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Hectic week for Microsoft

by Hugh Bicheno on 23 May 2008, 08:27

Tags: Microsoft (NASDAQ:MSFT)

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…and rest

ICT news over the past week has been dominated by news about Microsoft (MS), emphasizing how the giant company still controls the headlines more or less at will.

Search initiatives

MS announced yesterday that it will give rebates for items bought online via its Live Search service. “You can see why Microsoft would want to do this,” said the New York Times. “It has too much money and not enough customers, so why not pay people to use its services?”

“Nearly two-thirds of Internet users have decided that going to Google is the easiest way to find what they want online.” the article continued. “It is going to take more than some rebate checks to convince most people that they should change a behaviour that is fast, effective and satisfying.”

According to the latest comScore report, Google’s share of the search market grew again in April, from 59.8 percent in March to 61.6 (6.51 billion queries), while Yahoo’s share fell from 21.3 to 20.4 (21.6 billion), and MS from 9.4 to 9.1 (961 million). The market itself was static, with 10.58 billion queries in April compared to 10.77 billion in March.

Which suggests MS was lucky Yahoo did not go for its $33 per share offer. Reuters reported CEO Steve Ballmer flatly denying any remaining interest in a total acquisition of Yahoo at the launch of a new R&D centre in Herzliya, Israel, on Wednesday.

Reuters reported CEO Steve Ballmer flatly denying any remaining interest in a total acquisition of Yahoo

MS does want to combine Yahoo’s search operations with its own, leaving Yahoo to run its portal and display advertising operations. The partial divestment has the full support of Bill Miller, manager of Legg Mason Funds, which hold 5.45 percent of Yahoo stock.

Meanwhile oil billionaire T. Boone Pickens has bought 10 million Yahoo shares in support of his friend Carl Icahn’s slate in the battle with the Yahoo board for the company’s annual shareholders’ meeting scheduled for 3 July.

ODF vs. OOXML

MS announced yesterday that it will add Open Document Format (ODF) support to the Office 2007 suite, which uses MS’s version (OOXML) of Extensible Markup Language. The change will come with Office 2007 Service Pack 2 in the first half of 2009.

MS also said it would join the Organization for the Advancement of Structured Information Standards and the ODF working group of the International Organization for Standardization (IOS).

ODF was made an official global standard for interchangeable documents by the IOS in 2006. ODF is supported by IBM, Sun Microsystems, Oracle and Nokia, to name but a few.

The European Committee for Interoperable Systems (ECIS), a lobbying group for ODF standard supporters, was quick to suggest that MS’s belated acceptance of ODF was directly related to IOS approval of OOXML as another official global standard last month.

There is no reason to doubt it. MS’s fanatical resistance to any move that threatens its market dominance was well illustrated in its long legal struggle with the European Commission (EC) over the bundling of Windows Media Player in Windows OS.

The legal battle has now gone on for four years and has resulted in an escalator of fines and costs awarded against MS, climaxing last February with an additional fine of €899 million, the largest penalty the EU has ever imposed on a single company.

“The Commission will investigate whether the announced support of ODF in Office leads to better interoperability,” said the EC response to the MS announcement, “and allows consumers to process and exchange their documents with the software product of their choice.”

The deal with the UK government

MS’s belated embrace of ODF may also salvage the sweetheart deal it has had with the British government since 2002, which has generated about £100 million a year in license fees. In return for shutting out Linux, the British were granted an as yet unquantified discount.

In return for shutting out Linux, the British were granted an as yet unquantified discount.

The deal ran out in January, but was extended for six months because negotiations had “over-run.” Timid voices have been raised about interoperability, but our stalwart officials have now granted a second six month extension, presumably long enough to establish OOXML as the new standard.

Proactive virus protection patent

MS has been granted a US patent for handling malware not already listed on antivirus definition files. Patent No. 7376970, “System and method for proactive computer virus protection,” describes a virus scanner that loads a questionable executable programme into a virtual operating environment (to insulate the host OS) before beginning its analysis.

Several other companies had proactive scanning capability built into their products before MS even filed for the patent, and it remains to be seen if their virus scanners function in the same way. One that does is BitDefender’s, which raises the question of prior art. Patent lawyers are ecstatic.

Office Live Small Business promotion

On Wednesday MS (UK) called on partners to sign up and join the Office Live Small Business base, launched last February. Office Live is aimed at SMBs, giving them a free domain name, hosted website and email accounts. The promotion includes a free email marketing beta.

“There are already nearly 1 million businesses using Office Live worldwide,” said the press release, “which presents a significant market opportunity for partners.”

News flash

Late Thursday night (UK time), Yahoo announced that the shareholders’ meeting would be postponed until the end of July. It also announced the resignation of a director, apparently for genuinely personal reasons unconnected with the Microhoo circus.



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