Beyond Binary

Seth MacFarlane

Microsoft said Monday it has canceled its sponsorship of a planned variety show with the creator of the "Family Guy."

In a statement, a Microsoft representative said the show--a variety show to be done by Alex Borstein and Seth MacFarlane--was not "a fit with the Windows brand." Microsoft had hoped to use the show to tout its just-released Windows 7 operating system.

"We initially chose to participate in the Seth and Alex variety show based on the audience composition and creative humor of 'Family Guy,' but after reviewing an early version of the variety show it became clear that the content was not a fit with the Windows brand," the representative said.

Microsoft had announced plans earlier this month to present the Fox TV special.

Now who didn't see this coming?

Microsoft said Thursday that it has landed a deal to help NBC Universal sell television ads.

Starting this fall, NBC will make some of its national and cable advertising inventory available for Microsoft to sell via its Admira system, which uses demographic data to help ad buyers reach the market segments they are seeking.

The two companies did not disclose the financial terms of the deal. The TV ad market is yet another area where Microsoft finds itself in competition with Google, although both are upstarts trying to shake up the traditional means of buying and selling television ads. Internet auction site eBay also tried its hand in this market, but decided to focus its resources elsewhere.

NBC had been kicking the tires on Admira since March, using it to sell ads in the Los Angeles area.

"Our initial test of the system in L.A. is off to a great start," NBC local media executive Frank Comerford said in a statement. "Admira provides us with the potential to help attract an entirely new segment of advertisers to the local marketplace, particularly small and mid-size businesses that might not otherwise be able to buy local television station advertising, which is a huge leap forward."

Microsoft got into the TV ad-selling business with last year's purchase of Navic Networks.

The Microsoft-NBC deal was reported earlier by The Wall Street Journal.

Microsoft faces several tough problems in trying to market Bing, its revamped search engine.

The first issue, is of course, that Google has become essentially synonymous with search.

"Google is so much a part of everyday culture," said Danielle Tiedt, general manager for marketing in Microsoft's online unit. "It is the verb. If you talk about search you talk about Google."

The second issue, also a thorny one, is that people tend to think they are pretty happy with search. When they have problems, they tend not to blame their search engine or look for alternatives, Tiedt said.

"We know there is this latent dissatisfaction in the search market," Tiedt said. "When people don't get right search result they thing it's their fault."

Microsoft's huge TV ad campaign, which kicks off on Wednesday, aims to put a name to the problem and pitch Bing as the answer.

"A big part of the campaign is 'It's not just you'," Tiedt said. The ads will run first on CBS' "CSI: New York" and Fox's "So You Think You Can Dance." (Disclosure: CNET News is published by CBS Interactive, a unit of CBS.)

Bing started to be publicly available on Monday, but officially launches Wednesday, following months of development and internal testing. Microsoft CEO Steve Ballmer showed off the company's effort last week at the D: All Things Digital event in Carlsbad, Calif.

Microsoft isn't saying just how much it is spending on the ad campaign, though advertising trade magazines have estimated it at between $80 million and $100 million.

"Obviously, we are spending a significant amount of money," Tiedt said. "We're trying to get entered into the conversation of search. We are spending enough money that people (will) have heard of us."

The initial video spot will run for about two weeks, followed by more lighthearted ads that try to illustrate the challenges of search today. The next wave of ads, Tiedt said, are dramatizations of what it would be like if people had to talk to their partners or friends the way they do to a search engine. They get back responses that have the same words as their question, but nothing at all to do with what they asked.

Next month, Microsoft will start doing more product-specific TV ads that look at specific areas such as travel search.

An online ad push also starts Wednesday, with Bing ads on the front of MSN.com. The ads will move throughout the Web and Microsoft is also doing some things on Facebook and Twitter, including a photo contest where the community will get to choose a winning photo to become the backdrop for Bing itself on a particular day.

The TV spots are being done by JWT, while Microsoft's Razorfish unit created the online ads.

Arianna Huffington and the Washington Post's Katharine Weymouth discuss the future of journalism at D: All Things Digital in Carlsbad, Calif.

(Credit: Ina Fried/CNET)

CARLSBAD, Calif.--The Washington Post publisher Katharine Weymouth on Thursday tried to put the best face on the changes that have battered the newspaper industry.

"There is no doubt we have our challenges," Weymouth said, appearing on the D: All Things Digital stage along with Arianna Huffington. "We are going through this incredible seismic shift in the industry."

At the same time, she noted that 90 percent of The Washington Post's Internet traffic is outside he Washington Post, presenting the paper with an opportunity that didn't exist in print.

"We have to adapt," she said. "We can put our head in the sand and hope it all goes away or we can move. We're moving."

That hasn't helped avoid the financial impact though.

"We're losing money," she said. That's not something she is proud of. At the same time, she said the company is working on finding new areas that could be profitable down the road, such as working with Google to develop a news product--as well as offering the Post on devices like the iPhone and Kindle.

As for the Huffington Post, Weymouth said it drives a lot of traffic to The Washington Post's Web site. But, it also represents a challenge.

"We need to learn from what the Huffington Post does," she said. "We can learn from Drudge, from Politico."

For her part, Huffington offered a backhanded compliment to the print medium.

"I personally happen to love reading newspapers," she said. "It may be my age."

Moderator Kara Swisher noted the difference in size between their two newsrooms. Huffington said she had about 60 reporters and editors, as opposed to the Post, which has shrunk its newsroom staff, but still has 800 people creating the content.

Later though, Weymouth noted that the paper had a newsroom staff of around 375 people when it covered Watergate.

Huffington said, as she did before Congress recently, that the push to save newspapers is misguided and should be a conversation on preserving good journalism. She said the newspapers' plea for help reminds them of the auto industry's request at the beginning of the decade to relax environmental standards as opposed to working to transform themselves.

Weymouth said that she isn't asking for any handouts. "We are a business and we will return to profitability," she said. "We're a business. We need to be a business. That's what makes us great."

Swisher pointed out that Huffington isn't making money either.

"We are breaking even," she said.

She said her focus is on advertising revenue. Huffington said that subscriptions online only work for porn and "really weird" porn at that.

As for journalism, Huffington said that the industry has focused too much on writing stories as if every issue has two equally valid perspectives.

"Very often truth is on one side or the other," She said. "That's not partisanship."

One of the things clearly worth noting about Tuesday's announcement about a $200 million investment in Facebook is the fact that it values the company at $10 billion, down a third in the 18 months since Microsoft poured $240 million into the company.

However, the fact that Facebook isn't worth $15 billion, while confirmed on Tuesday, has been pretty well understood for some time. Ever since Microsoft took its stake, there have been questions about what the social network was "really" worth.

The $200 million investment announced Tuesday came from European company Digital Sky Technologies, which now has about a 2 percent stake in the social network.

Although Microsoft may have to take a write-off at some point, the deal was never about the return on that initial investment. Rather, Microsoft saw the deal as the price of admission to get an advertising deal with the social network. At the time, Microsoft had lost several recent deals to Google, including one with MySpace that has also been criticized since for being too generous to the social network.

To land the Facebook deal, Microsoft had to win a bidding war with Google.

Facebook CEO Mark Zuckerberg also noted on the conference call on Tuesday that Microsoft's investment "was part of a broader relationship."

"We feel good about the progress we've made," he said.

CNET News' Rafe Needleman contributed to this report.

This search result for Zune, seen on Live Search last week by enthusiast Ryan Rea, bears a significant resemblance to the Kumo prototype that Microsoft has been testing internally (click for larger version).

(Credit: Ryan Rea (aka volvoshine))

Microsoft has been testing its search engine under the name Kumo, but if a report in Advertising Age is on target, it will launch under the name "Bing."

The advertising trade magazine says Microsoft will spend $80 million to $100 million on print, online, TV and outdoor ads touting its latest search effort. The magazine notes that figure is higher than most consumer product launches. Rival Google, meanwhile, spent just $25 million total on advertising last year, AdAge said.

Microsoft declined to comment on the report. The software maker is said to be planning to announce details on its search plans at this week's D: All Things Digital conference in Carlsbad, Calif., where CEO Steve Ballmer is slated to speak.

Bing was among several names said to be in the running for the new search engine. Microsoft had said that the Kumo name that was being used internally was not necessarily the moniker the company would ultimately use for the product.

In addition to the internal testing, Microsoft has been publicly trying out some of the concepts it plans to introduce with Kumo, including a left-hand navigation pane to move between different types of searches as well as to related queries.

AdAge said that JWT will be handling the ad campaign, which the magazine said won't mention Google by name. "Instead, they'll focus on planting the idea that today's search engines don't work as well as consumers previously thought by asking them whether search (aka Google) really solves their problems," the magazine wrote.

Microsoft's latest anti-Apple campaign continues to draw fire, a sure sign that the company has finally at least gotten in the game.

The latest critique comes from BusinessWeek's Arik Hesseldahl. Hessedahl points out that the sticker price of the laptop is just the start of the comparison and suggests it is the Windows computer, rather than the Mac, that is loaded with hidden costs.

Microsoft, of course, made the opposite claim with it's "Apple Tax" return, which argued that owning a pair of Macs costs thousands more than two PCs over their lifetime.

And although I was the first to call Microsoft out for its faulty math, I will also say this. The fact that Microsoft was able to get people fired up shows that Microsoft has at least found the right area to focus its energies.

Until now, its 7-month-old Windows advertising campaign has been a rambling affair, shifting quickly from one disparate subject to another, from Seinfeld's shoes to cute little kids. In fact, one of the only things that the campaign's early pieces had in common was the fact that none were the kind of thing that would generate much real discussion on the issues.

That hasn't been the case since Microsoft shifted to its "laptop hunter" ads which focus directly on costs. Whether you agree or disagree with Microsoft's math, we are all finally talking about the relative costs of a Windows PC versus a Mac.

Even Apple has chosen to weigh in on Microsoft's latest claims. In a statement, Apple notes that "millions of people have switched to Mac because they love the security, stability, and power that comes with world-class hardware and amazing software that just works, right out of the box."

It puts its own spin on the price issue.

"A PC is no bargain when it doesn't do what you want," Apple said.

Let the games go on. At a minimum, this should be fun to watch.

Microsoft said on Wednesday that it has combined its product search engine with its Live Search Cashback, a product that gives users a rebate on certain purchases made directly after using Live Search.

"The new site unifies Live Search Products (the shopping vertical within Live Search) and Cashback to make it easier for you to research, compare products, and save money," Microsoft said in a blog posting.

The move also reflects the fact that on the back end, Microsoft has shifted the underlying engine for Cashback over from technology from its Jellyfish acquisition and onto the primary Live Search platform. The company launched the Cashback effort nearly a year ago in an effort to try and boost its overall slice of the search market as well as within the lucrative commerce segment.

Microsoft's changes to the product search feature come ahead of a broader revamp of Live Search due later this year. Microsoft is currently testing the new search, code-named Kumo, with its own employees. However, as we noted earlier this week, Microsoft still has work to do to grow its search share, even inside its own walls.

Live Search still badly trails both Google and Yahoo in the search market. For March, Microsoft had 10.3 percent of the U.S. search market, according to Nielsen Online, compared with 64.2 percent for Google and 15.8 percent for Yahoo. Also of note, Microsoft's year-over-year search growth was less than 1 percent compared with 16 percent growth for the market as a whole.

With three genuine installments on the Web, it's naturally time for the parodies of Microsoft's "laptop hunter" ads to start rolling in.

The first one I've seen is from LandlineTV. It features Frank, a homeless guy with $1,000 to spend on a laptop.

Frank's first stop is the Apple store.

"These are beautiful," he says, spotting a MacBook Air that is "so thin" but costs $1,700.

"What can I get for $1,000?" Frank asks. Eventually, he winds up in front of a Windows PC.

"Windows Vista Home Premium...This is (BS)," Frank says.

"Is this plastic?" he asks, before noting that the computer has "second-rate Korean components."

In the end, he uses the Windows laptop to cover his face while sleeping on the street. I've embedded the video below, but you should click play only if you don't mind some coarse language, partial nudity, and complete PC bashing.

Microsoft, for its part, declined to comment on the parody. As for Landline, it is a three-person outfit that has been doing Web video since September. Among its earlier videos was one called "Hockey Moms for Truth."

"We're sort of a Saturday Night Live meets the Twitter Age," CEO Jared Neumark said in an e-mail interview. Neumark said the company aims to crank out about two videos per week.