Some Microsoft news items from this week that did not find posts of their own:
State by state, Microsoft responds to creeping threat of OpenDocument Format:
Ed Homan, an orthopedic surgeon representing a central Florida district in the state legislature, thought an amendment touting open-source document formats he tucked into a 38-page bill wouldn’t draw much attention.
But within an hour of the proposed bill’s reading in late March, Homan said, he was greeted in his office by three lobbyists representing Microsoft Corp.
“They were here lickety-split,” Homan said. “I had no idea it was going to get that kind of reaction.”
Office 2003 SP3 will be a security upgrade featuring technologies from Office 2007. No date.
China Telecom gives Google Web advertising rights. Microsoft had earlier done a search deal with China Telecom, but doesn’t seem to be in any position to provide Chinese ads, since they have farmed their own out to Baidu.
No demand for Microsoft Office in the cloud according to Microsoft execs. No surprise there.
Microsoft angst fodder:
Finally one from last week – Microsoft and Samsung signed a broad patent cross-licensing agreement.
Last week’s rumor of Microsoft paradoxically contracting for search results from China’s Baidu search engine looks to be at least partially correct based on a brief report from Dow Jones Newswires:
Baidu.com Inc. (BIDU) said Microsoft Corp. (MSFT) agreed to display Baidu.com’s paid search listings on certain search results pages in China.
Baidu.com, a Chinese based Internet search provider, said Microsoft will display the listings on MSN, Live and other partner Web sites in China.
Baidu.com said the alliance started in December.
No financial terms of the deal were disclosed
It’ll be interesting to see the details and spin on this one. “Paid search listings” almost sounds like Microsoft is outsourcing Chinese search ads.
Update: It is ads and as odd as it may seem, Baidu won this eyeball auction. I guess Microsoft’s adCenter doesn’t have to worry about doing China. The press release at Baidu:
Microsoft (NASDAQ: MSFT) and Baidu (NASDAQ:BIDU) today announced a strategic alliance on paid search services, which will officially commence in December 2006. As a result of this strategic alliance, Microsoft will display Baidu’s paid search listings on the search results pages of certain Microsoft websites, including MSN, Live, and other partner websites in China.
“Microsoft is committed to bringing innovative online services and software, including search services, to Chinese Internet users,” said Erik Johnson, General Manager, Microsoft Online Services Group, Greater China. “China is one of our most important markets and the strategic alliance with Baidu will help us provide new opportunities for advertisers which will further enhance our search business in China.”
“Baidu’s partnership with Microsoft recognizes the huge potential and rate of growth of the Chinese online search market”, said David Zhu, COO of Baidu. “We are delighted to share our rich business experience and channel resources with our partners and contribute to the overall development of the Chinese search market.”
Update: One hopes that Microsoft has the guys with green eyeshades watching the Baidu results closely since they reportedly have more than the usual problem with click fraud. More here.
Update: WR Hambrecht analysts James Lee and Xiaofan Zhang provide some more commentary here including the fact that MSN China previously had no search monetization.
There’s a Wall Street analyst cat fight going on right now about the prospects for the leading Red Chinese search engine, Baidu.com, including their relationship with MSN China. SeekingAlpha:
WR Hambrecht analyst James Lee issued a brief written response to a competitor’s claims that Baidu.com is close to inking deals with MSN China, China Telecom and China Netcom.
(Apparently, the “competitor’s claims” come from Piper Jaffray.)
According to a note issued by a competitor’s firm, Baidu is close to signing agreements to provide search functions to MSN China, China Telecom and China Netcom.
The note stated that these deals would add 50M in searches per day and $10-$20M in revenues in 2007. We spoke with our channels and have the following observations:
I’m a little puzzled about the China Telecom claim, since Microsoft signed a Windows Live Search deal with them in September, but here’s the really interesting part:
c) MSN China. MSN China’s top two managers recently resigned, leaving the company in uncertainty. We heard “an agreement” with Baidu was drafted (but not signed yet) prior to the management departure, but we are unsure what the nature of the deal is. Our sources indicated that Microsoft headquarters recently sent a representative to China to review and restructure the company’s operations. We believe it may take months for this “review process” to be completed before deciding on its pending agreement with Baidu.
Microsoft’s Chinese operations seem to be an inexhaustible source of turmoil (recall Kai-Fu Lee).
With that in mind, we believe this agreement could be on hold until a new management team is appointed in China. We feel that Microsoft is not likely to outsource its search engine functions to Baidu. This would represent the company’s admission that its search engine technology has completely failed in China. Even if the agreement includes such provision, we feel that the new Microsoft China management team may not be on board with the plan.
Ah, but Red China is a special case when it comes to Web search (and much else) and that wouldn’t necessarily reflect adversely on the prowess of Windows Live Search. As I have mentioned before, Baidu seems unusually “well attuned” to the whims of the restrictive Red Chinese government and it gets a significant fraction of its traffic from searches for unlicensed music files which a Chinese court just confirmed as legal. (If you are curious about free MP3 downloads, an inability to read Chinese is not a problem.)
So, instead of tweaking Windows Live Search to spiff up indexing of illicit music files and never find any criticism of the Red Chinese government, why not go with a proven winner like Baidu? It probably doesn’t hurt either that MSN China is actually a joint venture of Microsoft with the next best thing to the Red Chinese government and that presumably also rules out the option of Microsoft washing its hands of the whole dirty business.