, as did the share of searches performed on Microsoft and Yahoo sites. Google's share increased, according to data just released by comScore.

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March 3, 2008 10:24 AM

Gates swipes at Google Apps, stays mum on presidential race, comments on Yahoo

Posted by Benjamin J. Romano

Microsoft Chairman Bill Gates, taking questions from the audience at his company's SharePoint conference in Seattle this morning, was asked how Google Sites competes with Microsoft's new SharePoint Services. It's an issue I covered in this story.

He lauded Google's Internet search, but said its online offerings that compete with Microsoft's own productivity applications such as Office and SharePoint don't have the richness or responsiveness that businesses demand. He also suggested that Google has been able to make big marketing splashes for its Apps products, but has had little market penetration.

"The day they announce them is their best day," Gates said, adding, "I might be biased."

Asked who he's backing for president, Gates pointed people to, an effort he has helped fund to get candidates to state their positions on global healh.

"I'm not making any particular public comment beyond that," Gates said.

He was also asked whether a Microsoft acquisition of Yahoo would have any impact on SharePoint. His answer, not really. The acquisition proposal reflects how serious the company is about consumer search, he said.

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February 29, 2008 9:56 AM

ComScore says Google 'paid click' decline not actually bad news

Posted by Benjamin J. Romano

Earlier this week, news stories across the Internet and in every major business publication had Google on the rocks. A comScore report on paid clicks showed an 8 percent decline from December to January and flat annual growth. Google's shares tumbled $22.25 on the news Tuesday to close at $464.19, wiping $5.2 billion off the company's balance sheet. It was also viewed as another sign of the economic slowdown dragging on the lifeblood of Web 2.0, online advertising.

Today, comScore posted a blog explaining why that reaction misinterpreted the Internet measurement company's data, and behind the decline in paid clicks actually is a positive trend for Google.


While comScore isn't saying everything's rosy in the broader economy, the company is correcting the record, in some detail, on what's going on at Google:

"The evidence suggests that the softness in Google's paid click metrics is primarily a result of Google's own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur. In addition, the reduction in the incidence of paid listings existed progressively throughout 2007 and was successfully offset by improved revenue per click. It is entirely possible, if not likely, that the improved revenue yield will continue to deliver strong revenue growth in the first quarter."

And in the broader economy?

"Separately, there is no evidence of a slowdown in consumers clicking on paid search ads for rest of the U.S. search market, which comprises 40% of all searches."

Not everyone is buying comScore's interpretation of its own data, however. At Silicon Alley Insider, Henry Blodget continues "to view the comScore report as supporting the theory that Google is exposed to economic weakness."

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February 26, 2008 6:00 AM

Openess another MSFT-YHOO synergy?

Posted by Benjamin J. Romano

"If you didn't realize it, Yahoo! is embracing openness like never before."

That's how the company put it in a blog post Monday announcing its new open Internet search effort, the Open Search Platform. Of course, last week, Microsoft, which would like to acquire Yahoo, announced that it is also embracing openness like never before. Shows how closely the companies are aligned, right?

Microsoft pledged to open communications protocols and application programming interfaces (APIs) for its biggest products to developers, with a few catches. The company didn't say whether that would extend to its struggling Internet search efforts, but some analysts I talked to saw the broader strategic shift toward openness as a potential boon for Microsoft's online services efforts.

Here's what Yahoo is saying about opening up its Internet search platform:

"This open search platform enables 3rd parties to build and present the next generation of search results. There are a number of layers and capabilities that we have built into the platform, but our intent is clear -- present users with richer, more useful search results so that they can complete their tasks more efficiently and get from 'to do' to 'done.' "

Details were sketchy on the blog post and Yahoo says it will elaborate over "the next few months."

The company wasn't shy about extolling the benefits, however, which will flow to Web site owners, big and small, who will be able to build plug-ins that, once enabled, will present more detailed information -- including reviews, images and deep links -- on Yahoo Search than on the competition. These enhanced results will help generate more traffic and please users with better information, according to the blog post from Vish Makhijani, senior vice president and general manager of Yahoo Search.

Meanwhile, outlets including Search Engine Watch, have more details and analysis:

Yahoo will not feature or promote plug-ins that include advertising, or that are not relevant to users. And publishers will never be able to pay for placement in the gallery or other promotion by Yahoo. "This is not a paid relationship; it's all about relevance," Amit Kumar, director of product management for Yahoo Search, told the Web site.

But will it be enough to help lift the company's market share in Internet search? In January, Yahoo's share declined 0.7 points from December to 22.2 percent of the nearly 10.5 billion Internet searches performed in the U.S. Google remained the leader by a long shot with 58.5 percent. Microsoft held on to third, it's market share unchanged at 9.8 percent.

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February 11, 2008 1:45 PM

All the fuss is about this: U.S. online ad revenue up 27 percent to $25.5 billion

Posted by Benjamin J. Romano

Analysis firm IDC just reported that U.S. online ad revenue last year grew to $25.5 billion, up 27 percent from 2006.

That pot of money covers search, display and other forms of online ads, and it's projected to continue growing as advertisers follow people from old media to the Interne. That's why Microsoft is trying to buy Yahoo.

Their common rival Google has been the dominant player in this market, but, interestingly, Google's net U.S. market share "declined for the first time in two years due to slower growth in domestic fourth quarter sales," IDC found. It's a slight decline -- 0.5 percentage points -- to 23.7 percent in the fourth quarter. It still has more than twice the share of its two closest rivals individually.

IDC conveniently put the figures in context with the news of the day. Karsten Weide, program director for IDC's Digital Marketplace: Media and Entertainment service, said, in a statement:

"If a merger between Microsoft's new media business and Yahoo! would come to pass, the combined entity would have a net U.S. advertising market share of about 17% based on our 4Q07 data. It would not quite bring Microsoft-Yahoo! to where Google is in online advertising in the U. S., but it would give them a much better fighting chance than if they went it alone."

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February 1, 2008 8:05 AM

Microsoft's Kevin Johnson on proposed Yahoo acquisition

Posted by Benjamin J. Romano

Kevin Johnson, president of Microsoft's Platforms and Services Division, answered questions about integrating the two huge companies after Microsoft made a $31 per share offer for Yahoo this morning. Here is an edited transcript of my conversation with him:

Q: Why are you doing this and why is now the right time to do it?

A: Well first of all, this combined entity creates a more competitive company. It creates value for shareholders and it's going to enable us to enhance experiences for customers, whether they are end users, advertisers or publishers, and it creates great opportunities for the employees of both Microsoft and Yahoo.

At the end of the day, this is about creating a more compelling alternative to an increasingly dominant player in the industry.

Q: Does this essentially say that at this point Microsoft doesn't see itself as able to catch Google alone?

A: I'd go back to the Financial Analyst Meeting [in July 2007]. We outlined a value chain analysis and the taxonomy of user services and ad platform, and, look, we've been making good progress over this last year. We released the Windows Live Suite in November, a new release in Live Search last October. We successfully completed the first phase of integration with aQuantive. We've signed up new publishers to our ad platform. You know, look, we're pleased with the progress and we're very proud of the work that our employees have been driving in this area.

You know, the fact is that this is an industry where scale matters and by combining our resources with Yahoo, not only are we able to achieve scale economics, we're able to expand the R&D [research and development] capability, capture operational efficiencies and focus on new user experiences.

Q: Certainly one of the most important metrics for online advertising and success overall online is still search market share and I think it's fair to say both Microsoft and Yahoo have been steadily losing share against Google over the last year. On that front, what makes you think that combining two entities that are losing share is going to help against the one that's dominant and still gaining?

A: Well, there's two things. First, I'd point out, if you look at our share, I think we've been kind of holding share, and holding flat on share. The fact is this is a game of scale. By bringing the companies together we can create a more efficient operation and organization that scale enables us to eliminate duplicate capital costs, such as servers and data centers and infrastructure and by combining our R&D capability it allows us to have more engineers that focus on a broader range of products. Instead of having engineers both working on search indexes and core search relevance, we can have one team of engineers working on that and that frees up engineers to drive new innovations in search -- search verticals, new search user experiences. There's plenty of opportunity to drive breakthroughs in search.

Q: When I think about Yahoo, it's hard to think of something that they do that Microsoft doesn't also do in the area of online services. So what's your strategy going to be for combining those many overlapping services? Is it going to be a co-branding thing, or what do you see happening there?

A: First of all, through recent experiences with aQuantive and Tellme, we know how to do successful integration. And part of that successful integration is having clear, defined synergies we're working to get. A clear set of integration principles and then it's putting together a joint team of Microsoft leaders and Yahoo leaders who are going to work through a thoughtful integration process to make the decisions on how this lands. We're confident based on our recent success of integration with companies like aQuantive and Tellme that this process is the right process to yield great results.

Q: But aQuantive and Tellme had much less of an overlapping set of technologies or businesses they were in. It seemed like it was adding technology to what you guys were already doing whereas there are so many things that both MSN and Yahoo do that are essentially competitive and the same service. Will those go forward under the same name, or how do you see that part happening?

A: If you just take decisions around brands, you know, first of all, we've got a great set of brands, The Yahoo brand is a great brand and as part of this integration process, we're going to get leaders from Microsoft and Yahoo that are going to make thoughtful decisions, not only around the technology integration, but the user experiences and the brands. This is an opportunity to bring together the best of both worlds.

Q: Are you anticipating any layoffs at Microsoft or Yahoo as you combine the two companies?

A: A key part of this is the expanded R&D capacity. We're hiring engineers today and by combining resources with Yahoo this expands the R&D capability. This is an opportunity to get that expanded R&D capability and really prioritize what they're working on so that we can expand the range of innovation that's taking place.

Now, certainly, in combination with that, there are operational efficiencies that we will gain from this combination. And on the people front, much of the operational efficiencies certainly relate to the integration work where we've got to do a great job of getting the right people in the right jobs and making sure that we have the right amount of head count and resources, focused in the right areas.

I think we're confident, not only will we take advantage of this expanded engineering capability, but we'll be very thoughtful about the operational efficiencies that we can gain by getting the right people in the right jobs and the right amount of resources allocated to individual areas.

Q: What about combining the cultures of the two companies? Is that a big challenge too?

A: Our two companies share a common passion for innovation and creating opportunity and great user experiences through technology. And that passion for innovation is really at the core, and so together I think we're going to redefine how people and businesses think about information in the new age of the Internet and I think that common passion is really a glue that helps us bring the workforces together.

Q: What you've described is a complicated and extensive integration process. What's your best-case scenario for how long it takes after approval is granted?

A: Certainly, we're going to go through the integration planning process with the joint team of Microsoft and Yahoo, make thoughtful decisions about that. Some of the thoughtful decisions that will be made is sort of the timing of when and how things are sequenced.

But, you know, clearly we've got a certain set of integration activities that would happen on day one of closing and then certainly over some period following that. We're going to work through the set of things that get implemented to bring resources together.

Q: Do you face a risk here of spending so much focus on integrating the two companies that you don't get quickly to some of the benefits you've talked about?

A: Certainly, there is some -- you know, you look at scale economics. Combining our search inventory on the same ad platform, that's going to deliver better yield or better revenue very quickly. So there's certain synergies that will happen very quickly. he fact that on our integration plan, we've got to work to get to a single search index, a single ad platform. And by doing that, that means that we have one team of engineers working on that instead of two.

That enables us to now prioritize engineering work on new emerging scenarios such as video, mobile services, social media, social platforms. And so, I think there's a set of things that we can get immediately and as we deploy engineering resources on the broad set of priorities, there's things that will also be driven long-term.

Q: How big of a risk do you think you face from antitrust regulation on this?

A: We've worked closely with our legal counsel and we are confident we can obtain all necessary approvals in a timely manner. And we'd expect to close within the second half of this calendar year.

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January 18, 2008 5:21 PM

Microsoft gains, Google falls in December search results

Posted by Benjamin J. Romano

Break out the champagne in RedWest.

For the first time in recent memory, a chink emerged -- albeit small and perhaps temporary -- in Google's armor. It's U.S. search share declined slightly from 57.7 percent in November to 56.3 percent December, according to numbers released today by Nielsen Online. Here's a blog post on the November report.

In the same period, Microsoft got a boost with its MSN/Live Search going from about 12 percent of U.S. searches in November to 13.8 percent in December, which is where it stood in October.

Yahoo was essentially unchanged at 17.7 percent in December, compared with 17.9 percent in November.

Microsoft also saw the "stickiness" of its search engine improve.

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January 16, 2008 1:04 PM

Microsoft reading rodeo

Posted by Benjamin J. Romano

Here are some interesting stories with links to Microsoft and technology that I'm reading today:

Tech Crunch reports that three German investors, the Sawmer brothers, are buying in to Facebook. The Wall Street Journal followed up with an estimated size of their stake -- between $10 million and $15 million -- at the $15 billion valuation imputed by Microsoft's investment in the social networking site in October.

Whenever we report on comments from Bill Gates and other technology leaders about the shortage of engineering talent in the U.S. and the need to raise the number of visas for high-tech workers, I know a deluge of email from readers will follow. The majority of the feedback comes from people who say there is no actual shortage and that the tech companies are inventing one to try to depress wages for engineers or give themselves cover to move jobs off shore. The emails tend to be long, angry and full of links to various articles and reports supporting their point of view.

Here's one to add to the list: Business Week published a story by Vivek Wadhwa, a fellow at Harvard Law School and executive in residence at Duke University. Wadhwa's research shows "that there is no general shortage of engineers in the U.S." Instead, age is at issue -- and more to the point, a failure by some older engineers to keep their skills current as tech marches on. Echoing comments I've heard from readers in this region, Wadhwa writes, "Tech companies prefer to hire young engineers. Engineering has become an 'up or out' profession---you either move up the ladder or you face unemployment. In other words, even though globalization has compounded the difficulties for aging engineers, it's not the culprit."

The Times Online reports on a Microsoft patent application for "a computer system that links workers to their computers via wireless sensors that measure their metabolism. The system would allow managers to monitor employees' performance by measuring their heart rate, body temperature, movement, facial expression and blood pressure." Break out the Big Brother bromides. (sorry) Here's the patent application.

For anyone who toured Google's new Fremont engineering office yesterday and is maybe weighing whether to toss her or his hat in the ring, check out this in-depth look at the company by Ken Auletta in the New Yorker. Not a lot new, but a very intimate look at how the search giant operates at the highest levels.

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January 15, 2008 1:34 PM

Google touts Fremont Engineering office, links to UW

Posted by Benjamin J. Romano

A gang of local politicos, venture capitalists, computer science profs and reporters gathered at Google's swank new Fremont engineering office this morning to check the place out. The company is eager to highlight its new digs, which opened in October and now houses close to 100 -- with plenty of room for more.

Tonight, the company is inviting would-be recruits to tour its space in the three-story Waterside Building fronting the ship canal in the Center of the Universe. The space used to be occupied by Getty Images, which has contracted its footprint in the neighborhood in addition to cutting staff. But Fremont -- and really the stretch from there to the University of Washington -- has turned into something of a high-tech strip, with Adobe, Impinj, Telecom Transport Management, the Institute for Systems Biology and the Allen Institute for Brain Science, among others.

Google's events today, along with a big billboard on the Queen Anne side of the Fremont Bridge that looks like a well-used software engineer's white board, appear to be recruiting. Google is aiming to raise its profile as a top destination for engineering talent in the region, and by all accounts, it has been successful, particularly at grabbing graduates from the UW. Brian Bershad, a UW computer science professor, joined Google in October and is director of the Fremont site.

The company's presence in the region now stands at more than 500 broken down like this: 400-plus in the Kirkland Engineering office, opened in October 2004, and is now, maybe, the second-largest Google office outside of Mountain View (New York City might be bigger, they weren't sure); 75-plus in the Fremont Engineering office; 25-plus in the Fremont sales office.

At last count, in September, Google had 15,916 employees spread across 40 engineering sites in 18 countries, and growing. On a tour today, an engineer said, "We seem to be growing at Moore's Law rate. If you look at the company, it's doubling every 18 months now."

Executives touted amenities at the Fremont office and gave a glimpse of working life for a Googler.

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