Is Microsoft's Bing really a better search engine? Since it debuted last month, it has earned praise for the smart way it presents results and how it lets users preview Web sites without clicking through to them.
Yet a closer look at its results reveals why loyal Yahoo users may not end up happy with the deal the company announced Wednesday, which calls for Bing to replace Yahoo Search.
ComScore Inc. says 19.6 percent of Web users go to Yahoo for their searches. Microsoft draws fewer, at 8.4 percent. That's up just slighly from the 8 percent it captured before Bing launched at the start of June. It didn't make a dent in Google's commanding 65 percent market share.
I think I can see why. Not only is using Google such an ingrained habit that we talk of "googling" something, but also its technology is better in some key ways. I found Bing to be less comprehensive than Google and, surprisingly, Yahoo Search. It simply returns fewer results for a lot of search terms.
With common terms like "cars," all the search engines return oodles of results. Yahoo reports 2.56 billion pages with that term. It doesn't matter so much how many pages they report, as long as they give relevant results, and all do.
Then I tried to hunt for something purposely obscure, like background on the country manor that my sister is interested in buying. Google gave me 46 links, Yahoo 15. Bing supplied just six.
Of course, even in this kind of query you might not have time to look through every link. So if Bing has six and they're good, that's fine.
Yet in the country manor search and other cases, often at the fringes of what you'd expect the Internet to know, I found the most relevant results in Google and Yahoo only.
Years ago, search engines competed by citing their "index size" — basically, how many pages they had collected in their database. Google played this game too. But as Google grew to dominate the scene by presenting better results, Web users lost interest in the statistics. Google doesn't make a big point of them anymore either, though it did say last year that it had more than 1 trillion Web pages catalogued.
Looking at results from Bing, it may be time to care about search index size again. That's especially the case because in other respects, the top three engines are so similar as to be nearly indistinguishable. Nos. 2 and 3 have basically copied Google.
All of them present neat and clean search pages and advertising that's placed through an auction process (advertisers bid for the right to show their ads alongside certain search terms, and pay the search engines when a user clicks on an ad). Search for a common term like "diapers," and they yield nearly identical results.
They do have other little things that set them apart. Google injects a helpful little map when it finds a location among the top results. Yahoo has (or soon we might say "had") a Search Pad application that lets you annotate your results, a useful aid in an extended research or shopping project.
Bing has earned praise for the smart way it presents certain search results. For instance it breaks down some results by category, giving you an easy way to quickly hone a search for "swine flu" with information on "symptoms" or "causes." It will also helpfully show previous searches you've made in a column to the left of the results.
Bing also presents a preview of each search result if you hover your mouse cursor over it. Hover the cursor over a video, and a preview starts playing right on the results page.
Microsoft has said that it put special attention in Bing to presenting authoritative results in a few areas, like health information, but the effort seems a little superficial. When you search for "swine flu," the Mayo Clinic's presumably more reliable page will appear above Wikipedia's on Bing. But if you search for "toddler fever," the results look indistinguishable from those on the other two engines.
Bing is young. It's possible Microsoft can make its index catch up to Yahoo's and even Google's, but doing so won't happen overnight. More likely, it will take years.
That's plenty of time for Yahoo users to discover that Bing — for all of its niceties in presentation — lacks depth. If they do, they'll know where to go, and Google would end up being the winner on this deal.
Friday, July 31, 2009
Thursday, July 30, 2009
MICROSOFT AND YAHOO CHALLENGE GOOGLE:BING IT ON
Microsoft finally persuaded Yahoo to surrender control of the Internet's second most popular search engine and join it in a daunting battle — taking on the overwhelming dominance of Google in the online advertising market.
A 10-year deal announced Wednesday gives Microsoft its best shot yet to show its new search technology, Bing, is as good as or better than Google's. Microsoft also hopes to use Yahoo to divert sales from Google, which generates more than $20 billion a year from ads.
Gaining access to Yahoo's audience would instantly more than triple Bing's U.S. market share to 28 percent. That's still a far cry from the remarkable 65 percent of U.S. searches handled by Google, according to the research firm comScore Inc.
By joining forces, Microsoft and Yahoo are betting they will be able to focus on their respective strengths. By turning over responsibility for search technology to Microsoft, Yahoo can concentrate on sales of billboard-style advertising on the Web — and figuring out how to keep luring traffic to its Web sites, which already attract more than 570 million people worldwide every month.
While the agreement shapes up as a potential boon for Microsoft, it was greeted in the stock market as a letdown for Yahoo. Just 14 months ago, Microsoft dangled $9 billion in front of Yahoo in an attempt to forge a search advertising partnership, only to be rebuffed. Yahoo had also turned down Microsoft's $47.5 billion bid to buy the entire company.
Yahoo has been struggling so badly since then that Microsoft isn't paying any money in advance. Instead, it will give Yahoo 88 percent of the search ad sales made on its Web site, above the usual commission of 70 to 80 percent.
By spending less on its own search technology, Yahoo expects to boost its annual operating profit by about $500 million — but not until 2012, when the two companies expect to have all the pieces of a complex technological puzzle in place.
"I think a lot of people are kind of looking at the numbers and seeing a lot of question marks where they expected to see exclamation points," said Scott Kessler, a Standard&Poor's equity analyst.
Yahoo Inc. shares plunged $2.08, or 12 percent, to $15.14 as investors expressed disappointment over the absence of an immediate windfall. Microsoft Corp. shares gained 33 cents to $23.80 while Google Inc. shares shed $3.61 to $436.24.
It took Carol Bartz, Yahoo's chief executive, just six months to strike a deal with Microsoft — something that neither of her predecessors, Terry Semel and Yahoo co-founder Jerry Yang, seemed interested in doing.
"This move makes up for a lot of the stupid mistakes made by the preceding administration," said technology analyst Rob Enderle, who thinks Yahoo will be able to devote more energy to developing services to compete with online hangouts like Facebook.
Shortly after her arrival, Bartz made it clear she was willing to farm out Yahoo's search engine for "boatloads of money" as long as she as thought the company would still get adequate information about its users' interests. Bartz predicted the deal will enrich the company over the long run.
"This agreement comes with boatloads of value for Yahoo, our users, and the industry," Bartz said.
Yahoo will have limited access to the data on users' searches, which yield insights that can be used to pick out ads more likely to pique a person's interest. The value of that information is why Microsoft wants to process more search requests.
Microsoft CEO Steve Ballmer could barely contain his excitement as he gushed about finally getting Yahoo on his side — something he has been trying to do for at least three years.
"I am very enthusiastic," Ballmer said in an interview. "This is what I have basically been saying for the past 18 months: The world will be better served for consumers, advertisers and publishers, and there will be more competition for Google, if we can somehow figure out how to get Microsoft and Yahoo together in search."
Antitrust regulators plan to review the agreement to make sure it doesn't lessen competition or compromise the privacy of people who use the search engines.
Google tried to stop Yahoo from falling into Microsoft's camp. Last year it formed its own proposed search advertising deal with Yahoo, only to be forced to retreat after U.S. antitrust officials threatened to sue.
Microsoft helped spearhead the campaign against a Google-Yahoo partnership. Now many people, including Ballmer, expect Google to try to turn the tables on Microsoft by opposing its Yahoo deal.
"There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users," Google spokesman Adam Kovacevich said. "We're interested to learn more about the deal."
Advertisers will probably support Microsoft because a stronger player in the search market should protect them from potential abuses by Google, said Kevin Lee, CEO of online marketing specialist Didit Inc.
"If there's only one choice in search, that's just an uncomfortable position to be in," Lee said.
Like Yahoo, Microsoft has invested billions in search technology during the past decade. Yet it remained a distant third in market share while its online losses piled up. Microsoft is counting on Bing, unveiled last month, to turn things around.
Bing has been getting mostly positive reviews and picking up slightly more traffic with the help of a $100 million marketing campaign. Analysts believe the successful debut pushed Microsoft to reopen negotiations so it could expose its search engine improvements to a wider audience.
While Microsoft and Yahoo await government approval of their partnership, there is no doubt Google will try to increase its lead by upgrading its own search engine, said Danny Sullivan, editor of the online newsletter SearchEngineLand.
Already, Google is going after Microsoft's bread-and-butter business of software for personal computers. It's working on a free operating system for inexpensive PCs, a move that could threaten Microsoft's Windows.
"Google is very paranoid about Microsoft," Sullivan said. "They are always trying to figure out what kind of 'evil' thing Microsoft is going to do next."
YAHOO INVESTORS DISAPPOINTED ,BUT HOLD OUT HOPE
Yahoo Inc investors are disappointed it could not milk more money from Microsoft Corp, but said they were relieved a deal was struck that would allow Yahoo to focus on its other, stronger businesses.
The companies signed a 10-year pact on Wednesday under which Microsoft will power search queries on Yahoo's sites and Yahoo's sales force will be responsible for selling premium search ads to big buyers for both companies.
Yahoo shares fell more than 12 per cent during the trading day because investors felt they got a raw deal. Prior to the announcement, some had expected Microsoft to pay up to $5 billion in upfront fees to Yahoo.
"It was disappointing, based on expectations," said Ryan Jacob, who owns Yahoo shares through his Jacob Asset Management. "I wish they (Yahoo) could have gotten better terms."
Investors lamented that Microsoft paid Yahoo no money upfront and that it will share only 88 percent of search revenue from Yahoo sites with Yahoo.
"I was surprised at their decision to give the milk for free rather than forcing Microsoft to buy the cow," said Eric Jackson, a former Yahoo investor, who sold off his holdings in September after Yahoo turned down Microsoft's $47.5 billion buyout offer.
"Yahoo should have fought harder for a big upfront," similar to the search proposal Microsoft initially suggested last year after it failed to buy all of Yahoo, Jackson added.
Jackson, who now owns Microsoft stock, does not regret selling his Yahoo shares because the search pact, "is a great deal for Microsoft, not so much from Yahoo's perspective."
Other Yahoo investors still held out hope for a full acquisition by Microsoft, or at least a search deal that would add value to Yahoo's share price. How much value this deal brings to Yahoo is not immediately clear.
"The sentiment was that deal would include as much as $3 billion to $5 billion of upfront, based on what sell-side analysts were saying," said a Yahoo investor, who spoke on condition of anonymity. "That's several dollars of value that goes off Yahoo's share price immediately."
Still, investors and analysts said the long-term benefits to Yahoo of partnering with Microsoft outweigh the short-term losses, especially in light of Google Inc's leading position in the search market.
They are keen for Yahoo to focus on developing its huge portfolio of websites and generate more revenue from selling advertising space on them, known as display ads, rather than battling market leader Google on Web search.
"The lack of an upfront payment and of cash flow guarantees, of a display relationship and complex systems integration are short-term negatives," wrote Jefferies & Co analyst Youssef Squali in a research note.
But Yahoo can now save on search technology expenses and add to earnings. It also "frees up management to focus exclusively on display advertising, where (Yahoo) clearly has an edge," Squali said.
Some analysts also said Yahoo Chief Executive Officer Carol Bartz was under pressure from investors to sign a search deal with Microsoft and move on after talks had dragged on for 18 months.
"This doesn't get them close to Google, but it's somewhat better for the market," said Ned May, an industry analyst with Outsell Inc. "There was such relentless pressure from Wall Street, they had to do something."
With the Microsoft distraction tended to, investors are hoping Bartz will focus more intently on the challenge of turning Yahoo around.
"They have some good strengths -- communication products, different verticals, Yahoo News, Yahoo Sports -- where they're number one across the board," said Jacob. "These are the areas really where they should be focusing and spending the money."
Yahoo, which recently reported quarterly earnings slightly ahead of Wall Street's expectations, has steadily cut costs in recent months. Bartz said on the earnings call the company is now hiring more engineers and sales and marketing staff as it invests in new products and branding.
YAHOO COMES FULL CIRCLE WITH RETREAT FROM SEARCH
Yahoo Inc. invested billions of dollars in its Internet search engine during the past six years before realizing it made more sense to entrust the job to an outsider — hearkening back to a conclusion the company's co-founders reached shortly after they started their Web directory in the mid-1990s.
The latest shift in direction will put rival Microsoft Corp. in control of the search results and the ads that appear alongside search results on Yahoo's highly trafficked Web site, assuming the proposed partnership is approved by antitrust regulators in the United States and Europe.
The 10-year deal announced Wednesday blows up a search expansion undertaken under Yahoo's former chief executive, Terry Semel, who resigned under shareholder pressure two years ago. The repudiation of Semel's strategy returns Yahoo to a philosophy embraced by co-founders Jerry Yang and David Filo in the company's early days.
Within two years of starting what was originally known as "Jerry and David's Guide to the World Wide Web," Yang and Filo concluded Yahoo wouldn't be able to index all the new sites proliferating on the Internet without more automation and sophistication.
Rather than spend its own money on expensive upgrades, Yahoo hired AltaVista to supplement its search engine and then later turned to Inktomi. Those decisions freed up more cash for Yahoo to spend on compelling content and developing other services that established its Web site as the biggest draw on the Internet.
As indexing the Web grew even more complicated in 2000, Yahoo sought the expertise of an ambitious young startup called Google.
In a move that the company later regretted, Yahoo promoted the Google brand next to its search box to show where it got its results. The exposure on one of the Web's most popular pages drove millions of people to Google's search engine, which quickly supplanted Yahoo as the go-to place to find stuff on the Web.
After Google came up with a way to make big money from text ads placed alongside search results, Semel wanted a bigger piece of the action.
Beginning in 2002, Yahoo spent more than $2 billion buying other search engines, including the remnants of AltaVista and Inktomi. Later, Yahoo invested heavily in search improvements that included a much-delayed advertising system called Panama.
Although it helped boost Yahoo's profits early on, the search expansion never panned out the way Semel envisioned. Google widened its lead in search as Yahoo's U.S. share shriveled from about one-third of the market in 2004 to about one-fifth of the market today. To make matters worse, socializing hubs like Facebook and MySpace supplanted Yahoo as the hot spots to hang out on the Web.
"They just lost their way," said technology analyst Rob Enderle. "This (Microsoft deal) will let them rediscover what they once were — a place where a lot of people liked to spend a lot of their time online."
While he was Yahoo's CEO last year, Yang tried to lessen Yahoo's financial commitment to search by forming an advertising partnership with Google. Under that plan — which is narrower than what Yahoo now wants to do with Microsoft — Google would have served up some of the ads that ran alongside search results on Yahoo. U.S. antitrust regulators threatened to sue to block the arrangement, scaring Google off.
Yang didn't seem to want any part of Microsoft. In May 2008, he and the rest of Yahoo's board rebuffed a Microsoft offer to pay Yahoo $1 billion in cash and buy $8 billion worth of stock in return for a search partnership.
Now, Yahoo will get no cash upfront, and instead will get a big share of the ad revenue generated by Microsoft's search engine when it handles queries on Yahoo's site. (Microsoft will also keep running its search engine at its usual locations, such as msn.com, bing.com and on the "toolbars" it lets people download to their Web browsers.)
Carol Bartz, Yahoo's chief executive for the past six months, quickly realized that the Sunnyvale, Calif.-based company needed to get back to its roots. Since her arrival, Bartz has been de-emphasizing Yahoo's need to run its own search engine.
"It really hard to tell whether (Bartz) just thinks Yahoo isn't that strong in search or whether she thinks she needs to jettison search to save the company," said Danny Sullivan, editor of the online newsletter SearchEngineLand.
This much is certain: Microsoft has been stalking Yahoo for years because it wants to boost its meager U.S. market share of 8 percent to narrow the gap separating it from Google, which commands a 65 percent share. Because Yahoo handles about 20 percent of search requests, the Microsoft-Yahoo combination would have about 28 percent share, assuming no big shifts in usage between now and when the project is fully running — which could take two years.
"We found a partner willing and excited to put a lot of technology behind search," Bartz said in an interview Wednesday. "So our customers are still going to get the same search experience or better search experience because of the investment that Microsoft is willing to make."
Microsoft is no stranger to the concept of farming out search, having done that itself earlier this decade, when it relied on Yahoo's technology.
Another prominent Web site, AOL, has used Google for search results and advertising for years. Having the extra money to spend on other products and services hasn't proven that effective for AOL, which has been faring so badly for so long that its corporate parent, Time Warner Inc., is cutting the subsidiary loose this year.
Since breaking away from its first partnership with Yahoo, Microsoft has been continually honing its search expertise and even hired away one of Yahoo's top engineers, Qi Lu, to further the cause.
This time, Yahoo won't feature its partner's brand in the prime space located next to its search box. Bing's name instead will only appear at the bottom of the search results page.
MICROSOFT TO OPEN STORES IN ARIZONA,CALIFORNIA
Microsoft Corp. said Tuesday it is planning to open its first two retail stores in Arizona and California this fall.
The software maker said Tuesday it signed leases at shopping centers in Mission Viejo, Calif. and Scottsdale, Ariz. The Shops at Mission Viejo is already home to an Apple store. The other location, Scottsdale Fashion Square, does not have a competing Apple Inc. shop.
The software maker confirmed details reported earlier by CNET News.
Microsoft maker picked those areas because they're "hot markets," with the right demographics, said Kim Stocks, a corporate communications director at the company.
She said the stores will sell laptops in addition to Microsoft and third-party software, Zunes, and Xbox 360 games and consoles.
Last week, a document surfaced online showing concept sketches for a Microsoft store where people can order personalized laptops, take classes and get help from experts. Microsoft said the sketches were early ideas and that the company hasn't finalized its designs.
Redmond-based Microsoft's stores are a way for the company to introduce consumers to its products in person, but they are not meant as a product showcase or a replacement for big electronics stores, Stocks said. However, Microsoft does want the stores to turn a profit, she said.
Stocks would not say exactly when the stores will open, whether other locations are planned to open at the same time, or how many stores Microsoft is planning in all.
In February, Microsoft hired David Porter, a 25-year Wal-Mart veteran to run its retail effort, but has released few details since.
The software maker said Tuesday it signed leases at shopping centers in Mission Viejo, Calif. and Scottsdale, Ariz. The Shops at Mission Viejo is already home to an Apple store. The other location, Scottsdale Fashion Square, does not have a competing Apple Inc. shop.
The software maker confirmed details reported earlier by CNET News.
Microsoft maker picked those areas because they're "hot markets," with the right demographics, said Kim Stocks, a corporate communications director at the company.
She said the stores will sell laptops in addition to Microsoft and third-party software, Zunes, and Xbox 360 games and consoles.
Last week, a document surfaced online showing concept sketches for a Microsoft store where people can order personalized laptops, take classes and get help from experts. Microsoft said the sketches were early ideas and that the company hasn't finalized its designs.
Redmond-based Microsoft's stores are a way for the company to introduce consumers to its products in person, but they are not meant as a product showcase or a replacement for big electronics stores, Stocks said. However, Microsoft does want the stores to turn a profit, she said.
Stocks would not say exactly when the stores will open, whether other locations are planned to open at the same time, or how many stores Microsoft is planning in all.
In February, Microsoft hired David Porter, a 25-year Wal-Mart veteran to run its retail effort, but has released few details since.
MICROSOFT,YAHOO IN 10-YEAR WEB SEARCH PARTNERSHIP
New York: Microsoft Corp and Yahoo Inc inked a 10-year Web search deal to better compete against market leader Google Inc but stopped short of combining their display advertising businesses.
Shares of Yahoo, which had risen in recent weeks in anticipation of this deal, fell more than 7 per cent in premarket trading, while shares of Microsoft edged higher.
The deal will boost Yahoo's annual operating income by about $500 million and yield capital expenditure savings of $200 million, the companies said in a joint statement on Wednesday.
Microsoft's Bing search engine will be the exclusive algorithmic search and paid search technology for Yahoo's sites, while Yahoo will be responsible for selling premium search ads for both companies.
Each company will maintain its own separate display advertising business and sales force, they said.
The deal combines the number two and number three players in the U.S. market for Internet search and positions them to better compete with Google, which has an estimated 65 per cent share of the U.S. search market.
GOOGLE 'INTERESTED' IN MICROSOFT-YAHOO DEAL
Washington: Search engine giant Google Inc said it was "interested" in Microsoft's 10-year search deal with Yahoo announced on Wednesday, adding that competition was usually good for online users.
"There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users," said Google spokesman Adam Kovakovich.
"We're interested to learn more about the deal," he said in an emailed statement.
Google made a search ad deal with Yahoo in June 2008 but scrapped it because of objections from the Justice Department.
Advertisers had hotly opposed it, fearing Google and Yahoo's dominance of the market could mean higher prices. Yahoo initially struck the deal with Google as a way to fend off an unsolicited takeover bid from Microsoft.
Microsoft had lobbied hard against the Google/Yahoo partnership.
YAHOO-MICROSOFT ALLIANCE FACES MANY OBSTACLES
It took Microsoft Corp and Yahoo Inc several years to find common ground on the best way to team up in the Internet search market. Now comes the hard part.
The partnership announced on Wednesday seeks to challenge the dominance of Google Inc, but executives at Yahoo and Microsoft acknowledge that building a search powerhouse will be a multi-year effort -- in a business where staying ahead of the competition, not playing catch-up, is critical.
And unlike previous discussions which involved an outright acquisition of Yahoo by Microsoft, this deal will create a number of uncertainties for both companies as they fuse disparate technologies, cultures and business priorities.
Yankee analyst Carl Howe said integrating two separate search engines is an inherently thorny process that requires merging vast and often incompatible indices of Web data.
"One of the ways they could have made this simple was to say 'We're throwing away Yahoo's search engine and going with (Microsoft's) Bing,'" he said.
"Ask any two banks that have ever been through a merger," Howe said. "The announcement of a merger is easy, it's combining the back end that takes years."
Under the terms of the 10-year deal, search on Yahoo's websites will be generated by Microsoft's new Bing search engine. Microsoft will license Yahoo's search technology, allowing it to integrate certain aspects of it into Bing.
Microsoft's advertising search product, AdCenter, will also replace Yahoo's equivalent product, Panama.
The two companies together would hold roughly 30 per cent of the US search market, which makes their combined audience a more attractive place for marketers to spend their dollars.
"The pieces are all there. Microsoft has a great product already developed. Yahoo has a massive audience," said Bob Davis, a partner at Highland Capital Partners and the former CEO of search engine Lycos.
But integration will be a lengthy and potentially distracting process.
Yahoo and Microsoft projected the complete, worldwide transition will take up to 24 months after the deal's closing and clearance by government regulators expected in early 2010.
Engineers relocate?
Many Yahoo search engineers will be asked to take jobs at Microsoft, whose Redmond, Washington headquarters is far removed from Yahoo's California homebase.
A Microsoft representative would not say where the company's search efforts were based, but noted that the search team is located in various offices including Silicon Valley.
"It ties them together but in a complicated way with no long-term certainty and limited control," said Ryan Jacob, chief investment officer of Jacob Asset Management, which owns Yahoo shares.
"I was in the camp that thought Microsoft should have just bought them. As a Yahoo shareholder, that would have been the best outcome. From Microsoft's standpoint, what happens if Yahoo decides to go somewhere else?" he added.
Any hiccups or technical glitches that affect search results or ad placements while the new technology is being rolled out might not sit well among advertisers.
Yahoo said the deal will allow it to save $200 million in capital expenditure and boost annual operating income by $500 million. Those cost savings could be crucial to a company that has seen revenue growth stall and profit margins shrink.
The benefits to innovation are less clear though, said Boston University Professor N. Venkat Venktatraman.
"What they should watch out for is Google coming into it with new innovations that these two companies independently do not know how to respond to, and collectively may not have gotten their processes for innovation in tune," said Venkat Venktatraman.
Yahoo CEO Carol Bartz said handing off search technology to Microsoft will free Yahoo to invest in its websites, display advertising products and mobile products.
But an increasingly vital ingredient in developing such products is the data that's gleaned from search queries, which can be used to create more targeted experiences for users.
Bartz and Microsoft CEO Steve Ballmer said determining how search data is shared between them was the most complex part of the negotiations. But the specific details are vague.
"Are they giving up the rights to use the search data that powers display advertising? That's still not clear," said Brigantine Advisors analyst Colin Gillis.
The partnership announced on Wednesday seeks to challenge the dominance of Google Inc, but executives at Yahoo and Microsoft acknowledge that building a search powerhouse will be a multi-year effort -- in a business where staying ahead of the competition, not playing catch-up, is critical.
And unlike previous discussions which involved an outright acquisition of Yahoo by Microsoft, this deal will create a number of uncertainties for both companies as they fuse disparate technologies, cultures and business priorities.
Yankee analyst Carl Howe said integrating two separate search engines is an inherently thorny process that requires merging vast and often incompatible indices of Web data.
"One of the ways they could have made this simple was to say 'We're throwing away Yahoo's search engine and going with (Microsoft's) Bing,'" he said.
"Ask any two banks that have ever been through a merger," Howe said. "The announcement of a merger is easy, it's combining the back end that takes years."
Under the terms of the 10-year deal, search on Yahoo's websites will be generated by Microsoft's new Bing search engine. Microsoft will license Yahoo's search technology, allowing it to integrate certain aspects of it into Bing.
Microsoft's advertising search product, AdCenter, will also replace Yahoo's equivalent product, Panama.
The two companies together would hold roughly 30 per cent of the US search market, which makes their combined audience a more attractive place for marketers to spend their dollars.
"The pieces are all there. Microsoft has a great product already developed. Yahoo has a massive audience," said Bob Davis, a partner at Highland Capital Partners and the former CEO of search engine Lycos.
But integration will be a lengthy and potentially distracting process.
Yahoo and Microsoft projected the complete, worldwide transition will take up to 24 months after the deal's closing and clearance by government regulators expected in early 2010.
Engineers relocate?
Many Yahoo search engineers will be asked to take jobs at Microsoft, whose Redmond, Washington headquarters is far removed from Yahoo's California homebase.
A Microsoft representative would not say where the company's search efforts were based, but noted that the search team is located in various offices including Silicon Valley.
"It ties them together but in a complicated way with no long-term certainty and limited control," said Ryan Jacob, chief investment officer of Jacob Asset Management, which owns Yahoo shares.
"I was in the camp that thought Microsoft should have just bought them. As a Yahoo shareholder, that would have been the best outcome. From Microsoft's standpoint, what happens if Yahoo decides to go somewhere else?" he added.
Any hiccups or technical glitches that affect search results or ad placements while the new technology is being rolled out might not sit well among advertisers.
Yahoo said the deal will allow it to save $200 million in capital expenditure and boost annual operating income by $500 million. Those cost savings could be crucial to a company that has seen revenue growth stall and profit margins shrink.
The benefits to innovation are less clear though, said Boston University Professor N. Venkat Venktatraman.
"What they should watch out for is Google coming into it with new innovations that these two companies independently do not know how to respond to, and collectively may not have gotten their processes for innovation in tune," said Venkat Venktatraman.
Yahoo CEO Carol Bartz said handing off search technology to Microsoft will free Yahoo to invest in its websites, display advertising products and mobile products.
But an increasingly vital ingredient in developing such products is the data that's gleaned from search queries, which can be used to create more targeted experiences for users.
Bartz and Microsoft CEO Steve Ballmer said determining how search data is shared between them was the most complex part of the negotiations. But the specific details are vague.
"Are they giving up the rights to use the search data that powers display advertising? That's still not clear," said Brigantine Advisors analyst Colin Gillis.
A LOOK AT HOW THE MICROSOFT-YAHOO DEAL WILL WORK
Consumers would still see Yahoo's logo striped across Yahoo.com. The only nod to Microsoft would appear when a user gets results from a Web search. At the bottom of the page Bing, Microsoft's search engine, will get credit for providing the results.
While it handles search requests at Yahoo, Bing would still be fielding queries at MSN.com, Bing.com, and other Web sites owned by Microsoft. And nothing figures to change in the way Microsoft accepts search requests from cell phones and "toolbars" added to Web browsers.
The Yahoo-Microsoft deal is noteworthy because it aligns two of the Internet's most powerful players in an attempt to take search kingpin Google down a notch or two. But it's common for one Web site to rely on another company to run its search engine and/or the ads the show up alongside search results.
Google even sells search ads on a rival search engine, Ask.com. AOL has been depending on Google for both its search results and search advertising for years. When their contract expires in December 2010, Microsoft is expected to bid aggressively against Google to provide the search engine on AOL.
Why all the competition? Because advertisers bid for the right to show their ads alongside certain search terms. The marketers pay the search engines when a user clicks on an ad. That means Microsoft and Google are trying to make the audiences for their search engines as vast as possible. The more eyeballs they have, the more advertisers are likely to pay.
While it handles search requests at Yahoo, Bing would still be fielding queries at MSN.com, Bing.com, and other Web sites owned by Microsoft. And nothing figures to change in the way Microsoft accepts search requests from cell phones and "toolbars" added to Web browsers.
The Yahoo-Microsoft deal is noteworthy because it aligns two of the Internet's most powerful players in an attempt to take search kingpin Google down a notch or two. But it's common for one Web site to rely on another company to run its search engine and/or the ads the show up alongside search results.
Google even sells search ads on a rival search engine, Ask.com. AOL has been depending on Google for both its search results and search advertising for years. When their contract expires in December 2010, Microsoft is expected to bid aggressively against Google to provide the search engine on AOL.
Why all the competition? Because advertisers bid for the right to show their ads alongside certain search terms. The marketers pay the search engines when a user clicks on an ad. That means Microsoft and Google are trying to make the audiences for their search engines as vast as possible. The more eyeballs they have, the more advertisers are likely to pay.
MICROSOFT CEO TRIES TO SELL ANALYSTS ON YAHOO DEAL
Microsoft Corp. CEO Steve Ballmer is trying to improve the bad feeling Yahoo Inc. investors have about the companies' search-advertising partnership.
Yahoo's shares plummeted 12 percent Wednesday after the deal was announced, and they continued dropping Thursday, ending 4 percent lower at $14.60.
Ballmer said he doesn't understand why.
"Nobody gets it," he said at a meeting of financial analysts at Microsoft headquarters.
Yahoo shareholders likely were hoping for a cash payment from Microsoft, which didn't end up happening. But the CEO said Yahoo investors should be pleased that the deal erases Yahoo's search costs and lets it keep 88 percent of the revenue from advertising sold alongside search results on its Web site.
Combining the two companies' search traffic will draw more advertisers, Ballmer argued. In turn, that should increase ad revenue for Microsoft and Yahoo, he said, because search ads are sold in an auction-style system in which marketers bid for the right to have their ad shown when a user enters certain search terms. As more advertisers make bids, the prices they pay figures to go up, Ballmer said.
Darren Chervitz, co-portfolio manager for the Jacob Internet Fund, which owns about 100,000 Yahoo shares, said Yahoo didn't get as much as it should have in the deal, considering that it has the Internet's second-most widely used search engine.
"It was a very disappointing conclusion to this two-year dance," Chervitz said. "I don't think they needed to do this deal unless the terms were incredible, and that's not the case here."
For all of Microsoft's efforts on improving its position in online search and advertising through the Yahoo deal, a much larger — and more profitable — chunk of its business is the Windows operating system, which saw its sales and operating profit fall about 30 percent in the last quarter.
Windows revenue has been hurt by the popularity of netbooks, or tiny, low-cost, low-power laptops, because most are sold with the older Windows XP system that's less profitable for Microsoft than the current Vista system.
The October launch of the new operating system, Windows 7, may help. The forthcoming system is supposed to work better than Vista on less-powerful computers. Ballmer said retailers can "upsell" netbook buyers to Windows 7, indicating Microsoft may be planning to charge computer makers more for it.
PC sales in developing countries also hurt Microsoft last quarter. Ballmer said that was because Microsoft was experimenting with charging less for Windows on the theory that it would increase overall sales.
"The theory was wrong," Ballmer said. With Windows 7, "we're going to readdress those prices north."
Ballmer also used the annual analyst gathering to let loose a few of his signature verbal tics. Netbooks? "Blah blah blah." The open-source Linux operating system? "Blah blah blah blah blah."
He also jokingly called out some of the analysts for using Apple laptops.
Microsoft shares ended up 1 cent at $23.81 Thursday.
Yahoo's shares plummeted 12 percent Wednesday after the deal was announced, and they continued dropping Thursday, ending 4 percent lower at $14.60.
Ballmer said he doesn't understand why.
"Nobody gets it," he said at a meeting of financial analysts at Microsoft headquarters.
Yahoo shareholders likely were hoping for a cash payment from Microsoft, which didn't end up happening. But the CEO said Yahoo investors should be pleased that the deal erases Yahoo's search costs and lets it keep 88 percent of the revenue from advertising sold alongside search results on its Web site.
Combining the two companies' search traffic will draw more advertisers, Ballmer argued. In turn, that should increase ad revenue for Microsoft and Yahoo, he said, because search ads are sold in an auction-style system in which marketers bid for the right to have their ad shown when a user enters certain search terms. As more advertisers make bids, the prices they pay figures to go up, Ballmer said.
Darren Chervitz, co-portfolio manager for the Jacob Internet Fund, which owns about 100,000 Yahoo shares, said Yahoo didn't get as much as it should have in the deal, considering that it has the Internet's second-most widely used search engine.
"It was a very disappointing conclusion to this two-year dance," Chervitz said. "I don't think they needed to do this deal unless the terms were incredible, and that's not the case here."
For all of Microsoft's efforts on improving its position in online search and advertising through the Yahoo deal, a much larger — and more profitable — chunk of its business is the Windows operating system, which saw its sales and operating profit fall about 30 percent in the last quarter.
Windows revenue has been hurt by the popularity of netbooks, or tiny, low-cost, low-power laptops, because most are sold with the older Windows XP system that's less profitable for Microsoft than the current Vista system.
The October launch of the new operating system, Windows 7, may help. The forthcoming system is supposed to work better than Vista on less-powerful computers. Ballmer said retailers can "upsell" netbook buyers to Windows 7, indicating Microsoft may be planning to charge computer makers more for it.
PC sales in developing countries also hurt Microsoft last quarter. Ballmer said that was because Microsoft was experimenting with charging less for Windows on the theory that it would increase overall sales.
"The theory was wrong," Ballmer said. With Windows 7, "we're going to readdress those prices north."
Ballmer also used the annual analyst gathering to let loose a few of his signature verbal tics. Netbooks? "Blah blah blah." The open-source Linux operating system? "Blah blah blah blah blah."
He also jokingly called out some of the analysts for using Apple laptops.
Microsoft shares ended up 1 cent at $23.81 Thursday.
MICROSOFT CEO SURPRISED AT YAHOO DEAL RECEPTION
Microsoft Corp's chief executive tried to persuade skeptical investors on Thursday that its 10-year Web search partnership with Yahoo Inc is good for both companies.
Shares of Yahoo slumped 12 per cent after the long-expected deal was announced on Wednesday, and fell more than 3 per cent on Thursday. Microsoft shares rose only slightly, puzzling CEO Steve Ballmer.
"I was myself kind of surprised by the market reaction," Ballmer told a meeting for financial analysts at Microsoft's headquarters near Seattle. "Nobody gets it. It's a little bit complicated."
Under the deal, aimed at creating a stronger competitor to Google Inc, Microsoft's Bing search engine will power queries on Yahoo's sites. In return, Microsoft will pay Yahoo 88 per cent of revenue from advertisements generated from these sites.
In theory, that means Microsoft gets more traffic to refine its search technology and build up its ad base, while Yahoo gets revenue from search ads without the expense of managing its own search engine.
The deal appears to end a long saga between the companies, after Yahoo rebuffed Microsoft's $47.5 billion takeover bid last year.
"Nothing got sold yesterday and nothing got bought yesterday," Ballmer told the meeting, in an attempt to explain the deal. "It's a win-win deal from my perspective."
Yahoo's share of search ad revenue is a "big number," said Ballmer, considering the company will have to lay out no money to obtain the revenue.
"On the Yahoo side - this is the one that stuns me that people haven't figured it out - Yahoo gets 88 per cent of the search revenue they have today. They have zero per cent COGS (cost of goods sold) and they have no R&D (research and development) expense and no ongoing capex (capital expenditure)," said Ballmer. "It's sort of unbelievable."
For Microsoft, he said the deal means it gets more Internet traffic, enabling it to refine its search technology, which should lead to more interest from ad buyers and hence better prices for its ads.
"The more queries you see, the more you can tune your product. The more scale you have, the more advertisers advertise on your system, and the more relevant they make their ads for your users," said Ballmer. "Because we have more bidders in our advertising marketplace, we will get higher bid prices, probably, and more liquidity in the marketplace. That will improve monetisation."
Yahoo shares closed down 3.6 per cent at $14.60 on Nasdaq. Microsoft shares closed up 1 cent at $23.81.
Shares of Yahoo slumped 12 per cent after the long-expected deal was announced on Wednesday, and fell more than 3 per cent on Thursday. Microsoft shares rose only slightly, puzzling CEO Steve Ballmer.
"I was myself kind of surprised by the market reaction," Ballmer told a meeting for financial analysts at Microsoft's headquarters near Seattle. "Nobody gets it. It's a little bit complicated."
Under the deal, aimed at creating a stronger competitor to Google Inc, Microsoft's Bing search engine will power queries on Yahoo's sites. In return, Microsoft will pay Yahoo 88 per cent of revenue from advertisements generated from these sites.
In theory, that means Microsoft gets more traffic to refine its search technology and build up its ad base, while Yahoo gets revenue from search ads without the expense of managing its own search engine.
The deal appears to end a long saga between the companies, after Yahoo rebuffed Microsoft's $47.5 billion takeover bid last year.
"Nothing got sold yesterday and nothing got bought yesterday," Ballmer told the meeting, in an attempt to explain the deal. "It's a win-win deal from my perspective."
Yahoo's share of search ad revenue is a "big number," said Ballmer, considering the company will have to lay out no money to obtain the revenue.
"On the Yahoo side - this is the one that stuns me that people haven't figured it out - Yahoo gets 88 per cent of the search revenue they have today. They have zero per cent COGS (cost of goods sold) and they have no R&D (research and development) expense and no ongoing capex (capital expenditure)," said Ballmer. "It's sort of unbelievable."
For Microsoft, he said the deal means it gets more Internet traffic, enabling it to refine its search technology, which should lead to more interest from ad buyers and hence better prices for its ads.
"The more queries you see, the more you can tune your product. The more scale you have, the more advertisers advertise on your system, and the more relevant they make their ads for your users," said Ballmer. "Because we have more bidders in our advertising marketplace, we will get higher bid prices, probably, and more liquidity in the marketplace. That will improve monetisation."
Yahoo shares closed down 3.6 per cent at $14.60 on Nasdaq. Microsoft shares closed up 1 cent at $23.81.
MOZILLA FIREFOX KEYBOARD SHORTCUTS
How to navigate the internet at lightning speed
Mozilla Firefox is a great browser, but one of its greatest features is one that few people bother to use - keyboard shortcuts. Spending just a few minutes learning the most common shortcuts can greatly increase the speed at which you browse web pages.
Enter URL
Location Bar Ctrl + L
Automatic.com Address Ctrl + Enter
Automatic.net Address Shift + Enter
Automatic.org Address Ctrl + Shift + Enter
Basic Navigation
You can access each of the navigation toolbar commands using keyboard shortcuts. They are listed below in the order in which they appear on the toolbar.
Previous Page Alt + Left
Next Page Alt + Right
Refresh Page Ctrl + R
Home Alt +Home
Stop Esc
Location Bar Ctrl + L
Book Mark
Current Page Ctrl + D
Search Engine Ctrl + K
Tabbed Browsing
In order to open a new (blank) tab, press Ctrl+T. To close a tab, press Ctrl+W. If you closed a tab by mistake and would like to recover it, press Ctrl+Shift+T.
If you are entering an address in the location bar, and would like to open it in a new tab, press Alt+Enter (or Alt plus any of the three combinations listed in the "Entering URLs" section). If you are browsing a page and see a link you would like to open in a new tab, hold Ctrl while clicking the link with your mouse (Ctrl+Click), press Ctrl+Enter after you Tab onto the link, or middle click the link. (Doing each of these will open the link in the background. In order to open the link in the foreground, also hold Shift during each of these shortcuts.)
If you have multiple tabs, you can directly access the first tab using Ctrl+1, the second tab using Ctrl+2, and so on up to Ctrl+8 (Ctrl+9 takes you to the last tab, regardless of its number). To move from one tab to the next, or one tab to the previous, press Ctrl+PageUp or Ctrl+PageDown.
Finally, to start a whole new group of tabs (that is, a new window), press Ctrl+N.
New Tab Ctrl + T
Close Tab Ctrl + W
Recovered
Close Tab Ctrl + Shift + T
Open
Address in
New Tab Alt + Enter
Open Link Ctrl+ Click
in New Tab Ctrl + Click
(Background) Middle Click
Open Link Ctrl + Shift + Click
in New Tab Ctrl +Shift + Enter
(Foreground) Shift + Middle Click
Select Tab Ctrl + (1 to 8)
Select Last
Tab Ctrl + 9
Next Tab Ctrl + Page Down
Previous Page Ctrl + Page Up
New Window Ctrl + N
Searching Page Text
To find a specific word or phrase in the text of a page, press Ctrl+F. To use the various search commands listed in the search bar, such as to find the "Next" instance of the word, press Alt and the letter underlined in the corresponding command. In the case of "Next" word, it would be Alt+N.
Find Ctrl + F
Next
Result Alt + N
Previous
Result Alt + P
Highlight
All Alt + A
Match
Case Alt + C
Miscellaneous
Book Marks Ctrl + B
History Ctrl + H
Downloads Ctrl + J
Zoom In Ctrl ++
Zoom Out Ctrl + -
Reset Zoom Ctrl + 0
Full Screen F11
Advance to
Next Click Tab
Help F1
Notes
This list is not exhaustive because I've omitted, for brevity, most of the obvious shortcuts (e.g., PageDown), redundant shortcuts (e.g., Alt+D), and esoteric shortcuts (e.g., Ctrl+Shift+D).
These shortcuts work in both Firefox 2 and Firefox 3 for both Windows and Linux. (However, there do exist shortcuts which will only work in one version or operating system.) Most of these shortcuts will work in Mac OS after substituting Cmd for Ctrl, Option for Alt, and Return for Enter.
For a more complete list of shortcuts, see the official Mozilla website.
Mozilla Firefox is a great browser, but one of its greatest features is one that few people bother to use - keyboard shortcuts. Spending just a few minutes learning the most common shortcuts can greatly increase the speed at which you browse web pages.
Enter URL
Location Bar Ctrl + L
Automatic.com Address Ctrl + Enter
Automatic.net Address Shift + Enter
Automatic.org Address Ctrl + Shift + Enter
Basic Navigation
You can access each of the navigation toolbar commands using keyboard shortcuts. They are listed below in the order in which they appear on the toolbar.
Previous Page Alt + Left
Next Page Alt + Right
Refresh Page Ctrl + R
Home Alt +Home
Stop Esc
Location Bar Ctrl + L
Book Mark
Current Page Ctrl + D
Search Engine Ctrl + K
Tabbed Browsing
In order to open a new (blank) tab, press Ctrl+T. To close a tab, press Ctrl+W. If you closed a tab by mistake and would like to recover it, press Ctrl+Shift+T.
If you are entering an address in the location bar, and would like to open it in a new tab, press Alt+Enter (or Alt plus any of the three combinations listed in the "Entering URLs" section). If you are browsing a page and see a link you would like to open in a new tab, hold Ctrl while clicking the link with your mouse (Ctrl+Click), press Ctrl+Enter after you Tab onto the link, or middle click the link. (Doing each of these will open the link in the background. In order to open the link in the foreground, also hold Shift during each of these shortcuts.)
If you have multiple tabs, you can directly access the first tab using Ctrl+1, the second tab using Ctrl+2, and so on up to Ctrl+8 (Ctrl+9 takes you to the last tab, regardless of its number). To move from one tab to the next, or one tab to the previous, press Ctrl+PageUp or Ctrl+PageDown.
Finally, to start a whole new group of tabs (that is, a new window), press Ctrl+N.
New Tab Ctrl + T
Close Tab Ctrl + W
Recovered
Close Tab Ctrl + Shift + T
Open
Address in
New Tab Alt + Enter
Open Link Ctrl+ Click
in New Tab Ctrl + Click
(Background) Middle Click
Open Link Ctrl + Shift + Click
in New Tab Ctrl +Shift + Enter
(Foreground) Shift + Middle Click
Select Tab Ctrl + (1 to 8)
Select Last
Tab Ctrl + 9
Next Tab Ctrl + Page Down
Previous Page Ctrl + Page Up
New Window Ctrl + N
Searching Page Text
To find a specific word or phrase in the text of a page, press Ctrl+F. To use the various search commands listed in the search bar, such as to find the "Next" instance of the word, press Alt and the letter underlined in the corresponding command. In the case of "Next" word, it would be Alt+N.
Find Ctrl + F
Next
Result Alt + N
Previous
Result Alt + P
Highlight
All Alt + A
Match
Case Alt + C
Miscellaneous
Book Marks Ctrl + B
History Ctrl + H
Downloads Ctrl + J
Zoom In Ctrl ++
Zoom Out Ctrl + -
Reset Zoom Ctrl + 0
Full Screen F11
Advance to
Next Click Tab
Help F1
Notes
This list is not exhaustive because I've omitted, for brevity, most of the obvious shortcuts (e.g., PageDown), redundant shortcuts (e.g., Alt+D), and esoteric shortcuts (e.g., Ctrl+Shift+D).
These shortcuts work in both Firefox 2 and Firefox 3 for both Windows and Linux. (However, there do exist shortcuts which will only work in one version or operating system.) Most of these shortcuts will work in Mac OS after substituting Cmd for Ctrl, Option for Alt, and Return for Enter.
For a more complete list of shortcuts, see the official Mozilla website.
Wednesday, July 29, 2009
TIMELINE:MICROSOFT,YAHOO ROAD TO PARTNERSHIP
.'s deal with rival Yahoo Inc.:
Feb. 1, 2008: After more than two years of talks and speculation, Microsoft makes unsolicited offer to buy Yahoo for $31 per share, or $44.6 billion.
Feb. 3: Google Inc.'s top lawyer says the buyout could hurt Web innovation.
Feb. 4: Yahoo CEO Jerry Yang tells employees that selling to Microsoft is an option.
Feb. 11: Yahoo rejects Microsoft's offer, saying it "substantially undervalues" the company.
Feb. 19: Microsoft Chairman Bill Gates says the software maker isn't in talks with Yahoo about raising its offer. Yahoo releases details of severance plans that would take effect after a buyout and could make a deal more expensive for Microsoft.
March 5: Yahoo extends a deadline for nominating candidates to its board, buying time to strike an alternative deal. Yahoo is said to be in talks with Google Inc., News Corp.'s MySpace.com and Time Warner Inc.'s AOL.
March 18: Yahoo releases optimistic revenue forecast for next two years, to justify rejecting Microsoft bid.
April 5: Microsoft CEO Steve Ballmer gives Yahoo three weeks to agree on a buyout or expect the software maker to go hostile — and potentially lower the offer price.
April 9: Yahoo says it will try using Google's search ad system instead of its own in a limited test. Microsoft's general counsel, Brad Smith, raises antitrust concerns.
April 26: Microsoft's deadline for Yahoo to accept the offer expires.
May 1: Ballmer tells Microsoft employees that he "won't go a dime above" what he thinks Yahoo is worth, and that he is willing to walk away from the deal.
May 3: Microsoft raises its bid to $33 per share, but Yang says the board wants $37. Microsoft withdraws its offer.
May 15: Billionaire investor Carl Icahn says he'll try to oust Yahoo's board at its annual shareholder meeting if it doesn't reopen talks with Microsoft and ditch plans to team up with Google.
May 18: Microsoft, Yahoo begin talking about a more limited deal. But within a month Yahoo says discussions have ceased.
June 12: Yahoo and Google formally announce a deal to run Google's search ads alongside Yahoo's search results and some of its other sites.
July 21: Icahn backs off in exchange for three seats on Yahoo's board.
Sept. 9: The U.S. Justice Department hires an antitrust litigator to review the pending Yahoo-Google search-advertising partnership.
Nov. 5: Google backs out of the partnership to avoid Justice Department lawsuit. Yang says he could still see Yahoo being acquired by Microsoft.
Nov. 17: Yang announces he will step down as CEO.
Nov. 19: Ballmer says Microsoft is "done with all acquisition discussions with Yahoo."
Dec. 5: Microsoft hires former a Yahoo search executive, Qi Lu, to lead its online division.
Jan. 13, 2009: Yahoo taps Autodesk Inc.'s Carol Bartz to replace Yang.
April 10: New reports emerge that Bartz and Ballmer have met about possible deals, including one in which Microsoft would sell advertising on Yahoo's search pages and Yahoo would manage Microsoft's display ads.
June 3: Microsoft launches retooled search site, Bing.
July 29: Yahoo, Microsoft announce partnership.
Feb. 1, 2008: After more than two years of talks and speculation, Microsoft makes unsolicited offer to buy Yahoo for $31 per share, or $44.6 billion.
Feb. 3: Google Inc.'s top lawyer says the buyout could hurt Web innovation.
Feb. 4: Yahoo CEO Jerry Yang tells employees that selling to Microsoft is an option.
Feb. 11: Yahoo rejects Microsoft's offer, saying it "substantially undervalues" the company.
Feb. 19: Microsoft Chairman Bill Gates says the software maker isn't in talks with Yahoo about raising its offer. Yahoo releases details of severance plans that would take effect after a buyout and could make a deal more expensive for Microsoft.
March 5: Yahoo extends a deadline for nominating candidates to its board, buying time to strike an alternative deal. Yahoo is said to be in talks with Google Inc., News Corp.'s MySpace.com and Time Warner Inc.'s AOL.
March 18: Yahoo releases optimistic revenue forecast for next two years, to justify rejecting Microsoft bid.
April 5: Microsoft CEO Steve Ballmer gives Yahoo three weeks to agree on a buyout or expect the software maker to go hostile — and potentially lower the offer price.
April 9: Yahoo says it will try using Google's search ad system instead of its own in a limited test. Microsoft's general counsel, Brad Smith, raises antitrust concerns.
April 26: Microsoft's deadline for Yahoo to accept the offer expires.
May 1: Ballmer tells Microsoft employees that he "won't go a dime above" what he thinks Yahoo is worth, and that he is willing to walk away from the deal.
May 3: Microsoft raises its bid to $33 per share, but Yang says the board wants $37. Microsoft withdraws its offer.
May 15: Billionaire investor Carl Icahn says he'll try to oust Yahoo's board at its annual shareholder meeting if it doesn't reopen talks with Microsoft and ditch plans to team up with Google.
May 18: Microsoft, Yahoo begin talking about a more limited deal. But within a month Yahoo says discussions have ceased.
June 12: Yahoo and Google formally announce a deal to run Google's search ads alongside Yahoo's search results and some of its other sites.
July 21: Icahn backs off in exchange for three seats on Yahoo's board.
Sept. 9: The U.S. Justice Department hires an antitrust litigator to review the pending Yahoo-Google search-advertising partnership.
Nov. 5: Google backs out of the partnership to avoid Justice Department lawsuit. Yang says he could still see Yahoo being acquired by Microsoft.
Nov. 17: Yang announces he will step down as CEO.
Nov. 19: Ballmer says Microsoft is "done with all acquisition discussions with Yahoo."
Dec. 5: Microsoft hires former a Yahoo search executive, Qi Lu, to lead its online division.
Jan. 13, 2009: Yahoo taps Autodesk Inc.'s Carol Bartz to replace Yang.
April 10: New reports emerge that Bartz and Ballmer have met about possible deals, including one in which Microsoft would sell advertising on Yahoo's search pages and Yahoo would manage Microsoft's display ads.
June 3: Microsoft launches retooled search site, Bing.
July 29: Yahoo, Microsoft announce partnership.
MICROSOFT-YAHOO DEAL TO FACE TOUGH ANTITRUST PROBE
The Internet search partnership between Microsoft and Yahoo faces a tough antitrust review in the U.S. and overseas, with approval likely hinging on whether the marriage would foster more competition with market leader Google.
The deal, announced Wednesday, may have a better shot at success than the proposed pact last year between Yahoo Inc. and Google Inc. That agreement fell apart after the Justice Department threatened to block it, ultimately leading Yahoo to revive talks with Microsoft Corp.
Yahoo's alliance with Microsoft could have an easier path because antitrust regulators are tougher on deals involving the top two companies in an industry, said Evan Stewart, an antitrust lawyer at Zuckerman Spaeder. Google is by far the leading search engine, with two-thirds of the U.S. search market, according to comScore Inc.; Yahoo is well ahead of Microsoft for the next two spots.
Even so, a key lawmaker on antitrust issues said Wednesday that the agreement "warrants our careful scrutiny."
Sen. Herb Kohl, a Wisconsin Democrat, said lawmakers would review the deal "because of the potentially far-reaching consequences for consumers and advertisers and our concern about dampening the innovation we have come to expect from a competitive high-tech industry."
Meanwhile, the Obama administration's antitrust enforcers have promised to subject deals to more rigorous review than the previous administration.
"I'm expecting tough scrutiny in the U.S., and even tougher" in the European Union, said Herbert Hovenkamp, an antitrust law professor at the University of Iowa. He noted that European regulators have historically taken a harder line against Microsoft than their U.S. counterparts in their reviews of the software company's dominance in other products, like Windows and Internet Explorer.
A Justice Department spokeswoman, Gina Talamona, would say only that the department is "aware" of the deal. Peter Kaplan, a spokesman for the Federal Trade Commission, which also enforces antitrust law, declined to comment.
Under the agreement announced Wednesday, Yahoo will use Microsoft's search engine, Bing, on its Web portal, significantly expanding Bing's reach. In return, Yahoo will keep 88 percent of the revenue from search ads for the first half of the 10-year deal.
The deal isn't expected to close until early next year, and Yahoo and Microsoft said in a joint statement that they expect the agreement to be "closely reviewed by the industry and government regulators." They insist their partnership will lead to better choices for consumers and advertisers.
A key issue, according to Hovenkamp, will be whether regulators accept Microsoft CEO Steve Ballmer's argument that the deal will create a stronger competitor against Google.
"In the past, that defense hasn't worked all that well," Hovenkamp said, and courts have shot down deals between the second- and third-largest players in other industries.
But Stewart said the deal should pass muster because it will provide "real competition" to Google.
Separately, privacy advocates came out against the agreement.
The Center for Digital Democracy, an online privacy advocate in Washington that opposed the Google-Yahoo partnership last year, called for an examination of the partnership's consumer data collection policies, as well as privacy and online ad business practices.
The U.S. Public Interest Research Group also came out against the deal, as it had the Google-Yahoo partnership.
"The Microsoft-Yahoo deal should serve as a red flag," said Amina Fazlullah, media and telecom legislative counsel for the Washington, D.C.-based group. "When we lose independent search competitors, then we lose the ability to have multiple competitors working to preserve privacy."
The deal, announced Wednesday, may have a better shot at success than the proposed pact last year between Yahoo Inc. and Google Inc. That agreement fell apart after the Justice Department threatened to block it, ultimately leading Yahoo to revive talks with Microsoft Corp.
Yahoo's alliance with Microsoft could have an easier path because antitrust regulators are tougher on deals involving the top two companies in an industry, said Evan Stewart, an antitrust lawyer at Zuckerman Spaeder. Google is by far the leading search engine, with two-thirds of the U.S. search market, according to comScore Inc.; Yahoo is well ahead of Microsoft for the next two spots.
Even so, a key lawmaker on antitrust issues said Wednesday that the agreement "warrants our careful scrutiny."
Sen. Herb Kohl, a Wisconsin Democrat, said lawmakers would review the deal "because of the potentially far-reaching consequences for consumers and advertisers and our concern about dampening the innovation we have come to expect from a competitive high-tech industry."
Meanwhile, the Obama administration's antitrust enforcers have promised to subject deals to more rigorous review than the previous administration.
"I'm expecting tough scrutiny in the U.S., and even tougher" in the European Union, said Herbert Hovenkamp, an antitrust law professor at the University of Iowa. He noted that European regulators have historically taken a harder line against Microsoft than their U.S. counterparts in their reviews of the software company's dominance in other products, like Windows and Internet Explorer.
A Justice Department spokeswoman, Gina Talamona, would say only that the department is "aware" of the deal. Peter Kaplan, a spokesman for the Federal Trade Commission, which also enforces antitrust law, declined to comment.
Under the agreement announced Wednesday, Yahoo will use Microsoft's search engine, Bing, on its Web portal, significantly expanding Bing's reach. In return, Yahoo will keep 88 percent of the revenue from search ads for the first half of the 10-year deal.
The deal isn't expected to close until early next year, and Yahoo and Microsoft said in a joint statement that they expect the agreement to be "closely reviewed by the industry and government regulators." They insist their partnership will lead to better choices for consumers and advertisers.
A key issue, according to Hovenkamp, will be whether regulators accept Microsoft CEO Steve Ballmer's argument that the deal will create a stronger competitor against Google.
"In the past, that defense hasn't worked all that well," Hovenkamp said, and courts have shot down deals between the second- and third-largest players in other industries.
But Stewart said the deal should pass muster because it will provide "real competition" to Google.
Separately, privacy advocates came out against the agreement.
The Center for Digital Democracy, an online privacy advocate in Washington that opposed the Google-Yahoo partnership last year, called for an examination of the partnership's consumer data collection policies, as well as privacy and online ad business practices.
The U.S. Public Interest Research Group also came out against the deal, as it had the Google-Yahoo partnership.
"The Microsoft-Yahoo deal should serve as a red flag," said Amina Fazlullah, media and telecom legislative counsel for the Washington, D.C.-based group. "When we lose independent search competitors, then we lose the ability to have multiple competitors working to preserve privacy."
MICROSOFT,YAHOO AND GOOGLE AT A GLANCE
10-year search advertising partnership Wednesday that the companies hope will help them compete against Google Inc. Some key facts about the three companies:
Microsoft:
— Founded: 1975 by Bill Gates and Paul Allen to bring the Basic programming language to an early computer, the Altair 8800.
— Headquarters: Redmond, Wash.
— CEO: Steven A. Ballmer
— Employees: 91,000
— Earnings: $14.6 billion in profit and $58.4 billion in sales over the last four quarters.
Yahoo:
— Founded: 1994 by Jerry Yang and David Filo as a guide to the World Wide Web.
— Headquarters: Sunnyvale, Calif.
— CEO: Carol Bartz
— Employees: 13,000
— Earnings: $11 million in profit and $6.75 billion in sales over the last four quarters.
Google:
— Founded: 1998 by Larry Page and Sergey Brin to organize the world's information so more people could find and use it.
— Headquarters: Mountain View, Calif.
— CEO: Eric Schmidt
— Employees: 19,800
— Earnings: $4.63 billion in profit and $22.3 billion in sales over the last four quarters.
Microsoft:
— Founded: 1975 by Bill Gates and Paul Allen to bring the Basic programming language to an early computer, the Altair 8800.
— Headquarters: Redmond, Wash.
— CEO: Steven A. Ballmer
— Employees: 91,000
— Earnings: $14.6 billion in profit and $58.4 billion in sales over the last four quarters.
Yahoo:
— Founded: 1994 by Jerry Yang and David Filo as a guide to the World Wide Web.
— Headquarters: Sunnyvale, Calif.
— CEO: Carol Bartz
— Employees: 13,000
— Earnings: $11 million in profit and $6.75 billion in sales over the last four quarters.
Google:
— Founded: 1998 by Larry Page and Sergey Brin to organize the world's information so more people could find and use it.
— Headquarters: Mountain View, Calif.
— CEO: Eric Schmidt
— Employees: 19,800
— Earnings: $4.63 billion in profit and $22.3 billion in sales over the last four quarters.
MICROSOFT,YAHOO JOIN FORCES TO CHALLENGE GOOGLE
Washington: Tech giants Microsoft and Yahoo reached a long-awaited partnership Wednesday in a bid to challenge Google, which holds a 65 per cent market share in online search.
Under a 10-year deal, websites from both companies would use Microsoft's Bing search engine, which could now integrate Yahoo's considerable trove of search technology.
Yahoo, in turn, would handle worldwide sales of premium search-related advertising for both companies.
In exchange for becoming Yahoo's sole search provider - and gaining access to its massive traffic - Microsoft would pay its partner 88 per cent of the search revenues generated on Yahoo sites.
"This agreement comes with boatloads of value for Yahoo, our users and the industry, and I believe it establishes the foundation for a new era of Internet innovation and development," said Yahoo chief executive Carol Bartz in a statement.
According to Microsoft chief executive Steve Ballmer, the deal will allow Microsoft to "create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company".
And in a dig against online search market leader Google, the companies said in a joint statement that "advertisers no longer have to rely on one company that dominates more than 70 per cent of all search".
A Yahoo-Microsoft partnership would mean about 28 per cent of Internet searches would be performed on their combined platform, according to figures from ratings firm comScore Inc.
That would still be less than half of the about 65 per cent market share of Google Inc., which has long dominated the search space.
Last year, Microsoft attempted to buy Yahoo for more than $45 billion, an unsolicited bid Yahoo rejected, but the Redmond, Washington-based software giant has long had Yahoo's search business at the top of its wish list, and the two had reportedly been in discussions for months.
Yahoo estimated the deal would add $500 million to its annual operating profit, as well as saving it around $275 million in expenses related to developing and maintaining its own search technology.
Under a 10-year deal, websites from both companies would use Microsoft's Bing search engine, which could now integrate Yahoo's considerable trove of search technology.
Yahoo, in turn, would handle worldwide sales of premium search-related advertising for both companies.
In exchange for becoming Yahoo's sole search provider - and gaining access to its massive traffic - Microsoft would pay its partner 88 per cent of the search revenues generated on Yahoo sites.
"This agreement comes with boatloads of value for Yahoo, our users and the industry, and I believe it establishes the foundation for a new era of Internet innovation and development," said Yahoo chief executive Carol Bartz in a statement.
According to Microsoft chief executive Steve Ballmer, the deal will allow Microsoft to "create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company".
And in a dig against online search market leader Google, the companies said in a joint statement that "advertisers no longer have to rely on one company that dominates more than 70 per cent of all search".
A Yahoo-Microsoft partnership would mean about 28 per cent of Internet searches would be performed on their combined platform, according to figures from ratings firm comScore Inc.
That would still be less than half of the about 65 per cent market share of Google Inc., which has long dominated the search space.
Last year, Microsoft attempted to buy Yahoo for more than $45 billion, an unsolicited bid Yahoo rejected, but the Redmond, Washington-based software giant has long had Yahoo's search business at the top of its wish list, and the two had reportedly been in discussions for months.
Yahoo estimated the deal would add $500 million to its annual operating profit, as well as saving it around $275 million in expenses related to developing and maintaining its own search technology.
ON THE CALL: MICROSOFT CFO CHRIS LIDDELL
With businesses cutting back on technology spending and consumers favoring low-end notebooks, the average amount Microsoft Corp. brings in from selling a copy of its Windows software has fallen.
Businesses typically buy the higher-end versions of Windows, like Vista Ultimate, so Microsoft suffers when they stop. When consumers buy netbooks, they're getting Windows XP, which is less lucrative for Microsoft.
On a conference call with financial analysts Thursday, Microsoft Chief Financial Officer Chris Liddell fielded a question about the matter.
QUESTION: You said Microsoft's Windows revenue has the potential to grow faster than the PC market. For that to happen, average selling prices would have to go back up. How do you expect to get there? Are you predicting a big upgrade cycle with Windows 7, which arrives in October?
ANSWER: As we've seen, weak markets in the last couple of quarters in the last year and in particular the last quarter, average PC sales are sort of down in the traditional market 16 to 18 percent and business was disproportionately badly affected.
And because business (customers are) typically our highest ASP (average selling price) from a mix point of view, that hurt us on the downside.
On the upside, when we go into next year, when we see, if we start to see the economy improve, business spending improve, and we start to see a refresh cycle in the business PC side of things, you know, which Windows 7 should obviously help facilitate, then you start to see the reverse impact.
So hopefully business PC growth will be at or greater than consumer, and so you'll start to see higher average selling price, units will have a higher growth rate and, hence, ASPs will go up.
Hopefully we'll see a double impact of a better PC market year-over-year and a better mix in the types of PCs we'll be selling relative to average selling price.
Businesses typically buy the higher-end versions of Windows, like Vista Ultimate, so Microsoft suffers when they stop. When consumers buy netbooks, they're getting Windows XP, which is less lucrative for Microsoft.
On a conference call with financial analysts Thursday, Microsoft Chief Financial Officer Chris Liddell fielded a question about the matter.
QUESTION: You said Microsoft's Windows revenue has the potential to grow faster than the PC market. For that to happen, average selling prices would have to go back up. How do you expect to get there? Are you predicting a big upgrade cycle with Windows 7, which arrives in October?
ANSWER: As we've seen, weak markets in the last couple of quarters in the last year and in particular the last quarter, average PC sales are sort of down in the traditional market 16 to 18 percent and business was disproportionately badly affected.
And because business (customers are) typically our highest ASP (average selling price) from a mix point of view, that hurt us on the downside.
On the upside, when we go into next year, when we see, if we start to see the economy improve, business spending improve, and we start to see a refresh cycle in the business PC side of things, you know, which Windows 7 should obviously help facilitate, then you start to see the reverse impact.
So hopefully business PC growth will be at or greater than consumer, and so you'll start to see higher average selling price, units will have a higher growth rate and, hence, ASPs will go up.
Hopefully we'll see a double impact of a better PC market year-over-year and a better mix in the types of PCs we'll be selling relative to average selling price.
MICROSOFT PROFITS DECLINE
New York: Software giant Microsoft Corp has reported sales of $13.1 billion for the latest quarter, well below Wall Street expectations of more than $14 billion.
The PC market has dwindled for three straight quarters.
The company, based in Redmond, Washington, saw profits for the fourth quarter of its budget year drop 29 per cent amid falling demand for its Office software package and Windows operating system.
"The economy continues to be challenging, and we need to lift our game to another level," chief financial officer Chris Liddell said.
The PC market has dwindled for three straight quarters.
The company, based in Redmond, Washington, saw profits for the fourth quarter of its budget year drop 29 per cent amid falling demand for its Office software package and Windows operating system.
"The economy continues to be challenging, and we need to lift our game to another level," chief financial officer Chris Liddell said.
MICROSOFT DEAL TALK,OPTIMISM OVERSHADOW RESULTS
Microsoft Corp will likely report the first annual sales dip in its history as a public company, but investors are looking beyond that for upbeat comments on Windows 7, signs of a tech sector recovery, and even a deal with Yahoo Inc to challenge Google Inc.
The question for investors when the world's largest software company reports quarterly results on Thursday is whether it can present enough optimism to maintain the momentum that has pushed shares up 63 per cent since early March.
Tech heavyweights IBM and Intel Corp ratcheted up expectations last week by blowing through Wall Street forecasts and setting ambitious outlooks that suggest the worst may be over for the sagging computer business.
Microsoft, whose software drives more than 90 per cent of the world's PCs, stands to benefit as it prepares to roll out its new Windows 7 operating system in October.
"There's been a sentiment shift," said Todd Lowenstein, a portfolio manager at HighMark Capital management. "People are starting to get excited now about the visibility of Windows 7 - it's got good reviews and they've got some pent-up demand."
"They've turned the corner in a lot of their businesses," said Lowenstein, a manager of HighMark's Value Momentum mutual fund, which holds about 530,000 Microsoft shares.
Aside from Windows 7 - which should help erase bad memories of its poorly received predecessor Vista - Microsoft has a new version of its huge-selling Office suite of applications in the works, and it is finally making headway against Google with its six-week old Bing search engine.
After months of intermittent negotiations, and an aborted takeover bid last year, Microsoft finally looks ready to strike an Internet search and online advertising deal with Yahoo, according to a source familiar with the situation. An announcement could come before the results on Thursday.
"The sooner these two decide to bring the best of what they both have together and then jointly go after the market, the more it will benefit both," said Lowenstein.
PC recovery
The broader technology economy could be moving in Microsoft's direction.
Last quarter's worldwide PC shipments fell about 3 per cent from a year ago, a much smaller drop than expected in the depths of a US recession. Analysts are now talking about growth in PC sales returning in the fourth quarter.
With Microsoft's Windows 7 scheduled to launch in late October, that could bode well for the company's fortunes.
"The new product pipeline, combined with even a modest rebound in IT spending growth, could have significant impact on Microsoft's top-line" in its new fiscal year, which started July 1, according to a Goldman Sachs analyst report last week.
Goldman put Microsoft on its top stock picks list - calling it a "conviction buy" last month.
If the stock rises after earnings, it could trigger an "investor snowball effect", according to Goldman, whose analysts point out that fund managers in the "growth" sector - looking for share price appreciation rather than undervalued stocks or high dividends - are significantly underinvested in Microsoft.
"The stock was under-owned for a while - it was in growth stock purgatory," said Lowenstein. "It hadn't delivered the higher expectations that some of the other software companies were producing."
If growth fund managers rush to buy an outperforming Microsoft stock to rebalance their positions, that could push the share price even higher, said Lowenstein.
Even after its recent surge, Microsoft stock is still reasonably priced relative to comparable investments.
Based on Friday's closing price, Microsoft shares are trading at 13.3 times expected earnings per share for fiscal 2010, according to Reuters Estimates.
By comparison, Apple Inc shares are trading at 23.4 times expected earnings for fiscal 2010, Google at 17.4 times and IBM at 11 times.
Despite rising hopes for Microsoft, some still sound a note of caution not to get ahead of a recovery that has not materialized.
"I would love to see higher revenues but I don't know if that's realistic," said Kim Caughey, senior analyst at Fort Pitt Capital Group, which holds Microsoft shares.
"I don't think their customers are expanding and thus need systems and processes to grow that. I want to see new (technology) projects starting up and I don't see that anywhere."
The question for investors when the world's largest software company reports quarterly results on Thursday is whether it can present enough optimism to maintain the momentum that has pushed shares up 63 per cent since early March.
Tech heavyweights IBM and Intel Corp ratcheted up expectations last week by blowing through Wall Street forecasts and setting ambitious outlooks that suggest the worst may be over for the sagging computer business.
Microsoft, whose software drives more than 90 per cent of the world's PCs, stands to benefit as it prepares to roll out its new Windows 7 operating system in October.
"There's been a sentiment shift," said Todd Lowenstein, a portfolio manager at HighMark Capital management. "People are starting to get excited now about the visibility of Windows 7 - it's got good reviews and they've got some pent-up demand."
"They've turned the corner in a lot of their businesses," said Lowenstein, a manager of HighMark's Value Momentum mutual fund, which holds about 530,000 Microsoft shares.
Aside from Windows 7 - which should help erase bad memories of its poorly received predecessor Vista - Microsoft has a new version of its huge-selling Office suite of applications in the works, and it is finally making headway against Google with its six-week old Bing search engine.
After months of intermittent negotiations, and an aborted takeover bid last year, Microsoft finally looks ready to strike an Internet search and online advertising deal with Yahoo, according to a source familiar with the situation. An announcement could come before the results on Thursday.
"The sooner these two decide to bring the best of what they both have together and then jointly go after the market, the more it will benefit both," said Lowenstein.
PC recovery
The broader technology economy could be moving in Microsoft's direction.
Last quarter's worldwide PC shipments fell about 3 per cent from a year ago, a much smaller drop than expected in the depths of a US recession. Analysts are now talking about growth in PC sales returning in the fourth quarter.
With Microsoft's Windows 7 scheduled to launch in late October, that could bode well for the company's fortunes.
"The new product pipeline, combined with even a modest rebound in IT spending growth, could have significant impact on Microsoft's top-line" in its new fiscal year, which started July 1, according to a Goldman Sachs analyst report last week.
Goldman put Microsoft on its top stock picks list - calling it a "conviction buy" last month.
If the stock rises after earnings, it could trigger an "investor snowball effect", according to Goldman, whose analysts point out that fund managers in the "growth" sector - looking for share price appreciation rather than undervalued stocks or high dividends - are significantly underinvested in Microsoft.
"The stock was under-owned for a while - it was in growth stock purgatory," said Lowenstein. "It hadn't delivered the higher expectations that some of the other software companies were producing."
If growth fund managers rush to buy an outperforming Microsoft stock to rebalance their positions, that could push the share price even higher, said Lowenstein.
Even after its recent surge, Microsoft stock is still reasonably priced relative to comparable investments.
Based on Friday's closing price, Microsoft shares are trading at 13.3 times expected earnings per share for fiscal 2010, according to Reuters Estimates.
By comparison, Apple Inc shares are trading at 23.4 times expected earnings for fiscal 2010, Google at 17.4 times and IBM at 11 times.
Despite rising hopes for Microsoft, some still sound a note of caution not to get ahead of a recovery that has not materialized.
"I would love to see higher revenues but I don't know if that's realistic," said Kim Caughey, senior analyst at Fort Pitt Capital Group, which holds Microsoft shares.
"I don't think their customers are expanding and thus need systems and processes to grow that. I want to see new (technology) projects starting up and I don't see that anywhere."
MICROSOFT INDIA LAUNCHES 'ONLINE SERVICES'
Businesses of all sizes, especially small and medium sized businesses (SMBs) can now save upto 50 percent of their IT-related costs with the launch of Microsoft Online Services.
Microsoft India has also announced a free trial period of two-months for the range of services, which include e-mail, collaboration, conferencing and productivity capabilities. Starting immediately, date customers can try the offering at http://www.microsoft.com/online at no charge, allowing them to experience the potential impact Online services can have on their businesses before the commercial launch in October 2009.
4 steps to cost saving with Microsoft online services
Step 1 - log on to www.microsoft.com/india/onlineservices Step 2 - Choose country and log in with Live id
Step 3 - Add chosen services to shopping cart
Step 4 - After you are notified that your service is set up, use your service.
Modelled on the 'pay-as-you-go' approach, Online Services provide affordability, enhanced productivity, and freedom from hassles of IT deployment. Online Services will allow businesses to stay in touch with customers, associates and teams across geographic boundaries round the clock and provide instant access to information, thereby enhancing efficiency and reducing costs.
"Over 80 percent of the businesses in India are SMBs that are increasingly looking to use world class IT for better business productivity. With tools such as email and collaboration becoming increasingly a must-have in this segment, the pay-as-you-go affordability and freedom from IT administration, Microsoft Online Services offers the much needed respite from financial and logistical hurdles. We encourage businesses to make the best of the free trial opportunity we are launching - and experience the powerful impact of Microsoft Online Services," said Sanjay Manchanda, Director, Microsoft Business Division.
"This launch also marks the second phase of Microsoft software plus services vision following the tremendous success we have seen of our hosted offerings including Hosted Exchange and Hosted ERP among Indian enterprises," he added.
Commenting on the launch, Mohammad Saif, Deputy Director, Consulting - ICT Practice, Frost and Sullivan, South Asia and Middle East said, "Lower TCO and capital expenditure, rapid deployment cycle, and a wide variety of offerings by various global vendors have constituted the driving force for on-demand softwares in India. Increasing awareness about the delivery model and flexibility of trial version have helped in allaying the apprehension of customers and is expected to play a major role in the growth of the on-demand software market, which is expected to grow from the current level of $40 Mn to $800 Mn by 2015, with SME fuelling the growth."
Microsoft Online Services is a part of Microsoft software plus services strategy which provides flexibility and choice of accessing and using software on premise and on Internet as a service.
As part of the Microsoft Online Services product family, Exchange Online (for e-mail) and Office SharePoint Online (portals and collaboration) are available separately or as a suite together with Office Live Meeting (for conferencing), Microsoft Exchange Hosted Services and Microsoft Office Communications Online (for instant messaging and presence).
In the coming months, Microsoft Online Services will also provide significant opportunities to a huge ecosystem of partners that will sell, customize and provide consulting, migration and managed services for Microsoft Online Services to Indian small and medium businesses.
Microsoft India has also announced a free trial period of two-months for the range of services, which include e-mail, collaboration, conferencing and productivity capabilities. Starting immediately, date customers can try the offering at http://www.microsoft.com/online at no charge, allowing them to experience the potential impact Online services can have on their businesses before the commercial launch in October 2009.
4 steps to cost saving with Microsoft online services
Step 1 - log on to www.microsoft.com/india/onlineservices Step 2 - Choose country and log in with Live id
Step 3 - Add chosen services to shopping cart
Step 4 - After you are notified that your service is set up, use your service.
Modelled on the 'pay-as-you-go' approach, Online Services provide affordability, enhanced productivity, and freedom from hassles of IT deployment. Online Services will allow businesses to stay in touch with customers, associates and teams across geographic boundaries round the clock and provide instant access to information, thereby enhancing efficiency and reducing costs.
"Over 80 percent of the businesses in India are SMBs that are increasingly looking to use world class IT for better business productivity. With tools such as email and collaboration becoming increasingly a must-have in this segment, the pay-as-you-go affordability and freedom from IT administration, Microsoft Online Services offers the much needed respite from financial and logistical hurdles. We encourage businesses to make the best of the free trial opportunity we are launching - and experience the powerful impact of Microsoft Online Services," said Sanjay Manchanda, Director, Microsoft Business Division.
"This launch also marks the second phase of Microsoft software plus services vision following the tremendous success we have seen of our hosted offerings including Hosted Exchange and Hosted ERP among Indian enterprises," he added.
Commenting on the launch, Mohammad Saif, Deputy Director, Consulting - ICT Practice, Frost and Sullivan, South Asia and Middle East said, "Lower TCO and capital expenditure, rapid deployment cycle, and a wide variety of offerings by various global vendors have constituted the driving force for on-demand softwares in India. Increasing awareness about the delivery model and flexibility of trial version have helped in allaying the apprehension of customers and is expected to play a major role in the growth of the on-demand software market, which is expected to grow from the current level of $40 Mn to $800 Mn by 2015, with SME fuelling the growth."
Microsoft Online Services is a part of Microsoft software plus services strategy which provides flexibility and choice of accessing and using software on premise and on Internet as a service.
As part of the Microsoft Online Services product family, Exchange Online (for e-mail) and Office SharePoint Online (portals and collaboration) are available separately or as a suite together with Office Live Meeting (for conferencing), Microsoft Exchange Hosted Services and Microsoft Office Communications Online (for instant messaging and presence).
In the coming months, Microsoft Online Services will also provide significant opportunities to a huge ecosystem of partners that will sell, customize and provide consulting, migration and managed services for Microsoft Online Services to Indian small and medium businesses.
MICROSOFT RELEASES SECURITY PATCH FOR INTERNET EXPLORER
Washington: Microsoft released a security patch on Tuesday aimed at preventing hackers from exploiting a vulnerability in its Web browser, Internet Explorer.
The US software giant said that the security update would be automatically installed for Internet Explorer users who have automatic updating enabled on their computers but would need to be installed manually by other users.
It said the update resolves three privately reported vulnerabilities in Internet Explorer.
"These vulnerabilities could allow remote code execution if a user views a specially crafted Web page using Internet Explorer," Microsoft said.
It said the security patch "addresses these vulnerabilities by modifying the way that Internet Explorer handles objects in memory and table operations."
Microsoft said an attacker could exploit the vulnerability by constructing a specially crafted Web page.
"When a user views the Web page, the vulnerability could allow remote code execution," it said. "An attacker who successfully exploited this vulnerability could gain the same user rights as the logged-on user."
"If a user is logged on with administrative user rights, an attacker who successfully exploited this vulnerability could take complete control of an affected system," it said.
Microsoft said the security update was considered "critical" for users of certain versions of Internet Explorer running on Windows 2000 and Windows XP operating systems.
The US software giant said that the security update would be automatically installed for Internet Explorer users who have automatic updating enabled on their computers but would need to be installed manually by other users.
It said the update resolves three privately reported vulnerabilities in Internet Explorer.
"These vulnerabilities could allow remote code execution if a user views a specially crafted Web page using Internet Explorer," Microsoft said.
It said the security patch "addresses these vulnerabilities by modifying the way that Internet Explorer handles objects in memory and table operations."
Microsoft said an attacker could exploit the vulnerability by constructing a specially crafted Web page.
"When a user views the Web page, the vulnerability could allow remote code execution," it said. "An attacker who successfully exploited this vulnerability could gain the same user rights as the logged-on user."
"If a user is logged on with administrative user rights, an attacker who successfully exploited this vulnerability could take complete control of an affected system," it said.
Microsoft said the security update was considered "critical" for users of certain versions of Internet Explorer running on Windows 2000 and Windows XP operating systems.
Tuesday, July 28, 2009
SUPERCOMPUTER BEING DESCRIBED AS WORLD'S MOST POWERFUL BECOMES OPERATIONAL
Washington: What is being expected to prove the most powerful computer of its kind in the world became operational at the University of Florida this week.
The supercomputer has been named by its designers 'Novo-G'. The first part of its name came from the Latin term for "make anew, change, alter", and the second from "G" for "genesis".
It is a "reconfigurable" computer that can rearrange its internal circuitry to suit the task at hand.
Alan George, professor of electrical and computer engineering and director of UF's National Science Foundation Center for High-Performance Reconfigurable Computing, says that applications may range from space satellites to research supercomputers - anywhere size, energy and high speed are important.
Traditional computers use so-called "fixed logic devices" to perform a large variety of tasks, but this approach requires a substantial amount of overhead in space and energy, no matter what work needs to be done.
While special-purpose computers can be built to perform certain tasks very well, they are not flexible.
According to George, reconfigurable computers make the best of both worlds because they can rearrange their internal circuitry like Lego blocks to create the most appropriate architecture for each assignment, and, thus, can be from 10 to 100 times faster than other computers their size, while using five to 10 times less energy.
Although the concept has been proven, reconfigurable computers remain at the research stage and are not easy to use. One of the main goals of the NSF Center is to pioneer techniques to make reconfigurable computers more accessible.
"It is very powerful technology, but it is also very complicated technology. We don't want this important technology to be accessible only to experts," George said.
The University of Florida has three partner universities in its reconfigurable computing center - Brigham Young University, George Washington University and Virginia Tech.
The university also has about 30 industry and government partners.
The supercomputer has been named by its designers 'Novo-G'. The first part of its name came from the Latin term for "make anew, change, alter", and the second from "G" for "genesis".
It is a "reconfigurable" computer that can rearrange its internal circuitry to suit the task at hand.
Alan George, professor of electrical and computer engineering and director of UF's National Science Foundation Center for High-Performance Reconfigurable Computing, says that applications may range from space satellites to research supercomputers - anywhere size, energy and high speed are important.
Traditional computers use so-called "fixed logic devices" to perform a large variety of tasks, but this approach requires a substantial amount of overhead in space and energy, no matter what work needs to be done.
While special-purpose computers can be built to perform certain tasks very well, they are not flexible.
According to George, reconfigurable computers make the best of both worlds because they can rearrange their internal circuitry like Lego blocks to create the most appropriate architecture for each assignment, and, thus, can be from 10 to 100 times faster than other computers their size, while using five to 10 times less energy.
Although the concept has been proven, reconfigurable computers remain at the research stage and are not easy to use. One of the main goals of the NSF Center is to pioneer techniques to make reconfigurable computers more accessible.
"It is very powerful technology, but it is also very complicated technology. We don't want this important technology to be accessible only to experts," George said.
The University of Florida has three partner universities in its reconfigurable computing center - Brigham Young University, George Washington University and Virginia Tech.
The university also has about 30 industry and government partners.
EMAILS CAN RESURFACE AFTER DELETION--IN THE WRONG HANDS
Washington:Beware, emails or Facebook posts or pictures can resurface months after they are deleted -- in the wrong hands or at the wrong time, according to researchers.
'If you care about privacy, the internet today is a very scary place,' said University of Washington (UW) computer scientist Tadayoshi Kohno. 'If people understood the implications of where and how their email is stored, they might be more careful or not use it as often.'
For instance, a lost cell phone can expose personal photos or text messages. A legal investigation can subpoena the entire contents of a home or work computer, uncovering incriminating, inconvenient or just embarrassing details from the past.
The team of UW computer scientists developed a prototype system called Vanish that can place a time limit on text uploaded to any web service through a web browser. After a set time text written using Vanish will, in essence, self-destruct.
Study co-authors include Roxana Geambasu, Tadayoshi Kohno, Hank Levy and Amit Levy, all with UW's department of computer science and engineering.
'When you send out a sensitive email to a few friends you have no idea where that email is going to end up,' Geambasu said.
'For instance, your friend could lose her laptop or cell phone, her data could be exposed by a hacker, or a subpoena could require your e-mail service to reveal your messages. If you want to ensure that your message never gets out, how do you do that?'
Many people believe that pressing the 'delete' button will make their data go away. 'The reality is that many web services archive data indefinitely, well after you've pressed delete,' Geambasu said.
Simply encrypting the data can be risky in the long term, the researchers say. The data can be exposed years later, for example, by legal actions that force an individual or company to reveal the encryption key.
'In today's world, private information is scattered all over the internet, and we can't control the lifetime of that data,' said Levy.
'And as we transition to a future based on cloud computing, where enormous, anonymous data centres run the vast majority of our applications and store nearly all of our data, we will lose even more control.'
Researchers compare using Vanish to writing a message in the sand at low tide, where it can be read for only a few hours before the tide comes in and permanently washes it away.
Erasing the data doesn't require any special action by the sender, the recipient or any third party service.
A paper about the project went public on Tuesday and will be presented at the Usenix Security Symposium Aug 10-14 in Montreal, Canada.
'If you care about privacy, the internet today is a very scary place,' said University of Washington (UW) computer scientist Tadayoshi Kohno. 'If people understood the implications of where and how their email is stored, they might be more careful or not use it as often.'
For instance, a lost cell phone can expose personal photos or text messages. A legal investigation can subpoena the entire contents of a home or work computer, uncovering incriminating, inconvenient or just embarrassing details from the past.
The team of UW computer scientists developed a prototype system called Vanish that can place a time limit on text uploaded to any web service through a web browser. After a set time text written using Vanish will, in essence, self-destruct.
Study co-authors include Roxana Geambasu, Tadayoshi Kohno, Hank Levy and Amit Levy, all with UW's department of computer science and engineering.
'When you send out a sensitive email to a few friends you have no idea where that email is going to end up,' Geambasu said.
'For instance, your friend could lose her laptop or cell phone, her data could be exposed by a hacker, or a subpoena could require your e-mail service to reveal your messages. If you want to ensure that your message never gets out, how do you do that?'
Many people believe that pressing the 'delete' button will make their data go away. 'The reality is that many web services archive data indefinitely, well after you've pressed delete,' Geambasu said.
Simply encrypting the data can be risky in the long term, the researchers say. The data can be exposed years later, for example, by legal actions that force an individual or company to reveal the encryption key.
'In today's world, private information is scattered all over the internet, and we can't control the lifetime of that data,' said Levy.
'And as we transition to a future based on cloud computing, where enormous, anonymous data centres run the vast majority of our applications and store nearly all of our data, we will lose even more control.'
Researchers compare using Vanish to writing a message in the sand at low tide, where it can be read for only a few hours before the tide comes in and permanently washes it away.
Erasing the data doesn't require any special action by the sender, the recipient or any third party service.
A paper about the project went public on Tuesday and will be presented at the Usenix Security Symposium Aug 10-14 in Montreal, Canada.
Monday, July 27, 2009
INKLESS PRINTER WASABI PZ310 FROM DELL....$$
If you want to have the instant photos print out than now there is a permanent solution from Dell. This will produce high quality print out of 2-inch-by-3-inch. This one uses zink (zero ink) technology.
Weight around only 225 gms with the dimension of 4.8 inch x 2.8 inch x 0.9 inch. This will have the capacity of 12 papers rite now.
You can use files from any device - Mobile Phone, Laptop, Digital Camera. This one uses special kind of paper produced on the technology of zink. In US price of this printer is around $100
Telling all which are the printers:
1.Dell Wasabi PZ310 ultra-mobile inkless printers
2.Dell Wasabi PZ310 ultra-mobile inkless printers 2
3.Dell Wasabi PZ310 ultra-mobile inkless printers 3
4.Dell Wasabi PZ310 ultra-mobile inkless printers 4
5.Dell Wasabi PZ310 ultra-mobile inkless printers 5
6.Dell Wasabi PZ310 ultra-mobile inkless printers 6
7.Dell Wasabi PZ310 ultra-mobile inkless printers 7
APPLE DISABLES iTUNES SYNC FEATURE ON PALM PRE
Apple Inc. has shut down one of the most compelling features on Palm Inc.'s rival Pre smart phone, crippling the Pre's ability to act like an iPod.
Users of the recently released Pre had been able to put music on it by using Apple's free iTunes software — a unique twist for a device not made by Apple. But Apple updated iTunes on Wednesday to block this feature.
Apple spokesman Tom Neumayr said the update "disables devices falsely pretending to be iPods, including the Palm Pre."
Palm spokeswoman Leslie Letts said Apple's move is a "direct blow to their users, who will be deprived of a seamless synchronization experience." For a workaround, she noted, Pre owners can stick to the older version of iTunes, move music from computers to a Pre with a USB cable or consider third-party music applications.
The iTunes software smackdown is the latest example of tensions brewing between Apple and Palm, which since June has been led by the former executive behind the iPod, Jon Rubinstein. Rubinstein became Palm's executive chairman in October 2007.
The $200 Pre includes a "multi-touch" screen like Apple's iPhone, letting users do things like pinch photos to zoom in and out. Apple was granted a patent in January related to certain multi-touch functions, though the effects on Palm are unclear.
Avian Securities analyst Matthew Thornton said Apple's move to squash the Pre's iTunes function could turn off some people looking to buy the Pre, since they might have considered the device as a way to consolidate their music player and cell phone.
Still, "it's not like 10 out of every 10 people who buy a Pre are going to use the device for their MP3 player," he said.
Users of the recently released Pre had been able to put music on it by using Apple's free iTunes software — a unique twist for a device not made by Apple. But Apple updated iTunes on Wednesday to block this feature.
Apple spokesman Tom Neumayr said the update "disables devices falsely pretending to be iPods, including the Palm Pre."
Palm spokeswoman Leslie Letts said Apple's move is a "direct blow to their users, who will be deprived of a seamless synchronization experience." For a workaround, she noted, Pre owners can stick to the older version of iTunes, move music from computers to a Pre with a USB cable or consider third-party music applications.
The iTunes software smackdown is the latest example of tensions brewing between Apple and Palm, which since June has been led by the former executive behind the iPod, Jon Rubinstein. Rubinstein became Palm's executive chairman in October 2007.
The $200 Pre includes a "multi-touch" screen like Apple's iPhone, letting users do things like pinch photos to zoom in and out. Apple was granted a patent in January related to certain multi-touch functions, though the effects on Palm are unclear.
Avian Securities analyst Matthew Thornton said Apple's move to squash the Pre's iTunes function could turn off some people looking to buy the Pre, since they might have considered the device as a way to consolidate their music player and cell phone.
Still, "it's not like 10 out of every 10 people who buy a Pre are going to use the device for their MP3 player," he said.
APPLE SMASHES PROFIT FORECASTS,iPHONE SHINES
Apple Inc's quarterly profit blew past Wall Street forecasts thanks to strong sales of Macs and iPhones and higher-than-expected gross margins, boosting its shares 4 percent on Tuesday.
The company continued to defy the global recession with a solid 13 percent jump in fiscal third-quarter net profit. It sold more than seven times as many iPhones -- 5.2 million units of its latest signature device -- as the year-ago period.
"The numbers are great. Their gross profits continue to surprise people and there is a return to product momentum ... a return to growth in the Mac business," said Andy Hargreaves, an analyst at Pacific Crest Securities. "And then the iPhone is doing tremendously well and that is a potent combination."
Apple reported a net profit of $1.23 billion, or $1.35 a share, for its fiscal third quarter ended June 27, up from $1.07 billion, or $1.19 a share, in the year-ago period.
Earnings per share beat by far the average Street forecast of $1.18 according to Reuters Estimates, and topped even the most bullish "whisper" numbers of $1.30 to $1.35.
Sales of Macs and iPhones both beat analysts' expectations, helped by product refreshes and lower prices, while iPod shipments were toward the low end of forecasts.
Apple said it sold 2.6 million Macs, up 4 percent from a year ago, and 5.2 million iPhones in the June quarter, during which the company launched its third-generation iPhone 3GS and cut the price on the second-generation model to $99.
The iPhone is often thought of as more of a consumer device, but Apple said nearly 20 percent of Fortune 100 companies have bought at least 10,000 units and it is unable to make enough iPhone 3GSes to meet demand -- a shortfall the company said it is working to address.
Although the smartphone segment continues to grow more crowded with competitors, Chief Operating Officer Tim Cook said on a conference call the company is "years ahead of other people" in its competitive position.
IPHONE DRIVES
The install base for the iPhone and the iPod Touch -- which share operating systems -- is now 45 million, Apple said.
"The iPhone is the biggest driver right now, because the profitability is really high," said Frost & Sullivan analyst Ronald Gruia. "It's been an absolute success."
Yet there had been some concern about margin pressure heading into the results, given the product price cuts and the trend of higher component costs.
Although Mac units rose, revenue in the segment fell 8 percent from a year ago as average selling prices came down, a trend seen throughout the PC industry.
But Apple posted a gross margin of 36.3 percent, above the 34 percent some analysts predicted. That compared with 36.4 percent in the last quarter and 34.8 percent a year ago. The company saw margins at 34 percent in the September quarter.
Apple said component costs rose, but not as much as expected and it spent less than it planned in several areas.
"The overall takeaway is that Apple continues to execute in this tough environment," said Kaufman Bros analyst Shaw Wu.
"They do the hardware, software and service, and that really allows them to have a leg up against competitors."
Investors have pushed Apple's stock about 75 percent higher this year, well ahead of other big technology issues.
Apple issued a typically conservative outlook for the current quarter, forecasting earnings of $1.18 to $1.23 a share on revenue of $8.7 billion to $8.9 billion.
While that was below the average analyst estimate of $1.30 in earnings per share and $9.1 billion in revenue for the fiscal fourth quarter, it had little impact on investors.
Revenue rose 12 percent to $8.3 billion in the June quarter, versus analysts' average estimate of $8.2 billion.
Cash and marketable securities totaled more than $31 billion, one of the biggest cash hoards in all of technology.
The results demonstrated the consumer appeal of Apple's products despite a troubled economy that has dented sales at competitors selling less expensive products.
Apple reported relative strength in consumer demand, and weakness in education, one of its key markets.
But iPods were a chink in its armor. Apple shipped 10.2 million iPods in the quarter, down 7 percent on the year. As iPod sales slow down, analysts see alternative catalysts on the horizon, with the expected launch of an iPhone in China and a rumored tablet PC or Internet device in the works.
Cook said the company hoped to have an iPhone in China within a year.
Chief Executive Steve Jobs did not make an appearance on the company's conference call, despite rumors that he might. Jobs recently returned from a nearly six-month medical leave, where he underwent an a liver transplant.
Shares of Cupertino, California-based Apple closed at $151.51 on Nasdaq and rose to $158.34 in extended trading.
APPLE 3Q BEATS FORECASTS DESPITE RECESSION
Apple Inc. coasted past Wall Street's expectations for its fiscal third quarter on a wave of laptop and iPhone sales. It did it during a quarter in which total computer shipments fell worldwide during a global recession. And it did it without sacrificing profit.
Investors sent Cupertino, California-based Apple's stock up $6.82, or 4.5 percent, to $158.33 in after-hours trading Tuesday. Shares had dipped $1.40 to end regular trading at $151.51.
"Times are tough. Apple continues to post pretty strong numbers," said Shaw Wu, an analyst for Kaufman Bros. "It's pretty incredible. It truly is."
Apple, the closest thing the tech industry has to a luxury brand, said earnings for the three months that ended June 27 jumped 15 percent to $1.23 billion, or $1.35 per share. Apple's profit was $1.07 billion, or $1.19 per share, in the same period last year.
The company, which recently welcomed CEO and co-founder Steve Jobs back from medical leave, said sales increased 12 percent to $8.34 billion from $7.46 billion in the year-ago quarter.
Apple beat Wall Street's forecast on both measures. Analysts were expecting Apple to earn $1.17 per share — less than last year — on $8.20 billion in revenue, according to a Thomson Reuters survey.
"In a better economy I think we would have sold even more," Apple Chief Financial Officer Peter Oppenheimer said in an interview.
Apple said it sold more than 5.2 million iPhones in the quarter, more than seven times what it sold in the 2008 quarter, thanks in part to a newly released version of the device.
Apple also sold 4 percent more Mac computers than a year ago, with a 13 percent rise in laptop unit sales more than making up for a 10 percent drop in desktops. Meanwhile, researchers recently reported a 3 percent to 5 percent decline for the overall worldwide PC market in the same period.
Apple's decision to cut laptop prices during the quarter helped it buck the industry trend, even though the move dragged laptop revenue down 2 percent. Tim Cook, Apple's chief operating officer, said Mac sales picked up after the company announced the cuts, its first major price reductions in the recession.
Cook said Mac revenue was also hurt as businesses that typically buy more expensive models continued to put off technology spending. Other computer makers, such as Dell Inc., have also said customers are holding on to their existing machines for longer than normal.
Wu noted that lowering prices didn't eat into Apple's gross margin, which improved from a year ago and beat his expectations. Apple said component costs weren't as high as anticipated, and Wu said he thinks the Mac remained one of Apple's most profitable businesses.
The main weak spot was Apple's iPod line. Even though iPod Touch unit sales more than doubled, total iPod unit sales fell 7 percent, hurt by declines in what Apple considers its traditional MP3 players — iPod Classic, Nano and Shuffle. Oppenheimer told analysts on a conference call that such declines are to be expected as Apple "cannibalizes" iPod sales by offering similar features, plus access to thousands of third-party applications, in the $229-and-up iPod Touch and the iPhone — the cheapest of which is now $99, plus a monthly service contract.
Apple's revenue increased in every region, including the U.S. and Europe. Average revenue in each of Apple's retail stores was $5.9 million, lower than the $6.8 million Apple reported at the same time last year.
At the end of the quarter, Apple's cash hoard totaled $31.1 billion, up from $28.9 billion at the end of the previous quarter.
For the current fourth quarter, Apple said it expects to earn $1.18 to $1.23 per share on $8.7 billion to $8.9 billion in sales. Analysts are looking for a stronger performance — profit of $1.30 per share on revenue of $9.1 billion — but Apple's guidance is typically conservative.
PALM PRE RECONNECTS WITH ESTRANGED iTUNES
Palm's Pre smart phone just can't stay away from Apple's iTunes software.
Palm Inc. says the Pre can again connect to iTunes — only a week after Apple Inc. shut it out. A software update delivered automatically to the phones re-enables the transfer of music, photos and video from iTunes to Pres, according to a Palm blog post made late Thursday.
The question now is how long the function will remain before Apple stamps it out again.
The $200 Pre launched in early June as a competitor to Apple Inc.'s iPhone, and became the first non-Apple device that could connect directly to iTunes. Apple crippled that function with an iTunes update last week, saying Pres were "falsely pretending to be iPods."
Palm's latest workaround is similar to the original trick it performed. When a Pre is connected to a computer through a USB port, the device gives out a hardware vendor code that Apple has been assigned by an industry standards group, the USB Implementers Forum. ITunes then recognizes the Pre as an Apple device and allows users to transfer content to it.
Palm spokeswoman Lynn Fox said her company thinks Apple is improperly using its USB vendor code. She would not elaborate, but presumably Palm believes Apple should not be allowed to set iTunes to respond only to devices with Apple's USB codes.
The USB group's rules, however, appear to not be in Palm's favor. They state that a "vendor ID used by a product must match the (ID code) of the company producing the product." Fox said Palm has notified the group of its steps to make the Pre work with iTunes.
The USB Implementers Forum had no comment.
In any case, Apple does not appear likely to let the latest incursion stand.
"As we've said before, newer versions of Apple's iTunes software may no longer provide syncing functionality with unsupported digital media players," said spokesman Tom Neumayr.
The iTunes battle is part of a larger rivalry developing between Apple and Palm, whose chairman and CEO, Jon Rubinstein, once was an executive at Apple and oversaw the iPod. The Pre includes a "multi-touch" screen like Apple's iPhone, which lets users do things like pinch the display to zoom in and out.
Tim Bajarin, a technology analyst for Creative Strategies, is not surprised that Palm came up with a way to reconnect the Pre with iTunes. He expects the technology equivalent of a game of whack-a-mole to continue for a while, because he doesn't envision Apple giving in to Palm.
Kaufman Bros. analyst Shaw Wu doesn't think Palm's compatibility fix was the right way to go, saying that "hacking someone else's software, especially if you're a publicly traded company, doesn't seem that professional." He thinks Palm should come up with its own iTunes-like software instead.
"They can call it PalmTunes or something," he said.
Carl Zulauf, a Pre owner in Omaha, Nebraska, said the iTunes feature isn't that important, but he doesn't like Apple's attempt to disable it.
"It seems like Apple's gone out of their way to make their product as incompatible with competitors' as possible," he said.
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