For years, newspapers and other media companies have complained about Google reaping profits by indexing media content for free. Google has responded that media companies are free to remove themselves from Google's search engines if they wish. But media companies never actually did it, because the hit to their traffic would be too big. They'd prefer to just get paid by the search engines. Which is what Rupert Murdoch may now do.

Business Insider estimates that the Wall Street Journal, News Corp's most prized media property, would lose about $15 million by pulling out of Google—meaning that Bing could theoretically secure exclusive search engine rights for that price. The money is almost too small to matter. But this could be a trigger for much bigger things. Namely, the Great Search Engine Wars for media content.

Brian Lam argues that this move would hurt consumers. Instead of being able to go to Google to find everything, consumers would have to know which specific media outlets had exclusive deals with which search engines in order to track down their content.

And that's absolutely true! This trend, if it becomes widespread—every big media company hunting for the richest deal it can get from a search engine—would make life more inconvenient for media consumers like you and me. Which doesn't mean that it's necessarily bad. The fact is that the current situation cannot stand. Have you read our #layoffs tag lately? Rupert Murdoch—and other media owners—are tired of Google making money off their content, for free. The original idea was that the traffic driven to media sites by Google would provide enough revenue, through ads, to make everyone happy. That hasn't turned out to be the case. Online ad revenue is not doing the trick.

So media companies will need new revenue streams to survive. A big one will be paid content; i.e., if you want to read the New York Times online, you will have to pay some sort of subscription fee. But search engine deals like this—in which media companies make search engines pay for exclusive rights to access their content—are another online revenue stream that could become significant. News Corp's deal isn't big money, yet. But presumably if Google and its competitors realize they will have to engage in bidding wars to lock in rights to good media content, the value of those deals would increase considerably.

The bigger picture is this: Yes, the "journalism" industry will shrink. That's part of the future. Fine. But even with the wondrous world of blogs and nonprofit journalism foundations and every other new permutation of creating content, the fact remains that if people want to enjoy a fundamental baseline of serious news media in this country, they will have to pay for it, somehow. Yes, it's more inconvenient to have search engines with exclusive content deals. It's also inconvenient to have to pay to read online news. But these and other new revenue streams will have to come into place if we don't want to keep griping forever about journalists being laid off and news quality getting shittier. Everything cannot always be free and delivered directly to us on a platter when it costs money to make, okay! So try not to fear the portentous coming of the Search Engine Bidding Wars. We're just going through the bumpy phase of things now. You'll get used to it. And the annoying kid you sent to J-school might actually be able to land a job one day, too.

[My colleagues do not necessarily agree with me!]

The spooks at the NSA are, of course, notorious for their role monitoring internet activity, and for their use of warantless wiretaps to monitor U.S. phones, often illegally. So computer users could easily be worried to hear that the NSA has "partnerships" with Microsoft, which makes their operating systems; Intel, which makes their wireless chipsets; and McAfee, which makes their antivirus software (so-called!).

From NSA Information Assurance Director Richard Shaeffer's testimony to the Senate Judiciary's Subcommittee on Terrorism and Homeland Security:

Working in partnership with Microsoft and elements of the Department of Defense, NSA leveraged our unique expertise and operational knowledge of system threats and vulnerabilities to engance Microsoft's operating system security guide without constraining the user's ability to perform their everyday tasks... All this was done in coordination with the product release, not months or years later during the product's lifecycle.

Shaeffer also talked about his agency's "trusting relationship" with the private sector, including a "partnership" with Intel and McAffee to promote a security protocol — or should we say, "security" protocol? — from the federal government.

These IT companies all want to do business with the government, so it's to their advantage to be seen as cooperative in implementing federal protocols in their products. But should consumers distrust these ties? The general consensus among private-sector security experts canvassed by ComputerWorld was, in the words of one, "I can't imagine NSA and Microsoft would do anything deliberate because the repercussions would be enormous if they got caught."

Right, because if there's anything that clearly motivates these two massive organizations with virtually guaranteed near-term revenue streams, it's fear of public shame. This is why we have not seen either entity doing anything embarrassing, recently.

(Pic: Microsoft CEO Steve Ballmer, by Getty Images.)

According to quotes compiled by blogger Dan Lyons, Dodge used to say things like "Microsoft is a great company to work for" is "always putting employees first." But he's changed his tune, now that he works for Google. A new post on his personal blog starts with this dig at his old employer:

Laying off 5,000 people when you have $37B in cash and huge profits isnot cool. But hey, thanks for pushing me on to the Next Big Thing.

And suddenly, Dodge has a new viewpoint about Gmail. Before:

Even Microsoft's online version of Outlook called Outlook Web Access is far better than Gmail... Gmail... doesn't compare to Microsoft Outlook.

Now:

Outlook... was getting kind of tired. Gmail is new, fast, web based, and has all the features I need. I especially like the way it threads conversations making it easy to keep everything in context... One other subtle thing: no spam. I never realized how much corporate spam invaded my Microsoft inbox.

But he "realizes" now!

Thanks for all the "thanks," Don, but the "fuck you" is still implied. Not that we're complaining.

(Pic: Dodge, by Jay Goldman)

In 1983, when Microsoft was still a small (if fast-growing), privately-held software company, Allen left his company to battle Hodgkin's disease, undergoing radiation therapy and a bone marrow transplant. (He retained a substantial stake in the company, which eventually made him fabulously wealthy.) A year ago, Allen underwent an "undisclosed medical procedure" that took him away from a local awards ceremony attended by his Microsoft partner Bill Gates.

His health then seemed to improve, but now Allen's announced a diagnosis of "diffuse large B-cell lymphoma, a relatively common for of lymphoma." The good news: Allen believes he'll be able to continue his role as chairman of investment firm Vulcan, Inc. And he's been through this before. As Bill Gates told TechFlash, " I know [Allen] to be a strong and resilient individual."

(Pic: Allen, left, with his friend Gates at a 2000 Portland Trail Blazers game. Getty Images.)

News Corp. Chief Digital Officer Jonathan Miller (pictured) said at a Monaco media event that his conglomerate plans to block Google (at least partially) within "months and quarters — not weeks... The traffic which comes in from Google... is the least valuable of traffic to us." That's according to the Telegraph, and followed similar comments from Miller's boss Rupert Murdoch just days before.

So why all the noise? Blocking Google is a straightforward process involving simple text files, not a big act of war that requires lengthy preparation.

Maybe Microsoft has offered News Corp. a middle ground between charging for content and leaving search engines entirely. Bing might offer a cut of ad revenue to News Corp. and other content providers in return for exclusively appearing in the Microsoft search engine, former weblog entrepreneur Jason Calacanis recently suggested.

And that idea isn't far fetched. The Associated Press's CEO recently said Microsoft was offering AP many more favors than Google:

Curley said he was negotiating a new partnership with Microsoft under conditions more favorable to the AP and its members...



Someone asked Curley if Microsoft was willing to accept the AP's demands. "They have said very strongly that they would," Curley responded... "They know how to have a conversation." And what about Google? "I'm not talking about Google," he said. "We haven't talked."

So maybe in the end Rupert Murdoch, the doddering newspaper fetishist, will have the last laugh over Google, reclaiming "his" content revenue... and delivering it straight to Bill Gates and Microsoft. Oh, Rupert.

(Pic by Dave McClure)

UPDATE: This new TechCrunch story about Microsoft's meeting with European publishers confirms that Microsoft's strategy is to ally with the likes of News Corp. against Google: "Microsoft plans to launch an assault on Google's flank, by cosying up to major content providers, especially newspapers, that feel hard done by Google News."

Rasmus Lerdorf, inventor of the PHP programming language, confirms he is leaving the company. "It has only been a couple of days," he told us by email yesterday. "I really don't know what is next yet... I am enjoying having a bit more time to play with pet projects this week."

Lerdorf, whose widely-used programming and templating system has been especially popular among Web startups, declined to elaborate on why he left Yahoo. But he was blunt about the matter on Twitter this past summer, just moments after Yahoo announced a pact in which Microsoft would power its search results — previously handled by in-house code — while Yahoo would continue to sell ads against the results:

If we had to guess where Lerdorf might end up, we'd lay our money on Facebook, a PHP shop and a fast-growing one at that. The massive social network has no doubt pushed Lerdorf's language to the edges of its performance envelope. More importantly, the young company shows no inclination to outsource software development to one of its largest competitors and turn itself into a second-tier advertising network.

(Pic by Aaron Hockley)

A redesign of MSN.com to contain "significantly less blue." Arrington, who loathes embargoed tech "news" (so do we), used to make an exception for Microsoft, and sat on this one until midnight last night. But a dastardly marketing blogger spoiled his exclusive by running the story an hour early, due to some kind of WordPress error. The startup information chieftan tells us:

They came in and briefed me, took an hour. Then I rearranged my evening to write the post, took more time. the embargo broke by at least 45 minutes and they [Waggener] didn't bother to let me know.

So now Google is the last big name in tech allowed to supply Arrington with embargoed news. Until one of their orchestrated PR news releases blows up in his face, too. And so Arrington's worthwhile, if ignoble, war on Valley flacks continues.

(Pic: Arrington, by Randy Stewart)

Microsoft has said it will lay off 800 in this round. A tipster tells us it shed at least eight 11 people from the Cambridge, Massachusetts office of its "FUSE" social networking research initiative, announced just last month by Microsoft chief software architect Ray Ozzie. Our tipster said the Cambridge operation has been going for a year and a half, though, so it seems likely this is part of the restructuring that created FUSE from three existing Microsoft groups. This is the group, by the way, that brought Twitter search to Bing.

Skeet blogged last month about how his new-ish employer Google advised him not to accept his seventh consecutive "MVP" award from competitor Microsoft. Online outrage ensued, and Skeet now reports that he's reached an understanding with Google: Skeet won't sign the Microsoft nondisclosure agreement associated with the program — this just covers pre-release software MVPs get access to, another MVP told us — or accept any of the fringe benefits, like (we presume) the special tech support.

In return, Skeet can accept the award. In other words, you can look, but don't touch. And to think this is the same company accused of digital "promiscuity."

(Pic: Skeet, by Ade Oshineye)

The threat from Microsoft's Bing search engine has even lit a fire under Google's icy, hypercompetitive search chief Marissa Mayer, according to the Wall Street Journal:

In recent months, Ms. Mayer has repeatedly pushed her team to better understand and compete with Bing, according to people familiar with the matter.

Mayer is hardly alone in her obsession. In June, the New York Post reported that Google co-founder Sergey Brin was "rattled" by Bing and personally led a "team of search-engine specialists... to determine how Bing's... search algorithm differs from" Google's. The bloated and insular company should focus that fanatically on its users and customers; Bing's market share is stalled at 9 percent, and Google's biggest threat will probably end up being a startup no one has yet heard of.

(Pic: Adam Tinworth)

Step one: Slowly destroy the Suggested User List, a list of Twitter's favorite websites which is used to populate the accounts of new users. CEO Evan Williams now says ""I desperately want to kill it or evolve it," according to Business Insider. A few weeks ago, Williams said, "we don't think it's our job to editorialize" through the list, according to NYU professor Jay Rosen.

Indeed, the list gave the microblogging startup tremendous unchecked power to instantly bestow large audiences on various Twitter publishers, yet it was assembled somewhat haphazardly, in a process that involved a "gut check" with "a couple folks" at Twitter Inc. The company reportedly and apparently removed TechCrunch publisher Mike Arrington from the list after, over Twitter's loud objections, he published internal Twitter documents obtained from a hacker. TechCrunch appears to have since been restored to the list; the below chart from TwitterCount shows the long fallow period in Twitter follower growth for TechCrunch when it was apparently out of Twitter's favor:

Step two: Provide search data to rivals. The value in Twitter is in its real time "fire hose" of tweet data. But the company has guarded that data jealously, providing it to only some companies who request it, and then often at a cost of thousands of dollars per month. But Twitter is now nearing a deal to finally sell access to its "full feed" to Microsoft for the Bing search engine, reports Kara Swisher of All Things D. The company is also believed to have been in talks with Google for a similar deal. Sharing with such large competitors is quite a bit of letting go — albeit with financial compensation — for a company that has treated its real-time content feed as a major strategic asset.

It would appear that Twitter is learning a lesson crucial to all sorts of small businesses: if you want to be successful at something, you have to give up on being successful at everything. One would think a company founded on tiny, 140-character status updates would have learned the benefits of limits much sooner.

(Pic: Williams, earlier this month, by Bruno Pin.)

According to Harvard's Nieman Journalism Lab, AP CEO Tim Curley (pictured) recently let slip at a Hong Kong gathering of journalists that the AP hasn't even talked to Google as part of its complete overhaul of the way it syndicates content online. Why bother, when Microsoft is clearly so lethally good, online? "They know how to have a conversation," for one, unlike a certain other tech giant, plus they gave AP this, just, killer demo:

Microsoft this month has some new technology that it's unveiling that will be much more visually dramatic than anything you've seen before. Multimedia in ways you haven't thought about yet. We've seen it, we've seen the technology.

Oh, and Microsoft also just happens to have basically promised to give AP top ranking — "privileging" their content, as Nieman puts it — over other sources reporting the same news. Never mind if other sources add information to a linked AP story, or generate lots of buzz by using an AP link to launch an in-depth opinion piece. Quality = AP, always. Which is why Microsoft Bing will rule the internet, real soon now. What could possibly go wrong?

Various startups, we're told, have already been able to buy access (for thousands of dollars, not the millions Google or Microsoft would have to pay) to tweets. Twitter is in "advanced talks" with both those companies to sell access to a full feed of tweet data for use in the companies' search engines, according to Kara Swisher at All Things D. Such a feed would presumably include all new tweets as they are posted along with public data on favorites and who is following whom.

Thought they haven't widely publicized the practice, Twitter is already in the business of selling access to its "firehose" of public data, according to a source close to one customer of the service. Twitter typically charges between $1,500 and $3,000 per month for such access, sometimes for a limited subset, this person said.

Then again, a typical customer until now has been a relatively small startup company with little revenue, utterly dependent on the Twitter ecosystem. Google and Microsoft are more fearsome competitors, with much deeper pockets. Google CEO Eric Schmidt just this past March called Twitter a "poor man's email system," and his company recently added real-time features to its GMail product, making it more Twitter like.

Of course, working with tech behemoths has its benefits, starting with cold hard cash. Swisher said deals on the table include payments of "several million dollars to Twitter." The company could also try and negotiate a cut of the advertising sales accompanying its results.

But the biggest benefit would be to reignite Twitter's growth, which appeared to stagnate over the summer. A company with a $1 billion valuation and little revenue lives and dies by its future promise. And a surge of search engine traffic could make that future look significantly brighter. Assuming, that is, that there's anything worth finding in the 140-character mental ejaculations of narcissists, celebrities and desk jockeys.

(Pic: Twitter co-founder Evan Williams with Google co-founder Larry Page, Williams' former boss, at industry event Foo Camp in 2007. By Scott Beale.)

In a blog post, Skeet writes that he checked with his Google bosses to make sure it would be OK if Microsoft "renewed" his "Microsoft MVP" award for yet another year, an honor that is far from automatic and akin to a new award. But Skeet wrote he "was advised not to do so."

Which is odd, since Google is fine with Skeet programming, on company time, in a language born from their competitor, and the company is fine with him offering extensive help with the language online. But accepting an award for offering help with said language is apparently akin to sleeping with the enemy. Sounds petty. Perhaps Google would feel more comfortable if Skeet offered to have the plaque and award pin swept for bugs.

(Pic via)

When Redmond, Washington-based Microsoft wanted to poach Stephen Elop from Juniper Networks of Sunnyvale, where he was COO, Elop really made them pay. According to a Microsoft proxy filing noticed by the Wall Street Journal, the software company's first concession was to guarantee Elop he would get the original purchase price of his home, even though its value had fallen significantly amid the real estate implosion. Score one for Elop.

Then Microsoft agreed to backstop a higher price for Elop's house, since he'd made some improvements. Score two for Elop. Next, Microsoft actually bought the home, since no one would buy at such levels, and resold it at a loss. Finally, the company paid all taxes associated with Elop's income on the sale, including capital gains, to the tune of $1.2 million. This was Elop's coup de grace.

To summarize: Microsoft reversed Elop's pre-existing real estate loss, financed old home improvements, and then paid the taxes on the income the company itself had created in the first place. And it did all this, to the tune of $4.1 million in total costs, under the guise of "relocation" expenses. No one in going to cry for Microsoft, here, but perhaps a few will wince for the company's shareholders.

Clearly meant to have a lively, "fun" feel, the painful video is so over-the-top bad we thought it first it must be a hoax. But Microsoft's in-house blogger has been touting these events, which are being organized by an apparently well-established marketing company that specializes in getting people to shill products to their friends at sketchy "house parties." Said marketing company owns the YouTube channel where this video appeared.

Microsoft has a track record of tone deaf commercials, but this marketing video somehow hits a new low. Maybe it's the way there's an undercurrent of tension and seething disdain even among the hired professional actors, as in this scene, about three minutes into the video:

Middle-aged white lady: I led an overview of some of my favorite Windows 7 features... It took, like, 10 minutes [approving murmurs]... It was totally, informal, like, everyone just kind of crowded around the computer in the kitchen [hearty laughter].

...After my overview, I went straight to an activity.

Older white lady: Oh, you went straight to the activity? I let everyone fool around with "Snap" [a Windows 7 feature] for a little while! [Uproarious laughter.]

Young black man: Me too! I did the same!

Middle aged white lady: I love Snap!

Older white lady: And then we started an activity maybe 30 minutes later.

Middle-aged white lady: Well, either way works, right? You figure out what your guests want, and play it by ear. In any event, we each did an activity, or two.

Angry party-pooper geek guy (white): Uh I did three activities. Ya.

Middle-aged white lady: Oooooh.

Young black man: Well, excuse me. [Snickering laughter.]

Middle-aged white lady: That's great! [Laughter] The activities each have you talk for a minute or so, and then...

Angry party-pooper geek guy (white): [Frowns, angrily slams down drink, walks over to get more food and stew in silent rage.]

Or maybe it's the way the video undercuts the very product it purports to be touting, by emphasizing the you should actually install Microsoft's operating system at least 48 hours before your... uh, install party. As in this scene:

Angry party-pooper geek guy (white): Of course the first thing you want to do is install Windows 7, right? [Boisterous, awkward laughter.] Now make sure you do that a couple of days in advance of the party. [Laughter silenced.] Call customer service if you have any questions. [Emphatically, this time, waving arms:] Got to play with Windows 7 before the party.

True. Nothing scotches an awesome Windows 7 party like catastrophic data loss, the Blue Screen of Death and impotent cursing. Person-to-person marketing might work for fun products like cosmetics, or cheap inoffensive gear like Tupperware. But operating system installs? Not fun, not trivial, and not the sort of thing that's going to liven up your kitchen. Device drivers? Crashes? Partitioning? Pass the tequila.

[via the Telegraph]

UPDATE: And of course, the parodies have already begun:

After spotting some stray tweets about the incident, Todd Bishop of TechFlash dug up the tale: At yesterday's annual Microsoft meeting at Safeco Field, Ballmer was making his entrance when a 'Softie tried to snap his picture with an iPhone. Bad idea!

Ballmer grabbed the Apple device from the employee and made some funny remarks as everyone booed. Then he put it on the ground and pretended to stomp on it, before walking away... during his presentation on stage, Ballmer referred to the episode again, teasing the person and making it clear that he hadn't forgotten what happened.

Ballmer, at heart a sales guy, perhaps does not cultivate the degree of self-awareness necessary to see the parallels between his relentless — if, in this case, somewhat lighthearted — demonization of his competitors within Microsoft and the tactics of Big Brother from 1984. He is, in short, acting like the very guy Apple has chosen as its ideal foil. But if his Two Minutes Hate at Safeco Field was a clumsy PR move, it was hardly out of character; in fact, as the viral mash-up above shows, there is something about large company functions that seems accentuate the man's insanity.

His employees, at least, are sympathetic...

...sometimes to a fault!

Kai-Fu Lee joined the company back in 2004, when Google was beginning its adventure in earnest and became the giant's President of Google Greater China and vice president for engineering. Unfortunately, mean old Microsoft reared its head and sued Google, for Lee was bound by a pesky "no competition" contract clause. The companies eventually settled, and Google hoped to go full speed ahead into uncharted territories. China's government, however, had other plans, and soon lured the company into its controversial web of censorship and, to add insult to injury, favored competitor, Baidu.

Despite the uphill battle, Google has made a few strides in recent months and gained 6 percent on Baidu. But that means little, because Baidu still controls about 62% of search traffic, while Google has a scant 21%.

Now Lee has abandoned his post to pursue some hush-hush "new venture" in Beijing, and Google's attempting trying desperately to refocus its energies by splitting his duties between two executives while simultaneously double its sales force. After five years struggling to be the big wig, you would think Google would give up on imposing its capitalist ideals amidst an aggressive communist state. But that's the magic of the internet: it's a field of ambitious dreams rife with international and political barriers.

That, at least, is what the Redmond, Washington software company clearly wants everyone to think. Lu, who headed Yahoo's search efforts before snubbing a Facebook job in favor of Microsoft, is described in today's New York Times as "self-effacing" and strict in his propriety. So it's safe to presume the Bing.com overlord is being pushed, not stepping, forward, and that it's all part of a Microsoft PR campaign.

The implicit message: We will iterate until we pass Google in the market, burying the company with the same persistent tactics we used against Netscape, done in by a steadily improved Internet Explorer, and Apple, trounced in market share by a steadily improved Windows. Li is to be the icon of ruthless self-improvement: Born poor in China, Lu couldn't even afford the application fee for Carnegie Mellon, where he ultimately earned a Ph.D.

He ended up at IBM, then "poured his heart and soul" into improving Yahoo search. Now he's president of online services at Microsoft, and the Times makes him sound like Drago in Rocky IV:

He sleeps three to four hours a night. One most weekdays, he wakes up around 4 a.m., goes through his e-mail and runs four miles on a treadmill while listening to classical music or watching the news.



He prefers to be in his office between 5 and 6 a.m. to have uninterrupted time to prepare for his day. He is often sending e-mail to his staff until midnight or later.

Do these work habits trickle down to Lu's staff? We'll answer that question with another nugget from the Times piece: Lu's daily staff meetings are at 9:30. At night.

There is no doubt an big element of caricature in this portrayal of Lu, but that doesn't make it any less clever a gambit by Microsoft's aggressive flacks. For all his superhuman strength, Lu has already lost once to Google, when he worked for Yahoo. That makes him the underdog. Now, thanks to Yahoo's defacto merger with Microsoft, he's in the ring again, building the technology behind Yahoo's search, and behind Microsoft's to boot. It's a grudge match, and a possible comeback story. If Lu wins, he's definitely not Drago any more. He's scrappy Rocky Balboa. At least until everyone remembers who he works for.

(Top pic: Randy Stewart)

Carol Bartz and the rest of team Yahoo certain have incentive to get on board; they are pursuing a potentially lucrative search agreement with the Redmond software company, and that requires a regulatory green light clearing the deal of antitrust violations. Bartz has already flip-flopped on whether Google was a threat to her company the day her deal with Microsoft as announced (see video above). That the Justice Department pledged to fight a similar deal between Yahoo and Google only strengthens this line of argument.

Then there is DC's corps of PR and lobbying firms, always eager for a well-monied client. Daily Finance mentions two, Law Media Group and Glover Park Group, but what about Burson-Marsteller? We heard earlier this year that Mark Penn's PR operation had targeted Google on behalf of sometime client Microsoft; the company stated only that "We are not lobbying for Microsoft against Google," a non-denial that leaves the oily firm plenty of wiggle room. With industry veterans like Google CEO Eric Schmidt's ex-girlfriend Marcy Simon on staff, the company can exert pressure on the company in ways far more subtle than formal political lobbying.