Microsoft News Tracker

Back in November, 2006 Microsoft shut the doors on the failed MSN Music download service but kept the DRM servers going to support existing customers. Last week, the end of that service on August 31, 2008 was announced as well.

Like iTunes, PlaysForSure authorizations are bound not only to a user’s individual computer, but to that particular instance of their operating system as well. If a user has to rebuild, upgrade, or otherwise reinstall his or her operating system, authorizations for MSN Music subscriptions will be reset.

MSN Music customers have little recourse, unfortunately. Aside from permanently deciding which computers will keep their account’s authorization – once August 31 passes, authorizations cannot be changed – users have the option of burning purchased MSN Music to CD and then re-ripping the music to another compressed format, such as MP3. However, the process of “transcoding” (converting) lossy-compressed files (as WMA files are) to another lossy format (such as MP3) significantly degrades the quality of the resulting MP3 file. Users can also burn their music to CD and convert to a lossless format, such as FLAC, but lossless formats consume significantly more space in order to make a perfect copy of already-degraded WMA files.

If you aren’t an audiophile, that probably isn’t a bad solution, but the fact that it’s the only solution grated on many. Microsoft’s Rob Bennett defended the decision for the obvious reasons:

In an interview with CNET News.com, Bennett said that continuing to support the DRM keys was impractical, that the issue only affects a "small number" of people and that focusing exclusively on Zune was the best way to go. He also noted that it wasn’t Microsoft’s decision to wrap music into digital rights management.

The reason for shutting down the DRM-licensing servers was "every time there is an OS upgrade, the DRM equation gets complex very quickly," said Bennett, general manager of entertainment, video, and sports for MSN. "Every time, you saw support issues. People would call in because they couldn’t download licenses. We had to write new code, new configurations each time…We really believe that, going forward, the best thing to do is focus exclusively on Zune."

The main takeaway is that DRM schemes for failed download services are like any other failed audio/video format such as 8-track audio tapes or Beta videotapes or HD high-def DVDs - the purchaser is at the mercy of the technology providers and if the business goes south, so does your media collection. Of course, the other takeaway is that if you don’t buy DRM protected digital content, you won’t have a problem and that is getting easier in the audio realm every day.

As recently as 2 years ago Microsoft was still persuading partners to ship SPOT watches using their MSN Direct specialized FM radio broadcast service, but that has all come to an end:

As of recently, the Smart Watches with MSN Direct have sold out and are no longer for sale. While we continue to move forward with MSN Direct and seeking out new opportunities for devices that would benefit from the MSN Direct service, we, along with our watch partners, do not have immediate plans to create a new version of the Smart Watch, as we are focused on other areas of our business. We will maintain support of our watch customers and continue to deliver information to the watches, but we do not plan to increase our investment in the watch business going forward.

Those other areas are MSN Direct for GPS navigation devices and MSN Direct for Windows Mobile where the form factor is more amenable (the watches had to be recharged every few days) and in fact, the Windows Mobile variant doesn’t even use the FM broadcasts. However, if you are still pining for dubious geek chic, there’s still a Melitta coffee pot.

Late yesterday, it was revealed that Microsoft has acquired Seattle airfare prediction service Farecast for an estimated $115 million in another apparent technology/personnel buy. So what’s an airfare prediction service? Mark Hendrickson explains at TechCrunch:

Farecast is an airfare pricing comparison tool that also uses a predictive algorithm to recommend when you buy your ticket. So the idea is to show the user not just who has the cheapest ticket, but whether or not waiting might make sense as well. The site has also guarantees tickets at its predicted prices for an extra charge. As of this past fall, it also began helping travelers determine the fairness of hotel pricing.

Microsoft had signed a deal last July for Farecast to provide their service on MSN Travel so presumably there’s a track record to justify the acquisition price.

Update: A commenter at John Cook’s Venture Blog (first link above) makes an important point:

Also, since Yahoo owns FareChase (about the same size as FareCast) and MSN will almost certainly end up with Yahoo, why do they need two travel meta-search sites. Seems like a waste of $115M for MSFT.

Without trying to compare the FareChase and Farecast technologies, there’s a fine line as to what you do or don’t do pending an acquisition that may never be realized, but it does seem that this one could have been delayed a while.

Last week Microsoft updated Live Search Maps and Virtual Earth 3D with a variety of new bells and whistles and this week launched a spiffy new Live Search News that inevitably drew comparisons to Google News which it somewhat resembles visually. However, my first thought on seeing them was wondering how they will stack up against Yahoo Maps and Yahoo News when the apparently inevitable acquisition takes place and the resulting “synergy” paring decisions are made.

My guess is that Virtual Earth 3D is safe by lack of comparable Yahoo product and Live Search Maps has a fighting chance of survival, but Live Search News will be shuttered almost immediately. (MSNBC.com’s news over at MSN will undoubtedly survive because of its unique heritage.) Kevin Johnson has told Microsoft’s online troops to stay focused, but it would be hard to believe that they are not looking over their shoulders.

Joanne Bradford who is Microsoft’s current MSN honcho and former Microsoft Web ad czar (”We love ad salesmen“) is leaving Microsoft for startup Spot Runner which is nominally an “Internet-based ad agency that makes it easy and affordable for local businesses to advertise on TV.” The trick apparently is to have canned creative content that can be easily modified for a local business. Bradford reportedly will be executive vice president of National Marketing Services, focused on national advertisers” which sounds like a good fit for her and apparently also fits somewhere in Spot Runner’s business model.

As for MSN, former Bradford direct report Greg Nelson, who is the general manager of MSN.com International, will be running things on an interim basis. I would chalk this up as yet more turmoil in Microsoft’s online business  - the departure of Bradford’s boss Steve Berkowitz was announced in February. Of course, we’ll really see turmoil if the Yahoo deal goes through and Bradford may well have been dodging exactly that.