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In the middle of a gritty search war, did Microsoft’s Steve Ballmer just commit the mother of all mistakes?

Sullivan sums it up nicely when he writes that “Microsoft got mileage out of the idea it was working with the Open Content Alliance as the “good” book search partner not encumbered by controversy that the Google Book Search service has encountered.

•  Danny Sullivan of SearchEngineLand rightly pointed out to The New York Times that while the number of people using search book services is relatively small, it’s an influential lot with researchers and librarians and other earlier adopters. Don’t underestimate the prestige factor.

Satya Nadella, who runs Microsoft’s Search, Portal and Advertising Platform Group wrote in a blog post that “given the evolution of the Web and our strategy, we believe the next generation of search is about the development of an underlying, sustainable business model for the search engine, consumer, and content partner.”

I’ve been wondering about that ever since Microsoft said it would close its Search Books and Live Search Academic projects, thus ceding the field of book digitization to Google. (While both Live Search Books and Live Search Academic are going dark, both Google’s Book Search and Google Scholar continue to operate.)

I tried getting through to Nadella on Tuesday for a better explanation, but Microsoft pulled up the drawbridge. Left on my own to speculate, it appears that Microsoft was being penny-wise but pound foolish. (After all, the company was ready to buy nearly $45 billion worth of trouble integrating Yahoo.) Memo to Nadella: When you get sick of hunkering in the bunker, let’s talk.

• Participation in the project allowed Microsoft to promote itself as being one of the good guys. The Open Content Alliance says it won’t scan books without first receiving permission of copyright owners. Google was sued by authors and publishers over its decision to scan copyrighted snippets without permission. Google argued that the works fell under the category of fair use. Rightly or not, however, Google was pilloried as a bad actor in this novella.

Reading through Nadella’s blog post, this much is clear: Microsoft wants to put its search marbles into programs like Cashback (the new Microsoft service that rebates people to buy products online) where there’s better potential for a material payback. But the search competition with Google is also partly a popularity test. Consider the following:

Now Brewster Kahle of the Internet Archive is left scratching his head how to replace Microsoft’s financial support for the consortium. A decade removed from its antitrust battle with the government, Microsoft’s not as uniformly dreaded as it once was. Maybe Microsoft believes it’s in a position where it doesn’t need to buy goodwill any more. Still, you can never have enough friends.

A refresher: Xobni integrates into your Outlook installation and shows you more about your e-mails than Outlook can itself. For each person who sends you e-mail, it shows you who else they communicate with a lot (their de facto social networks), and it finds their phone number from inside their e-mails. It also shows you all conversation threads you’ve participated in with the person, and all the attachments they’ve sent you. You can drill into message threads (very useful), and it has a snappy e-mail search engine built in (nice, but redundant).

Unlike many other Outlook add-ons that I’ve tried, this one seems to add its functionality without dragging down Outlook’s performance, or worse, crashing it. It is useful and it doesn’t get in the way. There’s no reason not to try it. And it’s free.

Xobni also extracts e-mail threads. (Click to enlarge.)

Xobni gives you a useful scorecard for each person who e-mails you. (Click for full image.)

The e-mail helper app Xobni exits its private beta period Monday morning. Compared with the previous version of the app I tried (see “Handy e-mail helper”), Xobni is now faster and more stable, and thus more useful.

Here’s what Xobni has up its sleeve: Xobni the app runs on Xobni the platform. This platform has hooks deep into Outlook. The platform is what enables Xobni to graft a viewing pane into Outlook, something other plug-ins can’t do. It can also integrate into Outlook’s default search bar (it doesn’t, yet). The platform is what gives Xobni access to all the message data that it uses without bogging down the Outlook host app.

Xobni is neat bit of programming, and Microsoft likes it so much it tried to buy the company. But Xobni walked away from the deal, CEO Jeff Bonforte told me. (Microsoft can’t seem to buy anything these days.) At first I thought that was a bad decision, since Xobni is hardly a must-have product. It improves Outlook a bit, sure. But the company is going to need more than this handy little plug-in to become a real business. Microsoft was an easy exit. Why didn’t Xobni go for it?

It turns out that Xobni is not really an Outlook plug-in company. Rather, it’s a company that makes a platform to abstract the difficult-to-write-for-Outlook, as well as other less-broken e-mail services, and that allows the creation of new products that integrate e-mail data with other apps. That’s good, since the business of painting incremental features onto Outlook is a bit shallow. The fundamental platform business is less visible to consumers, but it might actually make some money.

Xobni plans to do two interesting things with the platform: first, write hooks into other e-mail apps (like Yahoo Mail and Gmail), and second, make the platform available to other vendors. So, for example, if Salesforce.com wants to write a plug-in that tightly integrates its CRM data into Outlook or whatever e-mail app its customers are using, Xobni’s toolkit could make that work. Salesforce presumably would make money from such a feature, which Xobni would profit from as well.

Update: Charlie Cooper and I discuss Xobni in today’s News.com podcast.

Friday’s talk was similar to one Gore delivered in February at the annual TED conference, but without the slides. During the speech here, the 2007 Nobel Laureate was interrupted by hecklers three times; each was removed by security.

He then left the audience with a question: “How will future generations look back on us at the turn of the 21st century?” He said they could ask, “What were they thinking?” But, Gore, being Gore, said he was confident that instead they would ask, “How did they find the moral courage to do what they did?”

Gore cited his friend Amory Lovins of the Rocky Mountain Institute, a nonprofit energy policy institute, who told him that people often assume that when we change technology there will be a loss.

Gore then recounted a business example. He talked about how a company in Canada was using environmental unfriendly chemicals to clean circuit boards and wanted to phase out the use of these chemicals in its business. The company first asked, “what alternatives are there?” and pursued that line of thinking for a while. Then one day an engineer asked a new question: “How do the circuit boards get dirty in the first place?” That question, and the resulting answer, created a new type of circuit board that has proved immensely profitable to the Canadian company.

The environmental challenge is roughly the same, he said. Most of us have to deal with local problems such as clean water. Then there are regional problems, such as acid rain. And finally there are global concerns, such as global warming.

He drew a quick comparison between computer security and the global threat presented by global warming. He said most computer network threats are silent threats, like carbon dioxide. He said to make CO2 visible, he’d like governments to stop taxing employees and instead tax companies for their carbon footprint.

Returning to his reason for speaking at RSA, Gore said that “because CO2 is invisible, we need information technology to track it.” Specifically, Gore said we need to track the efficiency of technology we already use.

SAN FRANCISCO–Global warming is real, and new evidence shows it may be worse than we previously thought, former Vice President Al Gore said during an RSA keynote address on emerging green technologies Friday.

The talk, which ran 45 minutes and closed the conference here, updated the presentation used in his Academy Award-winning documentary An Inconvenient Truth.

Gore said that if we look at the true cost of carbon, we’re going to find that new technologies (such as solar energy) “are going to be much more useful to us now than they have been in the past.”

Gore arrived to a standing ovation. He thanked the audience, and said he had respect for the people sitting in the auditorium and for the conference itself. He then opened with a joke about he and wife, Tipper, buying and running a franchise fast-food restaurant.

Individual attendees of RSA are allowed to blog their personal experiences, and RSA also allows them to photograph almost anything they want in exchange for being photographed by the conference for future marketing use.

(Credit:
Robert Vamosi/CNET Networks)

Gore then launched into new research on global warming. As a senator, he said, he specialized in nuclear warfare and had occasion to talk with military generals. He said he learned that each level of conflict–local, regional, and the rare global–required “a different allocation of resources, a different mix of tactics and strategies, a different way of conceiving the overall problem.”

Focusing on technology’s role, Gore said that we have automated the process of converting carbon into CO2. “Most of it is waste.” He said the amount of energy we actually use from carbon is a very small amount, “which posses a great challenge and a great opportunity.”

Protesters make their voices heard
After talking for about 20 minutes, the first of three hecklers stood. A young woman started challenging Gore to admit he wanted to depopulate the Earth. She stood, taunting for about a minute before several security guards arrived to escort her out. As she was removed, a young man and a young woman toward the back stood up and began singing loudly. They, too, were removed. Then, after several minutes of silence from the audience, a middle-aged man stood up and started yelling that Gore was lying to the audience. He got the boot, as well.

Gore talked about Antarctica, and the effect of all that new carbon dioxide. He said the north polar icecap is normally the size of the lower 48 states, “give or take an Arizona.” He said that in the summer of 2005, we lost the equivalent mass equal to the entire region east of the Mississippi river. Then in 2007, another large chunk broke off, or, as the scientists explained to Gore, “it fell off a cliff.” He said that some scientists he’s talked to now believe that within the next five years, the north polar ice cap will cease to exist during the summers.

In an arrangement with RSA, Gore specifically requested that members of the press not be allowed inside the talk. And throughout the speech, security guards did their best to keep people from holding up cell phones and other photographic equipment, although no one was asked to leave for taking a picture.

Gore left the stage to thundering applause.

Learning to ask the right questions
Gore asked the audience, “How can we change old technologies to be more efficient?” The answer, he said, is in learning to ask the right question. “Most of the productive questions are going to be in the second or third order of asking.”

Citing Lovins again, Gore said the Colorado-based scientist had looked at how much energy was useful in a gallon of gasoline. Lovins found that only 1 percent is useful in moving a
car from point A to point B. The rest, 99 percent, is waste, according to Lovins, “because the process, which is more than 100 years old, is incredibly inefficient,” Gore said.

Gore then talked about a tale of two planets, Venus and Earth. He said that Venus wasn’t 877 degrees Fahrenheit just because it’s closer to the sun; he said it’s because it’s covered in carbon dioxide gas, which absorbs infrared radiation. “It’s not complicated; it’s physics,” he said. In all of human existence, carbon dioxide never went above 300 parts per million. “This year,” he said, “it’s 385 parts per million.”

News of the missing laptops first surfaced in late March in an anonymous post on the Dead Men Working blog written by foreign service officers.

Given the sensitive and often secret nature of data the State Department workers deal with, officials had been bracing for repercussions like congressional hearings, according to CQ. That’s what happened when a Veterans Administration official had a laptop stolen in 2006, IRS laptops went missing in 2001, and a State Department laptop containing the names of foreign agents working for the U.S. government was stolen in 1999.

Updated 11:10 a.m. PST Thursday May 8 with information that laptops were located

Auditors found that the State Department had lost track of about $30 million worth of equipment, most of it laptops, the initial Congressional Quarterly report says.

Hundreds of laptops used by the U.S. Department of State that were missing have been located, according to a report in the Congressional Quarterly.

It’s nice to see that $48,921 in Stanford MBA tuition going to a such a worthy cause.

The professors argue that:

commentary

More intriguingly, despite open source’s still-small market share relative to the Microsofts and Oracles of the world, it’s surely meaningful that professors from the world’s elite business institutions are turning their attention to figuring out how to beat open source. If it weren’t a threat, there would be no market for research like this.

In that case, the commercial vendor does well to enter the market with a compatible product and then invest in new product features to make its product compelling even though it costs more–a strategy sometimes known as “embrace and extend.” In this case, being “open” (or compatible) helps the commercial firm tap into the network created by the free product. Then, the commercial firm must compete by out-innovating the free product.

But what to do if the open-source product gets to market first?

(T)he ideal scenario for the commercial vendor is to bring its product to market first, to judiciously improve its product features, to keep its product “closed” so the open-source product cannot tap into the network already built by the commercial product, and to segment the market so it can take advantage of a divide-and-conquer strategy.

Having given in to gravity, America’s elite graduate schools are taking on open source.

In recent research published in Production and Operations Management, Deishin Lee (Harvard Business School) and Haim Mendelson (Stanford Graduate School of Business) teach would-be business executives how to “Divide and Conquer: Competing with Free Technology Under Network Effects.”

MySpace has partnered with the top four recording companies to offer streaming music, sell downloads, offer ad-supported music, as well as sell concert tickets.

Angel Gambino, the Bebo executive in charge of attracting record labels and musicians to the site, has resigned and she appears to be part of an executive exodus at the company following its $850 million acquisition by AOL.

“Bebo has been nowhere with music,” said one music-industry insider. “They have a very music-hungry community, but they have not done anything with it. They went to the labels a year ago and said they had plans to formalize their approach to music. But nothing has happened.”

Gambino, Bebo’s global vice president of music and content, follows Bebo’s founders Michael and Xochi Birch out the door. A source close to the situation said that at least two other Bebo managers are considering a departure.

She said that she jumped to Bebo a year ago from MTV to be part of a start-up and wants to be part of another. Another reason why Gambino said she is leaving is that developing Bebo’s music offering was not AOL’s highest priority.

Former MTV exec Angel Gambino announced Friday she has left Bebo.

” (AOL is) focusing on communication tools and integrating them into the platform. Music is on the agenda but it’s not tops on the agenda.” — Angel Gambino, former Bebo exec

Some critics of AOL’s deal have worried that Bebo’s teen audience may be turned off if the site becomes too buttoned-down as it goes corporate. The news comes as AOL scrambles to defend its purchase price. Earlier this week at the D conference, Time Warner’s CEO Jeff Bewkes acknowledged that AOL “may have overpaid.”

Instead, Bebo has gone with a more grassroots approach, catering to unsigned artists who were interested in showcasing their music on the site.

“The priorities right now are integrating ICQ and AIM,” Gambino said. “They are focusing on communication tools and integrating them into the platform. Music is on the agenda but it’s not tops on the agenda.”

Gambino said that was due to one thing: money.

(Credit:
angelgambino.blogspot.com)

AOL and Bebo representatives could not be reached for comment.

While MySpace, YouTube, and Imeem have built up their music offerings, Bebo has stood on the sidelines. Imeem has licensed music from all the major recording companies and now offers a free streaming music service. YouTube has deals to offer rock videos and to allow users to insert music into their videos.

“We tried to be creative in offering new models,” Gambino said. “We created some new models.”

In an interview with CNET News.com, Gambino acknowledged that her Bebo stock had fully vested when the all-cash deal closed last week and the extra money will allow her to spend time with her young son.

“We weren’t willing to pay the money that the labels expected for the licensing deals,” Gambino said. “We didn’t have the cash or the resources of a MySpace. We also didn’t think having loads of back catalog would be that beneficial.”

(Credit:
CNET Networks)

The 8GB iPhone has practically disappeared from the U.K. after a price cut last week.

Does this mean Apple has a 32GB iPhone planned for the 3G launch, expected to come in June at or around the Worldwide Developers Conference? Perhaps, although it’s only been a few months since it upped the capacity to 16GB. At that time, Apple’s Greg Joswiak said the company still believed there was demand for a 8GB model, but that stance might have changed to reflect a “bigger is better” mentality.

Price apparently was an object for U.K.
iPhone shoppers.

The decision by U.K. carrier O2 to cut the price of the 8GB iPhone prompted shoppers to exhaust stocks of that model at O2’s Web site and at Carphone Warehouse, an authorized iPhone reseller. Pocket-Lint confirmed with Carphone Warehouse that the 8GB models are kaput, and O2 told the site that while online stocks of the 8GB model are gone, retail stocks are dwindling fast.

It was only a week ago that O2 cut the price of the 8GB model from 269 British pounds ($533) to 169 British pounds ($335), a move that was seen as a inventory-clearing measure ahead of the expected introduction of a 3G iPhone. Both Carphone Warehouse and O2 told Pocket-Lint they were “reviewing” whether to order more 8GB models from Apple, which is yet another hint we’re going to see a new model soon.

EnerNoc is one of a handful of demand response companies in the field. To ease the load on the power grid during peak times, demand response systems can turn down electricity usage at commercial buildings or consumers’ homes.

Energy efficiency has been one of the most successful sectors within clean tech. Why do you think that is?
Healy: It goes back to the technology. Where we really are is at the convergence of data, networking, communications, and energy. We’re applying technology and leveraging this ubiquitous communications network that’s been built over the last 15 years. With that communications network, we can very cost-effectively get data and apply it in ways that have not been done before.

Is demand response dependent on any policies or government mandates?
Healy: No, but the regulatory piece is important. What we really need is to make sure that there’s a mandate to look first at energy efficiency before you look at anything else. Before a utility goes out to build a new peaking power plant, it should first have to prove, as a matter of law and regulation, that it has done everything possible to look to energy efficiency first and foremost.

Solar and wind are not dispatchable. But with demand response, we can press a button and get a new supply resource.

The best example is that you go out to a hotel chain and tell them, “We’re going to turn off all the sprinklers, water fountains, and some of lobby lights, but not touch anything else that is critical to hotel guests’ comfort or experience.”

It’s a field that’s getting serious attention from policymakers who are looking to avoid constructing new power plants, or reduce the number they need to build.

Policymakers seem to be showing more interest in energy efficiency. Why do you think that is?
Healy: Look at the load growth. It is forecast that we will increase energy usage by between 60 and 100 percent over the next 10 or 15 years. We now make between 700,000 and 800,000 megawatts, and that’s going to grow 60 percent between now and 2030 (in the U.S.). That’s a lot of electricity and a lot of new power plants…Nearly 50 percent of meeting that load growth can be done through energy efficiency.

How does it work? EnerNoc signs on corporate customers who agree to participate in energy efficiency programs. When the power grid is being pushed to its limits, it gets a signal from utilities. It then remotely cuts energy usage at a customer’s site, using the Internet as the conduit.

(Credit:
Martin LaMonica/CNET News.com)

What’s next for you in terms of new business?
Healy: Once we have a customer and our network, they look to use the data we’re collecting to become a more efficient customer. It’s an interesting investment opportunity when you can harness that data and leverage it.

What’s the business model for a demand response company?
Healy: It’s very similar to the way you would buy long-term contracts for energy. We operate long-term agreements to provide capacity to grid operators. They make that payment and we share that payment with our industrial network (of commercial customers). It’s just like an insurance premium because they want the supply.

The Internet is the backbone of this new business application. This has been done before historically, but not very much by leveraging technology. Instead, it was utilities picking up the phone. Our software applications automate what have been human processes in the past.

It could be unobtrusive things like dimming the lights at a supermarket for 15 minutes in the middle of the day. But added up, it can make a big difference: EnerNoc now has 1,500 megawatts under management. That’s the equivalent of 15 peak power plants, which are typically the dirtiest and most expensive to operate, said Tim Healy, EnerNoc’s CEO.

It’s not as flashy as solar panels or dramatic as wind turbines, but energy efficiency is fast becoming viewed as a significant “source” of energy. Some people refer to megawatts not used as “negawatts” (for negative watts).

On Monday, EnerNoc acquired South River Consulting, an energy procurement company. And on Wednesday, it announced that it narrowed its quarterly loss on strong demand for demand response and its energy management services.

Energy efficiency is also one of the more successful sectors within clean tech. EnerNoc and competitor Comverge have both gone public.

Once your meter can send information back to somebody other than a utility, you can do something with that data, right?
Healy: Yeah. You talk about policy and doing something about data; one of the things that we’d like to see become national policy is that data not be owned by the utility. The commercial, residential, industrial customer should own that data. It’s your data. Right now, it’s owned by the utility. And if we can change that construct and that data becomes property of the users of energy, you could see a spurt in innovation that you won’t necessarily see if it were continued to be owned by utilities.

It’s similar to calling for, for example, a demand response portfolio across the U.S., similar to a renewable energy portfolio standard.

I visited EnerNoc’s network operations center in downtown Boston and spoke with Healy about technology, exactly who owns your utility data, and his company’s plans to get into the business of managing corporations’ energy usage. Here are excerpts from our talk.

Q: I understand why a utility would want to have a way to lighten the load on the grid. But what’s in it for the companies in these energy-efficiency programs?
Healy: We say to them, if we can curtail electricity usage–selectively–which means nonessential use, there’s an inductive or incentive payment that we can give you for doing that.

When the grid operator or utility needs us, there is another payment so we are getting two revenue streams.

I’m not sure the utility wants to empower you to figure out how to use less of the product they are selling. So why not have that data belong to folks who are going to be incented, who are the ones who are paying for electricity use?

EnerNoc CEO Tim Healy

When you start to do that across thousands of locations like we’ve done, all of the sudden you can bring thousands of megawatts of capacity onto the grid.

What happens when there’s a smart grid infrastructure set up? Can you take advantage of that?
Healy: When people talk about the smart grid, they are talking about advanced metering infrastructure (AMI). Where we come in is that we are the management construct on top of that.

Indeed, when it comes to allowing users to test drive music before they buy, Last.fm is definitely in the back seat. Imeem offers unlimited plays while London-based Last.fm only allows a user to listen to an individual song three times.

“Offering free access to music is one thing but finding your way through all that is another,” Ward said. “Music discovery is a lot easier on Last.fm.”

Free streaming music turns people on to new music and encourages them to buy, says social-networking site Last.fm. In the music industry, this will not come as a huge revelation.

Last.fm says streaming leads to bigger music sales.

In addition, MySpace.com is preparing to launch its own streaming service that will offer unlimited plays.

Last.fm, acquired by CBS last May, announced Wednesday that since the company launched its on-demand streaming service two months ago, CD and download sales through its partnership with Amazon.com have more than doubled.

“We wanted to see how this service works first,” Ward said. “(The spike in sales) will encourage more discussion about pushing those limits back.”

Music discovery continues to be one of digital music’s greatest vulnerabilities. Nobody has come up with a sure or simple way to help people wade through the millions of tracks available on the Web. Last.fm’s numbers seem to confirm long-held beliefs of many that enabling people to sample full-length tracks is one way to spur demand.

Ward added that his company isn’t worried much about competitors. He said what separates Last.fm from the others is its music-discovery engine that can suggest songs based on what a user has listened to in the past.

So what does that mean?

(Credit:
Lastfm.com )

So Last.fm can take pride in knowing it was early to an offering that some music fans might find useful–albeit one that isn’t exclusive to Last.fm.

Christian Ward, a Last.fm spokesman, said the company is talking to the labels about rolling back some of the restrictions, presumably the three-play rule.

On Monday, eSolar said it has raised $130 million from Idealab and Google.org. Its solar-thermal systems, designed for utility-scale power plants, use mirrors to reflect light onto a tower that turns a turbine.

And last Thursday, Stirling Energy Systems announced a $100 million investment from renewable-energy developer and waste management company NTR.

Infinia on Tuesday said it has taken $7 million from Asian contract manufacturer Foxconn Technology Group, part of a total of $57 million in a Series B round first announced in February.

Solar-thermal technology has been around for decades, and Stirling engines date back to the 19th century. But the high cost of silicon-solar cells has made solar-concentrating systems more attractive in desert areas like the Southwest United States and Spain.

(Credit:
Infinia) The company uses a dish to concentrate sunlight onto a Stirling engine, which makes electricity. It intends to sell its 3-kilowatt devices to small-scale utility plants.

Stirling Energy Systems makes a huge concentrator dish that generates heat to turn a Stirling engine that makes electricity. It’s under contract for two power plants in the Mojave Desert that would initially generate 800 megawatts of power.

Three solar-thermal companies have raised money in the past week in a sector that’s showing life, despite a choppy investment environment.

Infinia's dishes use the sun's heat to generate electricity with a Stirling engine.