Tag: Microsoft

The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher

Seth Anderson0 comment

Darth Vader

 

ProPublica reports:

Eight years ago, the IRS, tired of seeing the country’s largest corporations fearlessly stash billions in tax havens, decided to take a stand. The agency challenged what it saw as an epic case of tax dodging by one of the largest companies in the world, Microsoft. It was the biggest audit by dollar amount in the history of the agency.

Microsoft had shifted at least $39 billion in U.S. profits to Puerto Rico, where the company’s tax consultants, KPMG, had persuaded the territory’s government to give Microsoft a tax rate of nearly 0%. Microsoft had justified this transfer with a ludicrous-sounding deal: It had sold its most valuable possession — its intellectual property — to an 85-person factory it owned in a small Puerto Rican city.

…Meanwhile, the numbers Microsoft had used to craft its deal were laughable, the agency concluded. In one instance, Microsoft had told investors its revenues would grow 10% to 12% but told the IRS the figure was 4%. In another, the IRS found Microsoft had understated revenues by $15 billion.

Determined to seize every advantage against a giant foe, the small team at the helm of the audit decided to be aggressive. It used special powers that the agency had shied away from using in the past. It took unprecedented steps like hiring an elite law firm to join the government’s side.

To Microsoft and its corporate allies, the nature of the audit posed a dire threat. This was not the IRS they knew. This was an agency suddenly committed to fighting and winning. If the aggression went unchecked, it would only encourage the IRS to try these tactics on other corporations.

“Most people, the 99%, they’re afraid of the IRS,” said an attorney who works on large corporate audits. “The other 1%, they’re not afraid. They make the IRS afraid of them.”

Microsoft fought back with every tool it could muster. Business organizations, ranging from the U.S. Chamber of Commerce to tech trade groups, rallied, hiring attorneys to jump into the fray on Microsoft’s side in court and making their case to IRS leadership and lawmakers on Capitol Hill. Soon, members of Congress, both Republicans and Democrats, were decrying the IRS’ tactics and introducing legislation to stop the IRS from ever taking similar steps again.

The outcome of the audit remains to be seen — the Microsoft case grinds on — but the blowback was effective. Last year, the company’s allies succeeded in changing the law, removing or limiting tools the IRS team had used against the company. The IRS, meanwhile, has become notably less bold. Drained of resources by years of punishing budget cuts, the agency has largely retreated from challenging the largest corporations. The IRS declined to comment for this article.

Recent years have been a golden age for corporate tax avoidance, with massive companies awash in profits routinely paying tax rates in the single digits, or even nothing at all. But how corporations manage to do this and keep the IRS at bay is mostly shrouded in secrecy

(click here to continue reading The IRS Decided to Get Tough Against Microsoft. Microsoft Got Tougher. — ProPublica.)

Truly despicable, on many levels. Microsoft is not teetering on the edge of financial collapse, they can afford to pay their fair share of taxes. Shameful that both political parties enable this abuse, and respond by defunding/defanging the IRS from doing its job. Meanwhile, the US debt grows by leaps and bounds, and corporate profits too.

Tech and Media Companies Back Microsoft in Email Seizure Case

Seth Anderson0 comment

Over Under Sideways

Good for Microsoft, and good for the tech industry to rally behind Microsoft1

A broad array of organizations in technology, media and other fields rallied on Monday behind Microsoft’s effort to block American authorities from seizing a customer’s emails stored in Ireland.

The organizations filing supporting briefs in the Microsoft case included Apple, Amazon, Verizon, Fox News, National Public Radio, The Washington Post, CNN and almost two dozen other technology and media companies. A cross-section of trade associations and advocacy groups, from the American Civil Liberties Union to the United States Chamber of Commerce, and 35 computer scientists also signed briefs in the case, which is being considered in New York by the United States Court of Appeals for the Second Circuit.

“Seldom do you see the breadth and depth of legal involvement that we’re seeing today for a case that’s below the Supreme Court,” Bradford L. Smith, Microsoft’s general counsel, said in an interview.

The case involves a decision by Microsoft to defy a domestic search warrant seeking emails stored in a Microsoft data center in Dublin. Microsoft has argued that the search warrant could provide a dangerous precedent that is already leading to privacy concerns among customers. The case is especially relevant, the company says, to customers who are considering conducting more of their electronic business in the cloud.

(click here to continue reading Tech and Media Companies Back Microsoft in Privacy Case – NYTimes.com.)

Even the Faux Walls have eyes
Even the Faux Walls have eyes

You know who isn’t mentioned here or at Microsoft’s public blog page for this case? Google. I wonder why? Seems like a pretty high profile case to be siding with the US DOJ instead of privacy advocates.

Today represents an important milestone in our litigation concerning the U.S. Government’s attempt to use a search warrant to compel Microsoft to obtain and turn over email of a customer stored in Ireland. That’s because 10 groups are filing their “friend of the court” briefs in New York today.

Seldom has a case below the Supreme Court attracted the breadth and depth of legal involvement we’re seeing today. Today’s ten briefs are signed by 28 leading technology and media companies, 35 leading computer scientists, and 23 trade associations and advocacy organizations that together represent millions of members on both sides of the Atlantic.

…

We believe that when one government wants to obtain email that is stored in another country, it needs to do so in a manner that respects existing domestic and international laws. In contrast, the U.S. Government’s unilateral use of a search warrant to reach email in another country puts both fundamental privacy rights and cordial international relations at risk.  And as today’s briefs demonstrate, the impacts of this step are far-reaching.

Today’s briefs come from:

Leading technology companies such as Verizon, Apple, Amazon, Cisco, Salesforce, HP, eBay, Infor, AT&T, and Rackspace. They’re joined by five major technology trade associations that collectively represent most of the country’s technology sector, including the BSA | The Software Alliance and the Application Developers Alliance. These groups raise a range of concerns about the significant impact this case could have both on the willingness of foreign customers to trust American technology and on the privacy rights of their customers, including U.S. customers if other governments adopt the approach to U.S. datacenters that the U.S. Government is advocating here.

…

Seventeen major and diverse news and media companies, including CNN, ABC, Fox News, Forbes, the Guardian, Gannett, McClatchy, the Washington Post, the New York Daily News, and The Seattle Times. They’re joined by ten news and media associations that collectively represent thousands of publications and journalists. These include the Newspaper Association of America, the National Press Club, the European Publishers Council, and the Reporters Committee for Freedom of the Press. These organizations are concerned that the lower court’s decision, if upheld, will erode the legal protections that have long restricted the government’s ability to search reporters’ email for information without the knowledge of news organizations.

(click here to continue reading Business, Media and Civil Society Speak Up in Key Privacy Case – The Official Microsoft Blog.)

Footnotes:
  1. not a sentence I’d thought I’d type [↩]

Bill Gates Pulls a Gingrich on Paul Allen

Seth Anderson0 comment

Windows XP Launch

What? Is Bill Gates running for the White House? I thought Newt Gingrich had the Be-A-Jerk-To-People-With-Cancer nomination locked up, but Bill Gates is giving him a run for the money, if Paul Allen is to be believed…

Bill Gates schemed to take shares in Microsoft Corp. from his co-founder during the early days of the software company following his partner’s treatment for cancer, according to a new memoir by the billionaire co-founder, Paul Allen.

The allegation is part of a critical portrait in the book of Mr. Gates, with whom Mr. Allen formed a friendship in grade school that evolved into one of the iconic partnerships of American business. The book, “Idea Man: A Memoir by the Co-founder of Microsoft,” is scheduled to go on sale on April 17. A draft of the memoir was viewed by The Wall Street Journal. An excerpt of the book appeared on Vanity Fair’s website early Wednesday.

The book gives a revisionist take on some details of Microsoft’s history and the relationship between Mr. Gates and his former partner, the two of whom have long been viewed as cordial if not close friends. The book has created a rift between Messrs. Gates and Allen, say people who know both men. In the book’s acknowledgments section, Mr. Allen thanks Mr. Gates along with 17 other people for “general and logistical assistance.”

(click here to continue reading Microsoft Co-Founder Hits Out at Gates – WSJ.com.)

AssholeBadge.jpg

and from the aforementioned Vanity Fair excerpt, Paul Allen writes:

After resuming the radiation, I was in Bill’s office one day talking about MS-DOS revenues. Our flat-fee strategy had helped establish us in several markets, but I thought we’d held on to it for too long. A case in point: We’d gotten a fee of $21,000 for the license for Applesoft BASIC. After sales of more than a million Apple II’s, that amounted to two cents per copy. “If we want to maximize revenue,” I said, “we have to start charging royalties for DOS.”

Bill replied as though he were speaking to a not-so-bright child: “How do you think we got the market share we have today?” Then Steve came by to weigh in on Bill’s side with his usual intensity; it would have been two on one, except I was approximately half a person at the time. (Microsoft later switched to per-copy licensing, a move that would add billions of dollars in revenue.)

Not long after that incident, I told Steve that I might start my own company. I told Bill that my days as a full-time executive at Microsoft were probably numbered, and that I thought I’d be happier on my own.

One evening in late December 1982, I heard Bill and Steve speaking heatedly in Bill’s office and paused outside to listen in. It was easy to get the gist of the conversation. They were bemoaning my recent lack of production and discussing how they might dilute my Microsoft equity by issuing options to themselves and other shareholders. It was clear that they’d been thinking about this for some time.

Unable to stand it any longer, I burst in on them and shouted, “This is unbelievable! It shows your true character, once and for all.” I was speaking to both of them, but staring straight at Bill. Caught red-handed, they were struck dumb. Before they could respond, I turned on my heel and left.

I replayed their dialogue in my mind while driving home, and it felt more and more heinous to me. I helped start the company and was still an active member of management, though limited by my illness, and now my partner and my colleague were scheming to rip me off. It was mercenary opportunism, plain and simple. That evening, a chastened Steve Ballmer called my house and asked my sister Jody if he could come over. “Look, Paul,” he said after we sat down together, “I’m really sorry about what happened today. We were just letting off steam. We’re trying to get so much stuff done, and we just wish you could contribute even more. But that stock thing isn’t fair. I wouldn’t have anything to do with it, and I’m sure Bill wouldn’t, either.”

I told Steve that the incident had left a bad taste in my mouth. A few days later, I received a six-page, handwritten letter from Bill. Dated December 31, 1982, the last day of our last full year together at Microsoft, it contained an apology for the conversation I’d overheard. And it offered a revealing, Bill’s-eye view of our partnership: “During the last 14 years we have had numerous disagreements. However, I doubt any two partners have ever agreed on as much both in terms of specific decisions and their general idea of how to view things.”

(click here to continue reading Microsoft’s Odd Couple | Business | Vanity Fair.)

Microsoft Kills Kin Quickly

Seth Anderson0 comment

Speaking of product launches, the Microsoft Kin has been discontinued after a whopping two months in the marketplace. Yikes. Sales must have been freaking horrible. Microsoft spent a lot of money developing Kin, and a lot of money advertising it. Who is getting fired tomorrow? Ballmer?

Ready for a scotch

Amid anemic sales, Microsoft has decided to halt work on its Kin phone less than two months after the product hit the market. The social media-oriented phone will not make its planned European debut and Microsoft is shifting the entire Kin team to work on Windows Phone 7, the Microsoft smartphone operating system due out later this year. Andy Lees, who heads up the company’s cell phone efforts announced the move to Microsoft workers earlier on Wednesday, according to a source close to the company.

Microsoft confirmed the move in a statement to CNET.

“We have made the decision to focus exclusively on Windows Phone 7 and we will not ship KIN in Europe this fall as planned,” the company said. “Additionally, we are integrating our KIN team with the Windows Phone 7 team, incorporating valuable ideas and technologies from KIN into future Windows Phone releases. We will continue to work with Verizon in the U.S. to sell current KIN phones.” The Kin, which made its debut just two months ago at an event in San Francisco, was the result of several years of work by Microsoft and stemmed from its 2008 acquisition of Sidekick maker Danger. However, despite a few innovative features including streaming music and a Web-based companion site, the Kin phones were criticized for missing key features, such as a calendar, as well as because the monthly fees for the phone were as high as more capable smartphones, such as the iPhone and Android-based devices.

(click to continue reading Microsoft pulls the plug on Kin | Beyond Binary – CNET News.)

How Google’s Algorithm Rules the Web

swanksalot1 Comment

Interesting reading about Google’s search algorithm team written by Steven Levy, though as of this moment, this particular search is not as described:

Even the Bingers confess that, when it comes to the simple task of taking a search term and returning relevant results, Google is still miles ahead. But they also think that if they can come up with a few areas where Bing excels, people will get used to tapping a different search engine for some kinds of queries. “The algorithm is extremely important in search, but it’s not the only thing,” says Brian MacDonald, Microsoft’s VP of core search. “You buy a car for reasons beyond just the engine.”

Google’s response can be summed up in four words: mike siwek lawyer mi.

Amit Singhal types that koan into his company’s search box. Singhal, a gentle man in his forties, is a Google Fellow, an honorific bestowed upon him four years ago to reward his rewrite of the search engine in 2001. He jabs the Enter key. In a time span best measured in a hummingbird’s wing-flaps, a page of links appears. The top result connects to a listing for an attorney named Michael Siwek in Grand Rapids, Michigan. It’s a fairly innocuous search — the kind that Google’s servers handle billions of times a day — but it is deceptively complicated. Type those same words into Bing, for instance, and the first result is a page about the NFL draft that includes safety Lawyer Milloy. Several pages into the results, there’s no direct referral to Siwek.

The comparison demonstrates the power, even intelligence, of Google’s algorithm, honed over countless iterations. It possesses the seemingly magical ability to interpret searchers’ requests — no matter how awkward or misspelled. Google refers to that ability as search quality, and for years the company has closely guarded the process by which it delivers such accurate results. But now I am sitting with Singhal in the search giant’s Building 43, where the core search team works, because Google has offered to give me an unprecedented look at just how it attains search quality. The subtext is clear: You may think the algorithm is little more than an engine, but wait until you get under the hood and see what this baby can really do.

[From Exclusive: How Google’s Algorithm Rules the Web | Magazine]

Probably because Bing has now indexed the Wired article and various links to it, if you search Bing for “mike siwek lawyer mi“, you currently do get relevant results, well, results of lawyers in Grand Rapids anyway1. Google still gives a better search result most of the time, I haven’t switched to using a different search engine.


Bing search results (click to embiggen, or do the search yourself)


Google search results (click to embiggen, or do the search yourself)

Quite interesting article though, worth reading more

For instance:

The search engine currently uses more than 200 signals to help rank its results.

Google’s engineers have discovered that some of the most important signals can come from Google itself. PageRank has been celebrated as instituting a measure of populism into search engines: the democracy of millions of people deciding what to link to on the Web. But Singhal notes that the engineers in Building 43 are exploiting another democracy — the hundreds of millions who search on Google. The data people generate when they search — what results they click on, what words they replace in the query when they’re unsatisfied, how their queries match with their physical locations — turns out to be an invaluable resource in discovering new signals and improving the relevance of results. The most direct example of this process is what Google calls personalized search — an opt-in feature that uses someone’s search history and location as signals to determine what kind of results they’ll find useful. (This applies only to those who sign into Google before they search.) But more generally, Google has used its huge mass of collected data to bolster its algorithm with an amazingly deep knowledge base that helps interpret the complex intent of cryptic queries.

Take, for instance, the way Google’s engine learns which words are synonyms. “We discovered a nifty thing very early on,” Singhal says. “People change words in their queries. So someone would say, ‘pictures of dogs,’ and then they’d say, ‘pictures of puppies.’ So that told us that maybe ‘dogs’ and ‘puppies’ were interchangeable. We also learned that when you boil water, it’s hot water. We were relearning semantics from humans, and that was a great advance.”

But there were obstacles. Google’s synonym system understood that a dog was similar to a puppy and that boiling water was hot. But it also concluded that a hot dog was the same as a boiling puppy. The problem was fixed in late 2002 by a breakthrough based on philosopher Ludwig Wittgenstein’s theories about how words are defined by context. As Google crawled and archived billions of documents and Web pages, it analyzed what words were close to each other. “Hot dog” would be found in searches that also contained “bread” and “mustard” and “baseball games” — not poached pooches. That helped the algorithm understand what “hot dog” — and millions of other terms — meant. “Today, if you type ‘Gandhi bio,’ we know that bio means biography,” Singhal says. “And if you type ‘bio warfare,’ it means biological.”

Footnotes:
  1. update, I notice that the Bing results are actually not as precise as Google’s results [↩]

Reading Around on July 30th through July 31st

swanksalot0 comment

A few interesting links collected July 30th through July 31st:

George Bush and his micropenis.jpg

  • Here’s the truth: ‘Birther’ claims are just plain nuts | McClatchy – “Obama was not born in Mombasa. He was born in America,” the translator says after talking to the woman.

    “I thought he was born in Kenya,” McRae asks again.

    “He was born in America, not in Mombasa,” says the response. Another response later says, “Obama in Hawaii. Hawaii. She says he was born in Hawaii.”

    Still, the charge has spread despite no evidence that Obama was born in Kenya and compelling evidence that he was born in Hawaii.

  • Vestigial Organs Not So Useless After All, Studies Find – Appendix, tonsils, various redundant veins—they’re all vestigial body parts once considered expendable, if not downright useless.

    But as technology has advanced, researchers have found that, more often than not, some of these “junk parts” are actually hard at work.
    Case in point: the spleen, which a new study shows may be critical in healing damaged hearts

  • Daring Fireball: Microsoft’s Long, Slow Decline – Microsoft is no longer ignoring Apple’s market share gains and successful “Get a Mac” ad campaign. But the crux of these ads from Apple is that Macs are better; Microsoft’s response is a message that everyone already knows — that Windows PCs are cheaper. Their marketing and retail executives publicly espouse the opinion that, now that everyone sees Apple computers as cool, Microsoft has Apple right where they want them.

    They’re a software company whose primary platform no longer appeals to people who like computers the most. Their executives are either in denial of, or do not perceive, that there has emerged a consensus — not just among nerds but among a growing number of regular just-plain users — that Windows PCs are second-rate.

    philly univac.jpg

Privacy and IE 8

Seth Anderson0 comment

Unfortunately, much of the internet, especially the ‘free‘ internet1 relies upon cookies, and upon tracking users and click streams. That said, IE 8 and its touted much-improved privacy controls will most likely benefit everyone. Not to mention that Firefox (via the Adblock plugin) and other browsers already have these privacy options, and have had them for years.

Microsoft’s newest browser is still only in beta, but it already has the advertising world in a tizzy. Its “InPrivate” set of features on Internet Explorer 8 out this week has publishers, marketers and industry advocates worried that it could block their ability to distribute, track and even monetize what the Interactive Advertising Bureau values as a $21.2 billion-plus internet-ad industry.

[From Latest Microsoft Browser Fuels Fear – Advertising Age – News]

Computer Consultants

IE’s default settings have InPrivate Blocking turned off, but some advertisers are already worried:

For instance, the InPrivate Browsing feature — already slang-termed “porn mode” — only allows a user to hide single browsing session activities from “over the shoulder” viewers such as family members. It does not block ads from being served to the user or from advertisers counting views or clicks.

It works, and got its nickname, by letting users surf porn sites (or any other content, for that matter) without caching any content such as a list of URLs visited, cookies or other data. That could mean no cookies on your computer — as well as no cookies for future use by marketers or publishers, although only during selected InPrivate sessions.

However, it is the InPrivate Blocking feature that seems potentially more worrisome for advertisers. InPrivate Blocking acts to inform users about sites that consistently track and collect browsing histories. In fact, when a user opts into an InPrivate session, it will automatically block third-party content if it detects that the third party has “seen” the user more than 10 times. So, for instance, if the third party is advertising.com and it is serving ads across 10 sites a user has visited during an InPrivate session, it will begin to block advertising.com tracking codes and possibly content on the 11th website.

Mike Zaneis asks:

“With IE’s market share, will so many people activate that so that it could affect the revenue side of the industry?” he asked. “Any content from anywhere that appears as third parties, whether advertising or stock tickers or news feeds, all appear as third parties, and in theory their content could be blocked.

“And if you’re blocking all third parties, you’re also going to block all analytic companies,” he said. “You’d be blocking the companies that do the auditing of ad delivery.” He’s particularly concerned about the potential disruption to the entire accounting system of internet advertising.

[Microsoft Internet Explorer general manager Dean] Hachamovitch concedes that IE 8 has no way of knowing if the content is an ad, a stock tracker or a newspaper column. It can only tell if it is third-party content. So that does mean that any content, say, ads, analytics and more, can be blocked.

Will the great internet gold-rush come to an end? Will DoubleClick have to change their policies? Stay tuned…

Footnotes:
  1. for instance, how many of you really click on the ads at this site? Not many, I presume, though Google still keeps track of you, and of our site’s content to theoretically serve targeted advertising [↩]