Microsoft enlists developers for Live push

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One significant advantage Microsoft has over Google or Yahoo is an existing, well-tuned outreach program, analysts noted. Also, Windows Live services cover tasks such as network authentication, which appeal to corporate customers rather than individual developers.

Ozzie's 'services disruption'
Although it hasn't been very vocal about it, Microsoft has been steadily filling out the Live picture for developers. It continues to publish APIs for its sites, such as Virtual Earth and Windows Live Messenger, and provide documentation.

Ray Ozzie

The company is also promoting the creation of "gadgets," which are mini-applications that can span the Web and Windows Vista.

Earlier this week, Microsoft released a beta version of a software developer's kit for creating gadgets. A third party could write a gadget, for example, which uses RSS to send a specialized news feed onto Live.com and the Sidebar feature of Windows Vista.

To generate ad revenue for itself and potential partners, Microsoft developed ad-serving software called AdCenter, which the company is in the process of rolling out for its MSN Web properties.

Two things have been missing so far from Microsoft, according to Rockford Lhotka, technology evangelist at Magenic, a consulting company that uses Microsoft gear. One is more sophisticated tooling to simplify the job of writing online-services applications. The other is the financial details behind the Live initiative.

Despite the fact that Live has been aimed primarily at individuals and small businesses, Lhotka said he sees potential for mash-ups in businesses, such as embedding a mapping service in a desktop application.

Closer integration with Microsoft's existing Visual Studio development tools would ease creation of online Live applications, Lhotka said. He said he also needed more clarity on the business arrangement between third-party developers and Microsoft.

"I have the same question for Microsoft as I do with Google: If I just use their APIs and wrap them with my branding, how do they make money?" Lhotka said. "If they don't make money, how do I know they will continue the service?"

As Microsoft seeks to generate more revenue from ads and subscription-based services, Ozzie is a key figure within the company.

His "services disruption" memo last fall helped spark a reorganization and accelerated plans to better compete with Google and Yahoo. He has been touting two efforts to build Web standards: Web Clipboard and Simple Share Extensions for RSS and OPML.

"Even if you care nothing about ad (revenue), the next generation of Internet-facing applications can benefit from incorporating services, such as collaboration and presence awareness," said Burton Group's O'Kelly. "That's the sort of thing Microsoft has already done with the enterprise, and they can now make it available on the Web at large."