Microsoft: 60,000,000 Windows 7 licenses sold last year

… and $19,000,000,000 in revenue for the last three months of 2009.

Net income for the quarter was $6,600,000,000, up 60% over last year.

Microsoft’s financial details this quarter make my head spin. It’s hard counting all of those zeroes.

CES keynote – Ballmer’s on tap

We’re about an hour away from the Consumer Electronic Show keynote, and Steve Ballmer’s no doubt in the green room, prepping for a talk that will be heard around the world. If you’re curious and don’t have anything better to do, you can watch it live on the MS Press Room site.

Me, I’m going to clean the fish tank.

Ballmer may well pull a rabbit out of his hat. One of the best things he could do for Microsoft and for us customers is to cut through the Windows 7 licensing BS: a re-design of the Win7 product lineup to mimic the Office 2010 lineup would be most welcome. But I’m not holding my breath.

UPDATE: Not much interesting from Ballmer at CES. I’m glad I cleaned the fish tank.

Custom XML and the demise of Office 2007 as we know it

There’s a lot of misinformation about this in the press, so let’s start with the basics.

You know about markup languages, yes? In its most basic form, a markup language lets you turn plain text into fancy text. For example, if you want the word Mxyzptlk to appear in bold italic, a markup language might understand something like:

< bold > < italic > Mxyzptlk < /italic > < /bold >

and display Mxyzptlk the way you want. Those thingies inside the < brackets > are called tags.

(If you’re an old WordPerfect user, you might remember a feature called “Reveal Codes.” In many ways, WordPerfect’s reveal codes are just a particular kind of markup language. When Microsoft introduced Word 1.0, it determined that Reveal Codes were harmful and hateful and fattening, and banished them from Word. Much wailing and gnashing of teeth emanated from the WordPerfect camp. But the worm has turned.)

XML, Microsoft’s eXtensible Markup Language, goes one step further and lets you define your own tags. So for example, you could create a formulation like this:

< bit > blah < /bit >== < bold > < italic > blah blah < /italic > </bold >

and the new tag < bit > suddenly takes on meaning.

In Office 2007, Microsoft introduced a new set of file formats based on XML. The .docx, .docm, .xlsx, .pptx and other formats you’ve probably sworn at, embody Microsoft’s attempt to move from a document file format that absolutely nobody could understand, to one that’s at least somewhat less inscrutable. If you crack open an Office XML file, you find that – to a first approximation anyway, and with a few if’s and but’s – it consists of a bunch of zipped text files, and a little bit of glue that holds the zipped text together. If you save a PowerPoint presentation in .pptx format, for example, each slide becomes its own zipped text file inside the pptx file.

With me so far?

Now for Custom XML. You can create your own, custom XML tags and stick them inside one of the new Office 2007 files. Not many people have the insane desire to write custom XML, but programmers (who may or may not have insane desires) use them on occasion. One example that Microsoft gives is for PowerPoint: if your company has a gazillion PowerPoint slides, you could write a program that scans the slides and sticks data inside custom XML tags that describes the slides. The data would be stored in the .pptx file, so it travels wherever the slides go. You could then write another program that asks a lowly human for his or her preferences, then scans all the slides in a particular slide dump, and assembles a new presentation based on whatever criteria the human had the temerity to give. The Really Neat Thing about PowerPoint Custom XML tags is that the data can be associated with a specific slide: the Custom XML contents get stored in a zipped file inside the pptx file, but the glue that holds the presentation together creates links between the Custom XML zipped file and the zipped file that holds the individual slide. Thus, the programer can reach into the presentation and gather slides like daisies in May and – this part is important – the program never has to use PowerPoint itself. The bloat and overhead that comes with dealing with PowerPoint never rears its ugly head.

So now you understand why Custom XML can be important, especially in big companies, and why mere mortals rarely use it. You can probably also see that there has to be a way for the glue inside the pptx file to bring together the file itself and the Custom XML data.

Back to the headlines. Back in June, 1994 (!), a little company in Toronto, Ontario (in Canada, eh?) applied for a US patent on a specific method for making the glue that binds parts of the documents and add-on files. Ends up that the method they invented is very close to the way Microsoft uses to bind pieces of Office 2007 documents and their embedded Custom XML zipped files. On May 20, a federal jury in Tyler, Texas, found Microsoft guilty of violating the i4i patent, and order Microsoft to pay i4i $200 million. Microsoft appealed. On August 11, Judge Leonard (no relation) Davis, citing Microsoft’s lawyers’ hijinx, slapped another $40 million onto the judgment for willful infringement, and cited $37 million in pre-judgment interest. Microsoft appealed, and lost its appeal yesterday.

Microsoft’s press release gives a very succinct and (far as I can tell) accurate assessment of the situation:

This injunction applies only to copies of Microsoft Word 2007 and Microsoft Office 2007 sold in the U.S. on or after the injunction date of January 11, 2010. Copies of these products sold before this date are not affected.

I’ve been searching up and down, and can’t find out why the injunction specifically applies to Word 2007, without also bringing down the wrath of the Court on Excel 2007 and PowerPoint 2007. My conjecture – and it’s only a conjecture – is that the case was so difficult, technically, that the i4i attorneys didn’t try to cloud the issue with the other products.

Microsoft’s been preparing for this eventuality for a long time. For example, companies that put together PCs with Office 2007 pre-installed have been installing versions of Office 2007 without Custom XML since October, per this advisory. (Thanks, Susan!) As of a couple of minutes ago, I can’t get through to that page. It’s possible that Microsoft took it down. If you can’t get to it either, here’s what it says:

Microsoft has released a supplement for Office 2007 (October 2009). The  following patch is *required* for the United States. /The patch will work with all Office 2007 languages/.

After this patch is installed, Word will no longer read the Custom XML elements contained within DOCX, DOCM, or XML files. These files will continue to open, but any Custom XML elements will be removed. The ability to handle custom XML markup is typically used in association with automated server based processing of Word documents. Custom XML is not typically used by most end users of Word.

Note that this patch is only for OEMs – the companies that put together new PCs. It doesn’t affect any customers, like you and me.

Several of you have asked what I think will happen next. Obviously, Microsoft’s attorneys are burning the midnight oil, trying to reverse the Federal Circuit Court of Appeals decision – but at this point their options are very limited: get the Fed Court of Appeals to re-hear the case seems very unlikely, and the Supreme Court looks to me like an even longer shot.

Will i4i go back and try to get damages for copies of Word and Office sold prior to January 11? Hell, if I was in their shoes, I would try. Apparently the Custom XML Schema technology in Word 2003 may infringe on the patent, as well. And if Word 2007’s a dirty patent-buster, Excel 2007 and PowerPoint 2007 must be in the same pigpen.

I think it’s highly unlikely that Microsoft will cut a deal with i4i – which they obviously should’ve done from the get-go. I also don’t think that the Redmondians will have a sudden change of heart, decide that they shouldn’t have violated the patent in the first place, apologize, and compensate i4i. Naw. Never happen. Too many Microsoft lawyers making too much money off this one.

Funny. Sometimes the American legal system actually works.

MS caught with their hand in the Plurk cookie jar

Remember the big stink about Microsoft stealing open source code, then taking almost a month to post an open source version of the offending product? Miccrosoft fessed up, saying that the offending party was, in fact, a contractor, and that nobody inside Microsoft realized that the contractor used open source code.

This one stinks, too, in a slightly different way.

Chinese microblogging service Plurk woke up one morning to discover that a big chunk of its code and design had been, uh, borrowed by Microsoft China. The Plurk blog puts it succinctly:

Microsoft China officially launched its own microblogging service, MSN Juku, some time in November, 2009. The service’s design and UI is, by-and-large, an EXACT copy of Plurk’s innovative left-right timeline scrolling navigation system… Some 80% of the client and product codebase appears to be stolen directly from Plurk… Plurk was never approached nor collaborated in any capacity with MS on this service.

Mark Hachman at PCMag reports that MS has fessed up about this one, too:

“On Monday, December 14, questions arose over a beta application called Juku developed by a Chinese vendor for our MSN China joint venture,” a Microsoft spokesman said in an email. “We immediately worked with our MSN China joint venture to investigate the situation.

“The vendor has now acknowledged that a portion of the code they provided was indeed copied,” the Microsoft spokesman added. “This was in clear violation of the vendor’s contract with the MSN China joint venture, and equally inconsistent with Microsoft’s policies respecting intellectual property.”

Golly.

The fact is that, after all these years, and all of the bad publicity, Microsoft’s corporate culture still accepts this kind of rotten behavior.

Maps in Bing Maps updated

I’m still not a big fan of Bing, Microsoft search engine-cum-revenue generator with cash for clicks enhancements. (It’s been subverted: See the “Breaking Bing Cashback” article and the original post in Google’s archives.)

Anyway, Bing has updated its maps, and I’m still underwhelmed. Just like everybody else, the first place I looked with the new, improved Bing maps is my house and home town – Patong, Phuket, Thailand. The results are dismal. Google Earth isn’t perfect, but it’s still head and shoulders above Bing.

Yahoo gets Binged

As expected, Microsoft and Yahoo just issued a joint announcement that explains how Microsoft will provide the search engine and Yahoo will sell the ads in the brave new world of second place search.

Details here.

Microhoo coming soon

Industry insider Kara Swisher reports that a Microsoft-Yahoo deal should be announced within the next 24 hours:

Sources said Microsoft search technology will be used on Yahoo sites, although it is not clear if it will be branded as “powered by Bing” … In addition, sources said Yahoo would still sell search ads on its sites and on Bing too, although Microsoft’s AdCenter advertising sales technology will be underneath it.

This makes the deal much smaller than ones previously envisioned, which included Microsoft taking over both Yahoo’s search and its text-based search advertising businesses, in exchange for large payments and guaranteed revenue.

Apparently there’s no big infusion of cash involved.

Microsoft-Yahoo search deal imminent?

Kara Swisher at All Things Digital says Microsoft is close to offering Yahoo boatloads of money to acquire Yahoo’s search advertising.

Top executives at Microsoft–including SVP of the Online Audience Business Group Yusuf Mehdi, search head Satya Nadella and top digital exec Qi Lu, as well as others–have all flown down to Silicon Valley from their Redmond, Wash., HQ today to iron out the remaining issues, which seem to have to do with the deployment of technology.

Expect speculation to run rampant. Will they finally seal a deal? My guess is yes – but it’s only a guess. Microsoft has a lot of money burning a hole in its pocket, and Yahoo could use the infusion.