Geek News and Musings

Those of you upset with Apple’s rejection of the Google Voice iPhone app and the implications of such shady behavior might be interested to hear that the FCC has opened and inquiry into the ban.

In letters sent late Friday to the two companies and AT&T Inc., the FCC asked why Apple rejected the Google Voice application for the iPhone and removed related applications from its App Store. The letter also seeks information on how AT&T, the exclusive U.S. iPhone carrier, was consulted in the decision, if at all.

[WSJ via Gizmodo]

Dan sends in yet another story about copyright gone wrong. Apparently the small town of Greenville Michigan has a strong Danish heritage, and wanted to show that off with some artifact representing Denmark. It chose the iconic Little Mermaid statue, based on Hans Christian Andersen’s story, and a similar iconic statue in Denmark. Apparently, however, the family of the artist who created the statue in Denmark is trying to clamp down and is demanding a lump sum payment or that the statue be taken down. The actual artist died in 1959… but thanks to recent extensions in copyright (yippee), copyright now lasts life plus seventy years.

Of course, I’m wondering if the statue even violates the copyright at all. While the town says it was inspired by the one in Denmark, the actual statue is different:

At about 30 inches high, it’s half the size of the original and has a different face and other distinct features, including larger breasts. “We’ve gotten a lot of heat about that too,” he says

Considering that so much of the statue is different, is it even a copyright violation at all? Apparently, this isn’t the only town that’s faced problems over such statues. The article notes, amusingly, that Vancouver, British Columbia — after failing to get permission from the artist’s estate — instead put up a statue entitled “Girl in a Wetsuit” and even added swimming fins and goggles to get the point across. It’s hard to believe that this one artist, whose been dead for fifty years, should have total control over statues of mermaids, but that’s what today’s copyright law gives us. Isn’t it great?

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We highlight the best instant messengers on the block, rant and rave over Apple’s bad iPhone decisions, tip you off to liars, and enjoy some cool summertime wallpapers.

Photo by Amecke.

• Five Best Instant Messengers
  Instant messaging has become so ubiquitous, an entire generation of internet users is probably unaware there was ever life without it. Check out the following five most popular instant messengers to to help you communicate across networks and the world.
• Bad Apple: An Argument Against Buying an iPhone
  Apple just rejected the Google Voice iPhone application from App Store distribution, the most recent in a long line of questionable moves, and the message is clear: If you want a device that won’t lock you out of innovation, skip the iPhone.
• Catch Phrases That May Tip You Off to a Lie
  Apart from more obvious signs, non-verbal gestures and other cues can also help to determine whether someone is telling the truth or not. Forbes outlines 11 ways to potentially sniff out a liar, including several phrases to watch out for.
• How Bill Gates Uses Office and Three Monitors
  Bill Gates drops a lengthy blog post explaining how he gets things done, Microsoft style, using three monitors to watch an inbox, read or write documents, and browse the web.
• Wallpaper Roundup: Ocean Views and Abstract Blues
  The temperature is rising across the country, and while you may not be able to get yourself to a cool and breezy locale, you can at least plaster your monitor with soothing reminders of one.
• Make Reverse-Engineered KFC at Home
  An enjoyable bout of foodie one-upmanship has yielded not only one “reverse-engineered” home recipe of KFC’s 11 herbs and spices, but an improved version of fried chicken that strips out the MSG.
• The Hidden Risks of Cloud Computing
  Every day more users move their computing lives from the desktop to the cloud and rely on hosted web applications to store and access email, photos, and documents.
• Avoid These Phrases to Keep Your Resume Relevant
  Resume writing is an infrequently used skill, and one with which most of us will take all the help we can get. Keep your resume from ending up in the bowels of a corporate shredder by avoiding these phrases.
• First Look at Firefox 4.0 Design Mockups
  Last week we took a look at initial design mockups for Firefox 3.7, and now the busy designers at Mozilla are back with some theme mockups for the even-further-into-the-future Firefox 4.0.
• Never Use Hotmail, Inactive Webmail As Your Secondary Email Account
  Registering for an account at any web site almost always requires an email address, and some people use a secondary address they don’t care about instead of their real email address to avoid spam.
• Brush Up on Getting Things Done with an Updated Flow Chart
  Since the release of his new book Making It All Work, David Allen has updated his original GTD workflow chart to include the new elements from the book.

My, how the tables have turned. Earlier this week, we learned that Apple had suddenly begun to pull third party iPhone applications for Google Voice, citing the unconvincing rationale that they “duplicated” some of the iPhone’s functionality. We then broke the news that Apple had also rejected Google’s own official Google Voice application six weeks prior, sparking a din of complaints from developers and users alike over the arbitrary and possibly anti-competitive restrictions being imposed by Apple. AT&T, too, has been a target of frequent criticism as many of us believe it too may have also played a part in the decision. Of course, nobody really knows who is to blame — AT&T has hinted that it was ultimately Apple’s decision, and Apple continues to remain mute on the issue. But now we may get our answers: the Dow Jones newswire reports that The Federal Communications Commission is looking into Apple’s rejection of Google Voice, and has sent letters to AT&T, Apple, and Google to find out what’s going on. We’ve obtained copies of the letters and reprinted them below.

The newswire report notes that this is part of the FCC’s ongoing investigation into wireless handsets and their exclusive deals with carriers. Of course, this all comes years after Google CEO Eric Schmidt sent a letter to the FCC, urging it to adopt open standards that would gives users the freedom to use whichever applications they’d like on their wireless devices, on whichever network they preferred. At the time the suggestions seemed perhaps a bit idealistic, but now it’s becoming clear just how badly they’re needed.

It has been just over one year since Apple released the App Store, and already we’re beginning to see just what can happen when major companies collude to restrict user choice without fear of recourse. As I’ve written before, Google Voice offers a service that innovates in the telephony space in a way that hasn’t been seen for years. But rather than try to improve and offer a better service, Apple and AT&T are doing what they can do to protect their sacred cash cow. But it looks like the government isn’t going to stand for that any longer. With this move, the FCC is showing that it’s not going to let Apple carry its famed culture of secrecy into the telecom space.

FCC Letter to Apple

                                       July 31, 2009
                                                                             

Catherine A. Novelli, Vice President
Worldwide Government Affairs
Apple Inc.
901 15th Street, NW, Suite 1000
Washington, DC  20005

RE: Google Voice and related iPhone applications

Dear Ms. Novelli:

Recent press reports indicate that Apple has declined to approve the Google Voice application for the iPhone and has removed related (and previously approved) third-party applications from the iPhone App Store.   In light of pending FCC proceedings regarding wireless open access (RM-11361) and handset exclusivity (RM-11497), we are interested in a more complete understanding of this situation.

To that end, please provide answers to the following questions by close of business on Friday, August 21, 2009.

1. Why did Apple reject the Google Voice application for iPhone and remove related third-party applications from its App Store?  In addition to Google Voice, which related third-party applications were removed or have been rejected?  Please provide the specific name of each application and the contact information for the developer.
2. Did Apple act alone, or in consultation with AT&T, in deciding to reject the Google Voice application and related applications?  If the latter, please describe the communications between Apple and AT&T in connection with the decision to reject Google Voice.  Are there any contractual conditions or non-contractual understandings with AT&T that affected Apple’s decision in this matter?
3. Does AT&T have any role in the approval of iPhone applications generally (or in certain cases)?  If so, under what circumstances, and what role does it play?  What roles are specified in the contractual provisions between Apple and AT&T (or any non-contractual understandings) regarding the consideration of particular iPhone applications?
4. Please explain any differences between the Google Voice iPhone application and any Voice over Internet Protocol (VoIP) applications that Apple has approved for the iPhone.  Are any of the approved VoIP applications allowed to operate on AT&T’s 3G network?
5. What other applications have been rejected for use on the iPhone and for what reasons?  Is there a list of prohibited applications or of categories of applications that is provided to potential vendors/developers?  If so, is this posted on the iTunes website or otherwise disclosed to consumers?
6. What are the standards for considering and approving iPhone applications?   What is the approval process for such applications (timing, reasons for rejection, appeal process, etc.)?  What is the percentage of applications that are rejected?  What are the major reasons for rejecting an application?

Request for Confidential Treatment.  If Apple requests that any information or documents responsive to this letter be treated in a confidential manner, it shall submit, along with all responsive information and documents, a statement in accordance with section 0.459 of the Commission’s rules.  47 C.F.R. § 0.459.  Requests for confidential treatment must comply with the requirements of section 0.459, including the standards of specificity mandated by section 0.459(b).  Accordingly, “blanket” requests for confidentiality of a large set of documents are unacceptable.  Pursuant to section 0.459(c), the Bureau will not consider requests that do not comply with the requirements of section 0.459.

Thank you in advance for your anticipated cooperation.

Sincerely,

James D. Schlichting
Acting Chief
Wireless Telecommunications Bureau
Federal Communications Commission

FCC Letter to Google

July 31, 2009

Richard S. Whitt, Esq.
Washington Telecom and Media Counsel
Google Inc.
1101 New York Avenue, NW, Second Floor
Washington, DC 20005

RE: Apple’s Rejection of the Google Voice for iPhone Application

Dear Mr. Whitt:

Recent press reports indicate that Apple has declined to approve the Google Voice application for the iPhone and has removed related (and previously approved) third-party applications from the iPhone App Store. In light of pending FCC proceedings regarding wireless open access (RM-11361) and handset exclusivity (RM-11497), we are interested in a more complete understanding of this situation.

To that end, please provide answers to the following questions by close of business on Friday, August 21, 2009.

1. Please provide a description of the proposed Google Voice application for iPhone. What are the key features, and how does it operate (over a voice or data network, etc.)?
2. What explanation was given (if any) for Apple’s rejection of the Google Voice application (and for any other Google applications for iPhone that have been rejected, such as Google Latitude)? Please describe any communications between Google and AT&T or Apple on this topic and a summary of any meetings or discussion.
3. Has Apple approved any Google applications for the Apple App Store? If so, what services do they provide, and, in Google’s opinion, are they similar to any Apple/AT&T-provided applications?
4. Does Google have any other proposed applications pending with Apple, and if so, what services do they provide?
5. Are there other mechanisms by which an iPhone user will be able to access either some or all of the features of Google Voice? If so, please explain how and to what extent iPhone users can utilize Google Voice despite the fact that it is not available through Apple’s App Store.
6. Please provide a description of the standards for considering and approving applications with respect to Google’s Android platform. What is the approval process for such applications (timing, reasons for rejection, appeal process, etc.)? What is the percentage of applications that are rejected? What are the major reasons for rejecting an application?

Request for Confidential Treatment. If Google requests that any information or documents responsive to this letter be treated in a confidential manner, it shall submit, along with all responsive information and documents, a statement in accordance with section 0.459 of the Commission’s rules. 47 C.F.R. § 0.459. Requests for confidential treatment must comply with the requirements of section 0.459, including the standards of specificity mandated by section 0.459(b). Accordingly, “blanket” requests for confidentiality of a large set of documents are unacceptable. Pursuant to section 0.459(c), the Bureau will not consider requests that do not comply with the requirements of section 0.459.

Thank you in advance for your anticipated cooperation.

Sincerely,

James D. Schlichting
Acting Chief
Wireless Telecommunications Bureau
Federal Communications Commission

FCC Letter to AT&T

July 31, 2009

James W. Cicconi
Senior Executive Vice President-External and Legislative Affairs
AT&T Services, Inc.
1120 20th Street, NW, Suite 1000
Washington, DC 20036

RE: Apple’s Rejection of the Google Voice for iPhone Application

Dear Mr. Cicconi:

Recent press reports indicate that Apple has declined to approve the Google Voice application for the iPhone and has removed related (and previously approved) third-party applications from the iPhone App Store. In light of pending FCC proceedings regarding wireless open access (RM-11361) and handset exclusivity (RM-11497), we are interested in a more complete understanding of this situation.

To that end, please provide answers to the following questions by close of business on Friday, August 21, 2009.

1. What role, if any, did AT&T play in Apple’s consideration of the Google Voice and related applications? What role, if any, does AT&T play in consideration of iPhone applications generally? What roles are specified in the contractual provisions between Apple and AT&T (or in any non-contractual understanding between the companies) regarding the consideration of particular iPhone applications?
2. Did Apple consult with AT&T in the process of deciding to reject the Google Voice application? If so, please describe any communications between AT&T and Apple or Google on this topic, including the parties involved and a summary of any meetings or discussions.
3. Please explain AT&T’s understanding of any differences between the Google Voice iPhone application and any Voice over Internet Protocol applications that are currently used on the AT&T network, either via the iPhone or via handsets other than the iPhone.
4. To AT&T’s knowledge, what other applications have been rejected for use on the iPhone? Which of these applications were designed to operate on AT&T’s 3G network? What was AT&T’s role in considering whether such applications would be approved or rejected?
5. Please detail any conditions included in AT&T’s agreements or contracts with Apple for the iPhone related to the certification of applications or any particular application’s ability to use AT&T’s 3G network.
6. Are there any terms in AT&T’s customer agreements that limit customer usage of certain third-party applications? If so, please indicate how consumers are informed of such limitations and whether such limitations are posted on the iTunes website as well. In general, what is AT&T’s role in certifying applications on devices that run over AT&T’s 3G network? What, if any, applications require AT&T’s approval to be added to a device? Are there any differences between AT&T’s treatment of the iPhone and other devices used on its 3G network?
7. Please list the services/applications that AT&T provides for the iPhone, and whether there any similar, competing iPhone applications offered by other providers in Apple’s App Store.
8. Do any devices that operate on AT&T’s network allow use of the Google Voice application? Do any devices that operate on AT&T’s network allow use of other applications that have been rejected for the iPhone?
9. Please explain whether, on AT&T’s network, consumers’ access to and usage of Google Voice is disabled on the iPhone but permitted on other handsets, including Research in Motion’s BlackBerry devices.

Request for Confidential Treatment. If AT&T requests that any information or documents responsive to this letter be treated in a confidential manner, it shall submit, along with all responsive information and documents, a statement in accordance with section 0.459 of the Commission’s rules. 47 C.F.R. § 0.459. Requests for confidential treatment must comply with the requirements of section 0.459, including the standards of specificity mandated by section 0.459(b). Accordingly, “blanket” requests for confidentiality of a large set of documents are unacceptable. Pursuant to section 0.459(c), the Bureau will not consider requests that do not comply with the requirements of section 0.459.

Thank you in advance for your anticipated cooperation.

Sincerely,

James D. Schlichting
Acting Chief
Wireless Telecommunications Bureau Federal Communications Commission

Photo credit: Billogs.

Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.

Another day, another lawsuit for the Pirate Bay team. This time, it’s taking place in Italy, where the local recording industry associations FIMI (Federazione Industria Musicale Italiana) and FPM (Federation against Musical Piracy) have announced plans to sue three of the individuals believed to be responsible for The Pirate Bay. This isn’t a huge surprise. A year ago, after complaints about The Pirate Bay, a court ordered ISPs to block access to the site, only to have a court overturn that ruling. And, of course, in the end all it really did was bring a lot more attention to The Pirate Bay in Italy. Considering that The Pirate Bay doesn’t appear to have any operations in Italy either, it’s not entirely clear that this lawsuit actually matters. And, also, there’s the issue that the three guys being sued here claim to not have any ownership of The Pirate Bay at all.

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Jason Torchinsky is a guest blogger on Boing Boing. Jason has a book out now, Ad Nauseam: A Survivor’s Guide to American Consumer Culture. He lives in Los Angeles, where he is a tinkerer and artist and writes for the Onion News Network. He lives with his partner Sally, five animals, too many old cars, and a shed full of crap.

Before computers became small, cheap, and reliable enough for this purpose, people still had the desire to stand in front of armoire-sized cabinets, stare into a glass panel, and pretend to do things they normally didn’t do, like kill aliens, drive like a madman, or work in a junkyard. The way they did these things was with wonderful, complicated electromechanical arcade games.

These electromechanical games are incredible contraptions, using every kind of trick– projections, spinning drums, remotely articulated models, whirring discs, mirrors, lights– to give the illusions of speed, action, explosions, distance, and more. Looking at them, it’s amazing they worked so well in such a high-abuse public environment. These are real engineering gems, long gone, and very rare now. Luckily, there’s a bunch of videos out there, since stills really don’t do these justice: Speedway, Hill Climb, Invaders, Haunted House. Enjoy!

We already knew that many printers waste a lot of ink (and money), but if you’re suspicious that your printer is a repeat offender, PC World rounds up five steps to help you determine whether your printer’s stealing your time and money.

The article addresses some of the more obvious cost issues—e.g., cheap printers that charge exorbitant prices for ink refills—but they've to make things a little more scientific. For example, the article suggests learning the cost per page of your ink cartridges by taking "the cost of the cartridge and divide it by the page yield—the number of pages the manufacturer says the cartridge can print." Then compare the price of your ink cartridge with these average costs (as calculated by PC World):

Inkjet printers:

Plain black text: 4 cents to 5 cents per page
Simple four-color page: 12 cents to 14 cents per page

Monochrome laser/LED printers:

Plain black text: 1 cent to 2.5 cents per page

Color laser/LED printers:

Plain black text: 2 cents to 3 cents per page
Simple four-color page: 12 cents to 15 cents per page

If your ink or toner cartridge price-per-page cost more than these averages, you may want to rethink your printer choice.

Similarly, the article calls out printers that require special paper, slow printers that steal your time, and printers with cheap paper trays that are bound to break in time. They’ve even put together most wanted lists for the biggest offenders (like the image above calling out printers with deceivingly expensive ink costs) in each category. Hit up PC World for the full low-down, and let us know how you navigate the pricey world of printing costs in the comments.

TechCrunch co-editor Erick Schonfeld appeared on Charlie Rose last night to discuss the Microsoft/Yahoo search deal alongside Steven Levy of Wired and Nick Wingfield of The Wall Street Journal.

The group talked about the initial deal Microsoft offered Yahoo last year to buy Yahoo outright, the complicated nature of this new deal, Microsoft Bing, Yahoo walking away from the search fight rather than engaging, how this was the worst of the deals that Microsoft had offered so far, the Bartz/Ballmer reaction, what this means for Microsoft versus Google now, and the possible antitrust implications of all of this.

Watch the part of the show that featured the discussion below.

And here’s the transcript:

CHARLIE ROSE: Microsoft and Yahoo! announced yesterday a partnership in the search and advertising business. Under the deal, Yahoo!`s websites will be powered by Microsoft new search engine, Bing. Yahoo! will get 88 percent of the ad revenue from searches on its sites for the first five years. With the partnership, the two hope to take on Google, which currently commands about 65 percent share of the U.S. market. The agreement follows Microsoft`s failed takeover bid for Yahoo! and shows the continuing importance it is placing on search.

Joining me now from Redmond, Washington, is Nick Wingfield of the “Wall Street Journal.” Here in New York with me, Steven Levy of “Wired” magazine and Erick Schonfeld, co-editor of TechCrunch blog. I am pleased to have all of them here.

Nick, tell me how this deal happened, first.

NICK WINGFIELD: It started last year with the CEO of Microsoft, Steve Ballmer, making an unsolicited bid for close to $48 billion to acquire Yahoo!. Never happened, Yahoo! resisted the offer. It fell apart.

Fast forward to about January. Yahoo! has a new CEO, Carol Bartz, and Microsoft and Yahoo! start talking about a more limited deal, not a full-blown acquisition, in which Microsoft basically take over the search operations, handle the search operations on Yahoo! in exchange for some value. And the deal went through all sorts of fits and starts, and finally arrived at the deal you described a moment ago.

All of this being designed to improve Microsoft`s fairly poor position in search right now, which is a highly lucrative market, the online advertising market that accompanies search, and one that Microsoft really has not had much success in on its own.

CHARLIE ROSE: Is this a good deal for just Microsoft or good deal for Microsoft and Yahoo!?

NICK WINGFIELD: Well, the shareholders of both companies seem to think it`s a better deal for Microsoft than it is for Yahoo! The stock of Microsoft went up a bit yesterday and up a bit today. Yahoo! is down.

One of the problems Yahoo! has is that they had sort of almost set expectation that they were going to get a big check, a multi-billion dollar check from Microsoft in exchange for a deal of this sort. And that didn`t end up happening. Instead, what Yahoo! is getting is very high percentage of the ad revenue from advertising sold on searches that Microsoft delivers. So, both parties argue that it`s better for Yahoo! to get this, because they`re getting more — a bigger chunk of the share of ad revenue on an ongoing basis, but there is no big upfront check, and that seems to disappoint people.

CHARLIE ROSE: So, what`s the judgment of people who are looking at it in terms of whether Yahoo! would have been better to take the original deal that Ballmer offered or take the deal they have now?

NICK WINGFIELD: Well, I don`t think there`s any question that Yahoo! shareholders would be better off if they had accepted the original $48 billion deal. I don`t know what Yahoo!`s latest market capitalization is, but they`re down a lot.

So, I don`t think Microsoft, though, regrets not acquiring all of Yahoo! I think they`re fairly happy with the position that they`re in. They also have managed to improve their own home-grown search engine, which is now called Bing, and have started to inch up a little bit in market share. So I think Microsoft probably comes out a little bit ahead here, but still, both parties argue that Yahoo! is going to thrive as well because they no longer have to invest in search, so they can be a lot more profitable.

CHARLIE ROSE: Is this going to work?

STEVEN LEVY: It has a lot of hurdles. I think the upfront money really isn`t the key to Yahoo! The key is, Yahoo! is disbanding their search team, their engineering, and disbanding the team which built their advertising engine to sell ads on search. Now, these happen to be some of the most important aspects of engineering at a company there. And really, if Yahoo! wants to be a top Internet company, it has to have the engineering chops to keep doing that.

So, it`s going to miss out on that. And it will save money by not hiring — having those people to pay, but those are the people you want in your company.

Also, this deal is a little complicated. Yahoo! actually is going to sell some of these ads to the premium customers. A lot of customers, those in the long tail, they just go on the website and buy the ads just straight there like you buy something from Amazon. But a big customer needs someone to work with them and tell them what words to buy. It`s very complicated in how much to bid, because these things are all done by bids. And Yahoo! is doing that part, and Microsoft has the technology, which means those people who work for Yahoo! are really going to have to go back and forth to Redmond and talk to a lot of people to be familiar with how that works there. So there`s a little complication in how they`re going to be able to do that, which is going to make it a little more difficult for Microsoft`s big task, which is to take on Google and build up its ad share to something beyond even what it has combined with Yahoo!

CHARLIE ROSE: Did Bing make a difference here at all, the fact that Bing has gotten — the Microsoft search engine has gotten good reviews?

ERICK SCHONFELD: I think Bing made a big difference, because Yahoo! was in a tough position. It was seeing market share eroding from the top, from Google, and now the prospect of market share erosion from the bottom, from Bing. Bing has only been out for two months, but it`s made a little bit of a gain in share, .4 percent. Is that going to last over time? Who knows. But Yahoo! didn`t want to find out. Right?

And the big problem here is that Yahoo! really — they kind of walked away from the most interesting fight on the Internet right now, which is search. And they handed it over to Microsoft for less than any of the previous deals that were on the table. The four real deals that were on the table going back to the $45 or $48 billion offer in February of 2008, the revised search deal that Microsoft offered, which included $8 billion to buy 16 percent of Yahoo! and $1 billion payment for the search part of the business. The Google deal that got squashed, that guaranteed $800 million in revenues.

This deal was the worst of all the deals. And as Steve mentions, the deal introduces a lot of complexity, right? So now you`re going to have Yahoo! sales people selling Microsoft`s search product. So Yahoo! sales people already have enough problem talking to Yahoo! engineers. Now they have to talk to Microsoft engineers. And what if something goes wrong? Who are they going to yell at? Are the Microsoft engineers going to like that, being yelled at by Yahoo! sales people?

CHARLIE ROSE: Nick, you`re in Redmond. What does this do for Steve Ballmer?

NICK WINGFIELD: Well, it gives him a real fighting chance in a market that he said is strategic to the company. They have about 8.4 percent market share on their own with Bing. With Yahoo!`s market share, they could go to 30 percent of shares — 30 percent of searches in the U.S., and that`s significant.

Now the question is, does it decline from there? Can they increase it? If they do that, you know, how much money do they make off of it? Because of course, Microsoft is losing money in its Internet search business right now. But they just want to gain the share. They argue once they gain the share, they get eyeballs. Search is a scale business, that they will start to improve the quality of the search, because they can do all sorts of things, make ads more relevant. And if they do that, they think they can have a flywheel effect and start really eating into Google`s share.

The other thing that this lets them do is, Google is not only strong in search with 65 percent plus share, but Google is also moving into these other areas that are quite threatening to Microsoft. They`re using their profits in search to get into operating systems, into online applications that are free, that threaten these cash-cow businesses like Office and Word and Excel. And they just recently announced that they`re going to be doing an operating system for laptops. They already have one for mobile phones. And I think Microsoft wants to gain share in search in part to help alleviate that threat.

CHARLIE ROSE: And what about the leadership of Yahoo!? Carol Bartz?

STEVEN LEVY: Well, she felt she had to do something. But I think in this case, by targeting the search team and taking it away, some people wonder whether that`s going to really take the glue, which keeps her portal together there.

The search that Yahoo! did had, you know, about three times the size of what Microsoft search, mainly because so many people come to Yahoo! and they search there. So it really was an opportunity for Yahoo! to grow out there and do more.

She says this is going to enable them to concentrate on the other things that they do. But having a very strong search team and engineering that comes with that search, and with the really complicated engineering you have to do to be able to sell ads on searches, that`s very complex. And you know, for reasons we can get into, it really helps if your share grows. Not having that, those engineers aren`t going to be able to filter through the rest of the company to help you do these other things there. If you look at the team now, gee, what are they going to do? It`s going to take well over a year for this to come to fruition with this deal there. So if I`m working as an engineer for Yahoo! now, what`s my future?

CHARLIE ROSE: That`s — and losing talent is the big issue so much, because they`re creating the new software and building on the old.

STEVEN LEVY: And who is one of the most talented people at Microsoft, the one they all talk about there, is Qi Lu, the guy who came from Yahoo!, and went to Microsoft. He`s now the big technology leader, the bright guy who is leading Microsoft search.

CHARLIE ROSE: All right. What about AOL? What`s going to happen to AOL?

ERICK SCHONFELD: So, I think AOL is a great example here, because you`ve got Tim Armstrong, who came from Google, who is now the new CEO of AOL, and he took what was really a hobbled company, and is taking it in a new direction, away from the sweet spot that Google or Yahoo! or Microsoft already dominate in. He`s hiring hundreds of journalists, which as you know from your Politico piece, that you know, they are very, very valuable assets. And is kind of creating — that`s just one part of his business — is creating this sort of new newsstand online. And is doing a lot of interesting things.

And so why didn`t Carol Bartz do that? Why didn`t she double down? You can make the argument that you know, ultimately she had to do something, because she doesn`t have Microsoft`s Windows money and she doesn`t have Google`s search money. So ultimately search is an expensive game and maybe she has to get out of that business, ultimately.

But Microsoft needs her search volume. Why not double down, invest in search, and get a better deal down the line? Or merge with AOL when they become public?

CHARLIE ROSE: Speaking of one final issue, anti-trust, Nick. Is Google worried about anti-trust ramifications of its market share? Will this deal be subject to anti-trust implications, questions?

NICK WINGFIELD: Well, Google is I think worried, yes, about their future in anti-trust. In this particular case of Microsoft and Yahoo!, they argue that together they have 30 percent of the market, compared to Google`s 65 percent. And so they think they are going to have a pretty strong case with the anti-trust regulators. They are definitely going to face some tough scrutiny. They`re prepared, I think, to really fight with Google, but it`s unclear what Google is going to do. There was some talk today at this Microsoft meeting I was at of Google employing sort of third-party advocacy groups to fight the deal. But Google really is the big gorilla here. So it`s a little challenging for them to make an argument that this is going to be anti-competitive. Google has…

(CROSSTALK)

STEVEN LEVY: There`s a really delicious irony here, because last year, when there was the threat of Microsoft buying Yahoo!, Google wanted to make a deal with Yahoo! for the search. It was not on the scale of this, and Microsoft complained about it, and said to the Justice Department, successfully argued that, hey, we can`t do this, because Yahoo! would end its search team. There would be less competition in there. Guess what?

CHARLIE ROSE: They`ll take over their search team. Yes.

Is there a feeling with the search — Bing getting good marks and now this deal, that Microsoft is back and that Microsoft can deliver a lot more than people, or may be much stronger than people assumed it was, say six months ago, when the effort to buy Yahoo! came to nothing?

NICK WINGFIELD: Well, there definitely is a feeling that they are on an upswing in terms of the quality of their products. Windows 7 is coming out, which they hope will erase the sort of disdain of Windows Vista, which was a very troubled operating system for them with some technical problems. Bing is doing well. They have done some innovative stuff in games. But they`ve also got some real challenges. For example, some people think that they have placed too much emphasis on search and neglected mobile phones. They have a pretty poor offering there. And Apple`s got the iPhone and others are doing very well in that category. So they`ve got some big challenges in other areas as well.

ERICK SCHONFELD: Microsoft no doubt is better off today in search than it was before. But we shouldn`t overestimate what their advantage is. Even if they have 30 percent of the search market share, they don`t have 30 percent of the revenues, because they`re giving 88 percent of that back to Yahoo!

CHARLIE ROSE: Exactly. Nick Wingfield, “Wall Street Journal” here. Erick Schonfeld from TechCrunch and Steve Levy from “Wired,” thank you all.

END

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

From the Rules of Thumb website:

A deep oil well has the same proportions as a human hair ten feet long. — Harold E. Haynes

Picturing an oil well

Once again, we get to see the entitlement culture at work — this time over in France. JohnForDummies points us to the news that a French company, Bottin Cartographes, is suing Google over its Google Maps offering, because Google lets companies use its web mapping services for free (how dare they!). Bottin Cartographes, on the other hand, offers a similar service that it charges for. Apparently, it seems to think that “competition” itself is “unfair competition.” Why should Google have to charge just because this other company has a bad business model? We’re back to companies declaring felony interference with a business model.

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