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Sam Gustin in the NY Post reports that
New York-based Rates Technology Inc. has slapped Google with a lawsuit claiming that Google Talk, the company’s voice-over-Internet-protocol service, infringes on patents covering technology that facilitates cheap ‘Net-based telephone service.
They’re threatening “to bring Google to its knees.” Apparently Rates has been making a pass through the IT industry:
Over 120 firms, including Microsoft, Lucent and Avaya have paid RTI one-time payments in exchange for a promise to not sue them for patent infringement, he said, adding that the company is currently in settlement talks with eBay’s recently acquired Skype division.
Update: Ed Oswald has more on RTI at BetaNews.
Next week the International Consumer Electronics Show (CES) is being held in Las Vegas and as the premier trade show for personal electronics gear, expect the hype to be deafening. I’m already seeing CES press releases from companies that want to be heard above the din.
Rachel Rosmarin explains the phenomenon at Forbes in “The Greatest Show On Earth?”:
While most people are still sleeping off the effects of their New Year’s Eve debauchery, more than 130,000 industry gearheads and 2,500 hopeful exhibitors will flock to Sin City for the annual Consumer Electronics Show. CES is a buzz-filled mecca, where the latest and greatest electronic wares are hyped by small startups and global conglomerates alike.
With more than 1.6 million square feet of space crammed with wires, chips, plastic, booth babes and various attention-grabbing gimmicks, the show is a true circus. No, not Circus Circus, but still the biggest show in town. In fact, the show floor has expanded this year to encompass not only the entire Las Vegas Convention Center but also the Las Vegas Sand’s Sands Expo near the Venetian.
It’s often difficult to separate the actual innovative products and industry-moving announcements that come out of Vegas in January, from the grandiose claims and puffed-up displays. That’s why a healthy dose of skepticism among show veterans goes a long way.
More by following the link. Anyhow, concerning Microsoft’s presence:
Microsoft promised developers a complete, full-featured preview version of the highly anticipated new Windows operating system, dubbed Vista, by early January. That sounds like CES to us; the show would be the perfect stage on which to unveil and demonstrate the software.
And don’t forget that Microsoft and MTV have promised to deliver the details of their joint URGE music service, not mention the rumors of other Microsoft media deals that might be announced.
Philipp Gollner and Eric Auchard also provide a pre-show guide at Reuters in “Top US electronics show offers cars, sex, software” where you’ll learn that the sex is in a separate parallel show and that Apple will be holding fire until Macworld which is scheduled for the following week in San Francisco. As for Microsoft (if indirectly):
And personal computer and storage makers such as Dell Inc., Hewlett-Packard Co. and Seagate Technology will seek to show how they can connect the living room to every other room of a networked home.
…
In years past, many analysts had predicted that the PC might overtake the television as the prime way consumers enjoy digital entertainment.Now most industry observers see the contest as more multifaceted, with no one dominant device.
“The PC has tripped on the carpet going into the living room,” said Richard Doherty, research director of Envisioneering Group in Seaford, New York.
Stay tuned.
Reading some of the 2006 predictions for Microsoft, I’ve been struck by how many concern issues that are largely ephemeral to Microsoft’s financial performance. I enjoy the latest technical buzz as much as anyone, but I think that occasionally a “green eye shade” view is in order. To that end, here are some predictions for Microsoft in 2006 that are contrary to the usual flow of techie chatter, but for which I believe a reasonable case can be made. They are intentionally ordered by recent Microsoft business unit profits.
Client OS: Windows Vista will be irrelevant except as an illustration that Microsoft is committed to its franchise
All except for a single digit share of new client PCs ship with a Windows client OS. There’s no room for growth in market share and results are thereby tightly locked to PC shipments. Vista won’t be compelling enough to inspire large numbers of upgrades or new PC purchases (or delay PC purchases if it is late) and it’s doubtful that the pricing will differ significantly from Windows XP. Net: business as usual in the client OS space.
Office (aka Information Worker): Office 12 will be similarly irrelevant
The Office 12 story isn’t as clear cut as that for Vista, but a slick new UI won’t change the fact that office suite software is a mature market in which Microsoft holds all but a minuscule share. Office servers and the use of Office as a front-end for business software are too small or too new to change the results. Net: Information Worker results will be basically flat as usual.
Server & Tools: The growth surge will continue
Being a contrarian doesn’t mean that there isn’t some good news! Server & Tools has been a growth bright spot recently and there’s no reason why that shouldn’t continue in 2006. There’s market share to be gained in servers, money to be made with the currently favorable IT spending climate, and S&T just went through a product refresh cycle including SQL Server 2005. Net: Another good year.
Everything else: Irrelevant except as investments in the future
Sorry about that. Even MSN, which has started making money from the growth in online advertising, isn’t going to amount to more than small change in the overall picture. Worthy of note, I suppose, is that Xbox 360 will likely turn in some magnificent losses as part of the strategy to gain market share, but they’re not important overall. Net: These are just long term investments although one of these years MSN might break from the pack.
I mentioned in passing the other day that advertisers were champing at the bit for Microsoft to expand its adCenter beta. Right now, Microsoft has stopped taking new advertisers for the beta, will provide results of the test in 1Q2006, and are “hoping” to launch in 1H2006. All of which seems rather less than sprightly.
In this same vein, Nathan Weinberg points to a blog post by “TDavid” titled 8 things Microsoft can do in 2006 to better compete against Google search and Adsense which, if I may put it succinctly, is “fish or cut bait.” Excerpt of number 1:
1. Launch Adcenter for websites worldwide ASAP (no beta invite only garbage). Why can’t I sign up for this and add to our websites now? Why is Adcenter still in pilot status? If this isn’t done in Q1-2006, they can pretty much forget about this doing anything unless their pay structure blows away all competitors. Adsense and YPN are gaining market share that MSN loses every day.
More by following the link including getting adCenter some traction among blogger publishers. That, of course, is another mystery – adCenter ads are currently only appearing on Microsoft Web properties and there is no sign of a beta publisher program other than the occasional rumor.
