Watching like hawks

CRN has an amusing story on one of the most comprehensive and useful Microsoft news sites out there: Watching Microsoft Like a Hawk. One sign of the site's emergence as a Microsoft authority: Every day around 3 p.m. Eastern time, according to the story, there's a noticeable surge in traffic on the site from the wagged.com domain, indicating page views by employees at Waggener Edstrom, Microsoft's primary PR agency.

Israel going open source

From the Associated Press out of Jerusalem today: "In an apparent showdown over price, Israel's government has suspended purchases of Microsoft productivity software and is encouraging the development of an open source alternative." See the full story here.

Update 3:20 p.m.: Microsoft's statement on the AP story: "We can not comment on the future plans of the Israeli Government. Microsoft is always willing to discuss how we can help bring the value of Microsoft products and services to the benefit of consumers and businesses alike. We will continue to work closely with the government to explore how we can best meet their business needs."

This just in ...

BREAKING NEWS from the MSN division: The butterfly will speak.

On tap in 2004

In today's P-I we ran our first Microsoft Notebook, a weekly news column that will run Mondays starting next week. The column today looked ahead to what the company will face in 2004, including a list (toward the bottom of the story) of issues and trends to watch in the coming year, in addition to the biggies mentioned in the rest of the story, like open-source and security.

With more room, I would have added a few more items to the list, including offshoring, Tablet PC sales, and the company's plans for a second campus in Issaquah. What would you have added? Feel free to drop me an e-mail or post a comment below.

In the meantime, here's a collection of year-end stories from other publications and Web sites looking ahead to the next year for Microsoft and the technology world:

• Analyst Views: Hot Topics -- 2004 Predictions
  
• BusinessWeek: Tech's Top Trends for 2004
  
• Washington Times: Expect low-cost advances in 2004
  
• InternetWeek: IT Security: Bad in 2003, Possibly Worse in 2004
  
• LinuxWorld: Unlikeliest Linux Development of 2004: 'Windows on Linux'
  
• Directions on Microsoft: Microsoft's Top 10 Challenges for 2004
  
• NY Times: 2 INDUSTRIES CONVERGE: Media and Technology in 2004
  
• Search 400.com: 2004 outlook: VoIP to rise, Sun to set
  
• CNN/Money TechBiz: Predictions for 2004
  
• Computerworld: Forecast 2004 Roundup
  
• Search CRM.com: Surprise mergers in store for '04
  
• Applelust.com: Prognostications 2004
  

'Wired' tells Microsoft to take blame for flaws

In its current issue, not yet available online, Wired magazine adds its voice to those calling for Microsoft to be held liable for flaws in its software. In a list of "101 Ways to Save the Internet," the magazine lists this as No. 58, part of a collection of items in the list addressed specifically to Microsoft:

Take the blame
Software license agreements that absolve you of, oh, deleting three years' worth of email are irresponsible. Bugs are negligence, and negligence should cost you, not us.

Opt-in vs. opt-out

The Denver Rocky Mountain News published a Q&A last week with Scott Richter, the Colorado man whose company, OptInRealBig.com, was recently sued by Microsoft and the New York Attorney General for allegedly sending deceptive spam e-mail. Among other things, Richter provides a glimpse into his mindset by offering a definition of "opt-in" that, shall we say, differs from the way other people define that term.

News: How do you differ from a spammer?

Richter: Our customers have signed up at Web sites. We believe we have a relationship with the user. A spammer usually harvests their names off of news boards and Web sites or chat rooms. All of our users have opted in at one of our Web sites or one of our partners' Web sites.

News: What's an example of what a customer who signs up would do?

Richter: Usually you see something like, "Enter a contest." And then you see 50 checkboxes underneath that are all pre-checked. If you don't uncheck those boxes, then you're more likely signing up for one of our lists or somebody else's lists.

Under a more traditional definition, opt-in means that the check-boxes are unchecked to begin with, allowing you to "opt-in" by checking them, and avoiding the chance that you'll unknowingly sign up by overlooking them. Read the full interview here.

A Windows 98 eulogy

Birmingham (U.K.) Post columnist Chris Tomlinson, reacting to the news that Microsoft would be discontinuing support for Windows 98, decided a proper eulogy was in order:

Well old friend, we had some fun along the way. Some laughs, and some tears. I’ll never forget the many happy hours we spent plugging and playing together along with that time you deleted my presentation, ten minutes before the big sales pitch. But it’s good that I can laugh about it now.

See a version of the full column on his company's Web site.

Tracking e-mail threads

Here's a recent Microsoft article about a company researcher, Gina Venolia, who's looking into ways of organizing an e-mail in-box by conversation, rather than the traditional way of just piling messages upon one another. (Link via Scott Hanselman.)

The result, as the story explains, is an in-box structured more like a series of online chats. The story includes an illustration of what this might look like, using a fictional series of e-mails between a newspaper editor and reporter. (The exchange is eerily true to life.) The theory is that this will make it easier to track the threads and outcomes of specific conversations. Some outsiders speculate that this type of thing could be integrated into future versions of Microsoft Outlook.

Under Microsoft's tree

With the holidays here, I was curious what Microsoft employees might be buying as gifts, so I checked out the Amazon.com "purchase circle" list of top 10 books purchased by Microsoft employees through the Amazon site. Coming in at No. 1., just what you always wanted under the tree: "Compiling for the .NET Common Language Runtime."

Don't worry, that's not what Microsoft employees are buying for their kids. That book is actually atop the list of titles "uniquely popular" at Microsoft, "as compared with the rest of the country," as Amazon describes it. Leading an alternate list, based purely on sales to Microsoft employees, is "Harry Potter and the Order of the Phoenix."

The bestselling "Harry Potter" is also atop the comparable lists of Sun Microsystems and Apple Computer. But as with the .NET title at Microsoft, the "uniquely popular" lists of those companies provide some insights into the employee mindset. No. 1 on the list for Apple is "Mac OS X in a Nutshell," as you might expect. Sun's preference, meanwhile, suggests Scott McNealy might want to keep a closer eye on some of his employees. No. 1 there is "Dillon’s Dilemma." As the publisher describes it, the book is "a high-tech story of hackers, international corporate espionage and artificial intelligence."

Salon on Microsoft blogs

Scott Rosenberg in Salon.com on the proliferation of Microsoft bloggers:

It has succeeded, in a way that no millions spent on Waggener-Edstrom P.R. and trade-press shmooze-fests could, in transcending the Evil Empire stereotypes that inevitably cling to Microsoft -- and highlighting the human faces behind the intimidatingly omnipresent Windows logo. It's hard to continue thinking of Microsoft as a monolithic Borg when you can follow the day-by-day jottings and musings of individual developers and Windows architects like Chris Anderson, Don Box, Chris Sells and many others.

See the full article here. (Subscription or free day pass required.)

Mythic vs. Mythica

Video-game news site RPG Vault has an interview with Mark Jacobs, the CEO of Mythic Entertainment, which said today that it suing Microsoft for trademark infringement for its Mythica game. He describes speaking with Mythica designer Hal Milton at the E3 gaming convention:

I expressed to Hal both our displeasure and concern with Microsoft's use of the name Mythica for their next game. I actually started the conversation with him by sarcastically telling him that I was thinking about calling our next game Microsofta, and asking him if he thought that would be okay with Microsoft.

In Mythic Entertainment's press release, the company draws parallels between its suit and Microsoft's suit against Lindows.com on allegations that Lindows infringes on the Windows name.

Bloomberg News quotes a Microsoft spokeswoman as saying that the company has been promoting "Mythica" for several months and during that time "has not been made aware of any confusion among consumers." The company is reviewing the complaint, according to the Bloomberg story.

Spamming the spammers

In a comment on yesterday's spam posting, a reader named Karl summed up the feelings of many when he wrote of spammers, "I wish there was a way to send something right back at them. I wish I could reach right through the monitor and choke the S%@t out of 'em!"

Which made me wonder -- why did Karl feel it necessary to disguise the word snot? OK, actually, his comment made me think of an August column in which the Miami Herald's Dave Barry published the toll-free number of the American Teleservices Association, encouraging people to call and tell the association how they felt about telemarketing calls. In a subsequent column, Barry explained what happened:

It turned out that a lot of you were eager to call up the telemarketing industry. Thousands and thousands of you called the ATA. I found out about this when I saw an article in a direct-marketing newspaper, the DM News, which quoted the executive director of the ATA, Tim Searcy. Here's an excerpt from the article:

''The ATA received no warning about the article from Barry or anyone connected with him,'' Searcy said. ". . . the Barry column has had harmful consequences for the ATA. An ATA staffer has spent about five hours a day for the past six days monitoring the voice mail and clearing out messages.''

That's correct: The ATA received NO WARNING that it was going to get unwanted calls! Not only that, but these unwanted calls were an INCONVENIENCE for the ATA, and WASTED THE ATA'S TIME!

I just hope nobody interrupted the ATA's dinner.

All of which led me to an interesting idea. But before I get to that, it should be noted that the allegations against the alleged spammers are just that -- allegations, which at least one of the companies is adamantly denying. Also, in the past, at least one Microsoft spam suit targeted someone wrongly. At the same time, this weblog obviously has a miniscule readership compared to the readership of Dave Barry's columns, with significantly less ability for its readers to get anyone's attention through sheer volume of response. In addition, e-mail addresses are much more easily changed than telephone numbers are.

With that said, it's worth noting that there are quite a few e-mail addresses of alleged spammers in the exhibit filed by the New York Attorney General. I took the liberty of collecting them below, just for the record. (One caveat: If you do happen to e-mail them, a la Dave Barry, you should create a disposable hotmail or yahoo account for the purpose, to protect your own e-mail address.) At the very least, Karl, it might make you feel a little better.

• SRich10195@aol.com
• larry@optinbig.com
• dustin@optinbig.com
• bob@cydoor.com
• jchampion@synergy6.com
• pgoldstein@synergy6.com
• justin@synergy6.com
• mkelly@synergy6.com
• raitken@synergy6.com
• chaz.berman@mindspring.com
• andi@optinbig.com

RealNetworks v. Microsoft

RealNetworks sued Microsoft today over alleged antitrust violations. See the press release. RealNetworks is holding a conference call at 1:30 p.m. Pacific time. More to come.

Update, 1:45 p.m.: Although the filing might seem to come out of the blue, given the U.S. Justice Department settlement with Microsoft, RealNetworks has been indicating in its Securities and Exchange Commission filings that it isn't happy with that settlement. Two days ago, for example, it included this passage in an SEC filing:

Microsoft distributes its competing streaming media server, player, tools and digital rights management products by bundling them with its Windows operating systems and servers at no additional cost or otherwise making them available free of charge. Microsoft’s practices have caused, and may continue to cause, pricing pressure on our revenue generating products and services and affect usage of our competing products and formats. Microsoft’s practices have led in some cases, and could continue to lead to, longer sales cycles, decreased sales, loss of existing and potential customers and reduced market share. In addition, we believe that Microsoft has used and may continue to use its monopoly position in the computer industry and its financial resources to secure preferential or exclusive distribution, use bundling contracts for its media delivery technologies and products with third parties, such as ISPs, content delivery networks, content providers, entertainment and media companies, VARs and OEMs, including third parties with whom we have relationships. Microsoft has also invested significant money in, has provided substantial financial incentives to, or offered or conditioned placement on or through the Windows operating system, the Internet Explorer Web browser and Microsoft’s MSN service to, certain of our current and potential customers and content suppliers. We expect this trend to continue, which may cause those customers to stop using or reduce their use of our products and services and which may cause those content suppliers to withhold desirable media content from us or end users of our products and services. Such arrangements, together with Microsoft’s aggressive competitive tactics, leveraging its operating system, and marketing of its Windows operating systems, server products and digital media products, may reduce our share of the streaming media and digital distribution markets.

Update, 2 p.m.: Here's the Associated Press story: RealNetworks sues Microsoft alleging monopoly of digital media.

Update, 3:20 p.m.: An excerpt of comments by RealNetworks CEO Rob Glaser during a conference call with reporters this afternoon:

Despite our success with new products and services, we believe it’s clear our business would be substantially larger today if Microsoft were playing by the rules ...

We’ve cooperated with both U.S. and European authorities. While we’re hopeful that the European Union will impose an effective remedy for Microsoft's violations of European competition law, those proceedings will not compensate RealNetworks for the harm caused by Microsoft's conduct. And in the U.S., it has become clear that government intervention alone has not been sufficient to end and undo the harm of Microsoft's illegal actions.

Although two U.S. courts have determined that Microsoft has illegally abused its monopoly power, it has become clear that Microsoft's settlement with the Department of Justice will not fundamentally change Microsoft's predatory conduct. The settlement has many limitations and loopholes, and it’s clear that Microsoft will exploit them. Our case is based on many of the same types of conduct by Microsoft that U.S. courts have already declared to be illegal, such as failure to disclose interface information and imposing restrictions on PC makers, as well as a broad course of predatory action in digital media that goes beyond the DOJ’s case against Microsoft.

While we had hoped that Microsoft would stop using unlawful tactics after the government proved that Microsoft had abused its monopoly power, this has not happened.

Our financial strength enables us to prosecute this case aggressively. While we intend to push our claim vigorously, such cases typically take about 3 years to go through trial. We expect this litigation to cost us approximately $12 million in 2004, in addition to approximately $1.5 million related to litigation this quarter that’s already factored into our Q4 numbers.

Update, 3:50 p.m.: Click here for a .pdf document of the complaint, RealNetworks Inc. v. Microsoft Corp., U.S. District Court for the Northern District of California, San Jose Division. Also, we've asked Microsoft for a response and will post it here when and if the company comments.

Update, 4:30 p.m.: Here's Microsoft's official statement:

RealNetworks' legal action today is unfortunate and particularly surprising given the intense competition in the digital media marketplace.

The facts are clear. There is vibrant competition in this market and Real Networks’ own reported growth shows that they have thrived on Windows and many other operating system platforms. Computer manufacturers are free to install and promote any media player on new PCs. Consumers are free to use any media player – and many consumers use several different media players.

It’s hard to reconcile Real’s own statements on their market success with today’s lawsuit. Real claims to be the number one provider of digital media solutions, with massive distribution of their software and more than one million player downloads a week. Thus, this is a case where a leading firm is seeking to use the antitrust laws to protect and increase its market share and to limit the competition it must face.

These issues are a rehash of the same issues that have already been the subject of extensive litigation and a tough but fair resolution of the government antitrust lawsuit. The government antitrust ruling imposes a range of significant restrictions on Microsoft’s business and provides considerable new opportunities for companies like Real Networks; we accept these new rules and we are committed to full compliance.

Media playback technologies have been included in Windows as far back as the early 1990s. Microsoft has competed on the merits in the digital media market by creating superior technology that delivers better quality, an open platform for software developers and device manufactuers and benefits to consumers. Companies are bringing new media players and services to the market every week. That is what is going to benefit consumers and move this market forward, and not this kind of rear-view mirror litigation.

Update, 12/19/03: Here's our story from this morning's P-I.

Update, 12/20/03: Here's our follow-up story in Saturday morning's P-I about RealNetworks' choice of the Silicon Valley as the venue for the suit.

Spam: Behind the scenes

Ever wonder about the mindset of the people who clog your inbox with unsolicited e-mail? The lawsuits filed today by Microsoft and the New York Attorney General against an alleged spam ring were based in part on e-mail exchanges among employees and principals of the companies the suits target. Those e-mails, subpoenaed by the Attorney General's office, were included as exhibits in the New York case -- providing a rare glimpse of a bulk e-mailing operation at work. Here's an example:

From: SRich10195@aol.com
Sent: Thursday, June 12, 2003 12:34 p.m.
To: Robert J. Aitken
Cc: Justin Champion
Subject: Re: More complaints from false headings

We send out 10 million plus emails a day and you on average send me 2 complaints or less in a day. Today 3 complaints. I think 1 complaint per 3 million is real good.

We average about 1 in 5 million but still we have generated over 19,984 leads for items in offerstream this month and I have logged from you guys less then [sic] 20 complaints this month being sent to us. If your [sic] having issues with your ISP maybe something else is the reason.

That's just one message, but you can see all the e-mails for yourself. The New York Attorney General's office has posted online the full text of its filings, including its lawsuit and exhibits (see the links at the bottom of the news release). The e-mails start on page 45 of this .pdf document.

Addendum, Jan. 2: The exhibits .pdf appears to have been taken down by the AG's office. I'll try to find another copy and upload it.

PCs in the living room

NPR's Morning Edition had a story this morning on the convergence of the personal computer and home entertainment, as evidenced by PC makers such as Dell, H-P and Gateway expanding into the world of consumer electronics devices, in addition to making PCs running Microsoft's Windows Media Center edition. A few quotes from the story:

John Hamlin, GM of Dell's U.S. consumer business: "We really see our average, or mainstream, customer buying the PC with media and home entertainment in mind, not just e-mail or not just Internet or spreadsheets."

Silicon Valley venture capitalist Roger McNamee: "I am not a believer that we are each going to have a PC server in our living room and run all these things off a PC. The personal computer user interface is just too hard for most people to work with."

NPR technology correspondent John McChesney: "In the end, though, it probably doesn’t matter whether or not the PC eventually rules the living room. What matters is that the consumer electronics industry is suddenly alive with major new competitors selling all kinds of standalone devices."

Access the online audio here.

EA chief on Xbox Live

Warren's Consumer Electronics Daily (not freely available online) reported yesterday that Microsoft and Electronic Arts are still negotiating over the possibility of Microsoft using EA's popular sports titles on the Xbox Live online gaming platform. (Online-enabled EA console games are available only for the Sony PlayStation 2.) The story was based on comments made by EA CEO Larry Probst to a Credit Suisse First Boston conference late last week. The story intrigued me enough to go back and listen to the online archive of the presentation. Here's what Probst said:

"We have had ongoing discussions with Microsoft about supporting their Xbox Live functionality. It really comes down to a difference in philosophy about the business model. They’re creating a new revenue and profit stream. They want to use our intellectual property. They don’t want to compensate us for the use of our intellectual property. We think that’s a little unrealistic. It would be akin to someone starting a new cable channel and going to HBO or ESPN and saying, we’re going to use your content, but you’re not going to be compensated for that. I doubt that they would get much of a reception from HBO or ESPN. And so, we’ve been having ongoing discussions. The negotiations continue to this day. We’re moving closer and closer together in terms of a business model that we think is palatable. I think we’ll eventually get there. In the meantime we are very, very strong on the Sony platform, supporting their functionality."

Macs and PCs, by design

A paragraph in a Forbes.com story about the 20th anniversary of Apple Computer's Macintosh puts into words the feelings many Apple users have about the fundamental difference between Macs and Windows PCs:

[T]he Mac team has always understood that really great design makes an object seem like a hitherto-unknown part of oneself, a new way to encounter and express yourself in the outside world. How that happens may be impossible to pin down, but you know it when you see it, and it is inspirational, it is emotional. PCs are functional, even well made, but they do not inspire.

NYPost on MSFT music

The New York Post and one of its renowned headline writers offer a unique take on the Microsoft-Loudeye music partnership announced this week:

"MICROSOFT'S MUSIC PLAY AIMS TO PUT APPLE'S ITUNES IN JUICER."

Windows team realigns

For more on the behind-the-scenes changes in Microsoft's Windows group, announced yesterday, see this analysis by Joe Wilcox of Jupiter Research on the firm's Microsoft Monitor weblog. Also see stories by CNet News.com, InfoWorld, Information Week and Microsoft Watch.

Brian Valentine, the Microsoft executive heading up the new engineering division within the Windows group, has a reputation both inside and outside the company as a motivational leader. Rob Helm of research firm Directions on Microsoft compared Valentine to Gen. George Patton in our story this morning. And tech writer Paul Andrews writes on his weblog, "If software development were football, Brian Valentine would be Bill Parcells."

For more on Valentine, see this archived story on the Microsoft Web site about his management of the Windows 2000 development and debugging effort. An excerpt:

Valentine immediately set to work as the "lead motivator," helping the team overcome the stress of such a large project with top-notch organizational skills and contagious sense of humor. He established steadfast goals and priorities, and made a motto out of the phrase, "Decisions in 10 minutes or less, or the next one is free." He wandered the halls and asked people, "What is a decision? It's a tool to remove confusion! Are you confused? If so, then make the decision and let's move on!" He brought in veteran project manager Iain MacDonald and charged him with dissecting the team's goals into concrete, achievable steps. He even performed stand-up comedy routines at weekly Friday afternoon parties designed to relieve stress and raise morale.

Microsoft's Wright Flyer

Amid the hoopla leading up to the centennial of the Wright Brothers' first powered flight, it's worth noting Microsoft's role in marking the occasion. The company's PC games division worked with the Experimental Aircraft Association to build special machines that use the Microsoft Flight Simulator software to give people a sense for what the first flight must have been like. The simulators toured the country this year with a traveling EAA exhibit on the Wright Brothers. Here's our story about the simulators, published in August, during the exhibit's Seattle stop.

I confess that some of us in the newsroom were a little disappointed upon seeing the Microsoft simulators. When first hearing about them, we envisioned the Flight Simulator software connected to full-size replicas of the Wright Flyer, along the lines of the recreation to be flown Wednesday in North Carolina. (See P-I photographer Meryl Schenker's photo for a sense of what the simulators were actually like.) Sure, our imaginations got the best of us, but you have to admit, running the simulation on an actual replica would have been pretty cool.

Still, while working on the story, I was able to try one of the simulators several times, and it was an enlightening experience. Echoing those quoted in the story, if the simulation is an accurate reflection of what the Wright Brothers faced, it's amazing they got that thing off the ground.

Bill Gates' legacy

During an online chat last night about his series on Bill Gates' global-health initiative, P-I reporter Tom Paulson was asked whether he thinks Gates will be remembered more as a philanthropist or as a businessman. (Actually, the reader asking the question used the phrase "evil monopolist," but we'll spare you the editorializing.) Here's what Paulson said:

"Well, I guess it depends upon if his massive attempt to revolutionize global health works or not. If it doesn't, I guess we'll all remember him mostly as a business tycoon. But if it does work, I've heard quite a few people predict his name will be more associated with this attack on disease and poverty. Who remembers that the guy who started the Nobel Peace Prize got rich off dynamite?"

See the full transcript of the chat and the special page for the global-health series.

Microsoft's challenges

Directions on Microsoft, an independent research firm based in Kirkland and founded by some Microsoft veterans, offers its take on Microsoft's Top 10 Challenges for 2004.

Forrester on offshoring

A new study from Forrester Research finds that, "Despite the hype surrounding the mass exodus of IT jobs to cheaper workers overseas, only five percent of the Fortune 1,000 has taken full advantage of offshore outsourcing." (Link via Chris Seper.) Microsoft has been testing the waters overseas, but the company has stressed that it is not as far along in that regard as others in technology-related industries. One good resource on the subject is the WashTech labor union Web site.

Did Blaster = blackout?

Internet security expert Bruce Schneier in a CNet commentary this week: "Did MSBlast cause the Aug. 14 blackout? The official analysis says 'no,' but I'm not so sure." He goes on to explain his reasoning.

MSBlast, the computer worm also known as Blaster, infiltrated computers around the world this past summer by exploiting a flaw in Microsoft software. The August blackout left a large portion of the Northeast and Canada without power.

Mossberg on smartphones

Influential technology writer Walter Mossberg gives Microsoft's software for smartphones a mixed review in his column in the Wall Street Journal today. He tested the Motorola MPx200 from AT&T Wireless and the Samsung i600 from Verizon, both of them running versions of Microsoft's Windows Mobile software.

"Both phones worked OK," Mossberg writes. "Their big flaw is that the Microsoft software is painfully slow to identify incoming callers, even if they are calling from numbers included in the phone's address book. The process is so slow that in a dozen tests, neither phone ever identified a known incoming caller on its screen before the calls went to voice mail. Microsoft and the phone makers are working on the problem."

Could this have been one of the "unspecified problems" to which T-Mobile referred in this story last spring? See the entire Mossberg column , and our September story on the Microsoft-AT&T Wireless smartphone deal.

Gartenberg on SPOT

Jupiter Research analyst Michael Gartenberg details his experiences using a beta version of Microsoft's SPOT (Smart Personal Object Technology) watch in this post on the firm's Microsoft Monitor weblog. The upshot: He likes it.

Linux on the tube

In case you were wondering, IBM's current TV advertising campaign for Linux isn't the first time the company has touted the open-source operating system in such a prominent way to consumers. A series of IBM ads three years ago, featuring actor Avery Brooks, included a spot about Linux. For a description see the second part of this Slate column from around that time.

IBM, MSFT and small biz

USA Today's Byron Acohido has a story today examining the competition among Microsoft, IBM and other companies in the software market for small- and medium-sized businesses: "Software Giants Think Small."

Jobs on Microsoft, Part II

Apple Computer's Steve Jobs, when asked in a Rolling Stone interview, "What happens to Apple when Bill Gates starts building an iTunes clone into the Windows desktop?":

I'd answer that by saying I think Amazon does pretty well against Microsoft. So does eBay. So does Google. And AOL has actually done pretty well, too -- contrary to a lot of the things people say. There are a lot of examples of companies offering services, Internet-based services, that have done quite well.

And Apple is in a pretty interesting position. Because, as you may know, almost every song and CD is made on a Mac -- it's recorded on a Mac, it's mixed on a Mac, the artwork's done on a Mac. Almost every artist I've met has an iPod, and most of the music execs now have iPods. And one of the reasons Apple was able to do what we have done was because we are perceived by the music industry as the most creative technology company. And now we've created this music store, which I think is non-trivial to copy. I mean, to say that Microsoft can just decide to copy it, and copy it in six months ... that's a big statement. It may not be so easy.

See the full interview here. (Link via Paul Andrews) See also our previous transcription of Jobs' Microsoft-related comments during a session with analysts.

Readers on Gates' giving

P-I reporter Tom Paulson's series this week on Bill Gates' initiative to improve global health explored both the benefits and drawbacks of the performance-based, businesslike model that the Bill & Melinda Gates Foundation is using. (The final installment ran today.) Given the strong and sometimes negative reaction to Gates' and Microsoft's business dealings, some of us at the paper who follow the company wondered how readers would react to the series on his global health initiative. Here's Tom's summary of the reaction:

The response, by email and telephone, has been mixed. I'd say readers could be split, roughly, into two fairly equal camps: Those who are mad that we would portray Gates as a humanitarian; and those who are happy that we are drawing attention to what the Gates Foundation is trying to do for the developing world. I've tried to respond to everyone. As I told one fellow who was very upset because he thinks it's all about Bill Gates buying himself a humane image: Who cares?

I don't know what motivates Bill Gates. I can't know. All I can do is report what he says is motivating him and describe what's happening. And what's happening in global health because of Gates is massive, historic. Millions of lives could be saved. And it's all being played out of Seattle. I'd say that's pretty newsworthy --no matter who's doing it.

Here's the relevant part of a message P-I reader representative Glenn Drosendahl received on the subject: " ... Don’t you think we’ve all had enough of Bill Gates and his phony philanthropy? Why doesn’t he start doing something for some of the kids here who don’t have books or computers or desks in their schools? It’s just a racket. This is supposed to be a paper that reflects people’s interests, and believe me, we’re sick and tired of Bill Gates."

Not everyone would agree with that sentiment. After a story last month about the various initiatives and products Microsoft has introduced at the Comdex trade show over the years, a reader sent an e-mail saying it would be wrong to cast Gates as any kind of technological visionary. Concluded the e-mail, "Why not credit him in the area he is really beginning to excel in, that of philanthropy where he and his foundation are doing some very real good and showing impressive leadership?"

Access the full global-health series, including photos by P-I photographer Mike Urban, here. Tom Paulson will also be participating in a live online chat with P-I readers at 6:30 p.m. Thursday, Pacific time, here. A transcript will be posted afterward, in case you can't make it.

Words from a Tablet fan

After some previous posts and a story about the Tablet PC, I received some messages from faithful Tablet PC users suggesting that the Tablet wasn't getting the credit they feel it's due. I asked one of those users, Steve Martin (no, not that Steve Martin), from the Salt Lake City area, to explain how he uses his Tablet and what he thinks about it. He responded yesterday:

I work as a network administrator for a company that handles the IT needs of hundreds of small and medium sized businesses. I use my tablet every single day. My boss has paper forms that he has us fill out with the day's activities and hand in to him. He gave the forms to me in Word format and I print them to the journal printer and fill them out by hand that way. I then e-mail the completed forms to him each day. On some occasions I will fill out a work order at a job location and have the customer sign the form on my TPC screen. I use it to configure firewalls and modems. My big wish is more battery life. I generally will plug in whenever I can conveniently do so or my battery would not last all day. I use the Toshiba 3500 and have been quite happy with it. Also, I would to see Microsoft make the journal printer available on regular desktop PCs. They already have journal viewer available so why not give them the ability to make journal files. You wouldn’t need to be able to edit the files on the desktop PC but at least you could print pages and then move them onto your tablet at a later time.

I would like to be more involved with the growth of the Tablet PC market but have not found a good way to tap into it yet. If you have any ideas or people I could contact, I would love any help you could offer. I am a firm believer in the concept and want to be involved in it in a big way. I think education is an area that would benefit greatly with this technology. When I was in college I used to imagine having a similar device to have all of my text books loaded onto and be able to keep all of my notes on. I didn’t even go so far as to include handwriting recognition. That’s just an added bonus.

Anyway, I love the TPC form factor. I am excited to get my hands on the update that is due to come out some time next year. I think the Tablet is here to stay.

Getting job offers from Microsoft and Amazon

Here's an interesting page by Matt Goyer, a University of Waterloo student who interviewed at Microsoft and Amazon.com -- and received full-time job offers from both. Aside from the job-hunting and interviewing tips, it provides a behind-the-scenes glimpse of the hiring process at two Seattle-area corporate icons. (Link via Robert Scoble.)

Among other gems, Goyer says that prior to his Amazon interview, he studied the book, "Programming Interviews Exposed: Secrets to Landing Your Next Job." He notes that it's the No. 6 book on the list of titles popular within the company. He asks, astutely, "Now, why would someone who has a job at Amazon buy a book on interviews unless they were using it as a guide for conducting interviews?"

For more on the Microsoft interviewing process, see this page by Microsoft employee Chris Sells. I'd also suggest the book, "How Would You Move Mount Fuji?", one of the books Goyer also recommends. (In addition, see the comments to Scoble's post.)

Latest on SCO and Linux

The E-Commerce Times has a summary of the latest back-and-forth in SCO's Linux-related lawsuit against IBM, with Stanford law professor Lawrence Lessig responding to an open letter from SCO CEO Darl McBride. [Link via SIIA Industry Daily] For some initial background on how Microsoft fits into this situation, see this story by the P-I's Dan Richman in May.

A look at 'Looking Glass'

Simon Phipps, chief technology evangelist for Sun Microsystems, describes his experiences using Project Looking Glass, Sun's prototype three-dimensional computer desktop, in this post on his weblog. He also points to images and a video demonstration of the technology.

The company has said the Project Looking Glass concept may ultimately be incorporated into the Java Desktop System, the low-cost, Linux-based system that Sun is offering as an alternative to Microsoft Windows and Office. There was more news on that today: Sun Strikes Software Deal with United Kingdom.

XML and Office '03

Woody's Office Watch, one of the newsletters produced by Woody Leonhard for users of Microsoft products, recently published a good series of articles on XML and how it's incorporated into the professional edition of Microsoft Office 2003. (Credit for spotting this goes to my dad, who subscribes to the e-mail version of the newsletter and alerted me to the initial article.)

The four-part series is about as close as these types of things get to plain English -- a nice primer for the uninitiated and also for those of us who thought we had a pretty good understanding of the technology. (XML, or eXtensible Markup Language, is a standardized method of encoding and sharing data across disparate computers and systems. Microsoft has also made it an important component of its .Net initiative.)

Bill Coan, author of the series, writes that XML is an underrated, or at least under-advertised, component of the new Office:

I'm all in favor of Outlook's new interface. I'm totally convinced and completely accepting of the fact that OneNote and InfoPath and collaborative workspaces are the new new thing. To me, though, nothing about Office 2003 is as exciting or as immediately useful as XML support. In fact, in my opinion XML support is the most dramatic change in Office since Word and Excel first got bundled together for marketing purposes oh-so-many years ago.

He then goes on to explain why. Here are links to the four installments. In some instances you'll have to scroll down to get to the relevant part of the newsletter:

• Part 1
  
• Part 2
  
• Part 3
  
• Part 4
  

Longhorn on Tablet PC

In a post on his weblog, software developer and Tablet PC enthusiast Loren Heiny describes one advantage that Longhorn, the next version of Windows, will bring for Tablet PC users -- using the operating system's optional check-boxes to select multiple files that aren't next to one another on the desktop or in a file folder. Doing so on a Tablet PC today "pretty much requires a keyboard," Heiny explains. See the full post here, complete with explanatory screenshots of the early Longhorn build distributed to software developers.

Analyst's theory on Microsoft share price

BusinessWeek Online has an interview on its site today with Standard & Poor's analyst Jonathan Rudy, focusing primarily on Microsoft. One of the issues discussed is the company's share price, which has generally trailed others in the technology sector during the past year.

Q: Why do you think its stock price remains bogged down?

A: This year in technology, particularly software, investors have been chasing high-beta, weaker companies, in our view, that were thought to be going out of business 12 to 18 months ago, and potentially offer a sharper upside in a rebounding economy. However, we believe that quality companies like Microsoft will return to favor at some point.

Other issues discussed include the company's cash reserves and the possibility of a larger dividend. Also, for reference, here's a chart made using the Bloomberg News chart-building application comparing the percentage change in Microsoft's share price with the percentage change in the Nasdaq Composite Index during the past year.

Newsweek readers react

Reading the letters to the editor in the latest Newsweek felt strangely like reading the comments often posted by readers on this weblog. The letters were in response to the magazine's cover story on Microsoft Chairman Bill Gates.

Those who wrote Newsweek on the subject included Jim Plunkett, of Portland, Maine: "For Bill Gates to insinuate that if he had applied Microsoft’s 'advanced ideas to do a Web-scale search engine,' Microsoft -- and not Google -- would dominate the search-engine market is not only arrogant, it’s preposterous. In Gates’s world, Microsoft is an infinite resource of ideas and talent that needs only to be channeled in the right direction. Wishful thinking. People with innovative ideas, who are willing to take a risk and who are lucky enough to have some good timing, succeed in doing what Microsoft can’t."

And Karl Kuhn, of Richmond, Kentucky: "It is interesting that you chose to interview Microsoft’s Bill Gates about IT innovation when your list of PC milestones includes Apple four times and Microsoft twice. Likewise, in 'Killer Applications,' Apple gets two mentions to Microsoft’s zero. Shouldn’t you talk to Apple CEO Steve Jobs to learn about the future of the computer industry?"

In fairness to Newsweek, it has had extensive stories in the past about Jobs and Apple, including one of the first previews of the original OS X, if i remember correctly. In fairness to Gates, one reader did call him "arguably a marketing and business genius" -- before asserting that "Microsoft has consistently been well behind the curve in terms of any true innovation."

See the full collection of letters here.

A study in open source

A UC Irvine research project funded by the National Science Foundation is finding that, "in many ways, open-source development can be faster, better and cheaper than the 'textbook' software engineering often used in corporate settings," according to an NSF news release issued today. Read the full paper, by UC Irvine's Walt Scacchi, here.

Microsoft's auto ambitions

Nearly 38 percent of people who took part in the P-I's web poll yesterday said they would be averse to the idea of Microsoft software running in their cars. (To put it more bluntly, in the language of the poll, they actually said they would "hate it.") See the final results and the AP story that inspired the poll.

Bikinis, booze & SPOT

A high-tech fashion show at the Rain nightclub one evening during Comdex featured products including Microsoft's Smart Personal Object Technology (SPOT) watches. Reading the Microsoft news release, the event came off as a trendy but relatively tame affair, with this being about as salacious as it got:

Smart Watches with MSN Direct were center stage at COMDEX’s first-ever fashion show, held at the Rain Nightclub in the Palms Hotel. Three male models wearing the latest designs from Fossil and Suunto strutted down the runway, demonstrating watches based on SPOT.

I bring this up now because at the convention I ran into a former colleague from a previous job, Chris Seper, now a technology reporter for the Cleveland Plain Dealer. He was in Las Vegas tracking a young tech executive from the Cleveland area. The resulting story ran this past weekend, and the opening scene was from the same fashion show. Here's how Chris described it:

[Jeremy] Straub, who works for two Cleveland Heights technology companies, leans over a second-floor railing at Rain, a trendy nightclub at the Palms Hotel and Casino. Ten minutes ago, men in tight leather outfits and women in glittery, beaded bikinis prowled a stage holding laptop computers, electronic organizers and mobile phones.

Now a crowd of high-tech deal-makers and marketers is jumping around like popcorn, draped in lavender and pink neon glow sticks. One couple is making out directly below Straub. Dozens of men ogle women in black bikinis gyrating on raised platforms to a 50 Cent song. A metal scaffold above the dance floor intermittently belches fire and showers confetti.

Not that you would expect Microsoft to mention all that, but it's safe to say the official corporate news release didn't quite capture the full reality in this instance. Read the full Plain Dealer story here.

Microsoft Matrix transcript

Microsoft has asked various people who posted photos and video clips of the company's Matrix spoof to remove them from their sites, citing the restriction on photography after the initial minute of Bill Gates' Comdex speech. Those people have obliged, which means relatively few people outside of the 7,000 or so who saw the speech have seen the full video. (The company's official transcript also omits any specifics about it.)

In the meantime, though, the spoof has been brought up by various people seeking to derive from it insights into Microsoft's psyche. (Including once in the comments to a Linux-related post on this weblog.) So, in lieu of the video, I went back and transcribed the film's dialogue from my audio recording of the speech, adding in brackets my general recollection of what was happening on screen. (Here again is Reed Stevenson's recap, as well.) Reading the transcript doesn't quite compare to seeing the film itself, but for now it'll have to do.

Gates, on stage, introducing clip: "Now, I get to spend a lot of time making sure that this drive towards these ambitious scenarios is really understood, and there's a strong commitment to it, all the way, throughout all the developers at Microsoft and in our partners, that build on top of the platform. I'm focused on making sure that strong commitment is really there, that people can see that vision. And I put together a little video that shows one way that working with one person at Microsoft I really did get the message across. Let's take a look."

[Film begins, first scene opens in stark interrogation room, with Steve Ballmer and agents on opposite sides of a table.]

Agent, speaking slowly: "We've had our eye on you for some time now, Mr. Ballmer. It seems you've been living an alternate life. In one life, you're Steven A. Ballmer, CEO for a respectable software company. The other life is lived in computers, where you go by the hacker alias, "Steve-o." One of these lives has a future. The other does not. Let's have a look, shall we?"

[Attempts to get computer to work, pounds on keys, camera angle shifts to show it’s a Linux box. Comdex crowd laughs and claps. On screen, in interrogation room, Ballmer watches, amused.]

Agent, hushed aside to assistant: "I need you to write a new device driver and recompile the kernel."

Agent to Ballmer: "We know that you've been contacted by a certain visionary. My colleagues believe that I am wasting my time with you, but I believe you wish to do the right thing. [Phone rings.] We're willing to wipe the slate clean, give you a fresh start. [Phone still ringing] Would you get that? [irritated, to assistant]."

[Assistant answers, hands phone to Ballmer]: "It’s for you."

Ballmer: "Hello?"

[There's a zapping sound, and Ballmer disappears. The film shifts to a new scene, with Gates as the Laurence Fishburne character, Morpheus, wearing Matrix-style garb and sunglasses, approaching Ballmer from across a darkened room.]

Gates: "At last. Welcome Steve-o. ... Have you ever had a dream that was so real, you weren't sure you were dreaming? Unfortunately, no one can be told what the Matrix is, but I can show you, and after this, there is no turning back. You take the big blue pill [shows him pill with IBM and Linux logos] and this story ends. You wake up in your bed, and armies of consultants are running around the IT world. You take the red pill [with Microsoft logo], you stay in Wonderland, and I show you how to ensure innovation frees the [inaudible]."

[Scene shifts]

Gates continues: "For years, I've watched them do it. They'd send thousands of consultants into the world to convince companies to outsource their information technology. But we see the world differently. Steve-o, you will deliver software breakthroughs that will enable the seamless sharing of information between desktops, servers and all types of devices. It's time for us to take it back. Our first step is to visit the Oracle."

Ballmer: "I think I can safely say we can just skip that step."

Gates: "Right. Let's get straight to your training."

Ballmer: "But they've got armies of consultants!"

Gates: "Free your mind, Steve-o. In here, we can equip you with the tools you need to succeed in your fight against those armies. Clear your mind. Think about what you need."

[More activity, Matrix-style fight scene ensues, with Gates and Ballmer doing their own imitations of the acrobatic stunts. Comdex crowd laughs.]

Gates: "Ow! … You are the one. It is time for you to deliver the truth. … Steve-o, you've got what you need to deliver every new innovation to our customers. It's time for them to unlock their potential. It's time for a change."

[Rock music blares, Ballmer, in Matrix garb, walks confidently from phone booth, evidently on Microsoft's Redmond campus. Video clip ends.]

Gates, back live on Comdex stage: "Well, we got Steve indoctrinated." Crowd laughs.

[Addendum 12/03: Since posting this, I've been alerted to at least two sites out there with pictures of the movie, at least for the time being: This site, apparently a mirror of the Tablet PC fan's gallery that was taken down, and Paul Thurrott's Windows SuperSite, which has two good shots of the movie among its Comdex Day One images.]

MSFT's Canadian influence

Finally someone writes aboot all those Canadian accents we always hear on the Redmond campus. Remember all those reports a few years ago that Microsoft was thinking about moving to Canada to escape its antitrust woes? Put the two together and there has to be a conspiracy theory in there somewhere.

Longhorn's early debut

The next version of Windows, code-named Longhorn, isn't expected to hit the market until 2005 or 2006 -- unless you live in southern Malaysia, where pirates are selling copies of the pre-beta version issued to developers at the company's Professional Developers Conference in Los Angeles several weeks ago, according to this Reuters report. Microsoft, as you might expect, is none too pleased.

Eric Raymond on Microsoft

Eric Raymond, president of the Open Source Initiative, points to the transcript of a recent conference call in which he was quizzed about open source by Prudential Securities analyst Brent Thill and a group of Prudential Securities investors.

At one point, Thill asks Raymond, "Is there a way that Microsoft could coexist with the open source movement?"

Raymond answers, "It's hard to see how because they're used to a level of pricing and a level of profits that can really only be sustained if you have monopoly lockout. So in that sense I don't really see how they could survive."

At another point, Thill points out that Linux has affected companies such as Microsoft on computer servers and asks Raymond if he foresees "as big of a hit on the application side as we saw in the server side?"

Eric Raymond: Oh, definitely. The question isn't if that will happen; the question is when. And to demonstrate that this is very likely, I won't just make arguments based on my own experience. I'll make arguments based on what Microsoft is saying. Microsoft has repeatedly stated both in public and in private internal memoranda that have leaked that it regards Linux and open source as the only serious strategic threat that it faces, and a very serious one.

Brent Thill: Okay. So if you had to put a time scale on it, when do you see companies such as Windows and some of the other desktop applications being more seriously threatened by Linux, next two to three years or beyond that time frame in terms of when you see adoption?

Eric Raymond: I don't know. I actually thought that the process would be further advanced than it is by now. And I'm not sure why I got the time scale wrong. But because I know I did, I'm reluctant to make time scale predictions. What I can say is we have here a classic case of what Clayton Christiansen called disruptive technology. So what we've seen is open source got established in niches first. And what we're waiting on is the breakout into the general desktop market. It will happen because Microsoft hasn't cannibalized its business to bring it down to a price level where it would be competitive with open source. And, by the way, what is that price level? Approximately zero.