It looks like Google's gambit to play the antitrust card against Microsoft last month paid off in spades. Google had complained to antitrust officials that Microsoft's Vista operating system crippled its own desktop search product. Microsoft is now backing down and changing Vista so that consumers can choose whichever default desktop search software they prefer.
Damn those Monopoly rules!
As Google works towards adding a Webtop version of Powerpoint to its Google Docs and Spreadsheets, it just bought a startup called Zenter to add to that effort. Zenter is an early-stage startup funded by Y Combinator. It should help to complete Google Office (my term, not theirs), which is aimed straight at Microsoft's bread-and-butter productivity suite.
Cool new feature on Google Maps—now you can write your own reviews for any restaurant, store or business. Local merchants will now have their reputations on the line anytime somebody is simply trying to look them up on Google Maps.
Not that the concept of marrying maps and consumer reviews is anything new. Google is playing catchup here with Yahoo Maps, which introduced the same feature two years ago. Google, what took you so long?
Microsoft's latest attempt to take over the living room is coming in the form of its Internet Protocol Television (IPTV) software that it is trying to sell to phone companies who want to compete with cable and satellite TV services. IPTV has been slow to take off, especially in this country where Microsoft software snafus were previously blamed for the tepid launch of AT&T's IPTV service (called U-verse) in a dozen cities across the U.S. Now that those issues have supposedly been resolved, Microsoft (MSFT) is making a new push to turn its IPTV software into the standard for this budding form of television.
Today, Microsoft announced that it is rebranding its IPTV efforts as Microsoft Mediaroom, upgrading the software to include access to the photos and music on your PC, and opening it up as a development platform for companies that want to create interactive TV apps within the walled garden of a telco's IPTV service. As I've previously noted, it will also work with your Xbox (which could give people an added incentive to sign up for IPTV service if that becomes a set-top box option).
Christine Heckart, general manager of marketing for Microsoft TV, tells me:
The Mediaroom is an early, first step towards bringing together the PC and TV environments. Anything you can do on the Web, you can now make accessible on the television.
Heckart says Microsoft has learned from its past TV failures (remember Web TV?), and its goal is first and foremost to create a killer TV experience. Microsoft is taking an "Intel Inside" approach, encouraging its 18 telco customers around the world—like AT&T, Deutsche Telekom, Swisscom, TOL France, and Portugal Telecom (which it just announced today)—to add Microsoft Mediaroom as a sub-brand to their IPTV services. Microsoft Mediaroom is certainly a better name than Microsoft TV IPTV Edition (it's former ungainly moniker). But why not simply use the more direct and informative Microsoft TV?
In its never-ending zeal to combat Microsoft (MSFT), it came out this weekend that Google (GOOG) is raising antitrust concerns with the government concerning the Windows Vista operating system. Vista comes with a desktop search feature that competes with Google's own (freely downloadable) desktop search software. The desktop search in Vista cannot be turned off, and this apparently slows down PCs when Google's desktop search is simultaneously running. Google has argued to officials in the Justice Department and states' attorneys that this crippling of its software harms consumer choice.
Google CEO Eric Schmidt learned how to battle Microsoft on antitrust grounds during his days at Sun. But this time around, Microsoft has more friends in Washington. Reports the NYT:
The top antitrust official at the Justice Department last month urged state prosecutors to reject a confidential antitrust complaint filed by Google that is tied to a consent decree that monitors Microsoft’s behavior. Google has accused Microsoft of designing its latest operating system, Vista, to discourage the use of Google’s desktop search program, lawyers involved in the case said.
The official, Thomas O. Barnett, an assistant attorney general, had until 2004 . . . been vice chairman of the antitrust department at Covington & Burling. It represented Microsoft in the antitrust case and continues to represent the company.
It guess it really does pay to get a good lawyer. Will Google fare as well from the Bush Administration as it faces its own antitrust scrutiny (at the urging of Microsoft) over its proposed deal to acquire DoubelClick?
Tomorrow, Salesforce.com (CRM) and Google (GOOG) are expected to announce a strengthening of their ties in the area of enterprise applications. (Perhaps Salesforce customers will get a special deal when buying Google's AdWords, or perhaps Gmail, Google Maps, and other Google Apps will be more tightly integrated into Salesforce.com. Update: It turns out the two companies are announcing a"global strategic alliance" making it easier for companies to buy and manage their AdWords campaigns from inside Salesforce.com. Last year, Salesforce bought a startup called Kieden that does the same thing, so this is likely a formal extension of that).
Partly because of that alliance, Salesforce's stock has been on a tear this past month. There's even been talk of an outright acquisition by Google. Salesforce's $5.4 billion market cap would make it Google's biggest deal yet.
Although it's unlikely, Michael Arrington of TechCrunch makes a persuasive case for such a deal. Excerpt:
The future of software delivery is the browser. Google’s betting on it. Salesforce has already made a business at it.
Google wants Salesforce. Google Office fits perfectly with Salesforce CRM and App Exchange. Google can take all of it offline with Gears. And Salesforce can sell it with their existing sales team. And the timing is right - Benniof is signalling that he is ready to retire.
But Microsoft can’t let that deal happen, and is very likely to enter a bidding war to try to keep Google and Salesforce apart.
While Google could use a sales team that targets enterprise software customers, don't underestimate the value to Google of Salesforce.com's considerable Web-based software talents. In particular, it's Apex development platform solves some thorny issues with Web-based software. Combine that with Google Gears, which turns Web apps into offline desktop apps, and you can see how such a deal might worry Microsoft.
Of course, this is all just idle (but fun) speculation.
Google (GOOG) is taking another jab at Microsoft (MSFT) by further blurring the line between Web-based and desktop apps. Yesterday, it announced Google Gears, an open-source project for software developers that lets them convert their Web-based applications to desktop applications that can operate on their own without a connection to the Internet. Google will enable such offline use for its own Google Reader so that people can read blog and news feeds on a plane or at the beach just like they now can download their e-mails with Outlook.
Google Gears represents the latest step in what I call the whole Webtop movement, and is similar to what Adobe is trying to do with its Apollo project. The basic idea here is that if you can get Web software developers to easily create desktop apps, then the current distinction between the two disappears. And so does Microsoft's hold on the desktop.
Update: Real Networks is joining this Webtop trend by making all video streams downloadable in their new RealPlayer.
Microsoft claims that open-source software like Linux infringes on 235 of its patents (which ones, it won't say).
The intricacies of open-source software's general public license (GPL) make it difficult for Microsoft to sign cross-licensing deals with open-source software distributors, even though it tried to get around those strictures in a deal last fall with Novell.
That means Microsoft's only legal option is to go after its customers. As Fortune reports, it's already had some of those discussions and may do so again:
Since the GPL covered only distributors of Linux, nothing stopped Smith from seeking royalties directly from end users - many of which are Fortune 500 companies. He would have to proceed carefully, however, because most of those users were also major Microsoft customers.
. . . In the meantime, with Microsoft seemingly barred from striking pacts with distributors, only one avenue appears open to it: paying more friendly visits to its Fortune 500 customers, seeking direct licenses.
If push comes to shove, would Microsoft sue its customers for royalties, the way the record industry has?
"That's not a bridge we've crossed," says CEO Ballmer, "and not a bridge I want to cross today on the phone with you."
It's a sign of the times that patent wars are coming to an area that was designed to be unpatentable.
The line between the virtual and the real economy just got blurrier. Swedish-based MindArk, maker of the online virtual world Entropia Universe, announced today that it sold five banking licenses for a total of $400,000. The winning bidders included Anshe Chung, perhaps the biggest virtual real-estate tycoon in Second Life, and Jon "Neverdie" Jacobs, the Entropia entrepreneur who previously paid $100,000 for a virtual space station. (He paid $90,000 for his banking license this time). Other bidders included a Russian Web payment company called Moneta.ru and an undisclosed real-world bank.
So why would anyone pay a dime to set up a bank in an online world and what exactly can a virtual bank do? Entropia dollars can be exchanged for real dollars at a fixed exchange rate of ten to one, which is guaranteed by MindArk. The way you progress through Entropia is you gain skills by hunting, gathering, or selling virtual goods. The roughly 600,000 registered users of Entropia collect a lot of virtual goods, and now these banks will be able to hold those virtual goods as collateral and lend players virtual money (which can be exchanged for real money). Already without the banks, last year $350 million changed hands inside the virtual universe, up from $165 million in 2005.
David Simmonds, MindArk's VP of business development, contrasts the Entropia economy to the Second Life economy (where Linden Dollars are the currency, and $1.5 million is traded daily):
You buy your Linden Dollars from Linden Labs, but when you want real dollars you have to sell them to another player. If there is no interest, you will have trouble selling them. We have a real cash economy inside the universe. They can take their Visa card and put it into the universe. Once they are finished they can take it out by different means. It's like when you go to Europe. When you get Euroes, you need the confidence that you can convert it back.
On average, Simmonds says, players put in $20 to $50 a month to buy virtual goods (weapons, clothes, real estate). And when they decide to leave Entropia, they can sell those goods back. Each item depreciates in value over time. That's how MindArk makes money, from the difference between the original value and the depreciated value. The longer a player stays engaged, the more money Entropia makes. (Set aside the fact that depreciation in accounting terms usually applies to physical goods that actually deteriorate over time, whereas a virtual object never wears or tears).
You've got to wonder what banking regulators will make of all of this, and whether these virtual economies will attract criminals or terrorists looking for new ways to launder money. But Simmonds has no doubt that those issues are manageable and that down the line more real-world banks will want in on the Entropia action.