The Seattle-Search.com Blog

Microsoft decided to muck its high stakes poker hand and the wager that it could induce Yahoo’s board to accept a $33 a share takeover offer and abruptly “left the table” last Saturday.

Apparently spooked by the prospect of a widening ad share arrangement between Yahoo and Google, and the unfavorable possibility of other defensive maneuvers that would further diminish Yahoo’s  value, Microsoft CEO Steve Ballmer turned on his heels.  Only afterwords, did Yahoo CEO Jerry Yang, tail between his legs, try to explain he was open to the deal all along. Yeah, Right!

Defending his company against allegations that they didn’t try hard enough to deal with Yahoo, Bill Gates spoke out in Tokyo yesterday, “A lot of effort” was put into trying to work out a deal and that the pair should pursue “independent paths”.  Gates continued, “Now at this point Microsoft is focused on its independent strategy.”

To this observer, Microsoft made the right move. Not to devalue what Yahoo could have meant to a Microhoo alliance, but the prospect that 1+1 would equal something other than 1 in this equation was speculative at best.

Ironically, many in the Search advertising world credit Microsoft with the more sophisticated technology when comparing the sharply innovative adCenter system with the often klugey Yahoo upgrade of a year ago, code named Panama. Microsoft’s keyword research tools, demographic targeting options, and the potential of visual search with Photosynth are, for starters, all more impressive than Yahoo’s technology. What Microsoft was seeking with Yahoo was simply popularity: the brand recognition (something it would ironically replace), and Web traffic,which can be fleeting. The joke on the street was that, for the asking price, Microsoft could buy the allegiance of Yahoo’s installed base by paying each user a handsome bounty.

What would a combined Microsoft-Yahoo alliance do for Microsoft that Microsoft could not do for itself? That question was far from easy to answer. Only now it will be up to Microsoft to find the path on its own. The results could come as quite a surprise for the stakeholders. Stay tuned!

Microsoft is preparing to take its most ambitious step yet in transforming its personal computer business into one tied more closely to software running in remote data centers.

The software giant announced on Tuesday a data storage and Web software system, called Live Mesh, that is intended to blur the distinction between software running on the Windows operating system and an elaborate array of services that will be delivered to a growing collection of electronic gadgets.

Live Mesh is Microsoft’s late entry into the rapidly growing market known as Cloud Computing. The term refers to the movement of software applications and services from PCs to centralized data centers, where they are made available via the Internet.

Companies like Amazon.com, Google, Salesforce and dozens of others are building computing centers that will effectively outsource data processing and make it a commodity that companies purchase as they would electricity.

The introduction of Live Mesh is a significant strategic shift for Microsoft, whose operating system helped popularize personal computers.

Ray Ozzie, one of the Microsoft’s two chief technology officers, set the stage:  “The Web is the hub of our social mesh and our device mesh,” he wrote. That statement is the first of a set of three “guiding principles” that Mr. Ozzie outlined.

15 components of the new Live Mesh service have been debuted, including a notification feature, a news feature and an information window displayed by the service, but only two are user-oriented applications. One synchronizes files on multiple computers. The other, Live Mesh Remote Desktop, is a free software service that will permit users to control computers and other devices over the Internet.

A private beta preview and waiting list line is forming here: <https://www.mesh.com/Welcome/Welcome.aspx>

Travel search site Farecast was rumored to be a takeover target recently and  CEO Hugh Crean has confirmed that the site has indeed been acquired by Microsoft. TechCrunch, citing John Cook at the Seattle PI, says the deal was worth something in the $100-$115 million range.Microsoft has a long history in travel, having started Expedia in the mid-1990s (it was sold to IAC’s predecessor USANetworks in 1999). Farecast’s claim to differentiation was that it could predict whether air fares or hotel prices were going up or down to help travelers know when to buy. The site has been around for about two years.

The capabilities are already present on MSN travel and we’ll likely see it affect travel-related search results on Live Search.

Amazon has two Q&A services in quiet development. Nownow and Askville each attempt to answer people’s questions in their own way.

Askville is a web based service that allows users to ask and answer each other questions. Users can earn points within the system for asking questions as well as answering them. Best answers are chosen by the group of question asker and answerers, where the asker gets one more vote than the answerers This service is very similar to Naver’s Knowledge Search, Wondir, Yahoo! Answers and Live QnA. Askville rewards users with “coins,” a virtual currency that will be redeemable in another community named Questville slated for release in early 2007.

NowNow is a mobile question-answer service that has a new twist on it. It is going to use Amazon’s own Mechnical Turk to handle the answers. It is free during the testing phase. The service is currently in closed Beta. Check the NowNow FAQ for more info.

Thanks to O’Reilly’s Brady Forrest (who will be sponsoring an Ignite Seattle non-conference tech-gathering event Dec. 7th) for this scoop!

A recent column in VentureBeat by Baris Karadogan, a partner at ComVentures, discusses Amazon.com’s latest initiative to provide early stage businesses with storage and other tech and logistical services.

The article reveals that Amazon wants to offer start-ups and other technology-based companies a smorgasboard of bandwidth, storage, server software and even fulfillment of physical goods — all services which Amazon.com has mastered — and all offered at a very competitive price.

Start-up companies don’t typically state in their business plans that “we are thinking of raising $500K to launch our web site and about $700M to build a global data center.” This is the need which Amazon wants to serve.

GridNetworks, a two-year-old Seattle startup led by Internet veterans Jeff Payne and Bo Wandell, today plans to unveil a new content delivery service that streams full-screen “DVD-quality” video on behalf of entertainment companies.

Inspired by another Seattle network delivery service — namely BitTorrent — GridNetworks taps the power of individual computer users who download the company’s software to share portions of movies over the network. As reported in the P-I, a movie viewer in Kansas who downloaded the software and watched “Goodfellas” would have six-second segments of the movie stored on his or her computer.

Those segments can be reassembled with others in the network to provide the entire film to a person in Chicago who requests “Goodfellas.”

The company competes against established content delivery companies such as Akamai Technologies and Limelight Networks.
GridNetworks’ board of advisers includes former Expedia and AtomFilms executive Matt Hulett, Isilon Systems co-founder Sujal Patel and others. It has raised about $500,000 to date.

The company believes it can cut the delivery cost of a full-length feature film in half, slicing the delivery cost for a 1.2-gigabyte film at about 25 cents to 50 cents — a price point that could change the rules of online video.

As first reported in BetaNews, Amazon will not hand over information on how it searches and indexes the text of books, filing an objection in U.S. District Court in Seattle. Google had subpoenaed the online retailer in its fight against the Authors Guild, which sued the search engine in September of last year.

The information that Google requested was “highly confidential,” Amazon said, and would require the divulging of trade secrets. Instead, the company directed Google to publicly available information on the Web about its book search methods.

Still outstanding are two subpoenas, one to Microsoft and the other directed at Yahoo. Neither company has responded to the requests as of Wednesday.

The rejection by Amazon is a blow to Google’s case, as its data could have proven valuable in defending its book controversial search project. Google has struck out on its own, following an “opt-out” system where it is the responsibility of publishers to ask the Mountain View, Calif. company to not index their books. Contrast this with Amazon and Microsoft, whose offerings have an “opt-in” system.

Taking actor-assisted (or is it babe-assisted?) search to a whole new level, a skunk works Windows Live Technology team has debuted MsDewey.com, a search engine interface that makes up in sex appeal and sassiness what it lacks in search speed or relevancy.

Ms. Dewey gives new meaning to the phrase “search engine performance” while opening up fresh opportunities for humor and entertainment in response to various search terms. Query Canon Digital Camera and Ms. Dewey inquires just what kind of pictures you had in mind?