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Ben Fritz at Variety has the buzz on Microsoft’s outreach memo:
Looking to strengthen ties with Hollywood as it delves deeper into online video, Microsoft on Tuesday sent a memo to top execs at all the major media congloms offering to work closely with them to combat piracy, but not to implement the kind of filtering technology Viacom is demanding on YouTube.
Confidential memo obtained by Daily Variety was sent by Microsoft to media toppers such as Peter Chernin, Jeff Zucker and Bob Iger as well as heads of the major labels. It outlines the tech giant’s approach to Soapbox, its newly launched viral video service on MSN that is going up against YouTube, MySpace Video and others.
In the letter, media and entertainment VP Blair Westlake said Microsoft is developing “what we believe content owners want and need: industry-leading notice and takedown … practices, including tools that enable our content partners to more easily find content that is rightfully theirs and give us prompt notice so we can respond even more efficiently and expeditiously.”
That’s probably (non-copyrighted) music to their ears except that
Soapbox, which is still in a public beta trial run and has a miniscule amount of content and visitors compared with YouTube, already has numerous copyrighted clips from “South Park,” “High School Musical,” “American Idol” and other TV shows, films and musicvideos.
Still, it behooves Microsoft to stay on the good side of the media bigs since their aspirations for future bounty seem to lie in that direction.
Speaking of which, the latest numbers from Compete show MSN is in 5th place with only with 4% marketshare. YouTube plus Google adds up to 54% and only MySpace with 16% looks like a contender.
Some Microsoft news items from this week that didn’t find a post of their own:
Michael Gartenberg leaves Jupiter Research to become a Microsoft “enthusiast evangelist.”
More episodes of the Odd Couple: Microsoft, Novell Detail Their Linux-Windows Roadmap (press release here) but Ballmer: Novell deal proves open source needs to ‘respect IP rights’ and Novell CEO: We’re Going to ‘Attack’ Vista. I always enjoy light comedy.
Russian Judge Dismisses Any Penalty in Piracy Case. I’m sure Microsoft is glad to dodge the public relations bullet, but the rationale sets an odd precedent:
A Russian judge convicted a provincial school headmaster on Thursday for using pirated Microsoft software in school computers, but declined to impose any penalty, saying that Microsoft’s loss was insignificant compared with its overall earnings.
Microsoft comes under fire from BBC’s Watchdog programme over Xbox 360 defects.
VirnetX files VPN patent suit against Microsoft.
Microsoft Announces Microsoft Dynamics CRM Analytics Foundation to Drive Business Intelligence.
MSN Soapbox, Microsoft’s YouTube clone, has shed it’s restricted beta for a public beta. I’m not kidding about the clone part – if you’ve seen YouTube, you’ve seen Soapbox except that the interface is slicker (i.e. more AJAX) and there are no ads.
A public release candidate of Windows Server Update Services (WSUS) was made available for download.
Yesterday’s Google acquisition of YouTube is being endlessly dissected today, but Steve Rosenbush has an interesting article at Business Week Online on the implications for Google competitors including Microsoft:
The software giant considers Google a top rival and a threat. Google already challenges Microsoft by creating free online software applications that compete with Microsoft’s spreadsheet software and other products. Microsoft’s MSN site competes with Google in search, advertising, video, and online media, and Microsoft reportedly had an interest in buying YouTube.
Microsoft CEO Steve Ballmer, meeting with BusinessWeek editors Oct. 9, said Google could emerge from the YouTube deal an even stronger rival. If Google can work out a good advertising model with YouTube, he said, it makes Google a stronger competitor to Microsoft. It will have a larger share of the growing online ad market, and can use the cash to create more products like the free online spreadsheet software, calendars, and word processors it already offers. But Ballmer says Microsoft has a long-term strategy, not to mention a history of coming from behind to overtake rivals such as Netscape, the early leader in the browser market. “We’re very long-term. We’ve got a stick-to-it-iveness, a tenaciousness that I would argue is unmatched,” he said.
All quite true and deep pockets certainly help with the persistence, but a lot of checks are being written on Microsoft’s stick-to-it-iveness account lately. I also think it’s interesting that Ballmer focuses on the Google’s free office software as if it were the ultimate objective of raking in the advertising bucks.
So what’s Microsoft to do about online video?
Microsoft has several options. It can continue to try to build MSN as a rival to popular sites such as YouTube. It could also borrow a play from Google and combine its technological prowess in a deal with a content company. While Microsoft’s employees can match Google in terms of technical brain power, it will be tough to find a company that can match YouTube’s cultural appeal and power on the Web. One possible target could be Yahoo!, which is suddenly looking like a laggard in the world of online media. But Yahoo retains a vast base of users and remains a powerful force on the Web.
There are smaller players in Internet video who could be takeover candidates, but they would not add much to Microsoft’s portfolio. Why not think big with a Yahoo acquisition which has advantages beyond just video?
Update: Speaking of stick-to-itiveness, Todd Bishop notes that coincidentally invitations went out yesterday to beta testers for MSN Soapbox, Microsoft’s nascent YouTube competitor.
Update Oct. 11: Business Week has the full transcript of the Ballmer interview here.
This morning’s Microsoft Blinkx tie-up story may have turned out to be a dud, but the Google YouTube acquisition rumor panned out to be US$1.65 billion of gold:
Google Inc. announced today that it has agreed to acquire YouTube, the consumer media company for people to watch and share original videos through a Web experience, for $1.65 billion in a stock-for-stock transaction. Following the acquisition, YouTube will operate independently to preserve its successful brand and passionate community.
The acquisition combines one of the largest and fastest growing online video entertainment communities with Google’s expertise in organizing information and creating new models for advertising on the Internet. The combined companies will focus on providing a better, more comprehensive experience for users interested in uploading, watching and sharing videos, and will offer new opportunities for professional content owners to distribute their work to reach a vast new audience.
…
When the acquisition is complete, YouTube will retain its distinct brand identity, strengthening and complementing Google’s own fast-growing video business. YouTube will continue to be based in San Bruno, CA, and all YouTube employees will remain with the company. With Google’s technology, advertiser relationships and global reach, YouTube will continue to build on its success as one of the world’s most popular services for video entertainment.
The number of Google shares to be issued in the transaction will be determined based on the 30-day average closing price two trading days prior to the completion of the acquisition. Both companies have approved the transaction, which is subject to customary closing conditions and is expected to close in the fourth quarter of 2006.
Marshall Kirkpatrick at TechCrunch has some estimates on how the loot will divvied up.
Update: Todd Bishop has the Microsoft reaction:
Where does Google’s $1.65 billion YouTube acquisition leave Microsoft? The question is particularly interesting in light of reports that the Redmond company was one of those that talked with YouTube about a possible deal.
Asked about those reports today, Microsoft didn’t precisely confirm them, but didn’t directly deny them, either. In a statement, the company said it “evaluated acquiring this type of technology several months ago” but decided that building its own video-sharing service would be “a more cost-effective way to compete in this new space.”
