Microsoft News Tracker

Andrew D Smith at the Dallas Morning News today reported that Blockbuster is experimenting with Microsoft’s Live Mesh to bring movies to mobile devices:

Blockbuster Inc. caught up to the competition last week by introducing a set-top box that brings rentals from the Internet to the television.

Now, the Dallas-based company hopes to pass the pack by teaming with Microsoft Corp. on new mobile services that will let customers watch even more movies on more devices.

“Eventually, we’ll give customers instant access to any movie on any device with an Internet connection and a screen,” said Keith Morrow, Blockbuster’s chief information officer.

“More immediately, we could use this technology to reach into airports. Travelers could quickly download movies from Blockbuster kiosks to their portable media players.”

Blockbuster will try to build some of these services on top of the new software platform from Microsoft.

Dubbed “Live Mesh,” it uses Internet connections to share data among different devices.

Reading between the lines it seems that Microsoft has some Live Mesh fans on the technical side at Blockbuster who have been experimenting with Live Mesh. It’s not clear how much “teaming” is actually going on, but I’m sure Microsoft is doing nothing to discourage Blockbuster.

Microsoft was touting a deal with personal computer giant Hewlett-Packard for Black Friday shopping this holiday weekend that offered shoppers 40% discounts if they went through Microsoft’s incentive shopping service, Live Search cashback. Unfortunately, Microsoft was not prepared for the load on their servers:

First, Microsoft’s Live Search Cashback site was down for a good part of the day, preventing many online shoppers from taking advantage of the Black Friday cashback promotions from HP and others. Now, some of the people who did get through to the site are reporting that they received a mere 3 percent cashback from their HP purchases, not the promised 40 percent.

The 3% instead of 40% is fixable with a lot of elbow grease from Microsoft and HP employees and yes, Web site overloads from holiday shopping frenzy aren’t uncommon, but this is certainly a PR black eye for Live Search. Even worse,it is extraneous to Live Search’s mission as a Web Search alternative to Google and Yahoo.

From a bean counter perspective, Microsoft likely is subsidizing Live Search cashback so the glitches may have actually saved money, but if the folks at HP wisely put a reimbursement clause in the contract it may get very expensive for Microsoft. As for HP, their online store just missed one of the biggest shopping days of the year so I am sure they are rather grumpy. Next year, I bet the "doorbuster specials" won’t be Live Search cashback exclusive.