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Microsoft: Built From Scratch, The Interface Migrates to the Web

By - April 21, 2004

msft_118x35Three things struck me as I reflect back on my trip to Microsoft Tuesday. One, it’s not wise to dismiss the company as being “at the first grade level” or “behind” the rest of the pack. Second, the fact that Microsoft came late to the search game just might be an advantage. And third, I need to get some face time with the Windows team, because I went into the day wondering if MSN isn’t becoming MSFT’s future interface/platform play, with Windows relegated to a supporting role (as DOS was to Windows) and, well, nothing I heard convinced me otherwise. And that certainly can’t be right. Or can it?

cole-1I met first with David Cole, who runs MSN and has a long history at the company, in particular with Windows and web technology. Much of what we discussed I need to save for my column, but suffice to say we covered a broad range of topics, including Longhorn integration (yes, MSN and search are being built with an eye toward that eventuality), the Web OS meme (while not dismissive of the idea, Cole thought it was just one of many approaches to solving computing and information service problems), and of course, competition with Google and the rest of the field. Cole began by outlining how MSN has shifted to its current strategy, based on building scaled software services that break into two major buckets: communications services (MSN Messenger, Hotmail, etc) and information services (search, content, etc.). Yusuf Mehdi, who I met with next, runs information services, and we had a pretty detailed chat about the present and future of search. That conversation was for the book alone, due to timing issues. I can report, however, that Yusuf was pretty charged up about what they are building.

So why did I leave thinking that MSFT’s late start in search could be an advantage? Well, think about it. The company has massive resources, and the folks in charge are pretty smart. So they get to tackle the search problem with no legacy issues and no presumptions with regard to approach. There are any number of hurdles in search – starting with how to scale your infrastructure and moving into how to integrate results with personalized data – and many of these might best be tackled by starting fresh. Plus, on the talent side, MSFT is really the only viable player that can offer engineers unlimited resources and the chance to start from scratch. I know, the Valley mill says MSFT is having a hell of a time hiring, but when I asked that question up in Redmond, I got quite the opposite answer.

I found both Cole and Mehdi personable and open, and willing to listen as much as hold forth. I did ask them any number of questions suggested by Searchblog readers, and I got a chance to talk to Scoble before I went in as well. I asked Scoble what I should ask the MSN execs, and he said he wanted to know when MSFT would launch blogging on MSN, what their RSS strategy was, how they plan to kick Google’s ass, and what they were going to buy. I asked those questions and more, and while some of the answers are under embargo for the book, here are a few of the highlights I can report:

- MSN Premium, a new subscription product, already has a rudimentary blogging tool, Cole told me, and blogging will be improved and incorporated in some way across the system.
– 3 degrees, a social networking application that is in testing in the Sandbox, has taught MSN a lot and we can expect to see some version of it attached to MSN Messenger. In particular, watch the music application.
– RSS: Well, Cole was not hip to RSS, but he said he would get hip pronto. (He also was not aware of Scoble, but that’s changed now!)
– Google: Very diplomatic on this front as you might expect. Respectful of how the company changed search and the internet for good. It’s not often that Gates admits defeat.
– What might they buy? We didn’t really get into this one – ran out of time. But I sense that MSFT is pretty into rolling its own right now. When the search platform is stable, I’d wager they might go looking for neat things to plug into it.

On the platform idea (point three), my general thesis is this: Over time, more and more of a typical user’s desktop real estate is devoted to web-enabled apps. I am an extreme example of this trend (and I’d wager the same is true of most of Searchblog’s readers): at any give moment, I’ve got ecto (a blogging tool), NetNewsWire (RSS reader), Firefox and/or Safari (browser), mail, and Office open. All these applications are web-enabled (Office is the lamest of the bunch, but not for long). Even OSX makes web calls – if only for software updates for now. So if you look at my screen, at least 80 percent of it is web applications. Compare that with five years ago, where it was just email and the browser, or ten, where it was just email.

Now, all these applications are migrating to the portals, and the portals are migrating to the model Cole described: software-based platforms replete with tools and applications – mail, calendar, blogging, rss readers, the works. At some point (and this certainly is not a new idea) the very idea of the “desktop” will become pretty old school. We’re building an entirely new architecture on top of our OSes. So…what does that mean for the traditional OS? In essence, it loses the glory role, in the eyes of the consumer. The OS does the hard stuff – files systems, security, connectivity, etc., but the interface, the stuff the user sees, is migrating to the web. And MSFT’s play there isn’t Windows. It’s MSN. At least, I think it is….

This, it seems to me, is why the company held its nose and lost untold billions through MSN’a rough patches (the service is now on a path to sustained annual profitability). And it also seems to me that this trend has something to do with Longhorn’s delays and missteps: how do you build a new operating system when its interface will live on the web, instead of on the desktop? I’m looking forward to learning more.

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Time Warner: Get Over AOL Already

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t_CD Photo 1As I watch the internet business really gain traction, I am reminded of a key player which, to my mind, remains unacceptably hobbled. Yup, it’s my AOL hobbyhorse, and I’m in a mood to saddle up. Maybe it was the MSN trip, I dunno. But I’ve written this before, and I will say it again. The people running Time Warner, who lost their company to AOL in 2001, then won it back in bitter street fighting during 2002, need to stop punishing AOL for the damage the deal did to their net worth (don’t think business is personal? Talk to Time Warner folks. Trust me, it’s personal. And it ain’t just the execs. It’s the whole Time Warner establishment…). My prescription? Cut AOL loose to be the mammoth success it could be, if only its management didn’t have to cowtow to Time Warner’s rear view mirror approach to the world. I mean, could you imagine Google, Yahoo, or even IAC run by Dick Parsons?

Here’s the lead to a recent Washington Post piece on AOL:

When AOL Chief Executive Jonathan Miller strides into the 10th floor boardroom at the Time Warner Center in New York tomorrow, he will face a difficult challenge: persuading board members that America Online can return to growth, even as its core dial-up subscription business continues to rapidly shrink.

Why on earth would someone who has 25 million paying users and a top five web property have to convince anyone that he has a growth story? I mean, really, think about that. Ads alone, he’s in the pink….unless, of course, his strategic goal is to assuage the Time Warner execs whose egos were bruised when they sold their own company short to Steve Case four years ago. Let’s get real here. And get over it.

This is a company with the largest installed paying base of internet users in the world! Hello? Time Warner execs, get over the fact that you sold yourselves short in the AOL deal, and let this company do what it must. And what must it do? Well, frankly, it must become a software-based information services company, as Google, MSN, and Yahoo already are. It needs its own R&D labs, its own world class engineers and product managers. It needs to stop forcing good people to work in New York and Dulles. In other words, it needs to be the kind of company Time Warner has no idea how to run or manage. My opinion? The AOL deal was smart, but you lost faith almost immediately. You decided the internet economy was just so much hooey, then you damaged both the AOL and the TW brands as you backpedaled and blamed those sneaky new economy folks at AOL for selling you a false promise. Well, it’s 2004 now. As they say here in California, let it go. Go buy more cable networks, lick your wounds, and prepare for the next time you do something massively dumb. Or, alternatively, get behind AOL in a major public way, and play the game along with Barry Diller, Terry Semel, the Google Guys, and Bill Gates. Because trust me, these are the folks who will own the equivalent of network television for the next decade.

But, I don’t think you buy that idea – you bought it once, and it didn’t pan out. So you want to get the most out of AOL? Clean it up and spin it out. Enough said. Move on, Time Warner. The AOL mess is no longer Case or Pittman’s problem. It’s yours. And if you don’t want to run this company, let someone else do it.

DIY Search

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mattWell, OK, if you’re Matt Wells, you can do it yourself. Gigablast is amazing, in that it really is just Matt. Here’s an interview that I read on the plane on the way to MSFT yesterday. Talk about dissonance. Matt Wells, one guy in New Mexico. MSFT, well, MSFT. My report on MSFT by the way is held up a bit as I clear some PR issues as to what I can and cannot report right now….stay tuned.

Nutch Update

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logo_nutchThe recent announcement of Mozdex, which is leveraging the Nutch open source engine, reminded me to ping Doug Cutting and see how things were going with the Nutch project. He replied that while Mozdez only crawls a few million pages, it’s a start, and he was pleased to see folks starting to use Nutch. He also pointed to ObjectsSearch, another site which uses Nutch.

But Doug said that his focus these days with Nutch is not to try to get a major, open source alternative to Google or Yahoo out there, though that remains a long term goal. Instead, he reports:

I’m opting for organic growth: get some users and developers
will follow.

In this vein, I put together a demonstration a few weeks ago for Oregon
State University. They love it. It’s at:

http://devjr.cws.oregonstate.edu:8080/en/search.html

Compare this to their Google appliance at:

http://search.oregonstate.edu/web/

The quality is pretty close, and the price a lot less. It took me about
20 steps to build that demo, I want to reduce that to just a couple, to
put it within the grasp of any campus webmaster. Then I’ll turn it over
to them to operate themselves.

I’m also contracting to build a Nutch-based search engine for the

Good Evening. More IPOs For You…Including a Mapping Giant…

By - April 20, 2004

sfdc_223x78Salesforce seems to be finally going ahead, an amended filing is here. They apparently had to deal with a bunch of SEC stuff, but it’s on again. Lead banker: Morgan. Revs in 2003: Close to $100 million. Profits around $3.5mm.

navteqAnd Navteq filed while I was at MSFT, the docs are here. Navteq, you say? Who the f*** are they? Well, the provide the mapping info for Yahoo, auto nav systems, et al. The CDDB of maps! OK, revs in 2003…ready? $237 million. HOLY SHITE! But wait, they have operating income of nearly $65 million. And some odd tax stuff (any CPAs out there?) which put their net income at … $235 millon! Oh my goodness….Bankers Credit Suisse and Merrill.

Taking the Day Off, Headed to MSFT

By - April 19, 2004

Going to MSFT today (well, early on the 20th) to meet with David Cole, who runs .net and MSN, and Yusuf Mehdi, who runs search and most of MSN for David. Should be darn interesting. Scoble, you around? If so, email me jbat at batellemedia.com.

Anyone care to suggest questions for these two gentlemen? Post away on comments or email me….thanks!

Want to Grok The Google File System?

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Then start here, with the paper describing it. And here, with a blog entry that describes the virtues of having a product platform.

Excerpt:

We have designed and implemented the Google File Sys-
tem, a scalable distributed file system for large distributed
data-intensive applications. It provides fault tolerance while
running on inexpensive commodity hardware, and it delivers
high aggregate performance to a large number of clients.
While sharing many of the same goals as previous dis-
tributed file systems, our design has been driven by obser-
vations of our application workloads and technological envi-
ronment, both current and anticipated, that reflect a marked
departure from some earlier file system assumptions. This
has led us to reexamine traditional choices and explore rad-
ically different design points.
The file system has successfully met our storage needs.
It is widely deployed within Google as the storage platform
for the generation and processing of data used by our ser-
vice as well as research and development efforts that require
large data sets.

(Thanks Ross!)

Good Day, Your Net IPO Today Is…

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bluenileBlue Nile. Bankers Merrill, Weisel, Bear Sterns. 2003: $128 million revenues, $11.3 million profits (not including an odd $15 million tax credit, which takes profit to $27 million). They sell jewelry online.

Prospectus here and here.