When it comes time to discuss Microsoft’s intentions on the Web, that discussion always turns to Google. How will Microsoft compete against the search juggernaut? What can it do to stop Google’s rise in Web advertising? They are valid questions that, so far, Microsoft hasn’t been able to adequately address. But there is more to fear on the Web than just Google.
Microsoft is slowly, but surely, realizing that the Web is the future of its operation. More and more applications are moving to the Internet. Consumers are even going to the Web. At this point, the company has no choice but to compete online in every space it can to ensure that, going forward, it isn’t left behind by Web powerhouses. But as it engages the Web, it’s also faced with more competition. And the idea that Google is the only online company that Microsoft needs to worry about is quickly forgotten.
Here are 10 Web companies that Microsoft needs to fear most as it continues to move its services online.
The web is still waiting for the worldwide roll-out of Google's next-generation search infrastructure, the mysterious indexing system overhaul known as "Caffeine."
A recent Wiredprofile of Google's search team indicates that Caffeine has already been deployed. But it seems the technology is still limited to a single data center, and though Google had planned to roll it out to other facilities after the New Year, this has yet to happen.
According to Search Engine Land, a Google spokesperson says that Caffeine will roll out across the company's global network of data centers "over the coming months." Previously, über-Googler Matt Cutts had indicated that Caffeine would be rolled out to multiple data centers "after the holidays," meaning after first of the year. And we're now two months on from January 1.
In early November, after testing Caffeine in a public sandbox for several weeks, Cutts indicated the platform would soon be rolled out to a single data center for use on the company's live search engine and that the company would follow suit with other data centers in a matter of weeks.
"Caffeine will go live at one data center so that we can continue to collect data and improve the technology, but I don’t expect Caffeine to go live at additional data centers until after the holidays are over," Cutts wrote on November 10. "Most searchers wouldn’t immediately notice any changes with Caffeine, but going slowly not only gives us time to collect feedback and improve, but will also minimize the stress on webmasters during the holidays."
Google did not immediately respond to our requests for comment. But that Google spokesperson tells Search Engine Land that the company expects to "roll [Caffeine] out to all data centers over the coming months." The company operates roughly 36 custom-built data centers across the globe.
"We run lots of tests with this big a change [sic] to our infrastructure,” the spokesperson says. “We want the new system to meet or exceed the abilities of our current system, and it can take time to ensure that everything looks good.”
It should be noted that Cutts never gave an exact date for the roll-out. He merely said it would not happen until after the holidays and - subsequently - "until at least January."
Caffeine continues to run in that single data center. In late November, according to Search Engine Roundtable, Cutts said that the the Google IP address 209.85.225.103 was hitting that single Caffeinated data center 50 per cent of the time, and it appears Google search-engine IPs are still mapping to the same data center.
"The data center remains the same,” the Google spokesperson tells Search Engine Land, “but different IP addresses can map to different data centers at different times due to how Google manages its traffic. Because of how Google employs custom load-balancing, there is not a single IP address that will always reach the Caffeine data center.”
Cutts first unveiled Caffeine - at least partially - in August with a post to the official Google Webmaster Central blog, calling it a "secret project" to build the "next-generation architecture for Google's web search," before pointing users to a sandbox where they could test it. Speaking with The Reg days later, he called it "a fundamental re-architecting" of Google's search indexing system.
"It's larger than a revamp," he told us. "It's more along the lines of a rewrite. And it's really great. It gives us a lot more flexibility, a lot more power. The ability to index more documents. Indexing speeds - that is, how quickly you can put a document through our indexing system and make it searchable - is much, much better." This is not a change to Google's search philosophy. It's not a change to its famous search algorithms. It's a change to the way the company builds its index of all known websites and the metadata needed to describe them - the index that the algorithms rely on. "The new infrastructure sits 'under the hood' of Google's search engine," read Cutts' original blog post, "which means that most users won't notice a difference in search results."
After interviews with Google's search team, Wired's Steve Levy described Caffeine as something that makes it even easier for engineers to add "signals" - i.e. "contextual clues that help the search engine rank the millions of possible results to any query, ensuring that the most useful ones float to the top."
Cutts confirmed with The Reg that as we had reported earlier, Caffeine includes an overhaul of the company's distributed Google File System, or GFS. A technology two years in the making, the so-called GFS2 is a significant departure from the original Google File System that debuted almost ten years ago and now drives services across the Google empire.
With GFS, a master node oversees data that's spread across a series of distributed chunkservers, - architecture that's no exactly suited to apps that require low latency, such as YouTube and Gmail. That lone master is a single point of failure. To solve this problem, GFS2 uses not only distributed slaves, but distributed masters as well.
Cutts also said that Caffeine uses other back-end technologies recently developed by the company, but he declined to name them. He indicated that these did not include updates to MapReduce, Google's distributed number crunching platform, or BigTable, its distributed database.
Whatever new infrastructure technologies underpin Caffeine, they have not been deployed across other Google services. But Cutts indicated that Google hopes to do so with at least some of them. Google's distributed global infrastructure is designed to operate a like a single machine, running all its online services. Certainly, GFS2 will be deployed across the Googlenet. ®
Akio Toyoda, the mysterious scion of the Toyota empire, apologized yesterday before a House committee investigating deadly flaws that sparked the recall of 8.5 million cars.
Toyoda, the automaker's chief executive, accepted "full responsibility" for the halting steps that led to the recall. He said the company grew too fast to keep up with safety controls.
"We pursued growth over the speed at which we were able to develop our people and our organization," Toyoda said in testimony prepared for delivery after press time last night (Beijing time).
"I regret that this has resulted in the safety issues described in the recalls we face today, and I am deeply sorry for any accidents that Toyota drivers have experienced."
Toyoda's statement departs somewhat from Japanese formality. In it, Toyoda made a personal appeal for credibility. He offered his condolences over the deaths of four San Diego, California, family members in a crash of their Toyota in late August.
"I will do everything in my power to ensure that such a tragedy never happens again," Toyoda was due to tell the House Oversight and Government Reform Committee. "My name is on every car. You have my personal commitment that Toyota will work vigorously and unceasingly to restore the trust of our customers."
But an apology won't be enough for the feisty panel of lawmakers on the House panel in a year in which every one faces re-election. Nor will any culture gap; Japanese CEOs typically serve symbolic roles akin to figureheads without much power to control operations.
Toyoda at first declined to appear before the panel but acquiesced last week when he was officially invited.
"I'm naive enough to believe that a global CEO is a global CEO," said Democratic Representative Paul Kanjorski of Pennsylvania, a member of the committee. "He's going to have to say more than that."
In Japan, company chiefs are usually picked to cheerlead the rank and file. As the grandson of the company's founder, Toyoda was groomed to play that role.
The firm was called "Toyota" because its eight strokes were considered luckier than the 10 for "Toyoda".
Japanese corporate royalty or no, Toyoda is familiar with the United States and its corporate culture.
He received his MBA in 1982 at Babson College in Massachusetts. He spent time in California as vice-president of a joint venture between Toyota Motor Corp and General Motors Corp.
Online rights activists are divided Wednesday over an Italian court’s guilty verdicts against Google executives who were convicted on privacy charges for not blocking a video that made fun of a child with Down syndrome. All agree the controversial ruling runs counter to longstanding U.S. and E.U. “safe harbor” laws immunizing online service providers for what users do — but the activists are mixed over what the decision means and how much importance should be place on it.
Leslie Harris, the president of the influential Washington, D.C.-based Center for Democracy and Technology, argued the ruling would be used by authoritarian regimes to justify their own web censorship.
“Today’s stunning verdict sets an extremely dangerous precedent that threatens free expression and chills innovation on the global internet,” Harris said in an e-mail statement. “If the conviction is allowed to stand, it will chill the provision of Web 2.0 services that provide user-generated content platforms in Italy, and Italian internet users will find themselves without a powerful forum for free expression.
“Most troubling, what happened in Italy is unlikely to stay in Italy. The Italian court’s actions today will surely embolden authoritarian regimes and be used to justify their own efforts to suppress internet freedom.” Chief among the concerns is that nations might turn to using criminal laws or threats of criminal prosecutions to force companies to bend to the their political will.
Electronic Frontier Foundation attorney Lee Tien of the San Francisco-based Electronic Frontier Foundation shares Harris’ concern for online rights.
“The threat to internet free speech from nations around the world that don’t have the same laws and attitudes about free speech is absolutely a constant problem and is getting worse,” Tien said.
But he warned against placing too much emphasis on this case, which many see as thinly veiled machinations against Google by Italy’s Prime Minister Silvio Berlusconi, who has nearly monopoly control over Italy’s mainstream media. Italy’s parliament is currently considering a law that would put online video services under the same rules imposed on broadcast stations — legislation intended to stifle online speech.
But the Google case will drag on in appeals for years and it’s not clear it will be anything more than a legal anomaly.
Meanwhile, there are plenty of real and sticky issues around hate speech and pornography — where people have legitimate issues and real public policy has to be worked out, according to Tien.
“I’d prefer people to think about those cases and not focus on show cases,” he said.
Google, for one, called the decision “astonishing.”
“It attacks the very principles of freedom on which the internet is built,” Google lawyer Matt Sucherman wrote on Google’s blog. “If that ’safe harbor’ principle is swept aside and sites like Blogger, YouTube and indeed every social network and any community bulletin board, are held responsible for vetting every single piece of content that is uploaded to them — every piece of text, every photo, every file, every video — then the web as we know it will cease to exist, and many of the economic, social, political and technological benefits it brings could disappear.”
And while it might be tempting for some to dismiss the suit as the work of a crazy Italian justice system, the United States is no stranger to politically motivated legal attacks on free speech and internet freedom.
The U.S. attorney’s office in Los Angeles prosecuted and convicted a Missouri woman on hacking charges for helping put up a fake MySpace profile to harass a neighbor’s teenage daughter, who later committed suicide. The judge in the case overturned Lori Drew’s conviction. He found the government’s contention that violating a website’s terms of service was the same as hacking “unconstitutional.”
And in South Carolina, the Attorney General Henry McMaster threatened to criminally prosecute Craigslist management if the classified listings site didn’t remove its erotic listings category, saying the site was promoting prostitution. A federal judge had to order McMaster to stop his threats.
The Italy decision won’t be published in full for several weeks and will likely be on appeal for years. None of those convicted will likely ever serve their six months of jail time, in no small part since they all live outside of Italy. The video at issue appeared in 2006, on Google Video, a service now replaced by YouTube.
University of Virgina media studies and law professor Siva Vaidhyanathan, meanwhile, sees the Italian case as a very local issue rooted in Italian politics and a sign that Google’s culture of audacious enterprises isn’t as welcome outside the Unite States as it hoped it would be.
“The government in Italy wants to hold Google down in Italy until it says ‘uncle’ for a while,” Vaidhyanathan said. “But it does say a lot about the fact that the globalization of Google is not going well. The ruling comes as cyberliberties are in flux globally and Google is trying to maintain revenues in countries like Egypt and Russia.”
Vaidhyanathan, whose upcoming book The Googlization of Everything tackles the subject of Google as a worldwide cultural force, says that the net’s and Google’s method of doing things first and letting people opt out later is proving to be not a hit everywhere around the globe.
“Google is finding that getting beyond America is difficult,” sad Vaidhyanathan, referring to Google’s hacking showdown in China, privacy issues with its Street View mapping cameras in Germany, and the censorship demands placed on it by China, Turkey, Thailand, Argentina and India.
“I can see the general objection to Google’s way of doing things,” said Vaidhyanathan. “It’s default setting is that it can do whatever it wants and if you have a problem, just let them know, and that opt-out model is not applicable in every case.”
To others, like Tien, the ruling is simply baffling. Clearly, Italy doesn’t want its own service providers to have to meet the burden of approving every forum posting, blog comment or uploaded video — and punishing executives when their companies miss the mark — as was the case of the Google executives in Italy.
That’s akin to making automobile executives personally liable in any automobile accident related to the company’s sticky pedal woes.
Tien said that would be a “massive extension of liability.”
WASHINGTON — The International Monetary Fund has long preached the virtues of keeping inflation low and allowing money to flow freely across international boundaries. But two recent research papers by economists at the fund have questioned the soundness of that advice, arguing that slightly higher inflation and restrictions on capital flows can sometimes help buffer countries from financial turmoil.
One paper has received particular attention for suggesting that central banks should set their target inflation rate much higher — at 4 percent, rather than the 2 percent that is the most widely held standard. As aggregate demand fell across the world in 2008, central banks, including the Federal Reserve, lowered short-term interest rates to nearly zero, where they have largely remained.
While the two papers do not represent a formal shift in the fund’s positions, they suggest that the I.M.F. is re-examining some of its long-established orthodoxies as part of its response to the global economic crisis that began in 2007.
The significant drop in the volatility of output and inflation since the mid-1980s — a period known as the Great Moderation — helped lull “macroeconomists and policy makers alike in the belief that we knew how to conduct macroeconomic policy,” the fund’s chief economist, Olivier Blanchard, wrote in one of the papers. “The crisis clearly forces us to question that assessment.”
That paper examines how, in hindsight, higher rates would have helped in the current crisis.
“Higher average inflation, and thus higher nominal interest rates to start with, would have made it possible to cut interest rates more, thereby probably reducing the drop in output and the deterioration of fiscal positions,” Mr. Blanchard and two other authors wrote in the paper, released Feb. 12.
The other paper, released Friday, said that in the aftermath of the crisis, officials were “reconsidering the view that unfettered capital flows are a fundamentally benign phenomenon.”
“Concerns that foreign investors may be subject to herd behavior, and suffer from excessive optimism, have grown stronger; and even when flows are fundamentally sound, it is recognized that they may contribute to collateral damage, including bubbles and asset booms and busts,” the fund’s deputy director of research, Jonathan D. Ostry, wrote, along with five other authors.
Both papers contained important caveats.
Mr. Blanchard’s said that fiscal policy — like decisions to tax, spend and borrow — had been as important in responding to the crisis as monetary policy, or control of the supply of credit. It argued that governments that had relatively lower debts to begin with had more flexibility to respond to the crisis.
And it asserted that regulatory measures — like requiring higher capital and liquidity ratios, lower loan-to-value ratios for home mortgages, and increased margin requirements for stock purchases — would be more effective than higher inflation targets in curbing excessive risk-taking.
Similarly, Mr. Ostry’s report said capital controls would be effective only if the flows “are likely to be transitory” and the economy is already operating near potential, with reserves at an adequate level and an exchange rate that is not undervalued.
The report also found that “the jury is still out” on whether capital controls had worked in practice. Evidence from countries like Chile and Colombia, it said, suggests that controls have been more effective at curbing exchange-rate pressures and the risk associated with capital inflows than in reducing the net influx of money.
In separate interviews, three former I.M.F. chief economists said the recommendations were significant but raised questions about the feasibility of carrying them out in today’s situation.
Raghuram G. Rajan, of the Booth School of Business at the University of Chicago, said the I.M.F.’s suggestion for allowing higher inflation might not be well received. “With bond markets worried that governments may inflate their way out of their debt obligations, this is probably not a good time for central banks to start debating their inflation targets,” he said.
Mr. Rajan said he was concerned that the nuances regarding capital controls would be overlooked. “The pressure within emerging markets to set up capital controls, with many countries not meeting the careful conditions laid out by the fund’s paper, will increase,” he predicted.
Kenneth S. Rogoff of Harvard noted that he had urged that the Fed and the European Central Bank consider slightly higher inflation targets after the 2001 recession in the United States. But he added, “Having spent the past two decades convincing the public that 2 percent inflation was magical, it might be both difficult and confusing for central banks to suddenly announce they have changed their minds.”
He said Mr. Ostry’s report was only the latest step in the fund’s reassessment of its “dogma on capital controls” that began with the Asian financial crisis in the late 1990s. “Today, it is patently obvious that the U.S. and Europe’s near-zero-policy interest rates are fueling a surge of international capital into Asia and Latin America that will end in tears if not properly managed.”
Simon Johnson, of the Sloan School of Management at M.I.T., said it would be “a very hard sell” to persuade central banks to raise their inflation targets “just because the financial sector is badly run and hard to reform.” But he praised the emphasis on regulation. “The I.M.F. is trying to redefine what is and what is not responsible financial policy after the crisis,” he said. “They are commendably aware of the need for greater regulation and the ways to synchronize that around the world.”
