MySpace CEO Owen Van Natta and News Corp. digital chief Jonathan Miller (far right) appear on stage with Kara Swisher and Walt Mossberg at D: All Things Digital in Carlsbad, Calif.
(Credit: Ina Fried/CNET)CARLSBAD, Calif.--MySpace's problem is pretty simple, says former Facebook executive Owen Van Natta, who is now MySpace's CEO.
"If you don't continue to innovate...people are going to shift interest elsewhere," Van Natta said, appearing on stage at D: All Things Digital, along with with News Corp. digital chief (and former AOL executive) Jon Miller. "We need to continue to innovate a lot more rapidly than we have been."
Van Natta said that, on the plus side, MySpace is more open than a lot of its rivals.
"There's a lot of self-expression that is happening," he said. "We need to seize on that."
Van Natta took over as MySpace CEO last month, shortly after Miller was installed to lead News Corp.'s digital efforts.
Kara Swisher asked Van Natta to compare Facebook and MySpace.
"I think they are both driving this notion of social activity on the Webl," he said, but adding there are fundamental differences, such as the role of music and self-expression on MySpace.
Swisher pressed them on whether MySpace can regain lost ground.
"Certainly we're not the darling of the press right now, that's pretty clear," Van Natta said. At the same time, he said the company still has a huge audience if it can deliver compelling features. ""We already have 130 million people that are coming to the site every day."
Miller said that the trick for companies coming from behind is to not focus on checking the boxes of things offered by competitors, but rather to figure out what you need to do to leapfrog those rivals.
Van Natta said that opportunity is part of what attracted him to the job.
"'When I look at MySpace there's just so much to build." Van Natta said, noting that in high school he used to always choose construction jobs because he likes "to build stuff."
Van Natta was asked whether the company's ad deal with Google has paid off. He said it had for them. As for Google, he said, "You'd have to ask Google."
But he said, long-term deals often take work to be mutually beneficial. "Good partners work together to close the gaps."
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.
(Credit:
The new Windows Live Home page bears more than a passing resemblance to social sites like Facebook.)
Microsoft has started to roll out a series of changes, outlined in November, that give Windows Live a more social networking-like feel.
Windows Live staples such as Spaces, Events, and the home page get a new look, while Microsoft is also putting special emphasis on group, profile, and photo pages.
"Essentially we're launching 'the new face of Windows Live' on the web today," Microsoft's Brandon LeBlanc said in a blog posting.
The changes, which are being rolled out over the next 24 hours, also include a bump in the limit for Microsoft's SkyDrive online storage, which now offers 25GB of storage and improved photo slide shows on the Web.
Also new is the ability to import contacts directly from Facebook to Windows Live.
Take a look and let me know what you think of the makeover. Does it make Windows Live look young and hip, or like an actress that's had one too many face-lifts?
It's hardly unexpected, but Facebook has integrated Microsoft's Live Search into its site.
As part of a deal announced in July, users can now search the Web using Microsoft's search engine without leaving Facebook. Of course, as Mashable points out, there are lots of other ways to search the Internet without leaving Facebook (say, using the Google Toolbar).
Although it's garden variety search today, there are some interesting possibilities--and also some nightmarish scenarios--one can imagine down the road, when one combines search with social networking.
The real question, for now, is how much of a boost Microsoft gets from being inside Facebook. It's clearly a branding-and-awareness plum, but it's not clear how much actual search traffic and revenue will be generated.
Also, since all the searches take place inside Facebook, it's not even clear whether Microsoft will get a direct increase in search share numbers.
With Yahoo apparently off the table, it's time to see what Microsoft's back-up plan looks like.
Microsoft has said for some time that it has a strategy with or without Yahoo, but it's a strategy clearly in need of a jump-start.
In search, for example, Microsoft has been trying to take on Google for some time, but it remains a distant third in search queries and also has struggled in the all-important battle of monetizing each search query.
Microsoft outlined two key reasons for buying Yahoo--adding its talented engineers and getting the significant boost in scale that would come from buying the No. 2 player.
Clearly, Microsoft could use just a fraction of those billions and get a ton of engineering talent. The scale problem, however, is a more challenging one. As Microsoft CEO Steve Ballmer himself said in a meeting with employees on Thursday, there just aren't that many companies out there with any significant scale.
As for where else the company may look, Ballmer's recent comments to The Wall Street Journal offer a cheat sheet to the short list.
"There's really only five or six that really have any scale," Ballmer said in that interview. "Worldwide, you'd maybe get seven or eight."
Among those companies with scale that Ballmer named were Facebook, MySpace.com, and AOL, along with the Yahoo, Google, and Microsoft itself.
Although Facebook and MySpace have huge audiences, selling advertising against those sites has proved to be trickier than in search. Plus, Microsoft had to agree to a massive $15 billion valuation for Facebook just to get an ad deal and a small slice of the company. MySpace, meanwhile, has an add tie-up with Google. AOL is certainly seen as in play, having been a frequent rumor target as a potential partner for Yahoo.
Still, Ballmer said in his letter to Yang and in a public statement that he will look at other business moves and may expect other deals to follow.
"I wouldn't be surprised to see Microsoft going on a buying spree to buy some of the things they thought they might be getting from Yahoo," said Gartner analyst Allen Weiner. "I think they'll look seriously at some of the significant Web 2.0 companies and what they might add to the Microsoft label."
There's also the possibility that Microsoft makes another try at Yahoo once the dust settles a bit. I'll explore this in a follow-up piece.
News.com's Stephen Shankland contributed to this report.
REDMOND, Wash.--Microsoft showed off two social-networking projects at TechFest on Tuesday that show that the company wants to do more in this area than just invest in Facebook.
One project, known as Salsa, aims to use one's corporate data to piece together their social network, or at least their network of co-workers. In its current form, the software is a plug-in to Outlook that shows social-networking information such as a photo and profile next to an incoming e-mail message. The program also pieces together a list of "friends" based on e-mail frequency and other data.
"When you start looking there is a surprising amount of information that gets locked in e-mail," said Shane Williams, one of the Microsoft Research team that worked on Salsa.
Lili Cheng, the Microsoft veteran who heads the social-computing team at Microsoft Research, said that part of the power of Salsa is simply putting a human face on e-mail. She said her own use of the site has borne out the power of that, noting it is harder to argue with a colleague when she sees a picture of them with their cute kid or pet.
"E-mail can be very dehumanizing," Cheng said.
Cheng said that in addition to deploying it inside Microsoft, she'd like to see how Salsa works within one or two other large companies to see if it is more broadly useful.
In another project from Cheng's group, known as C2, Microsoft researchers have created a Windows application that pieces together contact data from a variety of social-networking sites. For the purposes of Tuesday's demonstration, the researchers focused on Windows Live Spaces and Facebook. Researcher Steve Ickman said he chose those two because they represent among the most open (Spaces) and closed (Facebook) when it comes to data sharing.
Although Facebook is notoriously restrictive when it comes to members scraping their data, Ickman said that he believes he was able to stay within Facebook's terms of service by grabbing only approved data from one's own contacts and not caching the information long-term. "It's totally legal, at least at this point."
The project is more of a technology demonstration than anything geared toward a specific product, Ickman said, adding that he hoped it would demonstrate to the product teams that they can be more ambitious. "We tend to cancel things because they are too hard," he said.
Just a short while after abandoning Facebook due to being overwhelmed with friend requests, Bill Gates plans to experiment on rival service LinkedIn.
On Thursday, the Microsoft Chairman will post a question related to "how technology can be better utilized for charitable causes" to LinkedIn's entire 19 million members. I'm interested to see whether Gates finds LinkedIn scales to someone of his stature any better than Facebook.
The move comes as part of a set of announcements that LinkedIn plans to make on Thursday. A pitch from LinkedIn noted the company will have a revamped home page to show off as well as a "notable advertising announcement." They declined to say whether said announcement is with Microsoft, however.
Microsoft provides ad-serving to Facebook thanks to a sizeable investment in Facebook, while Google has an exclusive and pricey deal with MySpace. Google recently noted challenges in getting social networking deals to pay off.
So that's why Bill Gates hasn't accepted my friend request.
I was beginning to wonder why he hadn't added me to his list of Facebook friends. Well, apparently I wasn't the only person that was trying to add him to their list of pals.
According to the British tabloid The Sun, Gates was getting some 8,000 requests per day. While he once spent half an hour per day on the site, he has stopped using it altogether, the paper reported.
So I guess I shouldn't feel so bad.
According to a Wall Street Journal blog, the Microsoft chairman had so many people trying to add him as friends that the site just wasn't useful for him.
As for Facebook, it may not have the Microsoft chairman as an active user anymore, but at least it still have the software maker's millions in its bank account.
- Activision sued over 'Guitar Hero' for Wii--Suit follows admission by Activision that the Wii version of Guitar Hero III was outputting mono, rather than the advertised stereo sound.
- Office 2007 SP1 autoinstalls confuse Vista, XP users--While most users won't get the Office service pack automatically for some time, beta testers of Vista Service Pack 1 are having the update pushed automatically.
- Microsoft's Ministry of Truth--Blogger Long Zheng noted last week that Microsoft is hiring for a Director of Windows Client Disclosure, a position designed to making sure there are "zero surprises," when it comes to operating system news. Eek.
- Facebook Business Solutions--A funny parody of Facebook in the wake of its "Beacon" fiasco. Read this now, before Facebook's lawyers get it taken down.
It's official. Facebook decided to ignore the friend request from Google and instead clicked "OK" to one from Microsoft.
The deal, reported first in this spot earlier Wednesday, gives Microsoft a much-needed win against its Silicon Valley search rival. As noted over at Caroline McCarthy's blog, The Social, Microsoft is paying $240 million for a stake in Facebook, in a deal that values the social networking company at $15 billion. That's at the high end of what had been rumored.
Under the deal, Microsoft will also get an expanded role in Facebook's ad sales, becoming "the exclusive third-party advertising platform partner for Facebook," and also beginning to sell ads internationally. The two companies' prior deal covered only banner ads and only in the U.S.
So how important is the deal for Microsoft? Piper Jaffray analyst Gene Munster put it this way earlier Wednesday. "They've been beaten by Google since the beginning of time," Munster said. "They may want to make a statement that they aren't going to sit on the sidelines."
Well, it's definitely a statement. Let's see what Wall Street and the industry make of that statement. A conference call with analysts is due to start shortly.
