Microsoft News Tracker

Press release:

Microsoft Corp. today announced the spinout of a new social networking technology, developed by Microsoft Research, to create a new Silicon Valley startup, Wallop Inc. Wallop, whose aim is to deliver the next generation of social computing, is led by experienced entrepreneur and CEO Karl Jacob, with 30-year veteran Bay Partners providing Series A financing.

Microsoft IP Ventures will celebrate its one-year anniversary next month. “We’re excited by the interest it has attracted with entrepreneurs and the venture capital community,” said Eric Rudder, senior vice president of Technical Strategy for Microsoft. “Microsoft has one of the world’s preeminent R&D labs, and we are committed to getting our innovations into the hands of entrepreneurs. This deal is another great example of Microsoft working with the right team to get this next-generation technology into the marketplace quickly.”

There’s more there and from Microsoft’s Don Dodge about the Microsoft IP Ventures program where Microsoft licenses technologies they have no immediate commercial use for to entrepreneurs. It’s more than just patent licensing though - in this case, Microsoft took a stake in the company.

As for Wallop itself, it’s yet another of the social networking sites like MySpace that hopes to attract eyeballs and presumably thereby sell advertising. Micahael Arrington notes that the current mywallop.com is not what the ultimate site at wallop.com will look like and:

I’ve seen a bit of what they plan to offer, and I’ll say that this is not another “me too” social network offering. And there are a number of unique business model twists that they aren’t announcing yet. The launch is scheduled for this summer. One interesting thing to note: the current Wallop site is all-Flash. hmmm.

Arrington has more on the Wallop CEO, Karl Jacob, as does the press release.

I continue to retain my skepticism about the business aspects of the cloud of Web 2.0 social networking fluffiness exemplified by MySpace and its ilk. Per the press release:

Launching later this year, Wallop solves the problems plaguing current social networking technologies and will introduce an entirely new way for consumers to express their individuality online. For example, today’s social networks have difficulty enabling people to interact in a way similar to the way they would in the real world. Wallop tapped legendary Frog Design Inc. to conceive a next-generation user interface enabling people to express themselves like never before. In addition, Wallop departs from the friend-of-a-friend model common in all social networks today and the root of many of their problems. Instead, Wallop developed a unique set of algorithms that respond to social interactions to automatically build and maintain a person’s social network.

Whatever (although recent Microsoft offerings are based on apparently different formulations of a person’s social network).

It’s not that there is no market for online “social networking,” since it’s been evident ever since man invented modem that a large part of what was going on was people interacting socially with each other. The difficulty is the faddishness of the activity where yesterday’s Hula Hoop (e.g. Usenet, BBS, AOL) is soon catching dust in the garage and hordes of wannabees (e.g. The Source, Compuserve, Prodigy) didn’t even achieve that. The commercial trick is to be the first mover in a fad and make hay while the sun shines because inevitably your fadshare will get diluted by imitators and interest will dim as the ever fickle audience moves on.

For an entrepreneur hoping to capitalize on social networking, nimbleness and a lot of luck are survival, but for a large company like Microsoft the former is increasingly unlikely (if not always admitted) and the latter is really unnecessary. Microsoft can afford to attempt its own social networking offerings and also make widely placed insurance bets as long as the competitive overlap isn’t glaring, and that’s what Wallop appears to represent. Beyond that, of course, I’m sure Microsoft is perfectly willing to act as an “arms seller” and build a nice business selling their usual technologies (not Flash of course) and ads to the combatants without waiting and hoping for lightning to strike their own particular offerings.

Microsoft augmented its management software offerings line by acquiring Canadian assest tracking firm AssetMetrix today. Ina Fried has the scoop at CNET:

Founded in March 2000, AssetMetrix helps businesses manage their fleet of PCs and software. Felicity McGourty, director of product management in Microsoft’s Windows and enterprise management division, said that AssetMetrix’ technology will allow customers to get a better handle on their non-Microsoft software.
…
(AssetMetrix CEO) Campbell declined to discuss the terms of the deal, which was first reported by CNET News.com and announced Wednesday at the Microsoft Management Summit in San Diego.
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Microsoft plans to incorporate some of the Ottawa-based company’s technology into its forthcoming System Center Configuration Manager product, in particular AssetMetrix’s technology for helping companies manage their software licenses.

Update 4/27: If the name AssetMatrix seemed familiar, Gregg Keizer’s article Microsoft Snaps Up Asset-Tracking Vendor, Co-Founder Unhappy should remind you:

“It was more of a technology purchase than of the company’s business,” said Steve O’Halloran, one of the co-founders of AssetMetrix.

“I don’t think that Microsoft will continue with the AssetMetrix business. I think a lot of companies would be leery of their [hardware and software] inventory data being held in a Microsoft-owned data structure,” O’Halloran added.

O’Halloran left AssetMetrix shortly before the Microsoft acquisition was announced, over business plan disagreements with the company’s managers. He said Wednesday that his departure was independent of the talks with Microsoft that led to the purchase. O’Halloran still holds what he called a “large stake” in AssetMetrix.

“On one hand, I’m happy about the acquisition,” he said, “but in another way, I’m sad. It’s unfortunate that the IT community has lost a sentinel, a watchdog, that could report on how hardware and software are used.

“I’d be surprised if Microsoft maintained that transparency.”

In the past AssetMetrix has rebutted Microsoft’s claims that newer operating systems were widely used, and that older versions of Windows were no longer in play.

A 2005 report, for instance, noted that nearly half of enterprises still ran Windows 2000. The report was based on data from AssetMetrix’s research lab, which O’Halloran ran.

“We were also a factor in Microsoft extending Windows 98 support,” O’Halloran said, referring to a 2003 report that said Windows 98 users faced serious security risks even as support was to be terminated. Later, Microsoft extended Windows 98 support for about two-and-a-half years.

Reuters:

Microsoft Corp plans to pay $200 million to $400 million for Massive Inc., a privately held company that places ads in videogames, the Wall Street Journal said on Wednesday.

If you aren’t familiar with the concept, advertisers are increasingly willing to pay for “product placement” in videogames, just like in movies. Massive is a two year old startup with big name customers like Coca Cola, Intel, and Honda (see [1], [2]). No comments yet from either of the parties.

(Here’s the subscribers only WSJ link.)

Update 5/4: Rumor confirmed - press release:

Today at the seventh annual MSN® Strategic Account Summit, Microsoft Corp. announced it is acquiring Massive Inc., the New York-based creator of a world-leading network for video game advertising, in a move that will help deliver dynamic, relevant ads across Microsoft’s online services, starting with Xbox Live® and MSN Games. Massive’s solution depicts brands in various forms within the game — on soft-drink cans and pizza boxes, on billboards and posters, and in images on TV screens — where gamers would expect to see them in real life, adding realism to the overall gaming experience. Massive employees will continue to work from their current locations, including their headquarters in New York and offices in London, Los Angeles, Chicago, San Francisco, Paris, Sydney, Cologne and Toronto. Financial details of the acquisition were not disclosed.