Nes : Microsoft, Yahoo join in opposing Google books deal

By David Lawsky

SAN FRANCISCO (Reuters) - Microsoft Corp and Yahoo! Inc are joining a group of opponents to a class action settlement that gives Google Inc the right to digitize millions of books, the companies said on Friday.

The companies are becoming part of the Open Book Alliance, made up of nonprofits and libraries that have raised a red flag against Google's plan to digitize books and put them on the Internet.

"Yes, we've agreed to participate in the coalition," a spokesman for Microsoft said. A Yahoo spokeswoman said they had also signed on.

Amazon.com Inc has also reportedly joined, but a spokeswoman said: "We don't comment on rumor or speculation."

Critics say the deal gives Google the unimpeded ability to set prices for libraries, once they scan books and put them on the Internet. If the service becomes a necessity for libraries they would face monopoly pricing, Google's opponents say.

They also say it would also allow Google -- and only Google -- to digitize so-called orphan works, which could pose an antitrust concern.

Orphan works are books or other materials that are still covered by U.S. copyright law, but it is not clear who owns the rights to them.

Google took issue with the criticism. "The agreement is not exclusive. If improved by the court it will expand access to millions of books in the U.S.," said Gabriel Stricker, a spokesman for Google.

"The agreement stands to inject more competition into the digital book space, so it's understandable why our competitors would fight hard to prevent more competition," he said.

New York University law professor James Grimmelmann, who runs thepublicindex.org site, which carries documents on the case, said he is waiting to see the arguments of the Open Books Alliance.

"Google is right that there are access benefits to making books available," said Grimmelmann. "The question of whether this is good or bad for competition is hotly contested. There are clear ways that the settlement could create a concentration of power, especially over orphan books."

The deal is under review or investigation by the U.S. Justice Department, the European Commission and a group of U.S. state attorneys general.

The proposed settlement was reached in October, 2008, to settle a lawsuit filed in 2005 by the Author's Guild, when Google began scanning books.

The Guild and a group of publishers has alleged copyright infringement.

Google has agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and receive compensation from institutional subscriptions or book sales. A hearing on approval of the settlement is set for October 7 in U.S. District Court in New York.

(Reporting by David Lawsky; Editing by Tim Dobbyn)

News : Microsoft, Yahoo in 10-year Web search partnership

By Alexei Oreskovic and Bill Rigby

SAN FRANCISCO/SEATTLE (Reuters) - Microsoft Corp and Yahoo Inc have launched a 10-year Web search deal to challenge market leader Google but stopped short of combining other advertising businesses or suggesting any deeper ties.

The long-expected deal means Microsoft's new Bing search engine will be combined with Yahoo's experience attracting advertisers in the first serious threat to Google Inc -- if the companies get regulatory approval and can make the partnership work.

Yahoo shares fell 12 percent as some investors were disappointed by the limited scope of the deal, which did not include up-front payments for Yahoo. Some investors had expected up to $3 billion up-front, according to a Bernstein report.

"I would have preferred more money," said Ryan Jacob, chief investment officer of Jacob Asset Management, pointing to the lack of an upfront payment, as well as revenue-sharing and cost-savings terms that were not as high as he expected.

"There are risks on both sides. Big deals like this tend not to work out. It's a long-term deal that's going to take a long time to implement," said Jacob, whose $40 million fund holds some Yahoo shares. "It's better than no deal."

Microsoft shares closed up 1.4 percent, while Google shares fell 0.8 percent.

Yahoo estimated the deal would boost its annual operating income by about $500 million and yield capital expenditure savings of $200 million. Yahoo also expects the deal to boost annual operating cash flow by about $275 million.

ANTITRUST OBSTACLE

Under the deal announced on Wednesday, Microsoft's Bing search engine will power search queries on Yahoo's sites. Yahoo's sales force will be responsible for selling premium search ads to big buyers for both companies.

The partnership poses only a theoretical challenge to Google at present. It could take two-and-a-half years to get approval and be fully implemented, according to Yahoo Chief Executive Carol Bartz, which would mean the partnership would not be fully effective until early 2012.

Microsoft and Yahoo still face antitrust and privacy issues. Google dropped a planned search partnership with Yahoo last year under pressure from the U.S. Justice Department.

But experts said the deal would likely get the go-ahead after examination by Obama administration antitrust officials since it would create a stronger rival to market leader Google.

Google said only that it was "interested" in the deal, while the chairman of the U.S. Senate antitrust panel said it warrants "careful scrutiny."

Microsoft and Yahoo expected the deal to be "closely reviewed" by regulators, but they were "hopeful" it could close in early 2010.

The deal concludes a lengthy, and at times contentious, dance between the two companies. They have been in on-again, off-again talks since Yahoo rebuffed Microsoft's $47.5 billion takeover bid last year.

Microsoft CEO Steve Ballmer clashed last year with former Yahoo CEO Jerry Yang, who was strongly opposed to an all-out acquisition. Relations between the two companies improved under new Yahoo CEO Bartz, who took the reins in January and started to shake up Yahoo's management.

Ballmer and Bartz met "three or four times" over the past six months as they hammered out a deal, according to Ballmer.

HOW THE DEAL WORKS

While Bartz had previously said any deal would require a partner with "boatloads of money," she said on Wednesday the agreement provided "boatloads of value," adding the revenue- share agreement in the Microsoft deal was more valuable to Yahoo than a one-time payment.

"Having a big up-front cash payment doesn't really help us from an operating standpoint," Bartz said.

Microsoft's AdCenter technology will serve the standard sponsored links that appear alongside search results. Microsoft will pay Yahoo an initial rate of 88 percent of search revenue generated on Yahoo sites in the first five years.

That means Yahoo can concentrate on selling ads on its websites, while still generating revenue from search ads without the expense of maintaining its own search engine.

Bartz said the deal will result in "redundancies" in Yahoo's staff, although she declined to be specific. She stressed any changes would not occur until after full implementation of the partnership.

According to comScore, Google has a 65 percent share of the U.S. search market, compared with Yahoo's 19.6 percent and Microsoft's 8.4 percent.

"Microsoft will be able to report a greater share in terms of search ... And Yahoo doesn't have to spend any more money on search," said Barry Diller, CEO of IAC/InterActiveCorp, which owns rival search engine Ask.com.

Yahoo shares closed down $2.08 at $15.14 on Nasdaq, while Microsoft closed up 33 cents at $23.80 and Google shares closed down $3.61 at $436.24.

(Additional reporting by Tiffany Wu, Paul Thomasch, Robert MacMillan and Diane Bartz; editing by Derek Caney and Andre Grenon)

News : Microsoft, Discovery in online advertising deal

NEW YORK (Reuters) - Microsoft Corp has sold more than 90 percent of its advertising inventory across its web, mobile, and video game businesses to the Discovery Channel for a one-day campaign to promote the television series "Deadliest Catch," the companies said on Monday.

Discovery Communications, owner of the Discovery Channel, did not disclose how much it will spend on the campaign running Tuesday, April 14, but said that the show's full online marketing budget would be devoted to the deal.

The advertising campaign will span MSN, MSN Mobile, Windows Live Hotmail, Microsoft Live Search and Xbox Live, and comes as Microsoft remains in a heated battle with Google Inc and Yahoo Inc for increasingly scarce advertising dollars.

When the campaign launches on Tuesday -- which marks the premiere of the fifth season of the "Deadliest Catch," about crab fishing off the coast of Alaska -- it will involve a variety of Microsoft-developed video, mobile and interactive media.

For instance, Discovery will run interactive ads on the MSN home page, and will allow users to set DVR reminders or text and email alerts. In another example, Discovery will run a "Deadliest Catch" sweepstakes on Xbox Live in which the audience can win award points that may be used to buy games.

(Reporting by Paul Thomasch; Editing by Derek Caney)

News : Microsoft, Yahoo talking on search deal: report

SEATTLE (Reuters) - The chief executives of Microsoft Corp and Yahoo Inc met last week to discuss potential partnerships between the companies' Internet search and advertising operations, the technology blog All Things Digital reported on Friday.

Wide-ranging talks have taken place between executives at the companies, the blog reported, including discussion of the potential for Microsoft to handle Yahoo's search advertising business, and for Yahoo to combine and run the two companies' display advertising business.

Microsoft and Yahoo declined to comment on the report.

Expectation that the two technology giants would enter negotiations over Yahoo's search business has been rising since Yahoo's new CEO, Carol Bartz, took the reins in January.

She succeeded Yahoo co-founder Jerry Yang, who beat back Microsoft's effort to buy all of Yahoo last year for $47.5 billion, which soured relationships between the two companies.

Microsoft wanted to buy Yahoo chiefly to combat Google Inc's dominance in the Internet search arena, and CEO Steve Ballmer has made it clear he would still like to do some sort of deal in that area.

"Unless I'm fooling myself, over time I would expect there's a good opportunity for a deal," Ballmer told a media conference in New York last month.

(Reporting by Bill Rigby; Editing by Steve Orlofsky)

News : Microsoft, LG sign mobile collaboration deal

SEOUL (Reuters) - Microsoft Corp. and South Korea's LG Electronics Inc on Monday said they had signed a preliminary agreement on strategic collaboration in mobile technology.

"The agreement ensures continued strategic collaboration in R&D, marketing, applications, and services in the field of converged mobile devices," LG said in a statement.

"Both companies will continue to define and align their mobile strategies through annual top management meeting."

The agreement was signed during Microsoft CEO Steve Ballmer's trip to South Korea.

Meanwhile larger home rival Samsung Electronics on the same day announced the launch of the domestic version of the Omnia touch screen handset model, based on Microsoft's Windows Mobile 6.1 operating system.

The model will be available from mid-November under an exclusive deal with No. 1 mobile operator SK Telecom, Samsung said.

Microsoft is hoping its Windows Mobile operating system can continue to challenge Symbian, a platform backed by the world's top mobile phone maker Nokia and used in two-thirds of smartphones -- mobile handsets with computer-like capabilities.

Blackberry-maker Research in Motion and Apple Inc's iPhone are also growing threats to Symbian, while several manufacturers are planning or have started to roll out smartphones based on Google's Android software.

Both LG and Samsung are members of the Symbian Foundation and are also developing models based on Android.

"These are not new deals, but rather a way for South Korean makers to reinforce existing alliances," said Greg Roh, an analyst at Korea Investment & Securities, about the Microsoft-related announcements.

"Competition is getting more and more fierce in the smartphone segment, and South Korean makers have some weaknesses on Symbian platforms, so it is understandable that they would broaden their alliances."

(Reporting by Marie-France Han, editing by Jonathan Hopfner)

News : Microsoft, Google, Yahoo gain seats on OpenID Foundation board

What Yahoo's massive conversion to OpenID last month lacked is a way for Web sites to securely authenticate the users who have signed in. As it turns out, OpenID's directing body may want Microsoft to provide that part

Almost exactly one year ago, Microsoft made a bold announcement at an RSA security conference, saying it would be working with the OpenID Foundation to craft a solution to the problem of spoofing authentication. As was hidden from precisely no one, that method would involve Microsoft's CardSpace technology.

This morning, as part of an upgrade in membership status that also involves Google, Yahoo, and certificate provider VeriSign, Microsoft will be joining the other three as the Foundation's newest corporate board members. This means the four companies will now be represented on the board, rather than cooperating in ventures with the board.

Yahoo's upgrade in status is both important and deserved, as last month, it became the largest resource of OpenID identities in one fell swoop, moving its over quarter-billion registered usernames to an OpenID-compliant database. So Microsoft attaining a similar status with Yahoo in the same group would suggest it has something equally important to contribute.

That important component was apparently unveiled last year at this time: Microsoft wants to cement CardSpace's place as a provider of authentication for OpenID, the one component which even its own creators have admitted it lacks.

In a February 6, 2007 speech to the RSA conference, Microsoft Chairman Bill Gates spelled out the problem: "Identity...I think, is where the weakest link in these systems have been. You know, the overhead for password reset, the ease of guessing people's passwords, they use the same passwords on consumer things they sign up for that they use in the corporation. So passwords are not only weak, passwords have a huge problem in that...if you get more and more of them, the worse it is. And so that in the past if you want to just say get to a partner's Web site, they might give you a different account and a different password, and that would have to be managed, if you changed your role they wouldn't know to go and change that. So we have passwords, and, of course, we have to evolve from them, but we see Smart Cards as the specific, but certificates in general is the way that these things should go, that you'll be presenting certificates as opposed to weak passwords."

Gates did not, at that time, specifically mention OpenID as an example of a password-based approach which could be strengthened through the use of smart cards or certificates, but perhaps no knowledgeable person in the audience didn't think that's what he was talking about.

Just a few weeks prior to Gates' speech, Microsoft Chief Identity Architect Kim Cameron presented a demonstration of how CardSpace (which at the time was transitioning from its previous incarnation as InfoCard) could be used in an anti-phishing situation to prevent a malicious third party from using a man-in-the-middle approach to swipe an OpenID user's tokens. It wasn't a difficult demonstration to understand: CardSpace provided the secure transaction layer between the user (the relying party or RP) and the OpenID provider (which Cameron called the "IP," but which OpenID itself prefers to call the "OP"). As a result, an intermediary cannot then pretend to be the OP and provide the RP with a legitimate token, taken when that same party pretends to be the RP in communication with the OP.

Microsoft has been developing this system throughout the year, though little or no mention of it has been made by the Foundation. In fact, many of the Foundation's "current events" as of today continue to date back to December 2006 and earlier.

But today, it was Cameron who was given the floor by the Foundation in stating Microsoft's goals for making use of its board seat: "Since Bill Gates and [Chief Research and Strategy Officer] Craig Mundie announced our collaboration with the OpenID community last February at RSA, Microsoft has played a leading role in establishing the Foundation's open policy framework that allows everyone to participate in the development and use of OpenID specifications. Now, we look forward to working with the community to refine and drive adoption of the specifications."

And as Microsoft Director of Identity Partnerships Michael Jones pointed out to BetaNews early this afternoon, the Foundation needs to step up its work on completing the draft of the Provider Authentication Policy Extension document -- the specification which would enable CardSpace and others to provide that secure layer. Jones may have further comment for BetaNews later in the day.

Google's new seat on the board marks the official, and perhaps long overdue, acknowledgement by the Foundation of Brad Fitzpatrick, who is not only currently employed by Google but also just happens to be OpenID's creator.

Fitzpatrick's contribution to this morning's Foundation statement was noteworthy not only for what it said, but for the fact that it preceded Microsoft's by two paragraphs: "OpenID was always intended to be a decentralized sign-on system, so it's fantastic to join a foundation committed to keeping it free and unencumbered by proprietary extensions."

News : Reuters Technology Week