New Google/Microsoft warfront: billboards!
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Nikon camera’s its own projector.
Should Microsoft snap up Palm?
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Rumor has it that Microsoft CEO Steve Ballmer, flummoxed over press leaks, decreed that password protection be added to Office 2003. Ironically, Ballmer inadvertently detailed the transition costs of the company’s ten year search deal with Yahoo during his presentation at the Microsoft’s Financial Analyst Meeting (FAM) yesterday.
A slide marked “not for disclosure” found its way into the CEO’s PowerPoint deck. The slide itemized $675 million in transition costs, and revealed that Microsoft expects to absorb a $300 million loss during the first two years of the deal. Over time, the company expects to begin earning a “decent return” of “$400 million steady-state.”
The cost breakdown is: $90 million in retention costs, $170 million in R&D costs for paid search, $145 million for Cost of Goods Sold (hosting costs), $150 million in sign-on costs, $70 million for search algorithm R&D, and $50 million for advertiser migration.
The costs could conceivably have been disclosed in annual reports as a footnote or rolled up into other costs, but under SEC rules, Microsoft is allowed to be vague in its forecasts. I also don’t see why revenue would have to be reported separately for the partnership. Ballmer might be big on passwords, but there is no accounting for human error.
Microsoft has finished up announcing pricing details for Windows 7 by disclosing the cost for the three-user Windows 7 Home Premium Family Pack and for Windows Anytime Upgrades. (The latter option lets you the unlock features from higher-end versions of Windows.)
The Family Pack will go for $149.99, or $50 per user– $10 more per user than Apple’s five-user Leopard Family Pack, but an attractive deal considering that three stand-alone copies of 7 Home Premium list for $359.97. But the odd thing is, the Family Pack isn’t so much a new version of Windows as a limited-time sale. The Microsoft blog post says it’s be available “until supplies last.” (I think they mean “while supplies last” or (“until supplies run out,”) but you get the idea.)
Microsoft’s entitled to charge whatever it wants for Windows, but it’s a shame that it’s not making the extremely appealing idea of buying Windows in bulk at a discount into a permanent option for its customers. If Apple is able to do it, why not Microsoft? And the notion of doing it with no well-defined deadline smacks of infomercial hype. (If supplies run out, I suspect Microsoft could crank out some more copies if it chose.) We don’t know whether supplies will run out halfway through October 22nd, Windows 7’s launch date, or whether copies will still be plentiful on October 22nd, 2010.
Meanwhile, pricing for Windows 7 Anytime Upgrades involves a complicated matrix of original Windows 7 versions and upgrade versions. It makes my head hurt just to think about it, but ZDNet’s Ed Bott has done the math and says that Microsoft will gouge people who move from Windows 7 Professional to Windows 7 Ultimate Edition. Ultimate has very few features that aren’t in Professional, and Microsoft has said that only a “small set” of customers will want it. So maybe it’s just discouraging people from performing an unnecessary upgrade by making the pricing unattractive…
Microsoft’s Alex Kochis has blogged about this week’s compromising of a Lenovo key for Windows 7 activation, which allowed hackers to activate unauthorized copies of Windows 7. He says that Lenovo’s customers won’t be affected when they buy Windows 7 PCs, but that Microsoft will “seek to alert” people running copies of Windows 7 that have been hacked with the leaked key.
Kochis also says this:
Our primary goal is to protect users from becoming unknowing victims, because customers who use pirated software are at greater risk of being exposed to malware as well as identity theft. Someone asked me recently – and I think it’s worth noting here — whether we treat all exploits equally in responding to new ones we see. Our objective isn’t to stop every “mad scientist” that’s out there from dabbling; our aim is to protect our customers from commercialized counterfeit software that impacts our customers’ confidence in knowing they got what they paid for. That will continue to be our focus as we continue to evolve our anti-piracy platforms, and respond to new threats that we see emerge in the future.
Really? The primary goal of Microsoft’s copy-protection technologies is to prevent people from unwittingly buying pirated copies of Windows? The impact that piracy has on Microsoft’s wallet is apparently a secondary issue–one that’s not even worth mentioning in this post or on this page about the “Windows Genuine Advantage” program.
As I’ve often said, Microsoft is entitled to protect its intellectual property, and nobody is entitled to get Windows without paying for it. I buy the idea that one reason to avoid using pirated copies of Windows–either knowingly or unknowingly–is because it can be dangerous. And I acknowledge the fact that Microsoft has done a good job of fixing earlier aspects of activation that caused hassles for paying customers.
But I still don’t understand why all discussion of Windows Activation and other Microsoft anti-piracy technologies can’t begin with the honest disclosure of one simple fact: They exist to prevent people from stealing Microsoft software. If Microsoft took that approach rather than devoting 98% of its communications about copy protection to insisting that they exist mostly to help Microsoft customers, it would make me take its efforts more seriously, not less so.
With Windows 7, Microsoft is planning to rename the patronizing “Windows Genuine Advantage” program to the much more straightforward Windows Anti-Piracy Technology. Wouldn’t that provide a good opportunity to usher in a new era of grownup-to-grownup communications about its copy protection efforts?
Daring Fireball’s John Gruber has posted a piece titled “Microsoft’s Long, Slow Decline.” As with most of what he writes, it’s both provocative and thought-provoking, whether you agree with all of it, some of it, or none at all.
Gruber writes about such matters as Microsoft’s recent lackluster financial results, the recent news of Apple’s utter domination of the high-end retail PC market, and the cartwheels Microsoft COO Kevin Turner supposedly turned in the hallways over Apple’s response to Microsoft’s “Laptop Hunters” commercials. He mentions Windows 7 and says:
But no one seems to be arguing that Windows 7 is something that will tempt Mac users to switch, or to tempt even recent Mac converts to switch back. It doesn’t even seem to be in the realm of debate. But if Windows 7 is actually any good, why wouldn’t it tempt at least some segment of Mac users to switch? Windows 95, 98, and XP did.
I haven’t heard anyone contend that Windows 7 will convince Mac switchers to come back, either. Then again, I haven’t heard anyone say it’s not good enough to change the game. But it’s an interesting question.
It’s also one that’s hard to answer just yet. For one thing, while Windows 7 looks quite promising, we don’t yet know what PC manufacturers are going to do with it, and there’s a real chance that at least some of them will muck up a respectable OS with demoware, adware, and various other forms of unwantedware. For another, Windows 7 will compete against Apple’s Snow Leopard, an OS which doesn’t go on sale until September and which–unlike Windows 7–has had no period of public preview.
Based on the months I’ve spent running pre-release versions of Windows 7, I think there’s a good chance it’ll have a meaningful impact on the whole “PC or Mac?” question. It significantly narrows the gap between OS X and Windows for usability and overall polish, and while it doesn’t eradicate OS X’s lead, it should leave Windows users at least somewhat less likely to abandon ship.
But Gruber wasn’t talking about whether Windows 7 will stop more people from leaving Windows; he was talking about whether it’ll convince Mac users to switch from Macs, and saying that if Windows 7 is really good, it will.
I’m not so sure. History suggests that people don’t like to switch operating systems and the most striking significant shifts in operating-system market share have happened when one OS has been on alarmingly shaky ground. Back when the exodus from Macs to Windows 95 and Windows 98 that Gruber refers to happened, Apple’s OS was floundering and it wasn’t clear that the company was going to survive. And Apple has made major inroads over the past couple of years in part because Windows Vista was such a mediocrity.
Apple is positioning Snow Leopard as an OS that’s very much like Leopard, except faster, sleeker, and more reliable. Unless it somehow turns out to be a less appealing Leopard, it’s going to be really pleasing. People tend not to dump pleasing OSes, even if there are also other pleasing OSes. S0 I’m not going to judge Windows 7 based on there whether are meaningful quantities of Mac users who are drawn to it…
MarketWatch published a story today that could light a fire under Microsoft’s shareholders: it all but wrote an obituary for the company’s Zune portable media player. However, I do not think that the Zune is on the chopping block–yet.
Sales for the Zune dropped 42% over the last quarter to $211 million, according to Microsoft’s Q4 financial reports. In comparison, Apple iPod sales declined just 11%, for total sales of $1.5 billion, MarketWatch reports.
In terms of market share, the best-case scenario cited in the report was an IDC survey from last fall that found that the Zune holds 4.8% of the market. Recent numbers for the NPD group lower that estimate to a dismal 2%, compared to 70% for the iPod.
Microsoft is expected to ship the Zune HD, a touch screen interface device that offers high-def video output and radio, in the fall. Sales will likely continue to falter until then.
Google: Microsoft/Yahoo partnership bad.
3Jam launches Google Voice competition.
AT&T shirks Google Voice blame.
The Inquirer is reporting (in its usually snarky manner*) that the operating system currently known as Windows Mobile will be redubbed Windows Phone, apparently when version 6.5 comes out. Could be, although it seems kind of limiting, and I wonder if it’s a garbled misunderstanding of news that Microsoft announced back at Mobile World Congress in February–that Windows Mobile based phones would be known as Windows Phones, but that the OS would still be called Windows Mobile. (When Steve Ballmer announced this bifurcation, he looked a bit guilty, as if he knew it was lame even as he was explaining it.)
Whether the name change is happening or not, it does bring up an interesting question: Are we going to call these things phones forever? More and more, making voice calls is but one feature of devices that do a ton of stuff, and not necessarily the most important one. I’m prepared to believe that we’ll still refer to the descendants of today’s smartphones as phones decades from now. And as a traditionalist, I’d be okay with that–if Alexander Graham Bell is up there watching all this, he’d be pleased.
But I could also see that name going away in favor of something that more accurately describes all that these gadgets can do. How about PC? Maybe we can claim it stands for Personal Communicator…
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*I’m not sure if the whole “vole” thing was ever funny, but wouldn’t it be cool if the Inquirer quietly retired it?
It won’t be a truly done deal until it gets regulatory approval, but Microsoft and Yahoo have finally agreed to a partnership which, among other things, will make Bing the search engine on Yahoo and have Yahoo selling ads on Bing. The two companies’ explanation of why this is a good idea is summed up in the name of the microsite about the deal which they’ve launched: ChoiceValueInnovation.com.
Thing 1:
In Microsoft’s press release, CEO Steve Ballmer explains why this is a good idea for everyone concerned:
Through this agreement with Yahoo!, we will create more innovation in search, better value for advertisers and real consumer choice in a market currently dominated by a single company.
Setting aside the question of whether this’ll turn out to be good for consumers–it might–isn’t it bizarre to see the CEO of Microsoft arguing that a market being dominated by one company is bad for consumers?
Thing 2:
Back in 2004, Yahoo dumped Google as its search engine in favor of its own homegrown engine–the one it now plans to ditch for Bing. Back then, its press release explained the benefits thusly:
The combination of a world-class engineering team and proprietary search technologies, together with Yahoo!’s global reach, breadth and depth of content and leading network assets, uniquely positions Yahoo! to change the game in search.
That was Yahoo Senior VP Jeff Weiner. Here’s current Yahoo CEO Carol Bartz on the Microsoft deal:
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. Users will continue to experience search as a vital part of their Yahoo! experiences and will enjoy increased innovation thanks to the scale and resources this deal provides.
In 2004, being proprietary was supposed to provide the scale and resources that would change search for the better; now it’s outsourcing search to Microsoft that’s supposed to accomplish the same results. Oddly enough, nobody ever issues a press release about a deal quoting an executive explaining why it’s a bad idea…even though many deals turn out to be disappointing. (McCracken’s third law of tech-company press releases: Any news described in any press release will always lead to increased innovation…)
Yahoo/Microsoft: finally, finally, finally.
Windows 7 Ultimate activation cracked.
Apple: Jailbreaking iPhones is daaaaaangerous.
Logitech introduces seven new Webcams.
New Eye-Fi card automatically geotags.
Barnes and Noble’s Free Wi-Fi.
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