MSFT to Apple: Yes, your phone is better

As a number of people have already noted, Microsoft’s release of Seadragon for the iPhone — an image-viewing app based on the deep-zoom technology behind the software giant’s Photosynth project — doesn’t just seem like an admission that the iPhone is better than any other mobile out there: Microsoft product manager Alex Daley comes right out and says as much in an interview with Todd Bishop of the blog Tech Flash:

“The iPhone is the most widely distributed phone with a (graphics processing unit),” Daley explained. “Most phones out today don’t have accelerated graphics in them The iPhone does and so it enabled us to do something that has been previously difficult to do. I couldn’t just pick up a Blackberry or a Nokia off the shelf and build Seadragon for it.”

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Yahoo: We are so totally screwed

It’s not exactly a huge surprise, given the anti-trust brouhaha that the proposal caused in Washington, but Google formally announced that its search deal with Yahoo is over, kaput, deceased, pushing up the daisies — it is an ex-agreement. It wasn’t just the anti-trust concerns either; some advertisers were apparently worried about a lack of choice as a result of the tie-up, and not without reason. So how badly is Yahoo screwed right now? On a scale of one to 10, I would say Yahoo is now at 11.

As John Paczkowski notes at All Things D, this deal was supposed to generate as much as half a billion dollars worth of additional cash flow in its first year, money Yahoo could definitely use. But more than that, this deal was a way of trying to stand on its own two feet (albeit while leaning on Google for support), and that is now gone. Microsoft, which had its takeover bid for Yahoo derailed by the Google arrangement — among other things — is no doubt doing the math on another bid.

The only problem for Yahoo is that instead of a $45-billion deal at $31 a share, Microsoft is more likely to bid about half that, and that’s if it even makes another bid for Yahoo at all. Nice job, Jerry. How many failed Hail Mary passes can one CEO throw?


VentureBeat’s Matt Marshall is reporting that an internal Yahoo memo says to expect “a major historical announcement” later today, and the rumour is that Jerry Yang will step down as CEO. Kara Swisher at All Things D says that is dead wrong, and so does the New York Times DealBook blog. VentureBeat has now updated its post and quotes a Yahoo source as saying there is no truth to the rumours.

Does a Web Office hurt Google or MSFT?

So Microsoft seems to have finally woken up and decided to get serious about the Web — or at least semi-serious — by rolling out a cloud-computing platform called Azure and announcing the imminent arrival of Web-ized versions of its Office applications (my favourite response to these announcements came in a Twitter message from Sarah Perez of Read/Write Web). Obviously, the Web Office news is a shot across the bow of Google and its Google Docs — Microsoft is even using mostly Ajax just like Google, instead of its Flash-style Silverlight technology. But who does the rollout of a Web Office hurt Google more, or does it hurt Microsoft itself?

I don’t know the answer to that question, but I still think it’s worth asking. No doubt many users of Google Docs will shift to Microsoft’s version, in part because it will make integration with their existing corporate systems easier, or because their employers will make its use mandatory. Others may find that Microsoft’s Web apps offer better compatibility with regular Office programs (something that Google Docs still isn’t that good at, at least when it comes to advanced page layout and that sort of thing). But what about the competition between Microsoft’s Web Office and the real Office?

I would imagine that Microsoft is going to try its best to make Web Office just useful enough to entice people away from Google, but not nearly nice enough to tempt them to drop the regular installed version of Office. But no matter how hard it tries, there are likely to be small or medium-sized companies that decide it’s just as good to use the Web version as it is to pay $300 or whatever per seat to get an authorized copy of the desktop software. That’s going to be money right out of Microsoft’s pocket, since Office generates truckloads of cash for the software behemoth.

Maybe Microsoft will be able to manage the process so that it doesn’t cannibalize its Office franchise too much, or maybe it will err on the side of crippling the Web Office so that it doesn’t harm the installed software versions. But either way, that’s a tricky balance to strike.

Microsoft gets the ad thing right

Okay, so maybe the Jerry Seinfeld and Bill Gates ads were designed to soften up the market by letting people get out all their pent-up anti-Microsoft emotions, so that the newer ads would seem better by comparison (sort of a scapegoat strategy). Or maybe they were just a total screwup and someone thought better of them. Whatever the case may be, the new one I just watched is light-years better (and I was one of the few who actually liked the Seinfeld ones, along with Mike Masnick at Techdirt). It’s understated, it’s human, it’s international in flavour and it has some touching moments as well. All in all, pretty well done, I think.

Humanize Microsoft? That’s impossible!

Anyone who isn’t talking about how dumb Republican vice-presidential candidate Sarah Palin was in her interview (and that’s a lot of people) seems to be talking about the new Microsoft ad with Bill Gates and Jerry Seinfeld, and how they don’t get it. Mike Arrington doesn’t get it, and neither does my friend Mark Evans, to name just two. I think John Furrier comes close to the truth when he says that Mike not getting it is a sign that it’s working, because it’s not aimed at geeks. And part of what makes it hard to get is that it isn’t even about Windows, or Microsoft for that matter. Like Seinfeld, it’s not really about anything.

I made a marketing expert friend of mine mad recently when she said that the marketing professionals she knew didn’t like the original ad — and thought Microsoft was getting taken to the cleaners by its ad agency, Crispin Porter + Bogusky — because it was a dumb idea, or at least not a smart one. I tried to make the point that I don’t think Microsoft cares whether she and her marketing colleagues think the campaign is “smart” or not. They aren’t the target market any more than Mike Arrington is. I think whoever put these together is really just trying to humanize a giant company, and that’s a tough assignment.

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