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I chose Schmalensee because of his unique vantage point. During Microsoft’s antitrust trial a decade ago, Schmalensee testified as an expert witness for the defense, spending hours on the stand sparring with lead government attorney David Boies about the precise definition of a monopolist.

For an answer, I sought out the opinion of a renowned antitrust expert, Richard Schmalensee, of MIT’s Sloan School of Management.

Just how far ahead of everyone is Google? Consider the following, courtesy of Efficient Frontier Insights: Google now enjoys more than a 77 percent share of the search ad market.

(Credit:
CNET News)

Outside of the occasional fit of Monkeyboy inspiration, Microsoft’s managers are a sober bunch. They don’t decide things haphazardly and they don’t rush in reaction to current events. But their willingness to dig deep into Microsoft’s (enviably deep) pockets in pursuit of Google was a remarkably telling comment. Much like WordPerfect and Borland and Novell, which at one time sought unsuccessfully to play catch-up to Microsoft, the shoe’s now on the other foot– and it’s irritating the hell out of Microsoft.

There’s the proverbial $64,000 question, isn’t it?

(Credit:
MIT Sloan School of Management)

Advertisers are putting all of their new search dollars into Google, and pulling money out of Yahoo Search and Microsoft Live Search.

“There are the standard numbers people throw around but I think most people would say you have to decide whether search ad is a market for antitrust proposes. If it is, that’s a high enough share. But you also have to look at issues of entry and issues of fragility. How stable is that share and how intense is that market,” Schmalensee said.

I did a double take recently after listening to Microsoft CFO Chris Liddell acknowledge that his company was ready to lose even more money in online services in the near term, if that’s what it takes to catch Google. During the company’s earnings call last week, Liddell indicated that Microsoft is pouring hundreds of millions of dollars into its online advertising business, an investment he allowed would be “a drag” on the rest of the company.

MIT Prof. Richard Schmalensee

“There’s no magic threshold but with high share levels, you get to be concerned,” he continued. “On the other hand, monopolists are allowed to compete. The question is whether the arrangement would stifle competition.”

That kind of information was seized upon by Microsoft’s top lawyer, Brad Smith, during his recent testimony before Congress. Testifying on the proposed search advertising between Google and Yahoo, he said it was possibly “illegal under the antitrust laws.” Monopoly anyone? Of course, there’s nothing wrong with being a monopoly, per se. It all depends upon context and behavior. But considering Google’s dominance and Microsoft’s inability to significantly close the gap in the search business, I’m sure rivals would be thrilled if Uncle Sam finally declared Google a monopoly. That may be wishful thinking.

Republicans:

1. Ron Paul (10,589)

2. Mike Huckabee (2,064)

3. John McCain (1,986)

4. Mitt Romney (1,785)

One of my favorite things to get in my e-mail each week is the data report from News Corp-owned Photobucket. Think of it like the Google Zeitgeist, but for people’s searches on the popular photo hosting site. While the report doesn’t offer up every statistic, the creators pick a few interesting or pertinent things that make good reading. This week’s tidbit? Politics.

The Democratic and the Republican presidential nominees (Edwards now obviously excluded from that list) are represented with several thousand search hits each. So what do the numbers show?

Clearly the Dems like to search. Despite getting more love from the media, Huckabee, McCain, and Romney combined don’t come close in searches to Ron Paul. Take that for what it’s worth. However, it could mean that people are trying to figure out what the guy looks like.

I would like to see other popular social sites release weekly or even daily stats. The very nature of site stats are similar to Digg, Delicious, and others, in providing entertainment and a window into the habits of other users.

Top Searches Overall

1. Love

2. Funny

3. Emo

4. Happy birthday

5. Sexy

6. Heart

7. Music

8. Friends

9. I love you

10. Heath Ledger

Dugg Image of the Week (through a partnership with Digg, users are able to Digg images on Photobucket). Here’s one that stood out this week: Map of European Languages

The rest of the report is posted after the break.

Learn what? Well, perhaps we could learn from this that “partnering” with Microsoft on patent immunity is no excuse for a good business. Xandros’ deal with Microsoft didn’t do it any favors. Ditto for Linspire. To be fair, this patent foolishness was just the tip of the iceberg on Linspire’s and Xandros’ problems, but it sure didn’t help.

According to reports from OStatic and others, Xandros is buying Linspire. Who cares, you ask? Certainly not the former CEO of Linspire, Kevin Carmony, who had this to say as to the importance of the acquisition:

This will end up being a completely insignificant event for Linspire shareholders, and the end for Linspire customers. I predict this was done to: 1) help [Linspire owner and founder Michael] Robertson drain the company of its cash and resources…2) help Robertson save face by issuing a “Linspire Acquired by Xandros!” press release, instead of living with the public humiliation that Linspire failed under his leadership…3) Give Xandros (also seemingly on life support) a press release, and perhaps some way for them to spin this to investors to raise money.

In math, two negatives make a positive. In the fledgling world of desktop Linux, unfortunately, this is unlikely to be the case.

commentary

Masdar City will be the home of the Masdar Institute of Science and Technology, which backers hope will attract some of the best academics from the around the world. Also envisioned are research and development facilities from multinational companies and start-ups in the clean technology area.

The city will be placed to take advantage of the cool sea breezes, while a perimeter wall around the entire city will protect buildings from the hot desert air and noise from the nearby Abu Dhabi airport.

A desalination facility will be 80 percent more efficient than existing plants, and all wastewater will be purified and recycled to grow plants that could be used for biofuels.

The cleanest city in the entire world will take root next month in Abu Dhabi, a place best known for its oil.

No
cars will be allowed in the city. People will get around through an electric light-rail system that will be linked to the center of Abu Dhabi, the capital of the United Arab Emirates.

A solar-photovoltaic power plant will deliver energy to buildings. Builders also envision using solar canopies that provide shade, as well as power.

At the World Future Energy Summit in Abu Dhabi, a model of Masdar City is scheduled to be unveiled on Monday. The three-day conference is hosted by the Abu Dhabi Future Energy Co.’s Masdar Initiative, which is investing in a range of ventures, including clean-tech start-ups.

An artist’s rendering of the overall plan of Masdar City. A model will be unveiled Monday.

In February, Masdar (which means “the source” in Arabic) will break ground on the six-square-kilometer city that its backers say will be the first zero-pollution, zero-waste city. The city will be capable of housing 47,500 people, who are scheduled to start moving there in 2009. Construction is expected to take 10 years.

The vision of the city, designed by Foster and Partners, is to be a model for sustainable architecture.

(Credit:
Foster and Partners)

A vision of Masdar Institute of Science and Technology.

Three undersea fiber-optic cables get cut in just one week, and the conspiracy crowd is already convinced this is the prelude to World War III–or at the very least, a United States bombing assault on Iran.

View results

The cable cuts knocked out Internet service in a good chunk of the Middle East and South Asia. (There are reports of a fourth cable out of service but so far that’s unconfirmed.) What’s behind the disruptions? Two of the cables are owned by Flag Telecom, the other by a consortium of telcos. At this point, the companies suggest the most likely culprit is Mother Nature.

Not that any rational explanation is going to suffice in our fevered times. After the news broke, one 2003 U.S. government document began to make the rounds as Exhibit No. 1. The heavily redacted Department of Defense information operations report specifically calls out the Internet as potentially an enemy weapons system. (Decide what you will. Here’s the link to the report.)

In the absence of further details, that’s as plausible an answer as any. But the official explanation has been drowned out by a more cynical take in the blogosphere and some regional news outlets.

News.com Poll What or who caused the undersea cable rupture?

Truth be told, I’m not ready to dismiss their paranoia completely. Yes, they are nuts but they’re not entirely crazy. Look, outside of a handful of Washington insiders, how many of you really thought after September 11 that we’d be in control of Iraq, come winter 2008?

Normal wear and tear
Secret ops warfare
Dick Cheney was bonefishing in the area

My former CNET colleague John Borland has a great piece up at the ABC News site outlining the sequence of what’s known so far. In particular, this nugget:

It’s a large speaker, 56 inches tall and 24.75 deep, but it doesn’t seem as imposing as some statement designs. The Palladium’s zebra grain veneers come in your choice of three finishes, natural, merlot, and espresso (the wood is sourced from protected forests).

Klipsch may be one of the oldest American speaker companies, but that doesn’t stop it from manufacturing
iPod, computer, stereo and home theater speakers, along with a full line of professional cinema and music speakers.

The Audiophiliac and the P-39F

Paul W. Klipsch founded the company that bears his name in Hope, Ark. in 1946. And incredibly enough, the Arkansas plant is still building the company’s higher-end speakers.

I found the new boldly curved speaker’s “boat tail” shape distinctive as all get out and it’s not just for show, the rounded cabinet’s interior quells resonance that would muddy the sound. Those curved sides are made from seven ply, constrained layer, composite laminate wood panels, and the front baffle is reinforced with steel.

When I reviewed the P-39F tower speaker it was the only Palladium available, but in New York last week Klipsch showed the P-17B bookshelf speaker ($4,000/pair), P-27C center channel ($3,500), P-27S surround speaker ($4,000/pr) and P-312W subwoofer ($4,000). Complete Palladium 5.1 channel systems start around $16,000.

The 165-pound speaker rests on an aluminum and steel plinth/base; which reminds me, the P-39F’s speaker cable connectors are stealthily concealed within its bottom panel.

I reviewed Klipsch’s new flagship speaker, the Palladium P-39F ($20,000/pair), for Home Entertainment magazine, and I had a blast. The new speaker forgoes Klipsch’s traditional, square-edged aesthetic; for the Palladium project the company enlisted the talents of BMW DesignworksUSA in Los Angeles, Calif. They did a great job.

“This agreement with HP is a strategic indicator of our increased focus on securing broad-scale distribution for Live Search,” Kevin Johnson, president of Microsoft’s platforms and services division, said in a statement. “This is the most significant distribution deal for Live Search that Microsoft has ever done, and we are very pleased to be partnering with HP to help bring Live Search to millions of consumers across North America.”

Top executives said recently that they felt the quality of Live Search had reached a point where it made sense to start using some marketing dollars to acquire traffic, so I wouldn’t be surprised if this is the first deal of many, especially since Microsoft has yet to reach a deal with Yahoo and its share of the search market has continued to decline.

Microsoft didn’t say how much it is paying HP for the right to be on its PCs, but it did call the deal its most significant one to date.

For antitrust reasons, Microsoft can’t just make its engine the default in Internet Explorer (except in some very limited circumstances). If it wants to get Live Search on new PCs, it has to strike a deal with computer makers, just as rivals have done.

A sure way to get some search traffic is to make sure that your engine is the default option inside the browser.

While the scale of the center is impressive, it’s Roy’s ambitions that prove more remarkable.

The Switch Communications facility will use more energy that three large casinos.

“This building will be the first super-scale data center where all the new technology in the world merges and therefore creates a better layer of technology than anyone else has been looking at,” Roy said. “I can make this work because I can do things no one else can.”

Ashlee described the Switch facility as follows:

Switch Communications is a prime example of the massive data center buildout and the rise of the information utility, as Nick Carr wrote in his book, “The Big Switch: Rewiring the World from Edison to Google.” Whether Roy’s claims are justified remains to be seen, but he is gambling an estimated $350 million in infrastructure, security, and personnel that his Las Vegas facility will turn into the “big switch.”

It’s Sunday morning on Memorial Day weekend in the U.S. The technology industry is relatively quiet. Nothing new has been leaked or announced so far about negotiations between Microsoft and Yahoo or Yahoo and Google, but I ran across a fascinating and in-depth story by Ashlee Vance of The Register on a new data center service, Switch Communications.

It turns out that Las Vegas is an ideal location for a big switch, according to this map from Switch Communications.

(Credit:
Switch Communications)

The company is opening a 407,000-square-foot data center in Las Vegas that CEO Rob Roy claims will house four times as much gear as facilities from companies such as Google and Microsoft. He boasts:

Roy talks about linking the major casinos with the major content providers and carriers to make IPTV a reality. Only a company such as Switch with the bandwidth, data centers and connections could get all these folks to agree on a shared agenda, Roy says.

Rather than selling space in the SuperNAP to a handful of clients, which he could probably do, Roy wants to divide the building up among a number of the world’s thriving businesses that operate in various fields. Roy seems to see himself as a type of rainmaker for the internet age, bringing together disparate parties to create digital happiness.

(Credit:
Switch Communications)