The Week in Technology: MS goes small on upgrades

After the debacle surrounding its next operating system, Vista, Microsoft has decided to change its approach to software upgrades.

The mammoth effort surrounding the creation of Vista, which will not be released until late 2006, prompted Microsoft to move to smaller, more incremental and “modular” upgrades.

Steve Ballmer, company’s chief executive, satirically described as shy and retiring by The Inquirer, conceded that the lead-up to the launch of the much-postponed Vista was too long.

Sound familiar? A few Slashdot readers pointed to a similar decision made by Apple in the mid-1990s, after difficulties getting its “Copland” or OS8 operating system ready for release.

Also this week, Microsoft announced in Seattle changes to its “Software Assurance” scheme, a software licencing program that allows corporate customers to pay a fee over two or three years for use of software. Software Assurance was first announced in late 2000 as an attempt to move to “software as a service” - or, renting software rather than buying the licence outright, but it has attracted much criticism. Techweb reported that some of the changes were designed to sweeten customers, but Microsoft also announced that only Software Assurance customers would be able to buy Vista Enterprise, one of the many versions of the forthcoming new operating system.

Google launches blog search

Meanwhile, Google announced it had finally launched a blog search - a mere couple of years or so after buying Pyra, the publisher of leading blog platform Blogger.com. At the time of the Pyra acquisition there were fears from some that a blog-only search tool from Google would have the effect of separating the “blogosphere” out from the rest of the web.

Such fears seem to have been extinguished this time, as blogs have become increasingly important in their own right.

At last count, Google’s Blog Search had more than 188,000 entries for blog entries about Google Blog Search, but only 2,331 when searching for the exact phrase, rather than the keywords.

Reaction from bloggers - at least, from those indexed on Google’s blog search - was mostly positive, with many saying it was faster than Technorati, the most established blog search tool.

Some were critical, though. One blog publisher said a facility for blog-publishers to manually add their website feed to Google’s Blog Search index should have been included before the release. The BlogHerald was disappointed with the depth of search, saying Google’s tool found less than half as many items on BlogHerald itself than Feedster.com, another blog-searching site.

AOL, MSN in talks

News that Time Warner’s AOL and Microsoft’s MSN were in talks about linking up their search and advertising business didn’t impress analysts. One told the FT that both MSN and AOL were “weak portals” and tying the two together wouldn’t solve their problems.

MSN is increasingly focused on search, the New York Times reported, rather than its internet access and portal businesses. Google’s Desktop 2.0 software - which replaces, to an extent, Microsoft Windows - has given Microsoft a frightening glimpse of a future in which desktop software plays second fiddle to the internet.

Details of an AOL-MSN collaboration were light and talks were said to be only in an early stage, but could involve MSN buying a 50 per cent stake in AOL, or the two creating a new joint venture.

The SearchEngineWatch blog also points out that such a move would have implications for Google, because AOL currently both Google’s search technology and distributes its advertising - both of which are being challenged by Microsoft.

Ebay buys Skype

It wouldn’t be a week in technology in the year 2005 without a big dotcom acquisition and a News Corp-ramps-up-internet-portfolio items.

As first reported in the Financial Times, Ebay on Monday confirmed it had agreed to buy Skype, the peer-to-peer voice-over-IP provider, for between $2.6bn and $4.1bn, depending on performance targets. The scepticism from both financial and technical commentators which greeted the initial rumours of the deal continued, but Ebay’s share price had already taken a Skype-related dip.

The predicted application - of Ebay buyers and sellers being able to talk to each other - was there, but new opportunities such as selling phone call leads to marketers, in the same way that Google and Yahoo sell clicks, was also mentioned.

Ebay’s chief executive, Meg Whitman, added that Skype itself was a good business. With revenues expected to rise from about $60m this year to $200m next year, Skype is apparently showing better growth than even Ebay did in its early days.

But those niggles about paying customers - who make up only a tiny fraction of Skype’s 151m-strong user base - aren’t going away.

technology@ft.com