Beyond Binary

A week after it began shifting to Bing for its search results, Yahoo says it has finished the transition--at least for its main search results in the U.S. and Canada.

The move comes more than a year after Microsoft and Yahoo reached a deal to partner on search. There is still plenty of work to do as the companies work to shift the more-complicated paid search part of the business and to continue the move internationally.

In a blog post, Yahoo noted that Bing is now powering Web, image, and video search for both desktop and mobile searches.

"The speed in which this was completed is a testament to the great work and partnership between a number of Yahoo and Microsoft employees, the ranks of which are numerous," Yahoo senior vice president Shashi Seth said in a blog post. "With this week's milestone behind us, Yahoo will continue to drive technology innovation in the search experience to bring more value to users and advertisers alike."

Seth also said that Yahoo is working to figure out the new business model for its BOSS (build-your-own-search-service) program, one of several Yahoo search businesses that is being reworked or scrapped in the wake of the Bing shift.

The plan is to also move Yahoo to Bing for paid search this fall. However, both companies have said they are willing to postpone that until early next year if it seems the move would disrupt the all-important holiday season--a point that Microsoft search executive Satya Nadella reinforced Tuesday.

"We continue to work hard on the migration to AdCenter, and are optimistic about completing this phase later this fall," Nadella said in a blog post of his own. "As we have said all along, our primary goal is to provide advertisers with a quality transition experience in 2010, while being mindful of the holiday season."

Microsoft said Wednesday the next version of Office for Mac will get two key features that were part of the latest Windows version: photo editing and mini charts in Excel, known as Sparklines.

In a video posted on its Office for Mac Web site, the company showed how the two features will work. Sparklines are tiny charts that fit in a single cell and allow one to see the trend in individual data points.

Mac Office gets new tricks (images)

As for the photo editing, Microsoft said Office for Mac will allow such things as color correction or background removal from within the new versions of Word, Excel, and PowerPoint.

Office for Mac 2011, as the product will be dubbed, is due out in October. Among the key changes is the fact that Microsoft is bringing back Outlook for Mac, replacing the less-Exchange compatible Entourage e-mail and calendar program that had been in prior Mac OS X versions of Office.

Outlook will also get the conversation view feature that Microsoft added in Office 2010 for Windows.

Microsoft Chairman Bill Gates, speaking to CNET reporter Ina Fried after his talk at the Techonomy conference last week.

(Credit: Ina Fried/CNET)

NEAR LAKE TAHOE, Calif.--Bill Gates says it's gratifying to see the computer industry that he helped start turn some of its attention to broader societal challenges.

"I think there's increased awareness of using innovation to help in more than just profit making," Gates told CNET in an interview on Friday, following his speech at the Techonomy conference. "When I think back to the conferences I went to earlier in the industry, we were pretty darn focused on popularizing software and personal computing. Nothing wrong with that, but it's nice to see the evolution."

At the conference, the first in what organizers hope will be an annual series, Gates spoke about the need for better software modeling and his disappointment in the U.S. political system.

When he wasn't addressing the crowd, Gates had the chance to debate battery technology with Google co-founder Larry Page, hold several private meetings, and meet Talia Leman, the 15-year-old chief executive of youth-oriented nonprofit RandomKid.org.

In a car on his way to the airport, Gates spoke about his most recent efforts, including last week's announcement that around 40 wealthy American individuals and families had signed on to his Giving Pledge, agreeing to give half their wealth to charity.

As for his part-time work at Microsoft, Gates said he's most involved in search, but talks with CEO Steve Ballmer about a range of issues and also has been sending messages to the Windows team about how to make sure Apple's iPad doesn't wipe Microsoft out of the tablet game.

Below is an edited transcript of the interview. I've also included a brief video of Gates talking about software modeling--apologies in advance for the video quality: it's a bit bumpy.

Q: What was it like to see a conference organized on some of the things you have been talking about--how technology can be applied to these broader issues?
Gates: I think there's increased awareness of using innovation to help in more than just profit making--innovation in education, the fact that someone like DonorsChoose is here, even international development is being discussed. When I think back to the conferences I went to earlier in the industry, we were pretty darn focused on popularizing software and personal computing.

Nothing wrong with that, but it's nice to see the evolution. These are guys I've known forever. I wonder how old Brent was when he first interviewed me [30 years ago]. It's hard to start a new conference. It was good to see it got off to quite a good start.

Plus, do you get a lot of opportunity to debate battery technology with Larry Page?
Gates: It was great talking to Larry. Larry is a very easy guy to talk too. We think a lot alike about a lot of things. That alone was quite valuable.

One of the things you have been talking about for a while is hoping to convince others who have had similar significant good fortune to share that. how did it feel to see so many sign on to the Giving Pledge?
Gates: We're very happy to see where that stands. It's about getting people to think about younger in life than they might otherwise, getting them to get more involved. It's not easy to dive in, pick something you feel good about. We've good a good size group now that will learn a lot from each other.

That to me is actually one of the coolest things about it. We definitely had people who were putting the issue off because it involves thinking about your will, kids, hiring professionals and things like that. It's easy to put it off.

And the money isn't necessarily going to the Gates Foundation.
Gates: To some charitable thing, whether they create their own foundation or whatever they do. Our foundation has picked a few things that we focus on, whereas the Giving Pledge celebrates the diversity of givers. There are many, many worthy causes that our foundation isn't involved in. The two things are very distinct.

Anyway, it's been fun talking to people.

Are you and Larry Ellison going to hang out more?
Gates: Actually he and I exchanged e-mail. This lets us have philanthropy as a topic to discuss. I hadn't exchanged e-mail with Larry for certainly over a decade. Back then it would have been "How is your Windows version coming" or something. Warren [Buffett] was the one who talked to him over the phone, but I really thanked him and we had a good exchange. Of the 40 people, there were a lot of great stories there. Larry was kind of an exemplar of somebody that you wouldn't necessarily have expected. He was actually thinking he would be quiet about what he was doing, but we convinced him both in learning and convincing others it was great to join [the Giving Pledge].

You talked about this notion that one of the things that is needed for combating disease and handling a lot of large systems is better software modeling. Why is that so important?
Gates: If we want to find new compounds that work, trying them all out can be a very slow process. If we can model what is going on genetically with the disease, model the shapes of the proteins...model that interaction, we can understand what drugs will cause side effects before we do long, multiyear, $100 million trials. Modeling software will improve the efficiency in the field. We are seeing that everywhere, whether it is designing cars, planes. All this modeling capability is letting design cycles be better, higher quality. It's really the toolset that is driving innovation.

Is the foundation going to be designing this software?
Gates: No, no, no. Well, there is this one particular area that I'm funding in a foundation way, which is this disease modeling software. There's many different categories. The [disease modeling software] thing, we've just decided it should be free and available for researchers to connect up to. A lot of these things, whether it is heat modeling, or things we used for various innovations for the poor, we're just using the commercial packages, which are great.

I have a thing called Global Good, which is how I fund invention science through a group that Nathan Myhrvold has. Disease modeling, I've funded. Over 2011, we'll be putting it out for researchers to work with.

Obviously, most of your time is spent on the foundation stuff. Are there still specific projects you are deeply involved in at Microsoft
Gates: Well, I am a board member and that is a reasonably serious thing. Steve [Ballmer] brainstorms with me. When new product milestones come along, like some planning in Office, I'll be a part of that. Search is probably the one where I spend the most ongoing time.

I know tablets are a long-held vision of yours. A certain tablet has been getting a lot of attention and it's not necessarily one that uses your software. Is that one area you still want to put your two cents in?
Gates: There's certainly a lot of mail from me to the Windows group talking about how to make sure Windows is the best choice for all sorts of new form factors.

After years of losing ground to Firefox and other rivals, Microsoft's Internet Explorer browser posted its second consecutive monthly gain in share, according to a market researcher.

For July, Internet Explorer snagged 60.74 percent market share, according to Netmarketshare. That's up from 60.32 percent share in June and up nearly a full percentage point since May, when the company saw its market share dip below 60 percent.

"Last month, we saw coverage about Internet Explorer posting a worldwide gain in usage share," Microsoft's Ryan Gavin said in a blog post. "That encouraging news continues today...Most interesting is the fact that Internet Explorer 8 continues to be the fastest growing browser with a 0.98 percent increase worldwide in July--and now represents more than 30 percent of browser usage worldwide. In the U.S., Internet Explorer 8 picked up share for the third month in a row."

Microsoft has been heavily promoting its browser, including with a new TV ad campaign. The company has also benefited from strong sales of Windows 7.

However, Apple's Safari also hit a new milestone, accounting for more than 5 percent market share for the first time, up from 4.85 percent in June.

Both Mozilla's Firefox and Google's Chrome lost a bit of share in July, marking the first time in recent memory that Google's browser failed to gain share. Mozilla accounted for 22.91 percent of Internet usage, down from 23.81 percent a month earlier, while Chrome dropped ever so slightly to 7.24 percent, down from 7.16 percent a month earlier.

Separately, Netmarketshare also found that usage of Windows 7 passed Windows Vista for the first time, though Windows XP continues to be used more than twice as much as both Vista and Windows 7 combined.

REDMOND, Wash.--Microsoft kicked off a daylong meeting with analysts on Thursday as the company looks to reassure investors that its future is as bright as its past.

The company began the event touting its recent quarterly results which resulted in double-digit revenue growth in all of its business segments and noting that Windows 7 has now sold 175 million copies.

"That was a great result for us," said Bill Koefoed, general manager of investor relations for the software giant.

Ahead of the meeting, Microsoft announced a trio of cloud-computing deals, noting that Dow Chemical, Hyatt Hotels, and the University of Georgia will all be using the company's hosted versions of Exchange and other business productivity software.

CNET will have live coverage of the meeting throughout the day. The day is scheduled to be split between morning presentations from COO Kevin Turner and Chief Research and Strategy Officer Craig Mundie. Then, for much of the morning, analysts will have a chance to see some of Microsoft's products and schmooze with executives. Things kick off again at 1 p.m. PDT, with CEO Steve Ballmer.

Update 8:35 a.m.: Koefoed tries to make the case that Microsoft is more than just Windows and Office, while suggesting it is also not spread too thin. Rather, he suggests Microsoft has eight key businesses. On his list are: Xbox and TV, Bing, Office, Windows Server, Windows Phone, Windows, SQL Server and other software for business users.

Many of these businesses, he said, have natural extensions in the world of cloud computing, with products like Windows Azure, SQL Azure, Microsoft's online business software, and Bing and Windows Live.

8:45: Turner has taken the stage to talk about sales to businesses. "We wouldn't say we've recovered as it relates to the global macroeconomy...but we would tell you we see things getting much better," he said.

For the coming year, Turner said that Microsoft is shifting its sales efforts to focus on leading with the cloud. In the past, it went with a Burger King-like approach, suggesting it was in the business of telling customers to have it their way.

Ironically, Turner said that the change in approach will probably mean that the company will sell more traditional server software, but it will highlight that the company is serious about moving all of those products to the cloud.

8:58: Turner has a slide up showing that Microsoft is broader than cloud rivals like Google, Salesforce.com, Amazon.com, and VMware when it comes to offering businesses IT services in the cloud. Now he's touting wins, including 70 percent of its cloud wins that were new customers for Microsoft, many shifting from Lotus Notes.

9:05: Turner is talking about the shift from Windows XP and Vista to Windows 7, noting that Windows 7 adoption is coming at a record pace, but that 84 percent of businesses are still on Windows XP or Vista.

"We see these opportunities with these old versions," he said.

Microsoft touted the number of big businesses moving to Windows 7.

(Credit: Screenshot by CNET)

Also, Turner said that the company has finally gained some traction in the browser market with Internet Explorer 8, having gained share the last two months after years of decline. The company's beta of Internet Explorer 9 is coming out in September, he said.

"The momentum on that has changed and it's a whole new day," Turner said.

9:10: Turner continues bashing competitors, noting that Microsoft has started to win back customers that had tried Google Apps. "Some of those that had gone are actually coming back and we're welcoming them with open arms," Turner said.

Next he turns to VMware and virtualization, saying that Microsoft has gone from no presence in the market to 15 percent market share in two years, and now has not just a cheaper price but, he suggests, it has a better product as well.

On to Linux. Turner said that during the recent downturn Windows Server had its highest share gain against Linux in company history. In databases, Microsoft said that SQL Server grew 6 percent while IBM lost share and Oracle eked out a gain of less than 1 percent.

"Customers don't want to be locked into Oracle," Turner insisted, saying that Microsoft will pitch itself as a "life preserver" to Oracle customers that don't want to keep on that path.

As for Microsoft Exchange, Turner said that the company has managed to convert 16.3 million seats from Lotus Notes and said that the company has a similar opportunity to grab the rest of IBM's Lotus customers. He continued the rescue metaphor, saying Microsoft can help save customers "stranded on a Lotus Notes island."

9:20: Turner has wrapped up, handing things over to Mundie.

9:30: Mundie is talking about the opportunity to move Azure into other kinds of more private clouds for governments and businesses, pointing to the company's recently announced plan to offer an Azure appliance.

"You'll be able to buy these things and just have them delivered to your parking lot," Mundie said.

Nothing new here so far. He's on to a demo of a previously shown project, code-named Dallas, designed to create a marketplace of data feeds.

Mundie is also talking about the opportunities for computers to work on our behalf, a favorite topic of his. "I think this is going to be incredibly important in cutting through the clutter."

9:50: Mundie is talking about how Microsoft's research efforts in machine learning, speech recognition, parallel computing, computer vision, gesture interface, and other areas make possible its new Kinect controller for the Xbox 360.

"To build this product you had to have them all," Mundie said. "We went essentially from impossible to shipping in about three years.

Next he's showing a prototype of a computer that can do some basic medical triage, a tool Mundie said would be important as the world faces a shortage of trained medical personnel, particularly in developing countries.

With that, Microsoft is hosting a product fair, with the formal meeting resuming at 1 p.m. PDT.

REDMOND, Wash.--Aiming to show it is still winning customers against Google, Microsoft on Thursday announced deals to provide hosted e-mail and portal software to three big corporate customers.

The software maker said Dow Chemical, Hyatt Hotels, and the University of Georgia are all using the company's hosted e-mail and portal software, known as Microsoft Online. The announcements were timed to come just as Microsoft is set to host its financial analyst meeting here. (I'll be covering the day-long event live, starting around 8 a.m. PT)

In an interview, Hyatt CIO Mike Blake said the company, which had been running Lotus Notes, chose Microsoft after considering cloud-based options from Google, Microsoft and IBM's Lotus division.

"I would not say that I was a Microsoft zealot," Blake said. "I worked most of my career to find ways not to use Microsoft. I'm a huge Apple fan."

However, going with Microsoft allowed the company to not only provide e-mail to its current group of PC-equipped workers but also to 40,000 additional "deskless" workers, such as housekeepers and porters that historically haven't had work e-mail. Although that might have been possible with both Google and Microsoft, Blake said when it came to cost "Microsoft was probably a little more compelling."

And while Blake said he personally enjoyed the fact that Google was constantly innovating, he said more of his workers prefer stability where they can rely on programs working a certain way until a scheduled upgrade.

"Microsoft offers a proven solution," Blake said. "Google is still is working through it. Will they work through it? I am sure they will. The Google people were outstanding and probably the brightest people I'd ever met."

Hyatt plans to fully move to the Microsoft products by the first quarter of next year, with many workers getting access before the end of this year.

Meanwhile, Dow Chemical decided to move from Exchange servers to hosted exchange after considering a variety of private cloud options. Among the selling points of Microsoft's products was the fact that the company's workers were already familiar with the products that make up Microsoft's Business Productivity Online Suite, or BPOS.

"They already know Outlook, they already know (Office Communications Server and they already know Live Meeting," said David Day, Dow's director of global IS operations. The big new product for Dow will be SharePoint, Microsoft's portal server, which Day said that the company had just been starting to adopt.

Dow plans to start piloting the hosted Microsoft products in the fourth quarter of this year and, assuming things go as planned, move fully next year as the company also moves its desktops to Windows 7, a move which should be done by the end of next year.

Day said that the company didn't consider Google or other public cloud options because of security and privacy concerns.

After adding conversation view to the latest PC version of Office, Microsoft confirmed on Wednesday that it is adding the feature to the next version of Mac Office, which is coming later this year.

A look at the new Mac Office (images)

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As part of a series of videos previewing Office for Mac 2011 that Microsoft is releasing on Wednesday, the company showed the new e-mail threading view as well as the ribbon-style interface and a new template gallery that will be part of the new Office. Conversation threading has long been a selling point of Google's Gmail, but Microsoft has been steadily adding it to products including Office for Windows and Hotmail.

Microsoft also noted that the new Outlook will work with the Mac OS' Time Machine backup and Spotlight search features.

Redmond said last year that it was bringing Outlook back to the Mac after years of including a less compatible e-mail and calendar application, known as Entourage. Initially Entourage had almost no support for Microsoft's Exchange server software, but it has steadily gained Exchange support over the past several years.

Update: The videos are now live here.

Microsoft vice president Harry Shum, speaking Tuesday about the company's effort to move from 'hit or miss' results to more of a dialog with searchers.

(Credit: Ina Fried/CNET)

SAN FRANCISCO--With Bing still just a year old, Microsoft clearly doesn't expect its revamped search offering to be able to go out there and earn a living.

But no longer a newborn, Bing will need to do more than look pretty to win parental affection. Microsoft is counting on further gains in market share, not to mention continued progress in emerging areas such as mobile search and mapping.

In its first year, Microsoft managed to go from about 8 percent market share to 12.7 percent as of June, according to Comscore. That gain is significant, although the company spent a fortune to get there using both heavy advertising and pricey distribution deals that make Bing the search engine default on new PCs from Hewlett-Packard, Dell, and others.

"Our toolbar deals played a significant role in getting us users," acknowledged senior vice president Satya Nadella, speaking at a search event here on Tuesday.

Nadella held out hope that Microsoft could gain a similar amount of market share this year but said that would be a heroic achievement. So would a gain of just a point or two be disappointing? No, Nadella told me after the event. That would also be a success.

Clearly, Nadella has gotten the memo on underpromising and overdelivering.

One big wild card out there is whether Microsoft might be able to supplant Google in any key deals, such as becoming the search provider for AOL (That deal is up for renewal and AOL has said it is looking at its options.)

"We would like to be considered," Nadella said in an interview on Tuesday.

Nadella was also vague on when Microsoft might actually see profit from the search unit, suggesting that CEO Steve Ballmer or unit head Qi Lu would be the best ones to address that question.

Clearly one big task for Nadella and team will be the integration with Yahoo under the search partnership reached last year. This fall, Microsoft is due to start supplying both algorithmic and paid search results for Yahoo's site, though Nadella said that the companies are further along on the former than they are on the latter front.

"All our day jobs are really that," Nadella said during Tuesday's event.

Opening up a dialog
As for Bing itself, much of Microsoft's work centers on what top lieutenant Harry Shum refers to as building a "dialog model" with users.

"What I really want to do is get out of this mode--what I call the hit-or-miss mode--to really get into a dialog model, recognizing that queries are just inherently ambiguous," Shum said in an interview. "Intents are never really that clear."

That involves using information like a user's location, long-term history, and recent queries to help augment what ever information a user types into the search box. For example, if someone types in cam into a search bar, they might well be searching for a camera. However, if the search engine takes into account that the last search was for Toyota, then Camry would be a better bet.

Overall, desktop search results are likely to get a whole lot more local. Mobile search is already highly localized, drawing on the fact that most phones have GPS or other precise location information and the fact that people tend to want information that is right near where they are.

It's a little trickier on the PC, where the engine must decide whether to trust a user-defined location or use techniques such as reverse-IP lookup to determine where the PC is at that moment. But, even there expect more and more queries to be tailored to place.

Microsoft vice president Brian MacDonald showed a few slides of some other ideas the company considering. One image showed Microsoft adding more information to its home page, which today is dominated by the search box and a single, striking background image. MacDonald said the most likely things to make the front page would be portal-like information such as common tasks and local information like traffic, news, and weather.

The company isn't committing to that change, he said, but added that the slides he showed were certainly ideas he hoped made it past internal and focus group testing.

"I put in the ones I'm rooting for," he said, in an interview

Meanwhile, the coming year should also see a lot of work on tapping real-time trends to better understand user intent. Social sites like Twitter and Facebook offer a potential gold mine, as evidenced by the fact that all the major search engines have tried to tap those sites. However, real-time feeds are also noisy and no engine has really found a good way to yet cut through that clutter.

Semantic search--that is better understanding the linguistics of queries, is another area of opportunity. Microsoft bought a company called Powerset and has begun to incorporate its technology into Bing.

"In the past there has been a lot of false promise," Shum said, referring to semantic search in general. "People got very excited about a lot of semantic technology. So far we have not seen very effective use of those technologies, but I think we are pushing for this."

Microsoft's improvements to its Worldwide Telescope project include tons of additional Mars images from NASA.

(Credit: Courtesy of Microsoft/NASA)

Microsoft has made a number of improvements to its Worldwide Telescope project, including partnering with NASA to offer much better imagery of the planet Mars.

In some cases, the imagery lets you get close enough to see details such as the tracks left by the Mars rovers.

"You can see the boulders and things like that," Dan Fay, director of Earth, Energy, and Environment for Microsoft Research. Microsoft previously teamed with NASA's Jet Propulsion Laboratory on a Mars project that let youngsters and other space enthusiasts help count and label craters on the planet's surface.

With these changes, the telescope will gain several different new views of Mars as well as guided tours from some of NASA's experts on Earth's neighbor.

A close-up view of Mars (photos)

The addition of Mars imagery is one of several changes to the telescope that Microsoft is showing off Monday at its annual Faculty Summit meeting with outside researchers.

Other improvements to the telescope include an effort to add an improved spherical image of the full sky and make the seams between individual still images much less visible.

In all, the telescope is now based on a terapixel image of the known universe. To put that in relative terms, Fay said it would take 500,000 HDTVs to show the image in its full fidelity.

"We don't think there are any other images that are larger than this," he said.

The enhancements will be available on both the downloadable Windows version of the telescope, the Web-based version and on the telescope imagery used within Bing Maps.