World Economy: Microsoft, Google, Yahoo...

Jul 27, 2008

Microsoft, Google, Yahoo...

Tel is the message that Steve Ballmer sought to convey at the meeting with analysts held last week. While Google, like a black hole, intends to absorb any activity in its path - it has just officially launch its draft Knoll Wikipedia competitor - Microsoft intends to give a signal on its strong ambitions in the Internet universe. The unbundling Windows / Windows Live on one side and Online Services of the other is an element of this strategy.

While it is one of the first sites of traffic in the Internet world, Wikipedia remains a non-commercial project as had been hoped Jimmy Wales, one of the founders 5. Remember that Wikipedia is a collaborative online encyclopedia, universal and multilingual operating system with a wiki. The figures obtained by Wikipedia are remarkable: 400 000 contributors, a hundred languages represented more than 10 million pages including the fourth in English and nearly 700 000 in french (our east rather well represented).

But on the Internet (in the real world too), traffic is the fundamental element that helps to monetize any type of activity. From this point of view, Wikipedia would be an anomaly.

In any case, from the point of view that Google is a machine to monetize all this activity on the Internet is almost a perversion. While on Wikipedia, the authors are volunteers and items are not signed, the project Knol (for knowledge) Google brings this point of view of major changes. The product is officially announced was a test since December, according to a mechanical usual in the Internet world.

The basic principle of Knol is that the articles are signed by their author (or their group of authors). So that may exist several articles on the same subject. Any reader may propose suggestions that the author is free to accept or reject. The authors may decide to integrate Google Adsense advertisements. In this case, they will repay their share in proportions that Google has not specified. The content will be indexed by the search engine and there is a good bet he is "properly". In addition, Google has signed an initial agreement with the New Yorker magazine that anyone who can integrate an illustration of this magazine article. Google could expand this type of agreement with other magazines.

Knol is it a potential competitor to Wikipedia? In terms of knowledge, without doubt, even though it will take some time to propose an alternative content to that of Wikipedia. In economic terms, certainly not since Wikipedia is not located in the commercial world.

This new service shows the insatiable appetite for Google to monetize everything in its path. Google has been rather active recently with the new Google Trends, the virtual world Lively, the platform mobile Android ... and the list is not closed.

What's new in Search?

In all its presentations, Microsoft summarizes its strategy through its presence on four fronts: PC, server, Internet and Devices (basically all types of materials that the power of a PC). On three of these fronts, Microsoft has acquired a dominant position or achieving its objectives: almost absolute monopoly on the PC, now an enviable position in the world of servers with a new goal, tackle VMWare in the field of virtualization, and a very honorable in the world of mobile phones with Windows Mobile, which is one of three major platforms.

It is in the Internet that Microsoft has the most difficult to repeat itself even if the environment that is number three in this market. The Online division remains a major problem for Microsoft.

Admittedly, the last year that ended last June 30, sales grew by 30%, but still very modest compared to those of its main competitor, namely Google. On the market for Internet advertising, Microsoft would be credited only 3%, while Google is leading with 62% and would tend to increase its advance. Microsoft also indicates that it is the tenth advertising agency to the USA all media.

In addition, losses seem to grow with the turnover. In the past year, operating losses have reached $ 1.2 billion against just over 600 million a year earlier. The transformation to the digital world is in its earliest days, said Steve Ballmer to analysts and most of the advertising - a source of income coveted by Microsoft - is still offline.

Over the past decade, Microsoft has swallowed billions of dollars without achieving the desired result. It is better under these conditions the insistence displayed by Microsoft in the acquisition of Yahoo, in its entirety or only activity search engine. It seems that this is the only path to salvation for Microsoft if it wishes to one day become a serious competitor to Google.

As a first step, Microsoft is doing what it can do with its own forces by reorganizing its activities: on the one hand a division that combines Windows and related services Windows Live and all the other Internet activities, engine Search Live Search, the MSN portal and advertising related activities.

Everything Will Go Digital

Anything that can be digitized and supported by IP networks - to understand the Internet - will Steve Ballmer said. In such a context, the software becomes a predominant feature and we are rather in this activity. But in such a perspective, the "Search" is the entry point of the Internet, one from which everything begins (See also article in the letter the day of Nicholas Carr: "Is Google making us Stupid") .

"Search is ripe for innovation, said the CEO of Microsoft, because it was not the most innovative (...). Go back five years year and look back what research on the Internet: 10 links on the left, some advertising on the right and maybe a few advertisements at the top of the screen. Look at today: 10 links on the left, some advertising on the right and maybe a few advertisements at the top of the screen ... 50% of requests through a search engine do not lead to a satisfactory outcome ".

An analysis that is not false and indirectly pointing a number of sector by presenting it as an annuitant of a situation gained, but fails to talk about what is not, ie the mechanisms to improve the relevance of research. It is true that Google's position could change quickly enough. It is sufficient that a player - why a new startup - develop a new technology that makes a leap in the field of Internet search for the giant Google is shaken. However, it is very likely that the startup is ... Google itself or it should buy it.

In search of a new PageRank

Google has seated its reputation and its power on an algorithm called PageRank, which has revolutionized technology research on the Internet. Remember also that earlier he did not know really how to monetize its technology he had felt sold directly to businesses with little success, before the bright idea of contextual advertising.

Microsoft is working on a technology called BrowseRank to overcome certain weaknesses of PageRank. Several researchers at Microsoft Research Asia or Chinese scholars have just published an article called BrowseRank: Letting Web Users Vote for Page Importance that looks more like a mathematical publication only other thing that could provide answers to some problems with recall that PageRank the basic principle is to attach importance to the functions pages of links that point on. Among these problems the possibility of automatically links on a page to magnify its importance, taking into account my time that people spend on different pages ...

The basic principle for BrowseRank is to take into account the behavior of Internet sites on how they navigate the site, how long they spend ... But this is only academic research and the establishment in the engine Live Search is not immediately ... This explains the insistence by Microsoft to acquire Yahoo. And this is not the extension of the agreement between Microsoft and Facebook to link the services offered by the first social network to the second which will settle the issue.

World Economy

Microsoft, Google, Yahoo...

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