November 1, 2005 10:26 AM PST

Gates: We're entering 'live era' of software

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enter search queries onto a personalized Windows Live home page.

People will also be able to add non-Web items, such as a corporate SharePoint server or recently opened documents, to the Windows Live home page. Irving also presented the Windows Live Safety Center, a free tool that lets customers check on the health of their PC and scan for and remove viruses.

Also included is an AJAX-based Windows Live mail client that connects to Hotmail or other addresses. The Web client resembles Microsoft's Outlook e-mail program and can warn people about Internet fraud phishing scams.

There is also a Windows Live Messenger program that provides traditional instant messaging alongside some social networking features, such as the ability to view your circle of IM buddies. (Members have the right to say whether they want to be included in the viewable circle.)

In the demonstration, Irving showed how Windows Live Messenger offers the ability to make phone calls over the Internet, from a PC to a traditional phone.

Also for those who opt in, Microsoft has a new live business card that updates contact information online and on a PC any time that the information changes.

Some parts of the Windows Live software are in beta testing now, executives said. Others, like the new Messenger, should begin testing in December.

In the Office
The Office Live service is mostly targeted at small businesses, said Rajesh Jha, general manager of information worker services at Microsoft, who presented the demo of the service. He noted that 28 million of the world's 42 million businesses are companies with fewer than 10 employees.

Jha showed how small businesses like these can use Office online to set up Web sites with custom domain names and multiple e-mail addresses--all free. Initially, these sites will not carry ads, but Microsoft sees the feature as a revenue opportunity and expects it to eventually be ad-supported.

Another tool, called "Mojo," will enable a small group of users to work collaboratively on the same document--in the case of the demonstration, an Excel spreadsheet.

"We're always on the same page," Jha said. "This real-time service is going to be free."

He also showed some of the 22 applications that are part of the subscription service, including customer management tools and secure collaboration.

Office Live will be in invitation-only beta testing in the first quarter of next year, Jha said. That beta will also be limited to the U.S., he added.

More to come
Tuesday's announcement is more of a placeholder for other initiatives to come, Smith said. "I think part of why people look at this and say it looks sketchy is because it is. But it's a step in direction that they have to go in," he said.

Smith likened the announcement to Gates' Web call to action of a decade ago. "It's the beginning of a big change at the company that will take a long a time to see manifested in mainstream products," he said.

In the meantime, the new products help Microsoft better compete with online rivals. Although the traditional software industry is very profitable and well understood, online advertising is an important opportunity, Ozzie said. He praised Google for demonstrating some of the possibilities.

"Google is doing an amazing job of making that ad engine click on all eight cylinders," Ozzie said.

But he said that the industry has barely scratched the surface, pointing out that the market for online advertising could grow from $15 billion now to $150 billion by 2015.

CNET's Mike Ricciuti contributed to this report.

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Microsoft/Google competition is great for consumers
I believe Microsoft and Google are destined to compete for the hearts and minds of developers and users, and maybe someday enterprise customers. I don't think it will be a head to head battle for a while since Microsoft and Google approach the market very differently.

I am reminded of a quote "In a fight between a grizzly bear and an alligator, the terrain determines the winner". Meaning, each company has its strength and position in the market. The company that crosses over to fight on the others turf is likely to lose...but probably not die. These giants are too strong and too smart to battle to the death over any one market. It will be a battle for first place versus second place, with each making money in its own way.

My guess is this will be a battle of the titans fought on many different fronts for a very long decades. This is great for customers and users. Innovation will flourish and prices will decline. Competition is a great thing.

Microsoft has already entered the battle for Search supremacy. MSN Search is awesome. In fact, it is hard to pick a winner in terms of relevance of results for any particular search. Internal to Microsoft we have a search site that simultaneously sends a search query to MSN Search and Google, and displays the results side by side. Internal users vote on which results were more relevant. This feedback helps us tweak the ranking and relevance algorithm. I was director of engineering at AltaVista so I have a real appreciation for search. I have got to tell you that I think MSN Search is equal to, or better than Google. Now it is a matter of gaining user market share and building out the Ad Network revenue model.

I wrote a blog today on this subject and how I think it will play out. See <a class="jive-link-external" href="" target="_newWindow"></a>
Posted by Don_Dodge (64 comments )
Reply Link Flag
True, but
It is odd that both companies seem to be inventing ways to compete. On the surface, they do not appear to be competitors at all. Now, Google is contributing developers to, and Microsoft is making some kind of online Windows and Office products.

It is as if they each want to say "aha, we are beating the competition!" But, in order to do that they each have to purposefully jump from their core businesses into the other's. It is just weird.
Posted by just_some_guy (231 comments )
Link Flag
Sorry, your not objective...
Competition is good, but MS does the most to decrease
competition of ALL tech companies hands down. You work for a
bad company and can't admit it.
Posted by MacGregory (53 comments )
Link Flag
"MSN Search is awesome." -- Done Dodge

I am a consumer not connected to Microsoft or Google. I like working with Microsoft products. But when I search online, I use Google to save time simply because Google shows the most relevant results most of the time.

This is by experience. In the wild! Not in some control group or laboratory experiments organized by people connected to Microsoft.
Posted by Mendz (519 comments )
Link Flag
MSN search vs Google search
I find that Google typically returns 8-10 times more relevant results than MSN does for most common searches. Typically surfers tend to follow only the top 50-100 results which are kind of uniform for most search engines, Google, MSN or Yahoo!.

However, when it comes to depth of search and the number of indexed web-pages I see that MSN is nowhere close to Google. You can see this typically in image searches. Google tends to deliver images across a broad spectrum associated with the keyword(s) whereas MSN mostly delivers only images associated to the most popular interpretation of the keyword(s).

MSN search is also lacking heavily in the number of images in its index. A Google image search for "MSN" returned around 2,630,000 results whereas the same on MSN returned only 148,795 results, nearly 17 times lesser.

If MSN search is awesome, then Google search is simply amazing. You can blog all night on how awesome MSN search is, but the fact is it has a lot of catching up to do both in sheer size and scale, if it is to be comparable to Google.
Posted by pythonhacker (71 comments )
Link Flag
Microsoft the follower...
Microsoft has done well over the years in following others and cleaning up because of its scale. Following a company such as Google, won't work for Microsoft. I spoke with one of MSFT's lead engineers recently and he was telling me about the fantastic search that they have in the labs. But, the conversatin has moved on: it's about search-enabled applications now, it really is a SEA change :-)

Rebranding some MSN stuff and adding layers of subscription based services is not going to get MSFT very far.
<a class="jive-link-external" href="" target="_newWindow"></a>
Posted by tomforemski (18 comments )
Reply Link Flag
the flagship website of this effort is a joke. MS is now following Google in making big announcements about ridiculous products that lack any substance.
Posted by (42 comments )
Reply Link Flag
Windows Re-Live.
Sounds remarkably like Apple's .Mac service, Apple's own Address
Book will send out updates to one's Card when updated. Microsoft
are inventing things all over again, lets try something 'New'.
Posted by Bellette (22 comments )
Reply Link Flag
Not inventing...
Sounds more like their copying what someone else has already done.
Posted by thedreaming (573 comments )
Link Flag
Gates is trying to remain relevant

Me too, me too.
Posted by technewsjunkie (1265 comments )
Reply Link Flag
Gates will always be relevant
With the billions of dollars he pours into charity Gates will remain as one of the most relevant people alive today! No one does more period!
Posted by CoachWT (42 comments )
Link Flag
Always a follower, never an innovater! All software supplied has numerous security flaws as a standard feature!
Posted by heystoopid (691 comments )
Reply Link Flag
Microsoft actually did something productive.

Too bad it looks just like Google Home, including the google-esque name/beta logo.
Posted by wazzledoozle (288 comments )
Reply Link Flag
MS are so backward ... Apple has ben providing live updates to its software (that are user controlled not filled with spam and ads) ever since they launched OSX .. where has this company bene the last 5 years? Patching ....
Posted by paulie_shanna (5 comments )
Reply Link Flag
You can get a whole live desktop at
Why have a half live service when you can get an entire free online desktop with office and everything at <a class="jive-link-external" href="" target="_newWindow"></a>
Posted by iqula (59 comments )
Reply Link Flag
Nothing but a Linux box
Cosmopod is nothing but a Linux box and you use an X Windows client. Who are these people anyway? How do I know I can trust them with my data? The details of their service are very... non-existant...
Posted by wiley14 (39 comments )
Link Flag
MORE advertising?! just what we need
The 'new' business model of ad-based software/services is
following the 'known' business model of canned software.
Yikes. Do people really want this? Not likely. This is about
Microsoft putting the conditions in place to generate more
income. Trouble is, it doesn't offer the consumer any value, as
far as I can see. The consumer and the small business will be
the launch pad for this new direction and soon it will be
universal. When I imagine the future I don't see the myriad of
advertising that will be the norm for this kind of business plan.
Posted by Peter Norman (1 comment )
Reply Link Flag
And this brings the number of "live" Microsoft demo failures to...
..................oh, who knows? I lost track.
Posted by Norseman (1319 comments )
Reply Link Flag
Me Too
How come the " Me Too" becomes bigger and accepted wider than the original leader? Any way who is the widely used leader?
Posted by roameri (2 comments )
Reply Link Flag
I think it is exciting...
... to see how Microsoft will play out this "Web 2.0" game (whatever that means) targetting desktop and mobile users. Looks good though the UI's not as cool or as flashy as Microsoft Windows Vista...
Posted by Mendz (519 comments )
Reply Link Flag
IE + MS Live + Ads = More Security Nightmares
Thanks but I'll pass on this Chairman Gates. No doubt this will be "optimized" for IE, and the combo of all Microsoft all the time plus ads is just too inviting for those pesky virus writers that plague Windows.
Posted by R. U. Sirius (745 comments )
Reply Link Flag
Business Risk, Sarbanes-Oxley etc.
I agree.

There is certainly an argument to re-assess distributed systems, but does anyone really think it prudent to place the responsibility for the security of company data with an "online" service like Mojo?

I can just hear Data Security groups saying "I don't think so." when someone from Marketing asks if would be okay to...."

MicroSofts success in this space will be marginal at best - there are just too many security issues.

Posted by tbraith (1 comment )
Link Flag
MS CANT innovate
Microsoft is screwed they cant REALLY offer full webbased services because if they did you could use them from any platform using any browser that includes linux unix osx etc . so instead they offer crappy watereddown *extras* microsoft cant innovate because it will ruin their way of locking people into to their operating system and their office products.So now google is free to innovate and lead the way especially since they are a proponent of open source and have allied themselves with sun/openoffice
Posted by corvax (1 comment )
Reply Link Flag

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