Microsoft relaunched its search engine, as part of a strategy to win back lost ground. The stage is now set for a battle royale between Google, Yahoo and Microsoft.

WSJ writes:

The software maker replaced the search page on its MSN Web site with a cleaner and simpler design that resembles that of market leader Google Inc. For now, Microsoft will continue to rely on Yahoo Inc. technology for its search results and related text ads.

But also starting today, Microsoft is releasing a trial version of its own search technology. That trial, contained on a separate Web site, offers a much-awaited glimpse at the software giant's expensive, yearlong effort to create a Web-search engine to rival those of Google and Yahoo. By the end of the year, Microsoft plans to replace Yahoo's non-advertising technology on its site with its own.

The twin announcements are important milestones in Microsoft's ambition to become a major player in search technology, increasingly seen as central to online advertising, commerce and communication. The company won't disclose how much money it is devoting to this effort overall, but puts a $100 million price tag on the new MSN search site alone.

The company is making the early trial version of its own search engine available on MSN's research "Sandbox" Web site, with the goal of soliciting feedback from Web site owners and others. That engine will draw its search results from around one billion documents on the Web -- a fraction of the total reached by Google and Yahoo. Mr. Mehdi says MSN won't shift to Microsoft's own search results until they are at least as good as those from the Yahoo technology it licenses.

"This is a huge announcement for the search engine industry as a whole," said Andy Beal, vice president of WebSourced Inc.'s KeywordRanking.com, a search engine marketing firm. "Microsoft finally getting involved with search is going to send shock waves through the entire industry. Google has already seen the competition Yahoo is putting up. With Microsoft and their billions of dollars entering the arena, Google is going to be fighting attacks from two sides."

Analysts said today's release of the test version of Microsoft's own search algorithm would prove far more important, in the long run, than what they termed the largely cosmetic changes it is making to its MSN search site. Emulating Google, the site has a clean, uncluttered feel.

InfoWorld has a special report on business rules. "What if, rather than spending hours drafting meticulous requirements documents, business analysts could design and implement software logic directly, without the intervention of developers? That's the goal of rules engines, and they're changing the way IT does business." From the introduction:

A BRMS (business rules management system) can bridge the chasm between business and IT by giving control of the logic — and even the code — to business analysts. That heretical idea presupposes a fundamentally different approach to development, where developers isolate an application’s business logic from its data validation logic — usually a GUI of some kind — and from its flow control. The business logic then gets its own container, the BRMS, in which business analysts “code” business rules in a simple, English-like programming language.

Business analysts typically have a much more distant relationship with enterprise applications than they do with, say, a spreadsheet model on the desktop. If people on the business side want a new app built or want changes made to an existing one, they submit a request to the IT department, which probably hasn’t the foggiest idea what they’re talking about. So begins an endless round of meetings between business and IT where the ambiguities get ironed out.

At some point, developers start writing the code, either building business rules into software components running on an app server or implementing them in stored database procedures. The development team then tests the code and hands it back to business analysts for verification — at which point it’s rejected because the results are nothing like what the business analysts envisioned. A few months and a few code rewrites later, the business side finally gets something it can live with.

With a BRMS, business analysts both determine and write the business logic. All that’s necessary is that they know how to write a rule in English. A business rule typically goes like this: IF certain events occur or conditions exist THEN certain events should happen or ELSE other events should happen. Each IF-THEN-ELSE statement is a business rule. Each rule is declarative in nature and may interact with other rules. A BRMS allows business analysts to see, understand, code, and maintain those rules without help (well, sometimes with a little help) from IT.

A BRMS “chews” on the rules until it produces a solution. It continues to loop through the rules over and over again until there are no more rules that can possibly be executed. The whole idea is that changing data drives the way rules execute — and that interacting rules reduce the need for human intervention. Related sets of rules may govern loan approvals, insurance policies, shipping carrier selection, and so on.

eWeek's Steve Gillmor has an interview with the Sun president and COO. Excerpts:

SG: There are some very interesting technologies that not only live in the Java space but also have some application in terms of interoperability across the .Net platform. And it would seem to be of use and some value in regards to many things, including the RSS platform you and I have been discussing, establishing a thick, intelligent client that goes beyond Microsoft's lock-in and control of the browser. Are you going to be supportive of this kind of an idea, or is there something about BEA's strategy that you find not particularly conducive to a loosely coupled alliance?

JS: We're very open to partnering with BEA. We have a few common competitors, and we've always been pretty impressed with their innovation and capacity to execute. What you point out, though, is that one of the single biggest challenges in the software marketplace has been and will forever be distribution—how do you get your code out into half a billion desktops? Unless you have ubiquity, you're not going to get people to rely upon your service. One way around that is to basically take the Google path, which is to say, "I'm going to provide distribution by being really good at what I do and relying on no runtime other than that provided by Microsoft." Now, there's a danger to that predilection: Microsoft could elect to disable your service at any point [with] a simple upgrade to their browser. And thus, Google is worried about Microsoft's ability to compete with them. So, what we do with Java distribution and how we continue to evolve that platform are of acute interest to me and my team, because we already have the distribution, and now, as you rightly point out, we've got to figure out a way of leveraging that distribution in some way other than simply providing a platform for downloads off of Java.com.

SG: You don't have to partner with BEA as much as to encourage this loosely coupled framework that would allow a much more high-fidelity and potentially transaction-oriented technology, which by the way also works just as well if not better on [Mozilla] Firefox.

JS: We agree with you.

Jeff Jarvis writes:

Since RSS will be read by multiple clients on multiple devices (see the next two posts), we need to set business standards -- or at least establish business needs -- now so that as it proliferates it prospers. But I do not see any means of getting those business needs into standards-setting discussion now. Here are my opening bids for business needs:

1. Unique users. If content creators cannot report unique users they cannot get advertising. Period. So RSS readers must set unique-user cookies. Period.

2. Traffic. RSS readers must allow content creators to count displays -- versus just downloads -- of RSS items.

3. Advertising. If content creators cannot put advertising on feeds, they will not give full content and will give only headlines to link back to their sites where they have the ads. But partial feeds are a pain, right? So there's the carrot/stick: Give them ads, they will give you content. That's the way the world works.

4. Brand. I'm adding this one. As a reader, I find it frustrating that I can't see the brand of a feed unless I scroll up on FeedDemon and read the one line atop the the screen. Brand matters to the content creator, of course, but it also can matter to the reader: You want to know what you're reading.

5. Navigation. I'm adding this one, too. But I know I'm not alone here: Like many RSS fans, I use the feeds to alert me that something is new and if it is of the slightest interest, I prefer to read the post on the web page with full functionality. It's a pain to get to that web page now. The easy solution to Nos. 4 & 5 is to include a brand element that is also clickable to the creator's web page.

Brad Feld has an excellent post summarising why his VC firm invested in NewsGator:

The misperception is that NewsGator is only an Outlook plug-in. While the most popular product from NewsGator is currently their Outlook-based aggregator, what really turned us on when we dug into NewsGator as a potential investment is NewsGator Online Services (NGOS). Greg Reinacker's vision is much broader than simply an RSS aggregator - his goal is to provide RSS content on any device. NewsGator currently provides clients for Outlook, the Web, POP email, mobile devices (web-based and wap), and Microsoft Media Center (how cool is it to get an RSS feed on your TV?).

Following are several examples of how NGOS can be used today:

- I use a Tmoblie Sidekick - made by Danger - as my cell phone and wireless data device (web browser, email, AOL IM, wap browser, calendar). Using NGOS Mobile Edition, I can read my feeds via my web or wap browser on my Sidekick. These subscriptions are synchronized with my desktop, so I don't have to do any set up on my Sidekick - I simply access my services.newsgator.com mobile edition account.

- NGOS has a custom search feed capability. I put in all of my companies as keywords (one per feed) and then get feeds for each company. This is similar to Yahoo! Alerts and Google Alerts, but also searches all of blogworld so I get any postings in these feeds also.

- A NewsGator / Gmail interface exists. Using this, you can route all of your feeds into your Gmail account and take advantage of Google's search technology on your personal feed database.

Let me move on to why we invested in NewsGator. When I started really digging into RSS and blog technology, I began by actively playing with and trying as many different products and services as I could find. I had three goals: (1) figure out which were the most interesting products available today, (2) determine what the segments of the RSS / blog universe were, and (3) determine the "analog analogs" from the evolution of other segments (publishing, email, web, and ecommerce).

The first was fun for me as its appeal to my inner-nerd was very tactile. In many of the market segments that I invest in (such as IT infrastructure software products - companies like Cyanea, Newmerix, Oxlo, Rally Software and Xaffire) I can't actually use the software in a sustained way. Sure - I can look at demos - but I'm not the target customer or user - so any real use case is contrived. In the RSS / blog universe I could set up a blog, read blogs, use RSS syndication, explore the tools, look at and think about my stats, and play with new search and advertising technologies as they appeared. Once I got into this, I ran across a number of interesting new companies.

Once I became "a user" (meaning I was no longer in demo mode, but I was actually using this stuff every day), I starting figuring out which segments each company fit in and correspondingly began to rank the companies in terms of my perception of their future potential. The segments I came up with in hindsight are not that surprising, so I'm happy to share them here (and take constructive feedback from anyone that's bothered to read this far). The segments I identified are content management systems (CMS), readers (aggregators), tools, hosting, content, search, analytics, and advertising. There is obviously overlap between these segments (e.g. a company could be in more than one segment - search and advertising are a natural pairing, as are readers, tools, and analytics).

I decided that rather than try to find one "ultimate investment" in RSS that spanned all the segments (I don't think this will exist), I wanted to make investments in several segments. I've been working closely on this with Ryan McIntyre who was previously a founder of Excite and knows many of these segments well from his experience there (and - hence - another view on the analog analog). We identified several companies in different segments that excited us and have been systematically exploring working with / investing in them. In several cases these companies overlap in various segments, but when in the same segment (e.g. search), they are complementary to each other rather than competitive.

NewsGator was at the top of my list for readers and tools and NGOS complimented search and analytics. Per the misperception discussed above, NewsGator is currently thought of as only a reader - and an Outlook-based one at that. In fact - today - NewsGator (through the Outlook client as well as NGOS) has capabilities that cross all four segments. Clearly the emphasis is readers and tools - but if you dig into NGOS - you can see how NewsGator could be very complimentary to other companies that have their emphasis on search and analytics.

I was introduced to Greg by Karl Florida at Return Path who had been talking to him about RSS and how it fit within Return Path's world. Greg and I got together and I immediately liked him. He passed the "15 minute test" (in 15 minutes I believe you can make a directional decision on whether or not you want to pursue working with someone you have met for the first time). Over the next month, we met several times for increasingly long periods, talking about NewsGator, RSS / blogs in general, and his vision for what he wanted to create as an entrepreneur. This corresponded with an increase in my use of blog / RSS technology - I began actively using NewsGator and NGOS as my only aggregator technology (dumping all the other ones I had been playing around with), set up a Typepad blog (which I transitioned to Movable Type after about a month), and incorporated the reading and writing of blogs into my work habits.

In mid-May, I'd reached the point where I had a clear view that I wanted to pursue an investment in NewsGator. Greg and I started discussing this seriously and I started working through my deal approval process within my partnership. By the end of May we had a deal and officially became partners last week..

We hope NewsGator is the first of several investments we make in the RSS / blog world. I encourage you to give me feedback on NewsGator, your view of the way the market segments break down, and - if you are involved in what you think is in an interesting company in this universe, my door (ok - my "email box") is always open.

Apple's forthcoming Tiger OS with desktop search, its Dashboard (which seems quite similar to Konfabulator) and Sun's decision to licence Watson to find and present information from the Internet - we are finally seeing some innovation on and around the non-Windows desktops.

Jason Kottke points to a Dave Hyatt comment: "[The Dashboard widgets] are Web pages, plain and simple (with extra features thrown in for added measure). Apple's own web site says "build your own widgets using the JavaScript language", but that's sort of misleading. The widgets are HTML+CSS+JS. They are not some JS-only thing."

Jason adds: "His post also hints a couple of times to WebCore changes to faciliate Dashboard features and the RSS/Atom features in Safari: "each widget is just a web page, and so you have the full power of WebKit behind each one... CSS2, DOM2, JS, HTML, XMLHttpRequest, Flash, Quicktime, Java, etc." and "fixes to WebCore to support Safari RSS and Dashboard". This is really quite exciting. RSS/Atom parsing will be built right into the OS. With Webcore, Dashboard, and Apache on OS X, the lines are blurring between apps and Web apps. Nothing new (hello, push), but it's nice to see action in this area."

Bob Cringely has some advice for telcos planning to build packet-switched networks from scratch (in place of their existing circuit-switched networks):

The telcos need to pick their battles, which to me means that they need to concentrate on two main technologies -- one existing technology and one new one. The existing technology is plain old telephone service, which they should be able to keep competitive with VoIP by controlling costs. The other technology is entertainment -- music and video. Everyone from Microsoft to Intel to Apple sees digital content delivery as the next big business, and I just think that the telephone companies and their circuit-switched networks are in a prime position to dominate that industry.

Huh?

Other than the fact that it is already paid for, the advantage of a circuit-switched network is its massive total bandwidth. While 64 kbps per circuit seems pitiful in a world of DSL and cable modems, if viewed from the perspective of the total network, it really isn't, because all of those 64 kbps channels can operate at the same time. Broadband providers typically provision about 11 kbps per broadband subscriber, meaning the circuit switched network actually has six times the total capacity of a comparable packet network.

The telcos need to pick their battles, which to me means that they need to concentrate on two main technologies -- one existing technology and one new one. The existing technology is plain old telephone service, which they should be able to keep competitive with VoIP by controlling costs. The other technology is entertainment -- music and video. Everyone from Microsoft to Intel to Apple sees digital content delivery as the next big business, and I just think that the telephone companies and their circuit-switched networks are in a prime position to dominate that industry.

Huh?

Other than the fact that it is already paid for, the advantage of a circuit-switched network is its massive total bandwidth. While 64 kbps per circuit seems pitiful in a world of DSL and cable modems, if viewed from the perspective of the total network, it really isn't, because all of those 64 kbps channels can operate at the same time. Broadband providers typically provision about 11 kbps per broadband subscriber, meaning the circuit switched network actually has six times the total capacity of a comparable packet network.

We're not talking here about making a network for the quick download of new Linux distributions. You can't make bandwidth out of nothing. We are talking about creating an application for transmitting video-on-demand over a circuit switched network. Circuit switching inherently gives you all the advantage of on-demand, like the ability to view a show when you like, to fast-forward, stop, or reverse it. Yes, those capabilities are available on other networks, too, but not if everyone does it at the same time and especially not is everyone is watching something different, which is actually pretty much impossible on those networks but they never mention that part.

What we need to emulate here is the eye, itself. Look at the optic nerve that connects the retina of your eye to the visual cortex of your brain. The optic nerve is composed of approximately one million stringy cells called ganglia that fire in parallel over a distance of two to three centimeters with the actual visual signal travelling at about 4,400 feet-per-second. Taking into account recovery time between signals, the optic nerve has a total bandwidth of approximately 100 kbps.

100 kbps!!!! That's all the bandwidth we have available to appreciate HDTV and IMAX? We see the world through a pinhole that small?

Yup. So sending DVD-quality video down a 64 kbps line shouldn't be impossible at all.

India needs 100 million computers to build out a digital infrastructure across homes, the workplace, government and educational institutions. To make this mass-scale deployment of computers possible at price points that match that of a cellphone, India has to look at nothing short of a radical rethink of the computer architecture. Luckily for us, the ingredients are already in place.

Lets start with the question of what families and enterprises are likely to pay for computing. To get an idea, take a look at the spends on cellphones: about Rs 5,000 on a handset and Rs 500 per month for the service. In the case of computers, my estimate is that we could look at a 40% higher investment: Rs 7,000 ($150) for the computer and Rs 700 ($15) per month for the service of computing (which would have to include connectivity, since standalone computers in today’s Internet-centric world would have a very limited appeal). So, the challenge before us to make computing a utility is to make a solution available at these price points. How do we make this happen?

A combination of low-cost thin clients, server-centric computing, open-source software and bundling with a broadband connection is what is needed. The 5KPC is what needs to become the thin client. With an always-on connection between the client and the server, it is possible to make server-centric computing work seamlessly. In enterprises, the server will be on the local network, while for home users, the server can be at the premises of the broadband operator.

The monthly fee of Rs 700 needs to be split across the the 5KPC maker, the software provider and the broadband operator. The 5KPC maker will probably get Rs 50 per month, the software provider about Rs 200 per month for the base set of applications and support, and the broadband operator about Rs 450. In the case of the broadband operator, the monthly fee is almost similar to what cellphone providers get so it should be possible for them to provision the connection for that sum. In addition, users would have the option of getting additional services for incremental payments.

By putting together this package, we can build out India’s digital infrastructure over 5 years and transform our lives and the way business is done. This is the only way to remove many of the pain points that exist in our lives and our lower productivity in enterprises. In addition, this can also make a huge difference in the way education and healthcare, two focus points for the less privileged in India, are delivered across the country. Computing as a utility is what can build the real foundation for a New India.

Next Week: Tech Trends (continued)