Beyond Binary

Adobe Systems announced on Monday that it was taking steps to make Flash content on the Web more easily indexed by search engines. It touted deals with both Yahoo and Google, the top two search engines. Curiously absent was any statement about whether Microsoft would do likewise with its Live Search.

I was hoping that Microsoft might clear up the matter, but its response was "no comment." (It said it's possible that it'll have more to say, and I will post more when and if that comes.)

It's unclear whether there is a stumbling block and whether it might be Adobe that is uninterested in Microsoft or the other way around. Clearly, there is no love lost between the two around Flash--Microsoft is trying to take Flash head-on with its Silverlight technology, which was designed to be searchable.

That said, I can't imagine that Microsoft would want to have any more reasons out there for people not to use its search technology.

The welcome screen for the new Equipt offering lists the products and services available.

(Credit: Microsoft)

If you are looking for "Albany," you might want to try heading to Circuit City.

Microsoft on Wednesday announced that Circuit City will be the first to offer a new Office subscription service, first known by its Albany code name and now dubbed Equipt.

The idea behind the subscription service is to convert more new PC buyers into Office buyers. It plays on the fact that although most people don't buy Office at the same time as a computer, many do purchase a security software subscription.

Microsoft is trying to tap into the fact that while many people would rather find a copy of Office that they don't have to pay for (either an older version or a pirated copy) they are willing to pay for security software. "Security is basically the No. 1 thing that gets attached with a PC," said Microsoft group product manager Bryson Gordon.

Equipt bundles a subscription version of Office Home and Student with Microsoft's OneCare antivirus product for $69 a year--just $20 more than the suggested price of OneCare alone.

On the main page of the Equipt subscriber center, users can see their subscription status and make changes to their account.

(Credit: Microsoft)

Gordon said some less sophisticated users think they are getting a copy of Office as part of their PC purchase and are disappointed when they come home and find only a trial ... Read more

In the ever-rotating, but never stopping merry-go-round that is Microhoogle, the Wall Street Journal reported Tuesday night that Microsoft has been looking for partners in recent days that would help it make a new bid for Yahoo's search business.

The newspaper, suggests though, that because Microsoft canceled a scheduled meeting with Chairman Roy Bostock on Monday, that perhaps it is not finding any willing compatriots for a Yahoo move.

The paper also reports that Microsoft has met with Carl Icahn in recent days, urging the billionaire to keep pressing his proxy fight in an effort to motivate Yahoo's board.

Microsoft declined all comment. However, sources have told CNET News.com that large investors and at least one Yahoo director have been urging Microsoft to make a renewed bid for Yahoo's search business. Microsoft is said to be weighing such an offer.

It is also the case that Microsoft has met with nearly everyone at this point that could possibly be interested in a Yahoo bid.

The pressure on Yahoo appears to be increasing from several fronts. First, its stock price has dropped below $20 and to near where it was before Microsoft first went public with its bid on Feb. 1. Second, the federal government is moving to launch a formal probe of Yahoo's proposed search ad deal with Google. Finally, the company still faces its proxy fight with Icahn.

The Journal piece also has more detail and color about the two companies' past, failed negotiations. ... Read more

Linspire, the Linux company started by high-tech entrepreneur Michael Robertson, is ready to fully assume its place as a footnote in operating system history.

As previously noted, the company is being swallowed by Xandros, another of the smaller Linux players. The deal is expected to be officially announced Wednesday.

"The Linux business is going through some healthy and necessary consolidation, which will give resulting companies greater assets and size to deliver on larger initiatives so Linux can touch more people," Robertson said in a statement.

Linspire is best known for its Linux distribution, once known as Lindows. Robertson initially pitched Lindows as able to run some Windows software, though that feature was later put on the back burner. The company definitely ruffled feathers in Redmond for its name. Microsoft took Linspire (then also known as Lindows) to court in 2001. Three years later, Microsoft ended up paying $20 million to Linspire, which agreed to drop the Lindows name.

Incidentally, last year Linspire and Xandros joined the list of open-source companies that have signed patent protection deals with Microsoft.

Updated 1:15 p.m., with comments from Powerset co-founder and Microsoft executive.

Well, first it was a rumor, then an unconfirmed report, and now it's a deal. Microsoft is buying Powerset.

Microsoft confirmed the acquisition Tuesday on its Live Search blog.

"We're excited to announce that we've reached an agreement to acquire Powerset, a San Francisco-based search and natural language company," the company said in the blog posting. Powerset workers will join Microsoft's core search relevance team and remain based in San Francisco. The company said that Powerset's technology will complement existing natural language processing work being done inside Microsoft's research unit.

Terms of the deal were not disclosed, although VentureBeat, which reported last week that the deal was in the works, said Microsoft was paying $100 million or more.

Powerset, which has licensed technology from Xerox's PARC unit, recently made public a tool for searching Wikipedia. The company has 63 employees, all based in San Francisco's South of Market district.

Powerset's Mark Johnson said in a blog post that the company needed deeper pockets to reach its goal.

"With any start-up, the challenge is to take the seeds of an idea and grow it into a viable company," he wrote. "At Powerset, we transformed our idea into a world-class semantic search platform, demonstrating the future of search with our Wikipedia search experience. But building a large-scale semantic search engine is expensive, requiring an engineering effort and computing resources beyond ... Read more

I asked Forrester Research lead analyst Duncan Jones for his thoughts on the just-announced Select Plus licensing program offered up by Microsoft.

Jones said that the program is largely an improvement on Microsoft's Select program, but also pointed out a few potential pitfalls to watch out for.

On the plus side, Jones said that Select Plus should help large organizations that have multiple, autonomous business units.

"Often there is no central person or process to coordinate a group-wide forecast, agree (on) joint strategies and negotiate a single Select agreement because each unit wants to make its own decision when it is ready to do so," Jones said in an e-mail interview. "These companies end up paying more by buying licenses retail or (from a computer maker). Under Select Plus the enterprise can get economies of scale without losing any flexibility for the business units to decide what and when to buy."

Select Plus also offers customers the ability to see all their licenses in one place, he said. The new program will be better in almost all cases than Select he said, with the exception being a company that is "significantly expanding its purchases over previous years yet is unable to make one big purchase immediately."

He also notes the fact that companies wanting to add Microsoft's Software Assurance program have to buy a full three years' worth under the new program. Under Select, customers would buy one, two, or three years depending on which year of the ... Read more

I'll say this upfront: I'm not a good predictor of economic events. That's why I'm a journalist and not on Wall Street. Well, that and I don't like getting up early.

That said, those leery about Web 2.0 looking a lot like Web 1.0 have even more to worry about. As noted earlier this morning, there were no VC-backed companies that went public last quarter, according to a new report from Dow Jones VentureSource.

A second report, looking at the media, information, and marketing services areas showed that, although the number of VC deals in the first half of the year inched up from a year ago, the value of such deals plummeted. There were 404 deals in the first six months of 2008, according to the Jordan Edmiston Group, valued at an average of $23.16 million. That compares to 397 deals in the first half of 2007, with an average value of $65.77 million.

"M&A activity for the first half of 2008 was increasingly cloudy," Adam Gross, a Jordan Edmiston vice president, said in a statement. Gross did point to several bright spots, including in online media and in transactions of less than $1 billion.

Am I onto something or just over-reaching?

Microsoft said Monday that it is adding a new licensing option, this one dubbed Select Plus and targeted largely at midsize firms.

The program's two main attractions are the fact that it is not tied to a specific term and it makes it easier for different subsidiaries of a company to take advantage of their combined purchasing power.

The additional option runs counter to the trend at Microsoft, which has been working to scale back the number of different licensing plans. The company had managed to shrink its number of options--from 107 programs in 2006 to 23 as of last year. With Select Plus, the number of Microsoft licensing programs has crept back up to 26.

Although it adds yet another option, Joe Matz, corporate vice president at Microsoft, said that Select Plus fills a need.

"Many customers end up with multiple agreements because Select is not as flexible as customers would like," he said. Microsoft isn't getting rid of Select, but expects that over time, customers will choose the new option.

The software maker has come under criticism from some customers and analysts for both the cost and the complexity of its licensing programs.

In a recent report, Forrester advised its clients to plan months ahead to figure out which Microsoft licensing option made the most financial sense. The analysis firm also said that Microsoft's Software Assurance support program is more expensive compared with rivals.

"Microsoft's software maintenance agreement is among the industry's most ... Read more

Microsoft is used to having governments get upset over its products. But usually it's not the name they are complaining about.

ZDNet blogger Mary Jo Foley spotted a local story from Fiji saying the island nation's government was unhappy to learn there was a version of Windows called Fiji. Microsoft reportedly sent a letter to the government stating that Fiji was just the code name for the product.

Foley rightly zeroes in on the more important issue--in trying to pacify the Fijians, Microsoft reportedly said more than it ever has about the product, which is a near-term update to Windows Media Center.

The Fiji paper says that Windows Client Business Group manager Ben Green said that Fiji was a product "designed to add new television standards support, enhance the user interface and set-up experience, and add interactive TV features to Windows Media (Center)."

It was one of several great stories Monday from ZDNet blogger Mary Jo Foley, who also had the scoop on J Allard being named a chief technology officer at Microsoft as well as the "chief experience officer" for the company's entertainment and devices unit.

The mere fact that Microsoft will stop widespread sale of Windows XP at the end of the day has been a topic here and elsewhere for months.

So, rather than rehash things (though you can click here for a recap), I thought I would take a look at the Windows landscape.

The most immediate question is, with Windows XP moving off the stage, just where is Windows Vista?

On the plus side, the newer operating system has sold 140 million copies, according to Microsoft. But, as I've been saying for some time, that is largely a factor of how many people have wanted a new PC in the past 18 months, as opposed to an indicator of pure demand.

However, businesses, which get to choose which operating system they run, have overwhelmingly stuck with XP. Just a tiny fraction of corporate machines are running Vista, with some companies not planning any companywide Vista deployment at all.

Windows XP remains popular with consumers as well. So, if businesses and consumers all like XP, why on earth would Microsoft stop selling it?

There are a couple of reasons. For one, XP is now seven years old. Even with a major security enhancement (XP Service Pack 2), the company benefits from shifting things to the more secure Windows Vista.

It is also critical for Microsoft to build the install base of Vista as quickly as it can. That's because developers won't really start building applications that are Vista-dependent until it ... Read more