Microsoft unveils fruits of online shake-up

Microsoft on Thursday releases the first fruits of a new development intended to boost the pace of innovation in its online services group as it tries to close the gap with Google.

The effort is the brainchild of Gary Flake, a former head of research at Yahoo who has a key role in improving Microsoft's record in bringing out attention-grabbing new services, a job that has taken on added significance following the failure of its attempt to buy Yahoo this year.

In spite of spending more than $8bn a year on research and development and having one of the tech industry's biggest research labs, Microsoft has a reputation as a producer of "me-too" services that may be technically competent but rarely push the envelope in user experiences.

Mr Flake said that the 150-person group he heads, Live Labs, was set up to overcome this shortcoming by bridging the gap between the company's research labs, which typically take a 10-15 year view of new technologies, and the company's powerful products groups.

Live Labs is also experimenting with ideas for making money that break the mould of Microsoft's traditional way of doing business, Mr Flake added. In the past, the company "may have spent too long pursuing existing business models" rather than experimenting with new approaches, he said.

The hiring of Mr Flake three years ago was one of the first moves by Ray Ozzie, who has since taken over from Bill Gates as the company's chief software architect, to overhaul the company's technology organisation.

The service, called Photosynth, will be released on Thursday in a full consumer version rather than the usual narrow test versions that most internet companies use to trial new services.

Users of the Photosynth service will be able to create 3D online collages of their digital photographs using high-performance image-recognition technology that matches similar pictures.

The technology, developed by the University of Washington and Microsoft Research, identifies patterns in pictures, then matches these with related photos to produce overlapping montages that users can then navigate in a browser.

In one of the first demonstrations of the Photosynth site, Microsoft plans to carry a montage of 436 pictures of UK monument Stonehenge taken by photographers from National Geographic, allowing users to scroll as though they were on the site.

For Microsoft, the service is more than an attempt to grab consumer attention and boost its reputation for producing more innovative online services. The idea could unlock a new online commerce market, for instance by letting consumers navigate around virtual stores and before making purchases, said Mr Flake.

The decision to release an advanced new technology first in the form of a free consumer service marks something of a break with Microsoft's past. Traditionally, the company would have first used the technology to create new services for big corporate users, said Mr Flake.

Instead, by opening it up, it hoped to expand the potential reach of the technology rapidly before narrowing in on any one commercial application, he added.

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