Pressed in an interview published by Business Week on Sept.26, 2005, Ballmer countered forcefully:

“How are we doing in terms of talent? We’ve brought on fantastic new talent. People like Ray Ozzie, I don’t think I need to say more. Gary Flake, who has joined us in the MSN area [and] is really the technical guru and genius behind everything that had happened at Overture, a fantastic addition to our team. Li Gong who has joined our MSN team in China, who was one of the leading architects at Sun Microsystems (SUNW ). These are all people who have joined us in the last six months.”

Well, everyone has seen the report of Ozzie’s recent resignation. (and possibly his swan song memo Dawn of a new day). Not as widely reported is the quiet departure of Flake, whose Live Labs has now been folded into Bing. Myself? I left way back. For completeness, Blake Irving, who hired me to Microsoft, also left not long after and has re-emerged now as Chief Product Officer at Yahoo.

Why we all left? For all its talent pool and financial resources, Microsoft is squarely stuck in the innovator’s dilemma. (Some might say it never had that dilemma. But allow me to use the analogy here.) Despite all that got spent on MSN and Windows Live, the internal forces that go against new innovations and new businesses (and thus new threats to those incumbent senior officers) are simply too powerful. In the past 5 years, MSN’s mandate has oscillated between “be profitable now” and “take market share first”, with each change of direction resulting in massive realignment, reorganization, loss of time and opportunities, and the loss of talented people who want to succeed.

How can MSN/Live/Bing succeed? Assuming that Ballmer does not want to spin it off, then the easiest solution is to fold all of those entirely into the Windows division and make it Steve Sinofsky’s responsibility. That way, maybe all woods will be finally behind the same arrow.

I have heard from reliable sources at/close to Oracle both in the Bay Area and in China that many Oracle folks have been horrified by the ex-Sun managers they have encountered. Basically, the many work-was-so-undemanding-I-can-get-by-on-nothing Sun managers cannot handle the hardnosed, hard elbowed, and frugal culture at Oracle. I am told that they talk empty words at meetings, and they can do nothing except talk. And they think everything is a given, and they do not realize that they have to do any real hard work. I also heard that many laid-off Sun employees who now work at places like IBM find it hard to adjust to demands at work – they say they have never worked so hard in their lives.

Wake up ex-Sun folks! It’s a jungle out there! I can fully understand, having spent 9 years at Sun and later worked at Microsoft (an extremely well-organized military-grade machine) and having working knowledge of how the work environment is at successful firms such as Google – ignore the halo of free lunch and 20% “free” time, it is more like a pressure cooker inside the company and layabouts do not survive long.

Sun’s culture (however it is defined) was both a blessing and a curse for the company. Without the freedom to disagree with and defy higher-ups, things like Java would never have come to life. Sun also had luck – such as buying for about $400M the business from SGI that became the most successful Sun product line, the E10000 series of servers. Sun had a really good run when its products sold themselves. However, when real competition occurred not in the research labs but in terms of operations, Sun could not cope.

We sometimes interview ex-Sun candidates and often they expect (or practically demand) that they have a work environment like the one at Sun. They had it drummed into their heads that Sun’s culture was the reason of its success. They also had it so good (and easy). Like the father character in an old American movie (I wish I can remember the title – the father returned to college after becoming rich and graduated together with his son) who only half-jokingly proclaimed to students at the graduation ceremony – “go back to school, do not venture out, it is a jungle out there”, the world wishes the best to all Sun folks.

• #6,125,447: Protection domains to provide security in a computer system (filed Dec 11, 1997, issued Sep 26, 2000)

• #6,192,476: Controlling access to a resource (filed Dec 11, 1997, issued Feb 20, 2001)

So I was right that this was interesting — especially when one’s decade old patents have starring roles in such a major corporate battle!

Just another example of the sad state of the Internet in China today.

With such a move, CCB became the first major Chinese bank to support Firefox. This is very significant and positive news for Mozilla, because online banking has been the most visible area of web incompatibility problems in China. Until now, all major Chinese banks supported an IE-only solution with ActiveX-based technology, forcing users to use Microsoft Windows/IE and seriously lagging behind their international peers. CCB’s breakthrough represents just the beginning of this ground shift and we fully expect that other banks will follow suit in the coming months.

How will this movie play out? Let me spoil the plot here. My executive summary – not insider info from Google, just my own back-of-the-envelope analysis — is that (a) google.cn the service will move offshore, back to where it was. But the move has complicating factors that I will elaborate below; (b) Google will continue to sell their services in mainland China and earn revenue, but this may be negatively impacted if the pullout is not done carefully; (c) Google will keep its R&D center open, but its utility and importance is clearly diminished due to the pullout of the service offerings and the recent hacking incidence.

Now to the nitty-gritty. To understand what it might mean for Google to “pull out of China”, one has to understand what Google has inside China. It has, broadly speaking, three parts. It has the search service, Google.cn; a business team (including a sales force); and a R&D center. What Google the company has put a strong stake in the ground is with regard to its Google.cn service, and given the official statement contained in the bombshell, it does not appear to have any way out of this tangle, except for the service to move offshore, to HK for example. (Or, equivalently in search terms, just offer Google.com straight. The differences between Google.cn and Google.com lie not only in terms of content filtering but also in the other services that Google currently offer only in China – such as music search. (More on these other services later.)

How much will Google lose out by moving Google.cn offshore? You have to understand why Google brought it onshore in the first place. Back at that time, Google.com was reachable from inside China, but subject to sporadic blocking. Google figured that it needed a sufficiently pervasive presence to the Chinese audience. Otherwise, it may become irrelevant in China. Smart idea — look what happened subsequently to Facebook and Twitter – they are irrelevant in China because they are blocked early and thoroughly. Another less well known reason is that many places, especially university campuses, charged (and some still charge) students extra for international internet access. In order to reach these users, Google had to separately negotiate passageways with those gatekeepers (and often pay access fees) to make Google.com reachable from behind those walled gardens. Moreover, a local service would offer a platform to launch China focused services such as music search and download – a feature that has been often credited with cementing Baidu’s early dominance.

Moving the local services offshore now will incur less damage due to the improvement in environments. On the one hand, Google has established itself sufficiently in China such that blocking it completely will be a very testy proposition. For example, lots of university students voiced their strong displeasure during recent blackouts. On the other hand, the access environment has also improved, and internal demand will put enough pressure on the pipe owners to keep Google data flowing.

However, there is potentially serious collateral damage if this move is not done carefully, and this is perhaps why there is even the need for a negotiation in the first place and why it has taken so long to conclude. I am not talking about issues of the company’s social reputation or political standing in China. I am talking about their local services. Consider the music service, which is visible on its Chinese site but not on the US site. An educated guess says that the song rights Google has licensed are probably for mainland use only. Can they still offer these from HK or elsewhere? Ditto about map and other similarly locally acquired services. It is an option, technically, to keep these non-search services inside mainland China; however, they would be decoupled from the core search functions with much diminished user experience. It is hard to imagine that the Google brass in the US would permit such a world’s first exception for the China market. After all, these other services are loss leaders, and without the money making machine called Search, they do not have a reason to exist, corporately speaking.

More critically, Google has search partnerships with the likes of Sina.com, one of the biggest portals in China, and large mobile operators. Now, if the search service is provided from offshore and may be unavailable from time to time, would Sina (as a Nasdaq listed company) continue to rely on Google to power the search feature of its websites? Would Google be able to negotiate safe passages for such deals? Even if so, will these passages be unfiltered? If filtered, who does the filtering? And can the filtered search service still claim to be Google search? Will Google lose customers and revenue because of these factors? The deeper one probes these issues, the more complicated the situation becomes.

What about the much touted R&D center? There has been much fanfare since it was opened. It was said that Google chose to lease a separate but smallish building instead of part of a larger building because in the larger buildings Google would not be permitted to build their famous kitchen, an essential part of the corporate landscape. (Well, corporate security could be another argument, but Google is known to lease space in non-standalone buildings, even here in China.) Google’s salaries topped the previous leader in this market, Microsoft. Every (well, almost every) young and old engineer dreamed to join Google. The swagger was apparent everywhere around the Google building in Tsinghua Science Park.

From the outset, Google US was terribly concerned about information leakage in China. In the early days, Google US employees who travelled to China on business were issued blank, new laptops and were told to keep their own laptops at home. Now with the much rumored inside job, the pressure to close the lid is greater than ever. As a comparison, Sun Microsystems always had its entire intranet open to its China R&D center, except for export controlled technologies such as micro codes and hardware designs. But Oracle never allowed its China R&D center to touch core technology. What will happen now that the two companies have merged?

At the same time, the pullout of the local services also reduced the need for paying sky high salaries to several hundreds of idling engineers. What will they do? They cannot all move to Facebook as their US colleagues did en mass.

Assuming a Google pullout, where does that leave the China search market? Common wisdom says this is a win-win for Baidu, which will have the China market all to itself. That may be, for the short term. In the long term, things may not be as rosy. Not having Google as a distracting target, Baidu could become the focus of those who are unhappy about all the “Internet sins.” But more substantially, the departure of Google could make way for yet another Chinese contender to the search throne. It is often said that Baidu can beat the technologically more superior Google because it can operate the China market more effectively. This is obviously true. But by the same token, Baidu is more vulnerable to another local competitor, which can be as fierce, as shrewd, and as connected as Baidu. Words have it that Tencent – the owner of the dominating IM client QQ and since has expanded successfully into adjacent markets — is coming along with its own search offerings. And Sohu, the well-known portal, was founded to be the Google of China (thus its Chinese name — meaning search fox) and never gave up its search dream. And of course, Bing is always ready to fill any vacuum left by Google. Interesting times? You bet!

The scene in China is markedly different. Tons of websites, including commonly used ones, have been constructed and tested to work with IE6 only, without consideration of web standard (W3C), non-IE browsers (Firefox), or non-Windows platforms (Linux). This proliferation of non-standard websites is partly the result of ignorance. Remember the recent Green Dam fiasco? Green Dam was designed to block undesirable websites, but it only works if you access the web with IE. If you use Firefox, Green Dam has no effect. Another reason is financial. Contractors in China who produce websites for a living charge extra if you ask for a website that is W3C compliant or that is friendly to non-IE and non-Windows machines. Since most Chinese users use IE (NetApplications puts Firefox market share in China at 8% at the end of 2009) or an IE-clone such as 360 or Maxthon (more on that later), it seems that there is no reason to pay extra.

As a result, the Internet in China is stuck in an IE6 tar pit. Exhibit A is really ironic. Recall the latest push to have all website owners in China to register? Well, the registration website at MIIT (the ministry in charge) is IE6 only. Without IE6, you cannot file your registration information. (See reportage at http://www.donews.com/Content/200912/841eaefc655a401e9636a2603333ae6d.shtm) It would be amusing to see how MIIT responds to the latest scare over IE6 security problems. And I have not talked much about all the very publicized government push to procure Linux desktop machines for government workers, and the inability of these workers to access many of their own websites.

It is well known that online banking in China is strictly a Windows and IE6 love affair. Even open-source companies such as Sun Microsystems and Red Hat must stock their finance office in Beijing with Windows PCs; otherwise no work can be done through any of the major Chinese banks (see more at http://www.zeuux.org/philosophy/open-letter-to-cmb.cn.html). But this love affair with IE6 goes beyond these and into the arbitrary territory. In October of 2009, the province of Inner Mongolia issued a new directive that exams for accounting certificates will now be conducted entirely paperless. The exam environment is speced out clearly (http://www.esnai.com/exam/showdoc.asp?NewsID=48294&uchecked=true) – Windows 2000/2003 servers on the backend, and Windows XP Professional and IE6 on the exam PCs. You wonder what sort of accounting exam this is, because it also requires that the PCs are dual-core and have at least 1G memory. The exam system even requires 3721, the most notorious and (widely accepted as the) “original” viral software that helped shape the China Internet industry into its lawless state today.

Now let us return to the topic of IE clones. An IE clone is a software that wraps something around the IE core and declares itself a browser. Some clones offer additional functionalities while others make you question their existence.  No matter. There are about 35 IE clones that the local research company iResearch has been tracking. TT (an offshoot of QQ the popular IM software), 360 (a self-claimed “secure browser”), and Maxthon (the original successful IE clone) each take a large share of the browser market. Why so many companies do browsers? For one thing, it is cheap to do an IE clone. It has been estimated that you need about 5 people, roughly the same number of people to start a mobile phone company in southern China (if you buy ready-made components from MTK and just slap a case on it). Furthermore, you can be really lazy if you want – one very notable IE clone here simply appropriated the IE icon for its own use. (As far as I know, Microsoft has not sued.) However, the IE clone world is not all scenic, because the IE core is not open or transparent, so the wrapping around is by trial and error, and often produces problems such as sudden death. Worse, someone else (Microsoft) owns the underbelly and can do unexpected things. When IE8 came out in early 2009, there was a major crisis because the clones stopped working when users upgraded to IE8, and of course thousands of major websites suddenly became useless (http://ent.sina.com.cn/c/2009-02-20/11472383794.shtml). But that has not deterred the clone makers. After the recent Google bombshell, one of the clones shamelessly proclaimed that because IE is insecure people should use their browser instead. Sure looks like that these guys are banking on the ignorance of the Internet users in China.

In most parts of the world, the Internet has helped alleviate ignorance. That has not happened in China, yet; not to a satisfyingly significant degree, at least. This is rather depressing as John Steinbeck wrote in The Pearl – “ignorance leads to subjugation and oppression.”

The main update is that we now provide Google search (as well as Baidu) in Live Margins, and users can configure which default search engine they prefer. In Live Margins (the sidebar at the right side of the browser), if you set Google as default, then Google results will be shown. But at the same time you can simply click a button there to show results from Baidu for the same term(s) you are searching. Vice versa when you set Baidu as default.

We also updated a feature that we call (for lack of a better term) associated search. If you search in the chrome (either from Google, Baidu, or Wikipedia, or whatever), Live Margins will automatically conduct a search also, using the same term(s) you are looking for. So that, suppose you are looking for a definition in Wikipedia, you will also be presented with search results from your favorite engine. We will not duplicate search if the engine you are searching with is the same engine you have set as default in Live Margins. This associated search will occur even if you have “closed” Live Margins (by clicking the g-fox logo at the upper right hand corner). When Live Margins is closed, the g-fox turns into grey color. When an associated search occurs and “new info” is available for viewing, the g-fox blinks for a brief second and turns into bright red color. The associated search ensures that Live Margins always have up to date info on things you are searching for elsewhere in the browser.

The new version can be downloaded from mozillaonline.com or g-fox.cn. We welcome feedback on this forum or at the dedicated forum on g-fox.cn.

我们今日更新了火狐中国版，下载请到火狐中国版官方网站 G-Fox.cn 或其他各大下载网站。

本次更新主要内容是在“火狐魔镜”中提供用户可定制搜索引擎服务。继上月首次发布火狐中国版后，许多用户反映希望在“火狐魔镜”中增加搜索引擎选项。使用新版本，在呈现谷歌搜索结果的同时，用户可以选择查看百度提供的搜索结果。同样，用户在查看百度搜索结果的时候，可以选择使用谷歌的搜索服务。新版默认搜索引擎设为谷歌，使用“火狐魔镜”后，用户选择的引擎将成为下次搜索的默认引擎。

火狐中国版是我们推出针对中国用户量身定制的区域化版本， 携手众多本地顶尖互联网合作伙伴，同时支持包括微软、苹果和Linux三大电脑平台，力图为中国火狐用户和网民带来全新的浏览体验。

恳请大家在 g-fox.cn 的论坛上给我们提出宝贵意见。谢谢。