Outside Innovation

Microsoft One Ups Google to Win Facebook Deal

It’s been fun “watching” Steve Ballmer negotiate this week. First, in Brussels, he finally surrendered to Neelie Kroes, the EU’s competition commissioner, agreeing to comply with the EU’s ruling that Microsoft must allow open-source software developers access to interoperability information for its work-group servers, thus reducing the “Windows tax.” Then, popping up in Palo Alto and San Francisco, he triumphed over Google to gain the privilege of being the exclusive third-party “advertising platform partner” for social networking darling, Facebook. Microsoft sealed the deal with a $240 million equity stake.

It says a lot about what our society values when the hottest news of the day is Facebook’s $15 billion valuation. With “nearly 50 million active users” who attract others at a rate of 200,000 per day, the $240 million investment is a small price to pay for the value to Microsoft of keeping Google from grabbing more of the social networking turf and giving Microsoft a much-needed platform to expand its reach for both ad revenues and for its applications and utilities (Xbox, Microsoft Live, and Bill and Steve’s newest hot button—responding to iPhone with unified communications).

Patterns in My Head from Talking with Technology Architects

Last week, I met with our Pioneers—a group of seasoned technology architects who have each designed and deployed advanced distributed applications. Many of the pioneers now have five or ten of these enterprise-scale systems under their belts. Most of their original applications or descendants thereof are still running nuclear power plants, electric utilities, financial derivatives markets, global shipping and logistics systems, banking and financial trading systems, digital phone systems, nanotechnology robotics applications, and, soon, the world’s most powerful supercomputer. As always, my head is spinning from our rich discussions about how these “lead users” view the world and what they’re up to. I thought I’d share a few top-of-mind observations.

How to Get Customers to Tell Us What Bugs Them?

We are all grateful (or should be) when our customers care enough about our sins of commission or omission to point them out to us.

Our family members do it all the time. So do really good friends. They let us know when we let them down. They tell us when our speech or actions cause them aggravation or embarrassment or extra work. Often, when my husband or son complains about something I said or did, it surprises me. I had no idea that he would interpret or experience my actions the way that he did.

The same is true with our customers. We go trucking along with business as usual, oblivious to the fact that there may be something we do routinely—or something we did once or twice—that causes unnecessary annoyance and aggravation to our customers.

Google and Privacy

There’s an important privacy debate taking place on the global policy front. This latest round has been triggered by Google’s attempt to consummate its proposed merger with DoubleClick. Of course Microsoft, Yahoo, and the advertising community are raising antitrust concerns over the marriage of the two biggest players in internet advertising. Yet it’s the privacy concerns that are gaining the most traction among policy makers and enforcers worldwide. This is good news. It means that Google, Microsoft, Yahoo, and privacy watch dogs worldwide are all engaged in a renewed dialogue about how to protect citizens’ privacy in an era in which all our searches are captured, all our cookies are collected, and both the ads that were presented and the ads we clicked on are stored and mined for an indefinite period of time.