Outside the Lines

On this week's EIC Squared podcast, ZDNet's Larry Dignan and I talk about the tanking economy, the challenges facing an Obama administration CTO, and Microsoft's search quests with Verizon Wireless and Yahoo.

The holiday shopping season is looking grim as Circuit City files for bankruptcy and Best Buy lowers its forecast for its fiscal year. When will it ever end?

President-elect Obama has called for a national CTO. Given the complexity of technology infrastructure, the abundance of projects, the squeeze on budgets, and policy controversies, this will be an extremely challenging position.

We also discuss Microsoft's next moves to increase its share of the search market, with Verizon Wireless or Yahoo, or both.

As expected (see previous reports), Microsoft scooped up Powerset to buttress its search efforts.

Barney Pell, Powerset co-founder and CTO

(Credit: Dan Farber)

It's not a replacement for increasing market share by acquiring Yahoo Search, but it gives Microsoft some differentiated search technology and top engineers for less than $100 million. Ramez Naam, group program manager of Live Search, said the Powersoft negotiations happened in parallel with the Yahoo talks over the last few months. Google and Yahoo may also have been interested in Powerset, but no one is talking.

Whether Microsoft can leapfrog Google over the long term with this semantic engine remains to be seen.

Powerset had done a good job of creating a rich semantic layer on top of Wikipedia, but bringing natural language and slick semantic-based interfaces to the entire Web is a long-term and very costly endeavor.

"With an existing search infrastructure, incredible capital resources, unlimited data, a leading search team, and clear mission to revolutionize the search landscape, Microsoft can rapidly accelerate our progress in building semantic search technology and bringing it to full Web scale," Powerset's Mark Johnson said in a blog post about the acquisition.

Powerset can provide direct answers to queries from its Wikipedia and Freebase index and highlight the most relevant search results based on the meaning of the query.

According to a blog post from Satya Nadella, Microsoft's senior vice president of Search, Portal, and Advertising, Powerset's engineers will join the Search Relevance team and remain in San Francisco.

Back to the leapfrogging Google question. Much of what Powerset has enabled with its technology is a superior user experience for searching. Powerset's Wikipedia search, which surfaces concepts, meanings, and relationships (like subject, verbs, and objects in a language), is the very small tip of the iceberg.

If Microsoft can succeed in extending Powerset's technology to key parts of the Web corpus, Google will have to figure out a way to match the quality and user experience. And, there is little doubt that if Google decided that what Powerset and Microsoft are doing as one is important, the company dedicated to dominating search through its engineering prowess will circle the wagons.

A few months ago, Powerset co-founder and CTO Barney Pell told me that his start-up company's software was a first step in changing the way users search and consume Web content. "It's a complete shift. You see this and you want to experience all content in this way. And, as an introduction, it will drive huge investment in semantic and linguistic technology, just as investments were made in information retrieval and scalable databases in the past," he said.

During a conversation after the announcement, Pell told me, "Natural language search will be the center of innovation for the next 20 years." It will likely take 20 years to engineer the semantic, natural language Web that Tim Berners-Lee envisioned in his 2001 essay in Scientific American.

At a reception prior to the start of the D6 conference, Bill Gates held court among a throng of reporters. He explained some of the specifics of his July 1 "retirement" from daily duties at the company he founded. Gates said he would invert how he spends time today. Instead of spending 80 percent on Microsoft and 20 percent on the Bill & Melinda Gates Foundation, he will spend 20 percent of his time on Microsoft issues and the remainder on his foundation work.

Gates, who will remain chairman of Microsoft, said he will spend two to three days at Microsoft, where he will have an office, and two to three times that amount of time writing, thinking and working on a variety of pet projects, including the next generation Microsoft Office, natural interfaces (such voice and handwriting) and search. "I'm very involved in search, the internal development," Gates said. "We will build the world's best search." He didn't say with or without Yahoo, but that has been the Microsoft message.

Brian Lam (Gizmodo) and Ina Fried (CNET) in an informal Q&A with Bill Gates.

(Credit: Dan Farber)

Regarding the courtship of Yahoo, Gates said it wasn't a big deal in the grand scheme of things. "When we bet on the graphical interface, that was way bigger than any acquisition," he said. It took Apple to show Gates and his team the way, however.

During the D6 interview with Walt Mossberg and Kara Swisher, CEO Steve Ballmer said: "Look, we made a bid for Yahoo. It was out there for three months, and there was difference between bid and ask. We thought we could accelerate our business. We were going to be financially disciplined about it. We walked away. We are talking with them about other ideas, but we are not rebidding on the company. I won't comment on what we are talking about." Microsoft has been in talks with Yahoo about some kind of business deal for just search.

"We have a good team and we are patient," Ballmer said about Microsoft's search efforts. "People in our industry are way too impatient. Great things rarely happen overnight." He then expressed a core component of the Microsoft DNA--tenacity. Microsoft will keep coming and coming, as he likes to say. And Google is the target.

Regarding Ballmer not having him around as much, Gates said: "Steve is a founder just like I am. He came when the company was a rounding error. We have created a completely new company many times together." When Ballmer took over as CEO about 8 years ago, the two had to learn how to work in their different roles. "Steve wasn't used to explaining why he does things as I was, such as why you time out (no longer have confidence in them) on a person. As No. 1 you need to be able to articulate that."

During the interview, Gates said that he has been the junior partner for the last 8 years.

Bill Gates and Steve Ballmer: Partners for 28 years.

(Credit: Dan Farber)

Gates also pointed to Microsoft Fellows and $6 billion annual research budget as a key for Microsoft's future. "I am betting on the quality of Microsoft Research," he said.

Gates also said he would work on education, agriculture, and other initiatives that interest him. He is also involved in a project to map all of Africa, using Microsoft resources as well as contributions from Gates himself and his foundation.

Click here for full coverage of the D: All Things Digital conference.

My favorite tech news "aggrefilter" Techmeme finally added a search function. It provides search results in reverse chronological order, but only for items that have appeared as full headlines on Techmeme.

Techmeme creator Gabe Rivera explains the new search function, which was developed by Omer Horvitz:

There are two overall modes of searching, depending on how "close" a result is desired. The default mode only returns matches occurring in the title or the first couple of sentences. Searching for "Yahoo" in this mode typically return stories about Yahoo. Unchecking "Search title & summary only" on the result page (or the bare bones page) enables search of the full article text. In this mode, any article simply mentioning "Yahoo" will appear.

Narrowing results by source url, author, date, and other attributes is also supported. For instance, "sourceurl:http://searchengineland.com/" returns posts only from the blog Search Engine Land (as seen here). A concise list of all the search operators involved is available through the "Advanced" link on a search results page (or again, on the bare bones page).

What's next? Search for Techmeme's sister sites are planned but not active as of today. Also on the way are RSS feeds for search results, the simplest kind of search "API."

See also: TechCrunch