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09.21.10

Increasing Microsoft Embedment at Facebook and Yahoo!

Posted in Google, Microsoft, Search at 12:49 pm by Dr. Roy Schestowitz

Scoble and Zuckerberg
Facebook co-founder Mark Zuckerberg
with a former Microsoft evangelist who more recently joined Rackspace only to see it aligning with Microsoft a year and half later (source: Robert Scoble)

Summary: Facebook is giving Microsoft even more power and more user information for search profiling; Yahoo is meanwhile dying in Microsoft’s arms, perhaps serving as a cautionary tale to Facebook

Facebook receives a lot of bad publicity not just owing to its size. The company’s founder called Facebook users “dumb fucks” (a phrase used regarding trust and privacy) and not surprisingly he has personal relationships with Microsoft executives, both past and present. Even Microsoft's patent troll Nathan Myhrvold is someone whom he knows personally and met.

“A company is practically or just virtually ‘brought’ when its agenda is changed to align with Microsoft’s.”In our previous posts that are focused on Facebook we showed an increase in technical collaborations between Microsoft and Facebook (they get slapped for swapping personal data of users). Microsoft once tried to buy Facebook, but it’s so much easier and cheaper to just command the company from the outside, just like in Yahoo’s case. A company is practically or just virtually ‘brought’ when its agenda is changed to align with Microsoft’s.

Earlier this month it was revealed that “Bing could get access to anonymized Facebook data” or that “Your Facebook ‘likes’ might influence your Bing search results”. It turns out that “Microsoft and Facebook [are] in Talks to Add ‘Like’ Utility to Bing” or to put it differently, “Bing [is] in talks to fine-tune search with Facebook ‘Like’ data”. In more general terms, “Facebook, Microsoft in talks to deepen search ties” (shades of Yahoo!) and there is more information here. Facebook has been sharing data with Microsoft for quite some time.

The latest joining between Facebook and Microsoft was perhaps revealed here, if the “Exclusive” prefix is anything to go by.

Facebook and Microsoft are discussing an agreement that would significantly expand the search relationship the pair have shared for many years, said several people with knowledge of the situation.

Microsoft booster Emil Protalinski reveals more points of intersection between this pair of companies. Speaking of intersections between companies, “Microsoft’s Blair Westlake to join I-Academy” says this new article which shows just how much further Microsoft is reaching: “Blair Westlake, corporate vp of Microsoft’s Media and Entertainment Group, has been tapped as treasurer of the International Academy of Television Arts & Sciences.”

Then there is the Nokia HR problem which we mentioned in the previous post. A few days ago we found the article titled “What We Can Learn from the Flight of Microsoft Execs to Amazon, AOL, GM, Nokia, Yahoo…and Micro VC”:

Sometimes all you need to do is look at where former Microsoft executives are going, to piece together some interesting trends in the tech industry.

In recent months, a number of high-profile leaders from very different divisions of the Redmond, WA-based software firm (NASDAQ: MSFT) have departed. This might be true in any given year at a company with roughly 90,000 employees, of course, but what’s interesting here is where these execs are going—and what their moves say about their respective industries. (Also noticeably absent are any publicized moves to hated competitors like Apple, Google, or Oracle.)

I posit that the following six personnel moves say more about the near-term future of industries like mobile, gaming, online services, and automotive than about Microsoft itself, although there might be some intriguing partnerships with Redmond in the works:

Nokia, Amazon, and Yahoo are all mentioned there. We gave examples of Microsoft executives entering these big companies and concerns are justified based on consequences we saw. Yahoo! is still just busy serving Microsoft’s search [1, 2] rather than advancing PHP and BSD with its own operations. Its once-leading E-mail service gets a belated revamp after Zimbra was passed to the Microsoft employees who run VM_Bware [sic].

“In northern America, Yahoo! routes traffic to Microsoft, so gullible journalists resort to pretending that the US is the whole world…”Nielsen, which Microsoft is apparently paying, remarks/plots/writes about the Yahoo!-Microsoft search outcome while Yahoo! still holds on to Alibaba [1, 2] (noteworthy is their recent Google deal in Japan).

In northern America, Yahoo! routes traffic to Microsoft, so gullible journalists resort to pretending that the US is the whole world and therefore “Microsoft’s Bing Overtakes Yahoo As Number Two Search Engine” [1, 2, 3, 4]. Nielsen is used, but Microsoft swaps data with Nielsen, which leaves room for bias. The Microsoft-paid comScore [1, 2, 3, 4, 5, 6, 7, 8, 9, 10] says the same thing [1, 2], but it also measures market only in the US while saying the opposite of everyone else sometimes (while it only claims to be checking one country, the American press often fails to mention this).

MSNBC carries content from another Microsoft booster (original in Fool.com). It’s just propaganda along with self-selected numbers (that same old "US-only trick") regarding search. The Microsoft press is trying to get across the idea that Microsoft is somehow winning in search. How utterly shameful. There is more of that boosting from the same source and Enderle is still given a platform by ECT, despite his conflict of interest. That’s just a good example of how bad the press can be.

Here is what the ‘Microsoft press’ in Redmond says:

So, that Microsoft-Yahoo search deal? It’s kind of working a little bit! With Bing now running Yahoo, Microsoft’s consumer-search market-share numbers now seem, at least, to be marginally less pathetic than they used to be. Keep on foisting that sword at those windmills, Don Microxofte.

They refer to US-only (or north America) deal as though it’s global. That’s rather dishonest, yet expected from such a biased source.

The truth of the matter is that Google keeps gaining (Google gains are currently covered in [1, 2, 3]) and Yahoo! suffers because Microsoft is ruining the company. It is infiltrating those important positions in the company (CTO for example) and halting useful development, not to mention funding of Free software projects. In companies like Yahoo! and VM_Bware there used to be potential for advancing Free software, but that’s hardly the case anymore. Microsoft made Yahoo! lose its identity and become just a channel for Microsoft’s biased ‘search’. One journalist asks, “Why Is It So Hard For Yahoo To Explain What It Is?” There is this new article in the MSBBC (“Yahoo bids to get its ‘cool’ back and remain relevant”), which led richslxh from Identi.ca to writing: “Google at least helps !foss Yahoo doesn’t, now they are whining. #Yahoo-is-tech #my #arse… Google introduced instant search, Twitter revamped its website. Yahoo in comparison talked about “cool things coming up soon”. #yahoo #fail”

“What Microsoft did here only increased unemployment in Silicon Valley.”It’s not entirely Yahoo’s fault. Microsoft hijacked the company (ousted the old/original management), took the valuable parts, and ejected the rest. And some people still say that Microsoft is beneficial to technology? What Microsoft did here only increased unemployment in Silicon Valley. Some people from Yahoo! were left without a job (they previous worked around Free software) and some moved to Microsoft. Google has had a similar problem for a while — the problem is absorbing former Microsoft staff like Daniel Costello in this new case or Don Dodge last year [1, 2, 3, 4].

Who is left to run Yahoo! then? One might say that the company will inevitably become unethical/criminal like Microsoft, maybe even based on this new and exclusive report from The Register: [via]

According to Yahoo!’s chief economist, Preston McAfee, the company is “handicapping” its auctions using an algorithmic method it calls squashing. And it had been doing so since 2007.

“When someone has a really high ad click probability, they’re very hard to beat, so it’s not a really competitive auction,” McAfee told The Reg. “So that they don’t just win [every auction], we do squashing. This makes the auction more competitive.

“It’s like handicapping. We handicap the people with the high click probability.”

This, McAfee said, can increase Yahoo!’s revenues. “The bidders respond by bidding higher. The one who was destined to lose is now back in the race, so they bid higher trying to displace the number one, and the number one is trying to fend them off so they bid higher too.

“We can make the competition a bit more fierce using squashing, even on keywords where there’s not much bidding.”

This is potentially illegal.

Here is an article which preceded it (also from The Register):

Yahoo! economist rebuilds ad empire with ‘Magic Formula’

[...]

McAfee is a disciple of Nobel Prize–winning economist Roger Myerson, whose “mechanism design theory” has been used to build everything from efficient trading systems to reliable voting procedures. “In the same way a physicist develops a theory and an engineer builds something that actually uses that theory, we’re the kind of people who use scientific principles to actually make markets or interactions among people work better, work more smoothly,” McAfee says.

Ultimately, it seems possible that Facebook’s trajectory is similar to Yahoo’s. It is gradually being assimilated.

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