Betanews - Companies

After telling US to mind its own business, Kroes slaps caps on Rambus royalties

Scott M. Fulton, III — Wed, 09 Dec 2009 12:20:20 -0500

The European Commission has agreed to a proposal by US-based memory parts designer Rambus, to limit its royalties that memory makers worldwide will pay for double data rate (DDR)-based memory units to 1.5% per unit, and DDR memory controllers to 2.65% per unit. This in order to put to rest an ongoing EC investigation into Rambus royalties practices -- one which continued long after the US Supreme Court upheld an April 2008 Appeals Court ruling that stated the entire global memory standards system had lost its credibility.

During a morning press conference in Brussels Wednesday, EC Commissioner for Competition Neelie Kroes told reporters Rambus made this offer in order to redress prior conduct: specifically, manipulating the memory standards process in order to claim exclusive rights to high royalties.

"A US standard-setting organization called JEDEC developed an industry-wide standard for DRAM chips. The standard was very successful. JEDEC-compliant DRAM chips represent around 95% of the worldwide market and are used in virtually all PCs. In 2008, worldwide DRAM sales exceeded 23 billion euros," Comm. Kroes stated. "Rambus is claiming royalty payments on all these products, which represents a very substantial cost to industry. The Commission was concerned that Rambus may have only been able to charge these royalties because of a so-called patent ambush, in breach of EU antitrust rules' ban on abuse of a dominant market position. A 'patent ambush' means that during the standard-setting process a company intentionally conceals that it holds essential intellectual property rights relevant to technology used in the standard being developed. It only starts asserting its intellectual property rights, and claiming royalties on them, after the standard has been agreed, once other companies are locked in to using it."

Those are the same concerns raised by the US Federal Trade Commission, which ruled in August 2006 that Rambus had abused its position by manipulating the JEDEC standards organization in order to steer memory manufacturers towards using its intellectual property. Rambus' defense had been that if it had disclosed to JEDEC the nature of its proprietary standards prior to their having been submitted for discussion, they would no longer have been entitled to patents, having just told the world what it was up to.

The FTC didn't buy that argument, stating in its ruling three years ago (PDF available here), "If a competitor merely read or heard Rambus's disclosure, copied its application, and filed first in a foreign jurisdiction, the competitor would not have invented the technology and would not be entitled to a patent. Rambus failed to identify any foreign jurisdiction in which its ability to obtain patent protection would have been threatened by disclosures within JEDEC. Under these circumstances, and on this record, the only effect of Rambus's behavior was to prevent JEDEC participants -- who expected Rambus to conduct itself cooperatively and without deception -- from making their standard-setting decisions with knowledge of the consequences. That is not pro-competitive."

But the US District Court of Appeals for DC struck down that FTC ruling, and revealed in so doing that it had investigated the nature of business at JEDEC, coming to the conclusion that it really wasn't doing business as a formal organization anyway. Not following the rules of an organization that didn't abide by its own rules, or even really have any rules, couldn't be ruled illegal.

Sure, JEDEC had a "manual," but it didn't amount to very much, said the Appeals Court: "As the Federal Circuit has said, JEDEC's patent disclosure policies suffered from 'a staggering lack of defining details,'" wrote Senior Judge Stephen Williams last October. "Even assuming that any evidence of unwritten disclosure expectations would survive a possible narrowing effect based upon the written directive of Manual 21-I, the vagueness of any such expectations would nonetheless remain an obstacle. One would expect that disclosure expectations ostensibly requiring competitors to share information that they would otherwise vigorously protect as trade secrets would provide 'clear guidance' and 'define clearly what, when, how, and to whom the members must disclose.' This need for clarity seems especially acute where disclosure of those trade secrets itself implicates antitrust concerns; JEDEC involved, after all, collaboration by competitors...In any event, the more vague and muddled a particular expectation of disclosure, the more difficult it should be for the Commission to ascribe competitive harm to its breach."

Of course, the EC is not bound to adhering to findings of US law, or that of any other country. But Europe's independence from the US with regard to matters that take place on the same planet as Europe, was made crystal clear yesterday when Comm. Kroes spoke publicly on another matter: the proposed takeover of Sun Microsystems by Oracle. There, she told fellow lawmakers that US Senators pressing her to complete her investigation of Oracle should mind their own business -- specifically, to go argue about health care reform and leave her to mind the business of fair competition.

Kroes' remarks were quoted by the Associated Press, but have not yet been released in official EC reports on the speech. Nonetheless, EC spokesperson Jonathan Todd told Betanews this morning that the AP's citation of her comments was accurate, though he declined to elaborate further.

Rambus' behavior had been the subject of private IP-related lawsuits against it, including from Hynix Semiconductor. Since 2000, Hynix had been working to invalidate the very patents that Rambus is now charging royalties for. Rambus' defense at the time appeared to say the entire memory industry was conspiring against it -- a defense which, for most, seemed implausible.

But then in 2006, Hynix plead guilty in US District Court of conspiring along with memory giant Samsung, Infineon, Micron Technologies, and other companies to fix the prices of DRAM sold in the world market, in an effort that might have continued to shortchange Rambus were it allowed to continue.

Acer eclipses Dell for #2 spot in global PC shipments, says iSuppli data

Scott M. Fulton, III — Fri, 04 Dec 2009 12:12:35 -0500

By Scott M. Fulton, III, Betanews

At the rate at which Acer (which now also includes Gateway, Packard Bell, and e-Machines) was catching up with Dell, analysts predicted at this time last year that it could conceivably top Dell in units shipped worldwide by the third quarter of 2009. For once in this wacky economy, the analysts' predictions turned out to be correct: Acer is now the world's #2 PC producer in terms of units shipped, according to iSuppli.

But Acer is not catching up to Hewlett-Packard too fast, in any other regard besides placement on the list. HP's market share continues its strong rise, as the entire PC market enjoyed a nice recovery last month...and Dell shared in absolutely none of it.

Lagging server and commercial PC sales continued to take a toll on Dell's market share, which gave back a full point of market share, leaving 12.9% remaining as unit shipments fell 5.9% annually. Dell ended up shipping 650,000 fewer units in Q3 2009 as it did the prior year; and up to this point, the company has been blaming the sour economy for its continued declines.

But for everyone else, the sour economy has passed them by. Acer captured 1.8 points of market share, shipping 10.7 million units worldwide -- more than 1.5 million more than at the same time last year. HP shipped a million more units this last quarter than last year, and very nearly captured the unprecedented 20% mark in global market share -- the figure now is 19.901%.

The other four of the world's top five non-Dell brands are largely responsible for the entire PC market recovery. As a whole, total industry shipments rose by only 1%. And brand-name notebook PCs are the reason for the bottoming out, with shipments in that technology segment rising 17% annually. Market share for the "everyone else" segment slipped by 7.1% -- and with regard to worldwide sales, that points to continued bad news for Sony.

If you've been getting three or four different Lenovo ads in your inbox every day...well, someone can tell Lenovo the campaign's evidently working pretty well. The #4 PC maker also shipped one million more units -- its 17.2% annual growth rate puts Lenovo now on a par with HP in terms of capturing new customers. It shipped 6.9 million units last quarter, while #5 Toshiba held onto its slot, selling just over 4 million units and capturing four tenths of a point in market share.

Comcast deal for NBC Universal is about content, not broadband

Scott M. Fulton, III — Thu, 03 Dec 2009 11:20:00 -0500

By Scott M. Fulton, III, Betanews

After this morning, there should be no question in anyone's minds whatsoever as to what Comcast's deal with General Electric for control of NBC Universal is about: NBCU is a huge producer of cable TV content, and Comcast would like to be the parent company of that producer. The deal isn't so much about Hulu, or new media, or creating some walled garden around content distribution, as many would have believed and expected.

Comcast CEO Brian Roberts made this fact pretty clear during Comcast's investor earnings call this morning: This is not a technology deal. Comcast, the pipeline company, is already making deals in the technology side, including providing 10% of the operating capital of Clearwire. The pipeline company is going ahead with its plans to produce its own Web-based on-demand distribution network, which Broadcasting & Cable has learned will be called Xfinity. (Comcast must have used the same consultant Sprint used to come up with "Xohm.") And in response to direct questions today as to whether Comcast's indirect acquisition of NBCU's stake in video service Hulu would change Comcast's plans for deploying "TV Everywhere," Comcast COO Stephen Burke responded that he believed NBC's restraint in releasing its own content to Hulu was "smart," and that Comcast would let NBC continue in that regard.

And when pressed as to whether Comcast would press Hulu to create a premium, for-pay service, CEO Roberts emphatically responded, "That's certainly not in the cards."

"Two Comcasts"

The pipeline company will continue to do its own thing. Roberts told investors this morning, "We basically are creating two Comcasts." Here, NBCU becomes essentially Comcast, the content company, whose formal title Comcast's presentation to investors this morning intentionally leaves up in the air, at times calling it just "JV." (One possibility that springs to my mind: CNU, with the logo formed from Comcast's crescent merged with Universal's dual arcs.) As Comcast's charts to investors this morning illustrated, Comcast's operating cash flow taking the joint venture into account will be 97% driven by cable program distribution and cable channels. Keep in mind that the whole "distribution" slice of the OCF pie (80% by itself) will take into account the multiple platform hops that content goes through, and the Internet is one of those hops. So in that regard, this is an Internet deal.

But the reason Comcast went after NBCU in the first place -- a reason it now freely admits -- is the attractiveness of affiliate fees, those fees that DirecTV and Verizon and Dish Network and Time Warner Cable and their ilk pay to carry programming on their services, as well as to share resources. Even in this down economy, affiliate fees have managed to rise at a rate of 12% annually, thanks in large part to the almost singular efforts of Comcast.

The real reason for the deal

Assuming the joint venture were already in operation, Comcast estimates that its operating cash flow Comcast's fiscal year 2009 -- the amount of its revenue that the company can spend on itself, after expenses -- would have been $2.8 billion. An estimated 82% of that amount would have come from cable channels, largely through affiliate fees.

During this morning's call, COO Burke tried to play down some of these figures, saying that the annual rate of increase in affiliate fees may taper down into the "mid-single digits" over time. "Trees don't grow to the sky," he said. But you could almost hear the smirk in his tone of voice, as though he knew exactly where the jackpot was and believed he had the key to it.

Here is where we realize the extent to which the deal upsets the general belief about the order of precedence in the television industry. Analysts saw this right away and pounced on it: Comcast made a very important point this morning of stressing the contribution of its network of regional sports channels -- something it already owns -- as an element of the deal, as if that were something Comcast was buying. Why would Comcast phrase it as something it was adding to its arsenal if it already owned it?

The answer lies in attribution: By associating Comcast's existing regional sports network with NBC Sports -- the producer of the Olympic Games, the home of Sunday Night Football, and the employer of sports programming legend Dick Ebersol, whose position there appears very, very secure today -- the perceived value of Comcast's RSN rises, just as if that property were acquired. And that's important because regional sports is the tool Comcast has successfully used in recent years in its bargaining with cable and satellite systems for substantiating its ever-higher affiliate fees. Local sports, often at the high school level, is a staple of cable programming. When affiliate deals aren't renewed, Comcast yanks its RSN feeds from subscribing content providers. Customers immediately complain as STBs get turned back in, and before long, the affiliate deals are renewed.

Where regulators will likely strike first

The NBCU deal lends value to Comcast's principal bargaining chip in maintaining high affiliate fees. In a statement this morning, the president of the American Cable Association, Matthew M. Polka, pointed to this issue specifically as a reason why government regulators should nix this deal.

"Without broad government intervention, regulators in Washington, DC will see Comcast-NBCU wield its unprecedented power to drive up artificially the cost of its programming, particularly for its newly acquired local broadcast TV stations and its 'must-have' national and regional cable networks that air live sporting events," stated Polka. "Without restrictions, the new media conglomerate will also leverage its enhanced market power to force other pay-television providers to distribute all of its combined Comcast-NBCU programming on basic tiers, regardless of consumer interest in paying for this content."

And that's another key element: Comcast already owns the Style Channel, the Versus sports network, and the E! entertainment network, which not every pay-TV system in the country feels it needs to cover in its "basic" service. NBCU, meanwhile, operates two of the country's hottest cable properties, Bravo and USA. Comcast certainly could -- and probably will -- offer the entire slate to pay-TV systems in an all-or-nothing deal for basic tier subscribers. If you want Bravo, it may tell them, you gotta have Style.

The new order of media

As was made evident today, the NBCU deal was not about The Tonight Show or Law & Order or even NBC Nightly News. It was about Top Chef.

If federal regulators do raise objections to or concerns about this deal (as is likely to happen), they will be about affiliate fees. They will not be about broadband service rates, which are an entirely different part of Comcast's business. Comcast is not restructuring here. And as Comcast's executives made clear, its intention is for all of the free cash flow generated from the new NBCU, or whatever it's called, to be reinvested in NBCU's existing businesses. So revenue from cable will be redirected to cable and cable content, not to offset possible future revenue declines from broadband service. Thus the theory that Comcast could appease regulators by saying revenue from cable, television, and film could help keep broadband utility rates low, goes out the window.

In fact, the two elements whose names form the company Comcast will control, NBC and Universal, are frankly incidental players in all of this. The NBC broadcast network will contribute 11% of revenue to Comcast following the joint venture's creation, Comcast estimates, and 0% of that revenue will contribute to cash flow because NBC is a money-losing business. Comcast expects to garner more cash flow from Universal Studios' theme parks than from NBC. Universal, meanwhile, will provide about 2% of Comcast's OCF.

This is not a merger deal like AOL Time Warner or CBS + Viacom, but a change in control. And while those mergers failed spectacularly, this buyout may yet succeed. Still, deals of this nature often result in spinoffs of properties discovered to be of lesser importance. And it's altogether possible that, come 2012 or so, the two most expendable components of this deal, sold perhaps to some interested investment banking consortium outside of US borders, will be the NBC Television Network and Universal Studios.

Microsoft's Bob Muglia and Ray Ozzie on Silverlight vs. standards

Scott M. Fulton, III — Mon, 23 Nov 2009 16:43:58 -0500

By Scott M. Fulton, III, Betanews

Last week at Microsoft's Professional Developers' Conference, Betanews had the honor of being invited to join a small cadre of reporters -- including noted blogger Long Zheng; TechCrunch's Steve Gillmor; and our good friend from SD Times and Technologizer, David Worthington -- for a luncheon with Microsoft's President of Server and Tools, Bob Muglia; and Chief Software Architect Ray Ozzie. There, we discussed a handful of topics -- some of their comments were candid and off the record, and some were for the record.

The first issue on our plate Tuesday afternoon concerned Silverlight, and Microsoft's continuing efforts to entice developers to build Web sites around a platform that is not considered a "standard," and perhaps never will be. Some developers discount Adobe Flash as a "standard" for the same reason; while others suggest that Flash's ubiquity renders it a de facto standard. The questions for Web developers have centered around whether they can afford to evolve any portion of their forward-facing online assets around a proprietary standard (around Silverlight) and still have it be on "the Web," whose values are based around platform neutrality. Those questions do seem a bit more pronounced for Microsoft than for other platform developers. But how should Microsoft handle the delicate issue of developing for a platform that's "ours" versus one that is "yours?" (And what's the difference really?)

Bob Muglia took the lead on this question: "The thing we want to be careful of is, we're not trying to say Silverlight is an alternative standardization to HTML 5, and that part of the Web," he told us. "We're not saying, 'Hey, you should use this instead of that.' We're trying to provide people with an environment that has capabilities that you just simply can't do today in the standards-based world."

Ray Ozzie picked it up from there: "The way I view it, I know there's not a bright line. But when I'm thinking of Silverlight, I'm thinking a lot in terms of skills leverage for the people who have learned how to program, how to build things in C#, who have built-up assets...and it is the most seamless transition for people like that to build to things in the browser and build things that are hybrid, between the browser and the service. It's not intended to be disconnected from the Web; there's more and more integration between the things that you do in Silverlight [where] you don't have the browser. But we will build in both, and it just depends on where you come from, those skills."

This has been a major problem for Ozzie with respect to Web developers at large, and he made it very clear in his candid comments: Just who gets to say what the Web is, and where it ends? Technically, I've made it a point to explain the Web as the subset of Internet functions that utilize HTTP, which is how standards bodies might also explain it; but there are a growing number of protocols and technologies that are completely off the HTTP protocol and that rely, nonetheless, on the Web browser. Flash has been one of them; shouldn't Silverlight be another, posits Ozzie and Microsoft?

“We're trying to provide people with an environment that has capabilities that you just simply can't do today in the standards-based world.”

Bob Muglia, President, Server & Tools Division, Microsoft

Steve Gillmor noted that in a previous talk, Ozzie promised to "do the right thing" with regard to integrating Silverlight technologies down the road into the whole discussion of HTML 5 standards. He asked Ozzie what he meant by that; and Ozzie responded by saying that he's not always in the same position as those who are working directly on the problem itself, to say how much is being done and when it'll get done.

"We love the Web; we're not anti-Web, we're not going in a different direction," Ozzie continued. "And what I meant was, when we look at the various pieces of what we call HTML 5, as consensus emerges around different aspects of it, that we will do what people expect us to do in the spirit of the Web."

Bob Muglia then added this: "I think it's helpful to actually have a clear line that says, 'This is Silverlight, and then this is HTML,' and have both of them in existence, where we can step back and say, 'Okay, the standards process is evolving around HTML, and we very much want to participate in that and help drive it forward and build the world's best Web browser that does that.' [By that same token], it's nice to have something that's separate from that, it interact very seamlessly with that, it runs cross-platform, it does all these other things, but we can run like hell with it. And to be non-apologetic about running like hell with it."

Muglia drew a mental picture for us of a realm of clearly decided upon concepts called standards, a growing body of protocols that everyone agrees to follow. But customer demands run faster than standards organizations -- he cited Netflix as a critical example -- and companies like Microsoft and Adobe (here he wasn't ashamed to mention the Flash maker) have to run ahead of the pack, and in competition with one another, to meet that demand.

“As far as we can see, there will be a difference between the security context of running in a browser, and having a user make a decision to install (I use that word loosely) an application on their machine.”

Bob Muglia, President, Server & Tools Division, Microsoft

"The issue of rights management, for example...is interesting, and it matters. It matters to Netflix, it matters to a whole bunch of our customers," Muglia continued. "At some point, I suspect there will be standards-based implementations. Your guess is as good as mine as to when all those features will get into HTML, whether it's HTML 6 or whatever the heck it gets called. We know there's still all sorts of areas -- 3D as a whole example -- that we haven't touched with Silverlight; and there's a whole broad set of things that we know are areas where we'll want to invest.

"Our perspective on this is very simple: The standards-based world will advance, and continue to do more and more, and applications will be delivered in that way, and that's a critical thing. There will always be opportunities for people to build applications that take advantage of characteristics that go beyond what the standards do, and that's what we're trying to do with Silverlight. And we actually want to make it easy for developers to choose: You want to deliver something with JavaScript and HTML, great, we'll offer a world-class browser that does that, we'll enable that across our operating system and systems in different environments. If there's other things that you want to do in terms of delivering applications, we'll also have a world-class runtime to do that, and you can mix and match."

Next: Google Chrome Frame makes Ozzie very angry indeed...

With regard to the borderline between "proprietary" and "standard," there's something that has been sticking in Ray Ozzie's craw. He was well-behaved, for most of the afternoon, avoiding too much use of the "G" word. (Not "Gillmor.") But Google's recent behavior (the Chrome OS announcement event was still two days away at this point) clearly has Ozzie upset, especially with regard to how he perceives it tries to define "the Web" in its own image, moving the boundary between standards and proprietary protocols as it chooses.

"The thing that's tough is the thing in-between, and this is what really did surprise me about what Google did. The Chrome Frame thing is basically saying, 'Well, we believe in standards, but we're going to put our implementation that's beyond standards into someone else's frame.'"

Chrome Frame is the company's unsanctioned add-on to Internet Explorer that enables it to deliver designated Web pages through Chrome's browser engine rather than IE's. I asked Ozzie whether he believed Chrome Frame was just bluster on Google's part, a tactic to make folks like Ozzie upset. His answer indicated he did not believe so; he takes Chrome Frame quite seriously, as something designed to blur the line for Web developers who are legitimately trying to determine what their clients are running, and publish Web pages to that platform -- a kind of smokescreen.

The reason it's important for that dividing line to be clear, both Microsoft executives argued, is because applications need clear security boundaries, and Web applications must be more constrained about their security and permissions than "installed" apps on the user's system. "The two big differences between .NET Framework writ large and Silverlight are the execution model within which they operate, and the level of function," Ozzie explained.

Muglia took it from there: "As far as we can see, there will be a difference between the security context of running in a browser, and having a user make a decision to install (I use that word loosely) an application on their machine and provide access to physical resources...You can start to do that with Silverlight 3; you'll continue to see us do more there. For example, when we built Visual Studio 2010, almost all the new code and a very large part of the application is written in WPF. We're not to that point with Silverlight; there's no question about it, we can't build that application today with Silverlight. The day may come when we may continue to build more services and capabilities into Silverlight where you can build an application of that level of complexity, and that's true because all these environments continue to evolve."

“We love the Web; we're not anti-Web, we're not going in a different direction.”

Ray Ozzie, Chief Software Architect, Microsoft

Surprisingly, Ozzie's later comment bordered on contradicting Muglia: He sees an evolution of the development model where, in his words, "over time, both Silverlight and the browser get closer and closer to the OS.

"Whether it's the accelerometer or compass or whatever I/O devices, over time, all of these things are going to end up having to be permissioned...by the user to do extended things, and those will be used for installed apps probably first, but maybe even for Web-based apps, I have no idea. And I think therein lies some of the biggest challenge that we have moving forward. In AIR and Silverlight, you're going to see us pushing at the edge on what Web apps are just now doing with OAuth, where the user has permissioned a site to do something. Well, we're also going to have to have the application permissioning the client to do something, to have access to my local data, to my microphone or speaker; and that permissioning on the Web is done at the Web site level. I'm not sure yet what the right granularity is for the client. Is the client just a signed piece of the Web site that you're permissioning; once you permission the Web site, [does] the client have the permission to do these things? We're in new territory here."

More of our Lunch with Bob & Ray later this week in Betanews.

PDC 2009: What have we learned this week?

Scott M. Fulton, III — Thu, 19 Nov 2009 20:17:47 -0500

By Scott M. Fulton, III, Betanews

It ended up being a somewhat different PDC conference than we had anticipated, and even to a certain extent, than we were led to believe. Maybe this was due in part to a little intentional misdirection to help generate surprise, but in the end, the big stories here in Los Angeles this week were more evolutionary than revolutionary. That was actually quite all right with attendees I spoke with this week, most of whom are just fine with one less thing to turn their worlds upside down. It's tough enough for many of these good people to hold onto their jobs every week.

We'll start our conference wrap-up with a look at the flashpoints (remind me to call Score Productions for a jingle to go with that) we talked about at the beginning of the week, and we'll follow up with the topic that crept in under the radar when we weren't expecting.

Making up for UAC, or, making Windows 7 seem less like Vista. This was absolutely the theme of "Day 0," which featured the day-long workshops. At this point, Windows engineers have absolutely no problem with the notion of disowning Vista, disavowing it, even though it was technically a stairstep toward making Windows 7 possible. But it is now perfectly permissible to acknowledge the performance hardships Vista faced, and let go of the past in order to move forward.

Mark Russinovich leads the way in this department, and the fact that he's appreciated leads others to follow suit. During his annual talk on "Kernel Improvements" -- which he expanded this year to a two-parter -- Russinovich spoke about the way that the timing of Windows' response to user interactions was adjusted to give the user more reassurance that something was happening, rather than the sinking suspicion that nothing was happening.

In an explanation of a user telemetry service he helped get off the ground called PerfTrack, he told attendees, "We went through and found roughly 300 places in the system where you interact with something, and there's a beginning and then an end where you go, 'Okay, that's done,' and optimized the performance of those user-visible interactions. We instrumented those begin-and-ends with data points, which collects timing information and sends that up to a Web service...and for each one of these interactions, we define what's considered 'great' performance, what's considered 'okay' performance, and what's considered Vista -- I mean, uh, 'bad,'" he explained, with a little grin afterward that appeared borrowed from Jay Leno. "And then if we end up in that 'okay' or 'bad,' what we do is, selectively turn on more instrumentation using ETW [Event Tracing for Windows] -- instrumentation of file accesses, Registry activity, context switches, page faults -- and then we collect that information from a sampling of customer machines that are showing that kind of behavior. "We feed that back to the product teams, they go analyze those and figure out, 'Why is their component sluggish in those scenarios?' and optimize that."

One of the results he demonstrated, shown here in this pair of charts, shows the number of user-reported instances of Start menu lag time leaning more toward the quick side than the slow side of the chart, between two builds of the Windows 7 beta.

The fact that performance matters was one of the key themes of PDC 2009, and attendees greeted that message with enthusiasm -- or, maybe more accurately, with appreciation that the company had finally received the message. But there are still lessons to be learned here that can be applied to other product areas, if anybody out there is listening.

Why Windows Azure? The major theme of Day 1 was the ability to scale services up -- scaling local services up to the data center, and data center services up (or down, depending on your application) to Microsoft's cloud provider, Windows Azure.

Last year at this time, Microsoft went to bat with essentially nothing -- no real definition of an Azure application, no clear understanding of who the customers will be, and absolutely no clue as to the business model. But now we know that services will be rendered on a utility basis like Amazon EC2, and we have a much clearer concept of the customer groups Azure will address. One is the small business that has never before considered data center applications; another is the class of customer that needs to plan for exceptional capacity traffic during unusual situations, but can't afford to maintain that high capacity 24/7; and the third is the big customer building a new class of application that has never before been considered on any platform.

Channeling customers to Microsoft's cloud will be "Dallas," its code name for large-capacity data bank services typically open for mining by the general public, which should eventually be given a typically Microsoft-sounding name; and AppFabric, the company's new mix-and-match component applications system built on the IIS 7 platform. But in neither of these cases is Microsoft particularly inventing the wheel; and as I heard from a plurality of attendees this week, Microsoft's entering another crowded field of contenders (including SalesForce.com and IBM) where competition has already been saturated. Success in this venture is by no means assured.

Next: Office takes a backseat...

What will Office Web Apps do? Less than we once thought, apparently. The extent to which you can view "rich content" created with real Office applications, in Office Web Apps, apparently remains strong. But since O Web will be free to everyone (for sensible reasons) the ability to create the same depth of rich content online will be artificially limited.

Since many businesses utilize Excel as a type of database, or as a window into their databases elsewhere, this means the utility of that product online will be most restricted. Word may suffer the least, however, as the need to compose respectable looking correspondence from anywhere one happens to be, is a pressing need that Word Web App can easily fulfill.

Making the case for Office 2010. We expected Microsoft Office to be the star of Wednesday's keynote, with demos of new functionality that, if it wasn't major, would at least have been advertised as fresh and new. It was not to be. Although we did have an opportunity to speak with an Office product manager (more on that in the coming days), the message Microsoft was sending this year was very different.

In the past, folks used to ask why a consumer applications suite was being prominently featured at a conference geared towards developers. The answer from Microsoft typically was, because Office is a platform, and developers build to platforms. The message Microsoft sent this year was that Office was not a platform. And that's a problem, because if that's true, there's no conference for Office. The excuse for the lack of Windows Mobile news was that it was a topic for MIX, the conference for Web developers set for next spring in Las Vegas.

So does Office wait for TechEd? All of a sudden, this major profit center seems homeless.

There was a little buzz devoted to something called the Outlook Social Connector plug-in, a new tool for integrating individuals' social media contacts within Office's communications app. Deals with social network hosts such as LinkedIn were announced. In one respect, that does address consumer concerns; in another, it's a little ironic. Here we have a situation where people take the time to broadcast their identities over multiple social services on purposes as a way to spread out...only to discover the need for a kind of "identity vacuum" to pull them back in again to one cohesive chord.

What we did see from the Office 2010 public beta (released Monday, then released Tuesday, then "launched" Wednesday) let us know that if Microsoft truly is listening to its customers and acting on their telemetry, then the word they're saying most often must be, "Whoa!"

During the Technical Preview phase, Microsoft unveiled its BackStage concept -- a way of organizing all the preparatory content of an application, such as print preview and preferences, in a more dimly-lit, cooler arrangement, making you almost want to whisper when you talk about it. The screenshot above shows BackStage in the Excel 2010 Technical Preview.

This is the same BackStage in Excel 2010 Beta 1. It's more conservative in several obvious regards, including the staging. But notice also something very important: The "Office button," which premiered in Office 2007 and which flattened down to become an icon menu tab in the Tech Preview, has now returned to being the File menu. If customers have been asking, "Where's File/Save?" then you have to wonder when they started asking, and how long they've been at it.

The new flavor of Visual Studio is already the old flavor. When you're dealing with a development platform unto itself, the beta version is often, unofficially but certainly, the working edition for many developers. And VS 2010 is already on Beta 2 now. More than one session presenter this week asked for shows of hands as to how many folks were already using Beta 2 as their development platform -- and in each case, a majority of everyone's hands were raised.

Will virtualization envelop Windows? Hell if I know. One of the hottest topics of prior conferences was something of a dud this year, and that's not good for a company that is actually behind in its ability to virtualize 64-bit platforms on 32-bit systems -- a feature Sun's VirtualBox and VMware already provide. But once the problem of absence of live migration in Hyper-V was kicked, virtualization took something of a breather this year, though it wasn't off the radar altogether.

The push toward online identity. Indeed, this ended up being the wildcard topic of the show. The principal security and architectural problem faced not only by developers but administrators as well, is enabling a secure single sign-on platform for local and remote applications. With multiple vendors supporting even more authentication protocols than there are vendors -- or so it appears -- this goal would seem impossible to achieve.

Microsoft is working to address this in its upcoming Windows Identity Foundation library, which will require the push of Active Directory Federation Services 2.0 -- a way to get AD out there to servers that aren't Windows. But just getting all hosted apps vendors on-board with AD is a colossal task, made more difficult by a "competitive" spirit among application and security vendors that works against the very spirit of communication and federation they need to accomplish the goal of common identity. We will be talking more about this in the coming days, because we learned a lot about this from PDC.

Now, there's something I'm missing. Yes, Scott Guthrie, I know I missed you in my list of headliners...and I'm sorry, it was inadvertent, and I apologize. Though I do know Brian Goldfarb gave you heck about it. But there's something else, let's see, I'm trying to recall...help me out, Brian...

Oh thank you, Scott, much obliged. Silverlight 4. This one should have been on our radar for certain. Silverlight stole the show on Wednesday, and was much of the talk among developers on Thursday. The new version will provide 1080p video, which everyone wanted. And it will provide authenticated access to system services outside the sandbox, which everyone wants.

If Office Web Apps were to run on Silverlight 4, you would get access to the right-click context menu -- a critical feature of regular Office 2007 and Office 2010 that's difficult to make up for with the ribbon alone. S4's access to system devices will make it feasible for developers to craft iTunes-like smartphone applications for devices that are tethered to PCs...and maybe even devices running on smartphones themselves, and not just Windows Phones.

Which reminds me, there was that one Guthrie demo Wednesday that bit the bottom of the bit bucket, with that cool looking phone. Did anyone ever make that work...Brian Goldfarb to the rescue once again. Yes, it is indeed possible to perform adaptive streaming of movies to the iPhone using Silverlight. We talked at length with Goldfarb (more on that too in coming days), and here's a preview of coming attractions:

"We've worked with Apple to create a server-side-based solution with IIS Media Services; and what we're doing is taking content that's encoded for smooth streaming and enabling the content owner to say, 'I want to enable the iPhone.'"

It was certainly more of an evolutionary than a revolutionary tone at this year's PDC, but attendees seemed comfortable with that this time around. Here was one strange phenomenon we've never noticed before: Attendance increased with later days. Wednesday attendance was noticeably higher for sessions and the keynote than for the previous day, and that was despite news of the big laptop giveaway being kept under lock and key. And Thursday -- which has often been a day for "leftovers" -- ended up being packed as well, including with attendees who brought those shiny new Acer multitouch laptops with them.

Now, there's something that hasn't been touched on: Acer. Think about that for a moment. This is the same company that publicly dissed Vista in 2006 for being a non-event for consumers, practically leading the wave for the complaints that were to follow. And here it is lending its name to an event that not only promotes Windows 7, but prototypes its proper use (from Microsoft's perspective) in all computing. Microsoft let Acer show everyone else how quick bootup and clean performance are supposed to be done.

That's the biggest indicator of Lessons Learned we saw all week.

AOL's spinoff from Time Warner to shed 2,500 jobs

Tim Conneally — Thu, 19 Nov 2009 10:02:15 -0500

By Tim Conneally, Betanews

As Time Warner continues the process of spinning AOL off into a separate, independent company, AOL will lose a third of its workforce. The spinoff is expected to be completed on December 9. In filings with the Securities and Exchange commission earlier this month, Time Warner said the split will cost more than $200 million in restructuring charges.

Today, AOL has reportedly instituted a voluntary layoff program, asking for 2,500 employees to give up their jobs in exchange for severance packages. If this number cannot be reached, AOL will begin laying off people anyway. The soon-to-be spun off company is looking to reduce its operating expenses by $300 million.

AOL CEO Tim Armstrong will reportedly be giving up his 2009 bonus, which would have been more than $1.5 million.

"As a member of our team and the person who takes accountability for the results of the company, I am making the decision to forego my 2009 bonus," Armstrong wrote to employees. "That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees."

PDC 2009: Live from the Day 2 keynote

Scott M. Fulton, III — Wed, 18 Nov 2009 11:33:12 -0500

By Scott M. Fulton, III, Betanews

Microsoft's Windows division president Steven Sinofsky is the headliner for today's Day 2 keynote at PDC 2009, and Betanews has its usual front-row seat.

11:04am PT: Promise of discussion on Windows Mobile at MIX '10 next March 15-17 in Las Vegas -- notice once again that the number "7" is omitted from the reference to this product. Keynote ends 35 minutes over schedule.

11:00am PT: Outlook Social Connector -- a plug-in involving Microsoft and partners including LinkedIn, enabling information from individuals' social organizations and networks to be displayed in a meaningful context in Outlook. "This is a general SDK," meaning developers will be expected to deploy it.

10:37am PT: Office Mobile Clients for Windows Mobile 6.5 betas available today in Windows Mobile Marketplace.

10:37am PT: Office 2010, SharePoint 2010 public betas go live now...today was apparently the original release date to begin with.

10:23am PT: SharePoint now taking the stage, this is where we'll see the only real Office 2010 information. A lot of talk first about what Microsoft is focused on, which is a little bit of a downer coming off of some very impressive Silverlight 4 demos.

10:18am PT: Final release of S4 shipped first half of next year.

10:17am PT: Sinofsky: How S4 will be shipped: Public beta will include all features demonstrated today, tooling support for VS 2010. Now available for download.

10:15am PT: Multitouch features with basic features, zoom in, zoom out.

10:14am PT: Photos dragged-and-dropped from the outside can be loaded into the application live, then tagged, prior to being sent to Facebook.

Photo of the audience, plugged into the system, app will ask whether to upload the photo to Facebook -- all within about 10 seconds.

10:10am PT: Brian Goldfarb is showing an S4 application that utilizes Facebook, but which uses its own chrome to develop a real, custom app on top of custom Facebook apps. Can also take advantage of COM automation to right-click data from Facebook, then add to the Outlook calendar. Access to the Outlook inbox, with virtual wall on the right "to contextualize who I'm talking to."

10:07am PT: Google Chrome being added to S4's list of supported browsers.

10:05am PT: Window "chrome" of the application can be customized with out-of-sandbox support, cross-site networking, keyboard support in full-screen mode, more hardware device access. Access to any COM automation object installed on the system, using the _dynamic_ keyword in C# to call new methods found on system. For example, Office 2010 calendar can be queried, PivotCharts brought up from Excel.

10:04am PT: S4: Ability to build trusted applications that run outside the sandbox on Windows and the Mac, user consent dialog is provided automatically.

9:48am PT: UDP multicast support enables P2P networking, improvements to support for WCF, including RIA services. Transfer data 600% faster using internal transfer protocols instead of HTTP.

9:47am PT: Brush demo can be used with live video -- a YouTube video can be jigsawed live, while video and sound are playing.

Sinofsky's been rick-rolled...but he gets his revenge! A "rick-roll" video from YouTube is sliced and diced into live jigsaw pieces using Silverlight 4.

Compile in assemblies once, run in both Silverlight and .NET 4 -- compile once, run in both places.

9:45am PT: Text can be dragged and dropped from a browser to the application. Print Preview works, including with custom Print Preview dialogs. S4 will now write directly to the printer, has a print API.

HTML control is hosted within Silverlight app. HTML image can be converted into a brush -- the entire HTML page can be used as a brush, so that the page can be converted into, say, a jigsaw puzzle, the pieces of which can be juggled around the screen.

9:43am PT: "And _now_ the iPhone works," says Sinofsky.

Rich text control that ships in S4: Arabic, Hebrew, Kanji character sets all within the text editor. Custom context menu after right-click. Can paste and insert text, pictures, and DDE-like controls into a Silverlight app, such as a Data Grid control from Excel. Can cut and paste from Data Grid control back into Excel.

9:41am PT: HTML hosting support is coming, model/view development.

9:40am PT: IIS media tool, new version will enable streaming of media directly to Apple iPhone. Yes, you read that right. Video can be encoded once using smooth streaming, target clients using the iPhone.

Well, that could have gone a lot better. Brian Goldfarb rushed to the stage to give Steven a fourth iPhone. That one would link to the network, but once it accessed the Silverlight-based Vancouver Olympics site, the video would not load.

Demo tried using four different iPhones, the first three of which could not pull up the network using the router. The fourth did pull up the network, but the video from the Olympics Web site would not pull up in the Safari browser. Took several minutes, but Sinofsky refrained from making any silly Apple comment.

"We believe you, Scott!" yelled one attendee.

Printing / rich text / Clipboard access / right-click support for context menus / mouse wheel support are all coming to Silverlight 4.

9:34am PT: Demo of Vancouver Olympics site with Silverlight player, with instant seek.

9:33am PT: Open-source library for barcode reading, can immediately look up the prices of any object scanned from the barcode scanner, pulls up distributors or retail sellers.

9:32am PT: New Silverlight 4 will allow access to webcams and microphones on the user's machine. Demo now: Webcam application that captures live video, can do live effects with bulge, distortion. Integration with Twitter enables the result to be live-integrated into Twitter profile, so a picture just taken becomes the user's Twitter icon.

9:28am PT: Silverlight now installed on an estimated 45% of the world's Internet-connected devices. PDC is about Silverlight 4, first news.

9:25am PT: Corp. VP Scott Guthrie now takes the stage to talk Silverlight, now showing the video of Sketchflow feature in Expression Blend (not a particularly new video for many).

9:22am PT: The test distributions of "Microsoft PDC laptops" will likely come with promises that the users will be communicating telemetry with the company.

9:21am PT: Lot of new APIs in Windows 7, and IE will take advantage of these APIs. Videos of demos will soon be available on Microsoft Channel 9.

9:19am PT: Maps re-rendering will use 60 fps rather than 2 or 3, by moving to Direct2D from GDI.

9:18am PT: CSS selectors test, using CSS3.info -- passed 572 out of 578 (a variation of the SlickSpeed test) for CSS selectors used in rendering.

IE rendering engine will support rounded borders in CSS.

Rendering engine will use hardware-acceleration in DX9 mode (not DX10), using Direct2D. Highly resolved text with much resolved clarity.

Sub-pixel positioned text using DirectWrite. Zooms used to be jittery in GDI, nice and smooth as we move to Direct2D. Smooth realignments -- "changes without you having to do anything different with your site."

9:14am PT: Different Web sites have tremendous differences in how they handle JavaScript, CSS, and HTML parsing. Their profiles make everything different.

IE9 is getting close to Firefox 3.6 performance, not overtaken just yet. "It's getting really close to being a wash."

9:13am PT:

9:13am PT: JavaScript performance. IE9 is up to 32 on the Acid3 test, from 20. Audible groan from the audience.

9:12am PT: We continue to want to be responsible about building Internet Explorer.

First IE9 news: Three weeks into the project, we're focused on these areas:

Standards: Acid3, we're not ahead of that, we need to do a better job. There are new and emerging standards like HTML5, and we want to be responsible about how we support that, we don't want to generate a hype cycle among developers.

9:10am PT: Biggest applause of the day comes from this:

Sinofsky is now talking about a partnership project with Acer where it puts its own team through the process of actually building a laptop computer, just to see how one is built -- what laptop engineers actually go through. In learning the system that Acer goes through, Microsoft built its own limited run of PDC'09 laptops.

They will be giveaways to PDC attendees. About a minute of applause from that. "But please hang around for the rest of the talk," said Sinofsky. "We had a little problem, something like that, about four years ago, so please stay seated."

Folks realize they're being given free laptop computers. Yay. Applause, then what's the catch. No catch so far, so more applause. Then more. One of the longest stretches of applause in PDC keynote history.

9:04am PT: Everybody's jumping on the taskbar bandwagon, says Angiulo, and here again Microsoft gives credit to Mozilla for being quick to integrate previewing features into Firefox 3.6 (Beta 3 was just made available, by the way).

9:03am PT: Dell netbook uses an infrared data center to detect body heat, then powers itself back up when someone walks by.

Earlier, Angiulo demonstrated the differences between DirectX 11 processing power and DX10, mainly by means of offloading much of the computing power from the CPU to the GPU. Demos of moving thousands of "star" objects simultaneously in a simulated galaxy formation, with gravity and physical forces between them, all in a 40+ Gflops operation running on a $400 graphics card rather than a $15,000 computer.

8:58am PT: Windows engineer Michael Angiulo demonstrates how engineers of new small computers, such as netbooks, can do their part to accelerate Windows 7. After reminding everyone of the first generation UMPC (gagh!), he pulls out a pair of Windows 7 netbooks. But one has a bunch of branded background software loaded, and the other (by Sony) does not. The Sony model runs 30% faster, boots faster, and has 50% better battery life, simply by getting all that bloatware junk software out of the boot path.

8:53am PT: Moving now to examples of people trying to align their windows, one user talks about side-by-siding his windows, looking for where the window tiling feature is located...no, it's not that one...

Then another user snaps a window to the side using Aero Snap in Windows 7. "That is _way_ easier."

Aero Peek: "Hey, get all that!" says the user. "I can dig that! Good job, people."

8:50am PT: Discussion now about the UAC usability studies. We saw videos of some of these studies last year, but users are talking about not wanting things popping up in their faces constantly.

User is asked during an Adobe Flash installation what he just clicked on, and he made up a response about where the program is going on the drive. Another user is asked what the UAC prompt that he just received meant, and he answered, "It means that people...are happy with it now." [?]

8:43am PT: Video about how Microsoft programmers are held directly responsible for the errors of their ways, by way of a kind of "agony chair" that shocks, stuns, or stabs the individual developers discovered using the Watson logs to have been responsible for a specific problem.

Uh-huh.

8:40am PT: Anecdote about how Microsoft used to handle reliability problems in the Windows 3.x era using Dr. Watson (hands up if you remember that?), and how engineers pre-Internet developed the Watson system for "testosterone-based bug fixing" -- folks watching the Watson logs coming in over the BBS and responding to the most interesting and serious problems.

The sheer number of telemetry items returned from Windows 7 testers during the beta process.

8:38am PT: The value of the "Send Feedback" button, learning from clients what drivers were loaded, whether the installation of drivers and services were successful.

Software Quality Monitor ("squim") is designed to be opt-in for customers, but Sinofsky admits customers were "opted in automatically" during the preview and beta processes.

8:35am PT: At the moment, Sinofsky is going through a history of the Windows 7 launch, and lessons learned at Microsoft about being responsible about how to disclose information about the product. "You should expect us to have learned that lesson about responsible disclosure, and to continue as we move forward."

'A pivot from war to peace:' The AMD + Intel armistice, in their own words

Scott M. Fulton, III — Thu, 12 Nov 2009 17:27:06 -0500

By Scott M. Fulton, III, Betanews

For much of its history, AMD's image in customers' minds has been established, or at least reinforced, by its very public stance with regard to Intel. The company that AMD has tried to be, it has explained for years, begins with everything that Intel -- at least from its perspective -- is not.

So it must have been a bewildering feeling for AMD executives to approach this morning, perhaps after not very much sleep last night, in an environment that can no longer be framed by the legal and intellectual property conflicts between it and its sole rival. The legal war is gone. Only the market competition remains, the sole differentiator between the last two producers of CPUs for PCs in the world. It was what AMD said it has always wanted.

It's no wonder then, that the first words this morning from AMD's chief legal executive, Tom McCoy, were at times laced with poetic metaphors, and at other times flying loosely in the breeze, like this could still be a dream: "What's important about the agreement, to us, is that it signals a new era. It's a pivot from war to peace, and we're trying to redefine not only the path to a fair and fierce competitive fight in the marketplace, but also one of tonality with Intel. We're all trying to get this behind us and move forward in a very respectful way -- a way that will make everybody proud of this industry in which we operate, that is so fundamental and vital to innovation, to productivity, and to great fun, using technology in the world."

What's fair and what's not

The agreement between the two companies, as explained to the US Securities and Exchange Commission this morning, spells out a new set of guidelines for what both CPU producers can agree to be "fair competition." With federal regulators worldwide having used AMD's situation as a model case for a manufacturer treated unfairly by its dominant rival, the fact that AMD signed off on these new guidelines will make it difficult for them to continue pursuing their investigation of Intel the way they have been, although they will project the image of stubborn persistence for at least the next few months.

"The key points are, for us, that Intel will not be able to condition doing business with them on not doing business with us," McCoy explained this morning. "They can't use inducements in order to force exclusive dealing, to delay customers from using our products, delaying or prohibiting companies from marketing or advertising our products or systems with our products, withholding benefits from OEMs in the event that they elect to use AMD processors. We've also agreed to certain technical practices...particularly in the compiler business, so that compilers will not unfairly, artificially impair the performance of our products. We're never looking for any help; we're just not looking to be unfairly hurt. Intel has no obligation to help us; they do have an obligation not to do things that are simply designed not to hurt us."

What it was obvious that Intel needed at this point was an addition to its cost-cutting program -- a way to stop spending vital resources and capital on defending its image among lawmakers. It needed an exit strategy that enabled it to save face; and this morning, Intel CEO Paul Otellini stopped just short of saying exactly that:

"In most lawsuits between businesses, there comes a time where both sides step back and look at whether spending all of that time and money makes sense. That's what happened here. Intel and AMD took a step back. We look at the claims AMD was making, and they looked at our claims that they had breached their license rights to Intel's patents. After a lengthy negotiation that began last spring, we found a way to put these matters behind us and move forward.

"People can honestly disagree about business and marketing practices," Otellini continued, as he pursued his metaphor of stepping back and moving forward simultaneously. "We continue to believe that our discounts are lawful and in the best interests of consumers and the marketplace, although we understand that others have a different perspective. At this point, the best path forward is to bring closure to all disputes between the companies."

How can Intel effectively agree to stop doing what it says it never did, and keep a straight face about it? That's the essence of a question asked this morning by a Wall Street Journal reporter.

As Intel Executive Vice President for Legal Affairs Andy Bryant responded, "They [AMD] believe we conduct business certain ways that we don't believe we do. So it's been a contention for a long time...one of the examples they gave was, if a customer doesn't buy a certain amount from us, we punish that customer. We don't do that. We understand they believe that. What made sense for us was to say, since we all agree it shouldn't be done, let's write it down and agree to it. And we'll monitor it and have talks about it. So what we've really done is, taking where the two sides have a different conception, and codify what we will and won't do -- mostly what we won't do -- and hopefully, then, we can track that going forward, and everybody understands that competition has been fair and will be fair."

Under the terms of the settlement agreement, representatives from both companies will meet once every quarter to discuss possible points of dispute, perhaps in writing. This gives both sides the opportunity to propose solutions prior to any future litigation taking place.

Why was AMD willing to grant Intel some lee-way on what appeared to have been, up until today, the central point of its dispute -- for example, Intel's ability to bargain for exclusivity? In response to this question, AMD's Tom McCoy actually went so far as to state that certain elements of its case against Intel that seemed critical, really weren't.

"The key issue for us is the conditionality," McCoy said, not being nearly as poetic as at the start. "That is, that structures or inducements, or the opposite of inducements, that are provided to customers, are conditional on whether, and to what extent, or how, customers can also deploy AMD technology. That is the key practice that, in our view, has constrained our access to the marketplace, whether it be at the computer manufacturer level or the channel level; and Intel has agreed to cease those practices, consistent with what are already several regulatory decisions."

But a so-called "narrow set of practices" (which aren't so narrow after all; for instance, fairly bidding for exclusivity if an OEM offers it) remains permissible even under this agreement. As AMD's McCoy explained, "As to these other, narrow set of practices, bear in mind that there is also a decision that exists against Intel from Brussels, and that Intel is undoubtedly going to try to comply in good faith with that decision. So we believe that we, through the actions of the regulators, already have significant protections against these practices, and that our customers therefore are going to enjoy freedom of action to deal with us."

Next: The cases against Intel going forward, or backward...

The cases against Intel going forward, or backward

The most recently developed picture in consumers' and investors' minds about Intel's conduct during the early part of this decade came from the State of New York's antitrust suit, filed against Intel last week. There, State Attorney General Andrew Cuomo cited multiple e-mails, some from then-COO Otellini, which appeared to indicate that Intel was not only eager to enter into exclusivity deals with Dell and Hewlett-Packard secretly and separately from AMD, but was aware of the leverage those deals had in influencing those manufacturers' purchasing decisions and behavior.

It's clear this morning that Otellini remains personally disturbed by the New York A G's allegations, which are by no means settled: "We strongly disagree with the New York Attorney General's case, and believe the complaint is entirely without merit. Discounting and rebates are standard business practices, and perfectly legal, and it's unfortunate that the New York Attorney General chose to distort the facts. We would have preferred to have engaged in a dialogue with the Attorney General."

When pressed for further "color" on the subject by another reporter, Otellini turned up the volume: "On some of the statements in there that were attributed to me, yeah, I wrote some of those, at least the ones I remember. On the other hand, many of those documents are taken broadly out of context. When the full nature of the e-mails is exposed, I think that you'll see there's another way to interpret some of these statements."

The cross-licensing agreement

If AMD's complaints against Intel have been clear, emotional, and the stuff about which producers make movies, Intel's complaints about AMD are made up of the type of legal licensing language that keep attorneys in business. Under the terms of the two companies' long-standing licensing agreement -- the complete, non-redacted text of which has never been made public to this day -- neither company was allowed to license the other's intellectual property to other manufacturers. With AMD spinning off GlobalFoundries as part of its restructuring, that became another company that could do business with innovators other than AMD, putting Intel's IP in jeopardy. As a safeguard, the existing agreement stipulated that any foundry that AMD should hire to produce its chips should be a majority-owned subsidiary of AMD at the very least.

When the cross-licensing agreement was announced this morning as part of the two companies' settlement, evidently some red flags went up as though they were entering into some mysterious, Microsoft + Novell-like covenant. (If disputes can't be made more mysterious than they truly are, perhaps we can make hyperbole out of agreements).

But as AMD's Tom McCoy explained, the new cross-licensing agreement was essentially an extension of the existing one that's been under our noses since 1976: "It is an important feature of our agreement with Intel that we have resolved all disputes that have divided the parties. On the intellectual property side, AMD and Intel have had patent peace with each other since 1976 -- meaning that each company has had design freedom to innovate, respecting each other as great contributors to the intellectual property portfolio in the industry. And that continues unabated. So we have the continued design freedom, as do they, and we have now the flexibility...for full use of foundries. So now we can have 100% of our output produced in foundries that do not have to qualify as subsidiaries of AMD."

Analysis: The end of business-by-litigation?

Scott M. Fulton, III and Carmi Levy — Thu, 12 Nov 2009 14:30:09 -0500

By Scott M. Fulton, III and Carmi Levy, Betanews

The largest and widest ranging PC technology dispute, perhaps in the industry's history, came to an abrupt end this morning with Intel and AMD agreeing to set aside most of their differences, and all of their legal disputes. Is this a signal to the various litigators in the information technology industry that litigation is no longer the way to go, that it's too expensive a way for a company to continue protecting its market position? Betanews caught up with our contributing analyst Carmi Levy, by way of his trusty BlackBerry, on a train headed to Toronto this morning.

Carmi Levy: If litigation isn't too expensive from a fiscal perspective, then it certainly is onerous from a corporate attention perspective. Specifically, getting involved in years-long, tit-for-tat pitched legal battles that spill across global borders can often be the catalyst for losing focus on core competencies. While lawsuit-laden companies inevitably claim their legal processes do not impede strategic planning or day-to-day operations, it's clear that they're being overly optimistic. Litigation is a distraction. Never-ending litigation can split a company's focus for just long enough that it can easily lose touch with the needs of its market.

In a post-recessionary world, organizations are more vulnerable than ever to the consequences of this form of split focus.

Scott Fulton: Under the terms of this morning's agreement, Intel didn't have to acknowledge any wrongdoing, and it can continue offering volume rebates so long as they're not exclusionary...Doesn't that mean the cases of the New York Attorney General and the EC go flying out the window?

Carmi Levy: We may yet see pending cases in New York and Europe get tossed in the wake of this deal, but we'll have to wait and see how each jurisdiction weighs in. It's still early in that process, and it could take weeks or months before Intel gets the all clear in every venue where these is either current or pending litigation. Still, on the surface, it looks likely that Intel's ability to offer non-exclusionary rebates cuts the legs out from virtually all cases against it.

Scott Fulton: Is the business world ready for the dull, boring reality of competition between equal innovators everywhere in the spirit of openness and (yawn!) friendship? (Or put more directly, won't the rest of us in the media need to wake up to the new reality of business?)

Carmi Levy: I think it's time we -- both consumers as well as media, and while we're at it, the litigants and vendors, too -- moved on and paid more attention to what vendors do in the market with their products and services and less on what they're up to in front of a judge. In Intel's and AMD's case, they bring us technology that powers the information economy. They both have finally woken up to the fallacy of devoting endless resources to legal action that doesn't enhance their ability to design and market better products. Hopefully now they'll both be able to get back to business -- albeit an admittedly changed one.

And when they do, I think there's still ample opportunity for these two companies to slug it out where it matters most: in the market at large. Without the weight of seemingly never-ending litigation dragging them both down, we can look forward to more innovation and fewer antagonistic press releases and court filings.

Which means journos like us may have to change our approach to coverage as well!

The agreement: Intel and AMD 'wipe the slate clean'

Scott M. Fulton, III — Thu, 12 Nov 2009 13:35:19 -0500

By Scott M. Fulton, III, Betanews

The complete text of this morning's agreement between AMD and Intel was filed with the US Securities and Exchange Commission, and was made public early this afternoon. The agreement explicitly brings to an end three different legal disputes: the 2005 AMD antitrust suit against Intel in Delaware; the 2005 AMD antitrust suit against Intel in Tokyo, Japan; and Intel's objections to AMD's restructuring plan, specifically to spin off GlobalFoundries from a subsidiary to an independent unit.

The agreement acknowledges the gist of AMD's complaints about Intel's prior conduct, but Intel does not in turn acknowledge having acted as AMD suggested. But from there, the agreement effectively acts as if to say, "You know what? Let's forget about all that and start over."

"To avoid the time and expense of litigation, and without any admission of liability or fault, the Parties wish to fully, finally and forever resolve, compromise and settle the Actions on the terms and conditions set forth below," the agreement explicitly reads. "Further, Intel and AMD acknowledge that for most of the last three decades, their relationship has been difficult, challenging and often acrimonious. Intel and AMD wish to change that relationship going forward, both by 'wiping the slate clean' as to all past grievances, and by approaching future grievances in a constructive manner designed to address and resolve such grievances amicably, if possible."

The business practices which Intel has agreed to abide by, are very carefully worded so as not to suggest that Intel never abided by them in the first place. For example, the agreement does not say Intel will "discontinue" any practice, or "refrain from" doing something, which would imply that it did so in the past.

It's a long section, but what it boils down to is the following:

No rebates to OEMs for exclusivity. Intel won't enter into any deals with manufacturers that would give them benefits or awards for restricting their own freedom from being able to purchase parts from any other producer, anywhere in the world.
Intel can make exclusionary deals, and no, that is not a typo. There are conditions that have to be met, one of which being that Intel must compete (presumably with AMD) for those deals. The explicit language states Intel is not prohibited: "...to lawfully compete on the merits for selection by the customer for any then-current design award or for satisfaction of any or all of the customer's then-current demand for microprocessors in a manner consistent with this Agreement." So if an OEM is offering exclusivity, it must offer it to both competitors, and in writing. And the winner must execute its agreement with the OEM explicitly, and in writing.
Intel cannot reward a company for refraining from advertising AMD parts, or for not entering into marketing agreements with AMD, nor can it penalize a company by saying such an agreement with its competitor is against an existing agreement with Intel.
Intel can't rebate anyone for using mostly or entirely Intel parts. That type of exclusivity doesn't constitute a "design award" or a marketing program, and is thus forbidden.
Intel can compete for a design award by a manufacturer were mostly or all Intel parts are used, just as long as AMD can compete as well.
Intel cannot create artificial technological impairments such as, for instance, a compiler state that would render some software better or faster on Intel multicores but defeated or dampened on AMD multicores.
Both AMD and Intel may offer discounts to customers, especially volume discounts. That's been a point of contention with Intel, whose accusations against it in recent months have extended to include the ability to offer deep discounts to OEMs for high-volume purchases. As Intel executives have questioned, since when has discounting been illegal, even for a dominant player? Later in the agreement, it specifies that Intel's ability to offer retroactive discounts -- markdowns on current and future purchases based on volumes of past purchases -- may be preserved as well, depending on the outcome of current regulatory challenges worldwide.

The agreement explicitly states that Intel will not challenge the findings of the European Commission, the US Federal Trade Commission, and the New York Attorney General's office, although it may be free to challenge the language of those decisions. AMD will continue to argue against Intel's use of retroactive discounts with respect to these regulatory actions, assuming they continue.

As for any other Intel conduct, AMD says it's releasing its complaints against Intel; and Intel in turn is releasing its IP complaints. In the terms of a new covenant, neither party can hold the other party or its customers liable for past conduct.

EC still holds Intel accountable even after AMD settlement

Scott M. Fulton, III — Thu, 12 Nov 2009 13:03:39 -0500

By Scott M. Fulton, III, Betanews

Despite an historic resolution to AMD's and Intel's long-standing business practices and intellectual property disputes this morning, the official position of the European Commission -- which issued formal objections to, and fines for, Intel's alleged conduct last May -- is that nothing whatsoever has changed with regard to its ongoing prosecution of its Statement of Objections.

In a statement to Betanews this afternoon, EC spokesperson Jonathan Todd said: "The Commission takes note that Intel and AMD have settled all their litigation and that Intel is paying AMD compensation of $1.25 billion. Intel has an ongoing obligation to comply with the Commission's May 2009 Decision and with EU antitrust law. The Commission continues to vigorously monitor Intel's compliance with its obligations under the May 2009 Decision."

Although AMD is likely to continue cooperating with regulators worldwide, its active participation in their efforts is likely to subside, but not yet completely.

"The regulatory investigations and enforcement actions around the world are conducted by sovereign governments pursuant to law and their mandates to protect competitive processes and consumer value," said AMD Executive Vice President for Legal Affairs Tom McCoy this morning. "So the regulators will do what they are going to do; and what we would say is that, from our perspective, we are withdrawing, obviously, from all pending litigation. We will be withdrawing all complaints that have been lodged with regulatory agencies, and if asked, we will say that the agreement, to a great extent, resolves outstanding disputes between AMD and Intel under the antitrust laws. There are some exceptions, there are some practices that we believe are exclusionary, that we will, under the agreement, there are a narrow set which we will continue to advocate to the regulators should be addressed for the health of the industry; and Intel will have its own point of view of that, of course. So the regulatory agencies still have a role to play, but from our perspective, this agreement significantly resolves our concerns."

From Intel's perspective, all of the regulatory concerns that governments may have stem from AMD's original civil complaint. And now that that's over, Intel believes, the rest of it all should follow.

"In terms of regulators, I think in general, all of these comments that have been coming from regulators, and actions, have been as a result of the complaints between these two private parties," said Intel CEO Paul Otellini this morning. "Now that the issues between the private parties are settled, I think that should provide some degree of comfort for the regulators, at least in terms of our behaviors and how we're going to compete in the marketplace, and so forth. Beyond that, they may have their other concerns in areas like pricing, as we've mentioned, that we may still want to them and they may want to talk to us about."

Endpoint analyst Roger Kay later pressed the Intel executives for further clarity, including with regard to the New York Attorney General's antitrust complaint, filed last week.

"In the places in the world where AMD had complaints against us, those will be withdrawn," responded Intel Executive Vice President for Legal Affairs Andy Bryant. "In places where governments around the world were asking us questions, those will continue on. Actually the EU appeal will continue on...We are having discussions with the [US] FTC; currently, there are other countries in the world who have asked us questions, we will still continue to talk to them, answer their questions. And of course, we have the New York Attorney General situation to deal with."

This prompted a Fortune Magazine correspondent to ask whether A-G Andrew Cuomo's complaint -- which contained never-before-public e-mails from Intel execs, including Otellini, as evidence of improper conduct -- led Intel to conclude it must settle now with AMD to avoid embarrassment.

Otellini responded first by revealing that settlement talks with AMD actually began last April, before the EC's Statement of Objections. In fact, it's conceivable that had the EC suspended its operations for another month, it might have discovered it had less to complain about.

With respect to Mr. Cuomo's filed complaint, Otellini added, "On some of the statements in there that were attributed to me, yeah, I wrote some of those, at least the ones I remember. On the other hand, many of those documents are taken broadly out of context. When the full nature of the e-mails is exposed, I think that you'll see there's another way to interpret some of these statements. Remember, there were 200 million pages of documents produced, and these were four or five snippets out of 200 million pages. So we're anxious to talk about our side of the story and show our other halves of e-mails, and so forth, as we go forward."

Betanews has shared some of Otellini's statements with Attorney General Cuomo's office, and we may expect a response from him later in the day.

Breakthrough: AMD and Intel settle antitrust dispute, reach new cross-license agreement

Scott M. Fulton, III — Thu, 12 Nov 2009 09:55:16 -0500

By Scott M. Fulton, III, Betanews

Intel has made a statement to Betanews this morning that it and Advanced Micro Devices are settling their long, outstanding legal disputes, including pending antitrust litigation in Delaware court, with Intel agreeing to pay AMD $1.25 billion.

Intel will also agree to abide by a new set of business practices, which may be announced in a matter of minutes. It's over.

"While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development," reads Intel's statement this morning.

10:55 am EST November 12, 2009 · "The agreement to us signals a new era. It's a pivot from war to peace," announced AMD Executive Vice President for Legal Affairs Tom McCoy, in a statement that could entitle the opening of a new chapter in the x86 computing era.

With poignant and historic language, AMD executives this afternoon announced the end of the intellectual property and business practices dispute with Intel that at one time, from a marketing perspective, defined AMD as a company. Intel's executives' statements remain forthcoming at this time. But AMD CEO Dirk Meyer explained today's agreement has three categories:

1. Intel will agree to new ground rules for corporate business practices.

2. A new, five-year patent cross-license agreement between AMD and Intel will give both companies broad access to each other's technologies.

3. GlobalFoundries, the manufacturing arm of AMD that was spun off as a subsidiary, may now be completely separated from AMD and operate independently. Under the previous cross-license agreement with Intel, GF had to operate as an AMD subsidiary in order for AMD to share Intel intellectual property with it -- the old agreement prohibited AMD sharing Intel trade secrets with another company. The new agreement permits such sharing specifically with GF.

However, we learned this morning, not all business practices to which AMD and certain other governments had been objecting, will be covered by Category 1 of the agreement. Specifically, from AMD's point of view, it appears only Intel conduct with regard to limiting end users' choices between AMD and Intel technology, will be curbed. But business practices such as volume rebates to OEMs may (perhaps) be allowed, so long as they are not exclusionary -- specifically, as long as they are not structured in such a way that OEMs promise not to purchase AMD parts, or to hold AMD purchases to specified caps.

We'll learn more from Intel's point of view in a few minutes. In advance of Intel's statement, that company has already released an update to its financial guidance, increasing its business expenditures to account for the one-time charge of $1.25 billion to be paid to AMD.

12:25 pm EST · Intel's business conduct agreement, we learned from Intel this morning, will not extend to the practice of volume rebates with OEMs such as HP and Dell. Without acknowledging any wrongdoing -- in fact, while continuing to defend its prior business practices with all OEMs, including Dell and HP -- Intel executives today stated they now openly promise not to do in the future any of the exclusionary tactics which AMD accused it of doing, while saying it never did so anyway.

Or maybe not. When directly asked by a Financial Times reporter this morning whether Intel's take on the agreement means it's not changing anything with regard to its business conduct, Intel Chief Administrative Officer Andy Bryant heaved a great, audible sigh, and responded emphatically, "No changes at all. Again, I'm just gonna say the same thing over again, so bear with me: AMD believes we have conducted business in some fashion that they believe is inappropriate. We have said we don't do what they actually accuse us of doing. We are confident that -- in fact, it's in the contract, we wrote down exactly what those provisions are, what we will and mostly what we won't do, and then those can be monitored at any time."

Then after what sounded like a pause for Intel CEO Paul Otellini to pick up where he left off, suddenly Bryant decided he needed to correct a little something: "I don't want to say there's absolutely no change to what we're doing. We have met with the EU, we have changed some business practices because of that. There are issues around pricing, which we think that the regulators may want to talk to us about -- we'll talk about those things. So I don't want to say we're not changing any of our business practices. The things that AMD was concerned about in the contract are things that we don't do, and we readily agreed to not do, because we don't."

The patent cross-license agreement reached today is a five-year extension of the existing agreement -- an extension that had been threatened by Intel's concern over AMD's restructuring. Specifically, if GlobalFoundries were to split completely from AMD ownership to become independent, AMD's sharing of x86 technology necessary for GF to produce chips would violate the previous licensing agreement.

That's important, because GF plans to do business with other companies; and GF's other current co-owner -- Abu Dhabi government-run investment firm ATIC -- reached an agreement last month to acquire Chartered Semiconductor. That makes GF, which was once just a manufacturing company, into a full-scale CPU innovator and manufacturer on the order of what AMD was in 2007. Chartered doesn't exactly expect its IP to be shared with Intel; and Intel would not want the reverse.

But borrowing the term "peace" from his AMD counterpart this morning, Intel's Andy Bryant told reporters that Intel was usually at peace with foundries, so striking an independent deal with GF wasn't too much of a problem. Intel isn't worried about losing its x86 IP, and is trusting GF just like it previously trusted AMD. This enables AMD to complete the last part of its restructuring: separating GF completely as an AMD subsidiary, into a firm that is majority-owned by ATIC, and minority-owned by AMD. That resolution also officially took place this morning.

Both Intel and AMD are expected to file paperwork with the Securities and Exchange Commission today, either or both versions of which should detail the complete agreement between the two companies. Betanews will continue reporting on today's breakthrough as we learn more.

Microsoft damage control after marketer claims Win7 inspired by Mac

Scott M. Fulton, III — Thu, 12 Nov 2009 09:51:39 -0500

By Scott M. Fulton, III, Betanews

It's not like this sort of thing has never happened to someone at Microsoft before: a moment of clarity and candidness which may actually be close to, if not exactly, the truth, but which is nevertheless "off message." During a recent reseller's conference, a Microsoft marketing manager named Simon Aldous representing the Worldwide Partner Group gave credit to Apple for creating an operating system that folks in a Microsoft study appreciated. But then, according to PCR Online, a publication for computer and software resellers, Aldous went one step further and said Microsoft took that inspiration and, then with Windows 7, "create a Mac look and feel in terms of graphics."

It was exactly the phraseology that blogs throughout the Internet were looking for, and Aldous' comment became the latest water cooler conversation topic...even though the publication was incorrect in one very important respect: Aldous was not a "Microsoft exec," and therefore was not speaking on behalf of the company. The fact that the publication got Aldous' position wrong created suspicion in at least one person residing on planet Earth that perhaps it had gotten the quote wrong as well. Nonetheless, the headline "Windows 7 was inspired by Apple OS" rocketed throughout the Web.

The entire incident might have ended there, except for the fact that one of Microsoft's chief online evangelists, Brandon LeBlanc, publicly excoriated Aldous for having made the comment...rather than cast doubt on its authenticity. "Unfortunately this came from a Microsoft employee who was not involved in any aspect of designing Windows 7," LeBlanc wrote this morning. "I hate to say this about one of our own, but his comments were inaccurate and uninformed."

There is indeed one element of Windows 7 whose differences from Vista were probably inspired by Mac OS: the revised taskbar. When it was unveiled last year at PDC, Microsoft representatives were extremely careful not to characterize it as Mac-inspired. Staying on-message at the time, Microsoft design manager Samuel Moreau coined the term "delighter" to refer to visual elements derived from extensive examination of test results obtained from the opinions of people using Vista while being videotaped. The new taskbar was designed to be a staging area, he said, for several of these delighters.

But neither Moreau nor anyone at Microsoft at that time steered completely clear of the other "M" word, acknowledging the design impetus of Mac OS even when folks in the audience asked questions to the effect of, "You realize this is more like the Mac Dock, right?" No one said, however, that the taskbar had a "Mac look and feel."

HP to acquire 3Com for $2.7 B in cash, focus on China

Tim Conneally — Wed, 11 Nov 2009 17:07:15 -0500

By Tim Conneally, Betanews

HP announced this afternoon that it has entered into an agreement with network switch, router, security, and solutions company 3Com for approximately $2.7 billion in cash.

"By acquiring 3Com, we are accelerating the execution of our Converged Infrastructure strategy and bringing disruptive change to the networking industry," Dave Donatelli, executive vice president and general manager, Enterprise Servers and Networking, HP said today. "By combining HP ProCurve offerings with 3Com's extensive set of solutions, we will enable customers to build a next-generation network infrastructure that supports customer needs from the edge of the network to the heart of the data center."

This acquisition will not only give HP 3Com's property, but also that of network security company TippingPoint and former joint venture with Huawei, H3C.

HP's announcement put special weight on the H3C aspect of the acquisition, as it will "significantly strengthen the company's position in China -- one of the world's fastest-growing markets -- via the H3C offerings. In addition, the combination will add a large and talented research and development team in China that will drive the acceleration of innovations to HP's networking solutions."

Since buying out Huawei's share of the H3C joint venture, Huawei had an agreement to not compete against 3Com. That agreement, however, expired in 2008 and 3Com has lost a large portion of revenue from strong Huawei's sales (an estimated 17% of its total) in China.

How would you rewrite Google's '10 Things?'

Joe Wilcox — Wed, 11 Nov 2009 14:08:48 -0500

By Joe Wilcox, Betanews

More and more people are using the M word -- that is "monopoly" -- to describe Google. Certainly there is an argument that, globally, Google has a monopoly on search. According to combined analyst reports, Google's worldwide search share is about 60 percent, even 70 or 80 percent in some geographies -- and that's just from the desktop or portable PC. Google also is rapidly gaining search share on mobile phones as well; 60 percent, or even more, in many countries.

Google's influence is a hot topic this week because of media mogul Rupert Murdoch's threat to put most, if not all, his content behind a paywall and remove that content from crawling by Google search bots. Is Google doing evil to traditional media publishers like Murdoch, by making their content easily available for free? In August, over at my Oddly Together Website I tackled this topic in post: "Can You Charge for News? Ask Google."

As Google's might increases, it's reasonable to ask how the company's business practices are changing and whether or not it can stick to corporate philosophy "Ten things we know to be true." Perhaps the best known is No. 6: "You can make money without doing evil." But can Google does this? That's the question I pose to Betanews readers.

I'll go further and ask: How would you rewrite Google's "10 Things" to more appropriately fit how the company conducts its business? I offer my list below but ask for your adaptations in comments. By the way, my revision is a bit hard-ass with a purpose: To generate discussion. The revised 10 Things don't necessarily reflect how I personally feel about Google, which otherwise gets knocked around in my revised 10 Things.

I got the idea to rewrite the 10 Things from a Twitter exchange, late yesterday. I tweeted: "Q: Does YouTube diminish if Bing Videos easily collects videos from many sources? If Microsoft taps in social sharing/networking?" Windows developer Mugunth Kumar responded: "I wish it would. Google videos is like too much inclined toward YouTube :-( "don't be evil, no non-google videos for you"!" I shot back a revised No. 6, which you can read below. With that introdcution...

Google's 10 Things -- As revised by Joe Wilcox

1. "Focus on the user and all else will follow" should be: Focus on the algorithm and all else will follow.

Google's core business is really about ranking the relevance of Websites. If keywords are any indication, the focus is not on the user. Keyword search is hugely inexact, and it's unnatural to how people look for things (e.g., they ask questions). But keywords are important to how Google makes money from search.

2. "It's best to do one thing really, really well" should be: Don't put all your eggs in one basket.

While cliché, the saying is appropriate to Google. In the early 2000s, Google did search "really, really well" -- better than any competitor. But end users and even keyword customers could still easily switch to another search engine (just type a different URL into the browser's address bar). Google extended its search technology and brand success by releasing many products with cross-integration benefits. Today, Google search is sticky, because of supporting products or services. Few of them are another thing done "really, really well," however.

3. "Fast is better than slow" should be: Slow is better than fast.

With the exception of perhaps Chrome, most Google products or services stay in perpetual states of beta before release. The development process is anything but fast. Gmail spent five years in beta. Exactly what is fast about that? The slow process allows Google to get something to market, while it's refined to reach a "good enough" threshold (see #10).

4. "Democracy on the web works" should be: Monopoly on the Web works.

Microsoft showed the power of monopoly when Internet Explorer tied to Windows ruled the Web. Contrary to democratic concepts about the Web, a minority of Websites account for the majority of traffic. Increasingly, the means for getting to these majors, and most of the minors, is search: Google search. And there's nothing really democratic about one company, or its algorithm, controlling access to most information.

5. "You don't need to be at your desk to need an answer" should be: You don't need another search engine to find the answer. Google is king of the search hill. Early on, this was because of its technology and keyword business practices. Google has extended its reach through its own services and by way of partnerships, such as being default search engine in every major Web browser but one -- Internet Explorer.

6. "You can make money without doing evil" should be: You can do evil without making money.

Other than search, most Google services don't directly make money. But they do take money from someone else -- what other businesses might call "evil." Google gives away for free something someone else charges for. For example, last month, shares of turn-by-turn mapping manufacturers plummeted after it was revealed that Google would include turn-by-turn mapping features with Android 2 for free.

7. "There's always more information out there" should be: There's always more information that Google can cannibalize for free.

The core dispute Robert Murdoch has with Google: He pays talented people to produce valuable content, which Google profits from through keyword search. Google doesn't produce content, but like a human parasite leeches nourishment (e.g. revenue) from the host.

8. "The need for information crosses all borders" should be: The need to index information crosses all boundaries.

Google wants to catalog everything. The practice has generated some corporate -- and even government -- backlash about privacy and security. Google produces none of this information, owns none of it, but looks to profit from it.

9. "You can be serious without a suit" should be: You can't be taken seriously without a suit.

Sure, regular Googlers dress however they want. But how does Google chairman and CEO Eric Schmidt dress? In a suit!

10. "Great just isn't good enough" should be: Good enough is good enough.

Few Google products or services are great, nor does the company strive to make them so. The majority, especially those competing with something already available, strive to cross the "good enough" threshold. When something is good enough for less or free, people will adopt it and even give up some more valuable that costs more. Microsoft has repeatedly demonstrated the "good enough" principle with its products, such as Internet Explorer in the late 1990s.