Microsoft News Tracker

Tom Krazit at ZDNet:

Apple Computer and Creative Technology have agreed to settle their legal dispute over music player patents for $100 million, the companies announced Wednesday.

The $100 million, to be paid by Apple, grants Apple a license to a Creative patent for the hierarchical user interface used in that company’s Zen music players.

Sounds fairly straightforward, right? Wrong - there are some twists:

The patent covers an interface that lets users navigate through a tree of expanding options, such as selecting an artist, then a particular album by that artist, then a specific song from that album, said Phil O’Shaughnessy, a Creative spokesman. The patent applies to portable media players, which includes devices like the iPod or cell phones that have the ability to play music, he said.
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Apple can get back some of the $100 million payment if Creative is able to secure licensing deals with other MP3 player manufacturers, said Steve Dowling, an Apple spokesman.

That’s a nice touch, since Apple in some sense has just validated the patent. I bet the Apple legal staff is just itching to help Creative work on the letters to all the player manufacturers right now. But wait, there’s more:

As part of the agreement, Creative will also enter Apple’s Made for iPod program as an authorized seller of iPod accessories. Creative will be able to affix the “Made for iPod” logo to its speakers, headphones and other related products, O’Shaughnessy said.

You think maybe Creative decided that there wasn’t much future in being a Microsoft PlaysforSure partner in view of the Zune and decided to diversify a little?

Update: For reference, see also the Apple press release.

Press release:

Microsoft Corp. (Nasdaq: MSFT) and Citrix Systems, Inc. (Nasdaq: CTXS), today announced they plan to expand their existing partnership in access and end-to-end application delivery to make computing faster, more secure and more cost-effective for employees in branch office locations. The two companies will collaborate on developing and marketing a new multifunction Citrix branch office appliance based on the Microsoft® Windows Server® operating system and Microsoft Internet Security and Acceleration (ISA) Server and utilizing the recently announced Citrix® WANScaler™ solution.

The planned joint solution represents a new type of branch office appliance that combines advanced wide area network (WAN) optimization technologies with consolidated branch office services in a single, multifunction appliance that is easy to administer remotely. This combination helps solve a major problem for customers that cannot be solved today with traditional networking solutions or individual point products and that Microsoft and Citrix are uniquely able to address with their technologies, channel partners and customer reach.
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The joint marketing and development plan comes amid growing trends in both branch office IT consolidation and increased mobility among branch office and remote workers. An estimated 55 percent of enterprise employees today access all of their mission-critical business applications from a remote office location, according to Citrix’s research. Before these applications reach the intended user, they must travel long distances over wide-area networks (WANs), a process that can significantly degrade performance, impact the user experience and force expensive bandwidth upgrades. Support for workers in locations beyond headquarters is a major challenge for corporate IT departments.
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The new initiative builds on an already extensive partnership between these two market leaders and is the first step in a long-term plan by the two companies to collaborate on other Windows®-based application delivery and access solutions.

Citrix has long had a symbiotic relationship with Microsoft in the niche of using Windows server operating systems as hosts for thin clients - i.e. the end user applications actually ran on the server and results were displayed on client terminals. It’s sort of the old mainframe dumb terminal updated for the PC era.

However, to provide an equivalent look and feel to a regular Windows PC a good deal of data has to be transferred between the thin client and the server which puts a premium on bandwidth and makes it tougher when the connection is via WAN rather than LAN. This announcement is based on Citrix’s acquisition of Orbital Data whose WAN acceleration technology for this purpose is being reintroduced as the Citrix WANScaler. The magic behind the curtain is data compression and protocol optimization and it is useful for general WAN traffic like file transfers as well as the terminal scenario.

After the viral marketing buildup at notfornoobs.com, Microsoft and partner Razer have labored mightily and delivered a mouse. OK, it’s a fancy mouse for gamers:

Today at the Games Convention in Leipzig, Germany, Microsoft Hardware and Razer USA Ltd. are turning up the heat in the growing PC gaming peripherals market by teaming up to design and develop next-generation computer gaming peripherals. Microsoft Corp. and Razer, creator of the world’s leading brand in high-end computer gaming peripherals, are introducing a new gaming mouse, the Microsoft® Habu™, a high-tech wonder that brings together the best of both worlds for PC gamers: more than two decades of cutting-edge innovation and comfort from Microsoft Hardware and industry-leading gaming technology from Razer.

You can read the list of peculiar gamer-oriented features by following the link, but there are pictures and more glaring colors in the Razer version of the press release. If you found the excitement hard to handle, beware because:

Microsoft Hardware and Razer plan to announce another co-branded next-generation gaming product soon. Stay tuned and game on!

Indeed.

Microsoft’s fledgling Internet advertising effort, adCenter, signed up the Facebook social networking site:

Facebook and Microsoft Corp. today announced a strategic alliance in which the two companies will collaborate to bring relevant advertising to the more than 9 million registered users of Facebook, the Internet’s leading social directory. Microsoft’s advanced advertising technology and Facebook’s unique social network make possible the multiyear collaboration grounded in the two companies’ commitment to technological innovation.

As part of the relationship, Microsoft will be the exclusive provider of banner advertising and sponsored links on Facebook using Microsoft’s digital advertising solutions and the Microsoft® adCenter platform. The two companies also agreed to work together on future technology and advertising initiatives.
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Advanced technology from Microsoft and Facebook will help connect advertisers with Facebook users in more relevant, innovative ways through a combination of graphical ad placements, as well as automated text-based advertisements targeted to content and, over time, aggregate user behavior on an anonymous basis.
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The two companies began talks about the relationship only last week and expect the new advertising experiences to appear in the early fall. Microsoft and Facebook have expressed an interest in moving quickly to implement the terms of the deal.

Whew - someone was in a hurry to get hitched! No financial terms were announced and the deal is supposed to run through mid-2009.

If you aren’t familiar with Facebook, it started as a social networking site for US college students, but has broadened to cover the coveted general young adult demographic in the USA. Facebook competes with 100 million registered user MySpace which recently did a mega advertising deal with Google, and that’s likely the biggest part of the story according to Michael Arrington:

This news is most notable because the partner that Facebook chose isn’t Google.

Google has been hyper aggressive in stalking the big advertising deals, going so far as to give 90% or more of total revenue to select partners (such as, reportedly, AOL and Ask), and guaranteeing nearly $1 billion to Myspace in a deal announced earlier this month.
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My hunch is that Microsoft bought this deal with a revenue guarantee and is flat out willing to take a loss to get into the game. Google would not let this deal, and the massive number of Facebook pageviews, go without a serious fight.

Katherine Q. Seelye at the NY Times:

“It’s basically a consolation prize,’’ Phil Leigh, president of Inside Digital Media, a market research firm specializing in digital media, said of the deal. “But Facebook is also a legitimate test bed, a place where Microsoft can test new technology in a commercial context,’’ he said.

“What we’ll see is Microsoft attempt to do some fairly leading-edge type of things, involving banner ads, animation and interactivity,’’ he added. “Whatever technology they develop and use effectively in Facebook, they’ll be able to use it elsewhere.’’
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Steve Berkowitz, senior vice president of the online services group for Microsoft, said ads would be made for Facebook, but they could also be aimed at any of MSN’s various Internet properties, which have a total of 400 million users worldwide. At the same time, ads running on MSN properties may also appear on Facebook, depending on what audience the advertiser wants to reach.
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Mr. Berkowitz said the deal was “not comparable to the MySpace deal because we focused on the right economics for both parties.’’

We can’t begrudge Mr. Berkowitz some snarking, but since Google’s MySpace spend was the end result of a lengthy eyeball auction and this deal pretty much a quickie, the jury is still out.

Owen Van Natta, chief operating officer at Facebook, said: “We’ve had a number of conversations with folks about a number of different partnerships.’’

Must have been a busy week.

Update: Robert Guth has more on the background of the deal at the Wall Street Journal.