In brief: Microsoft downplays rivalry with Google

Microsoft CEO Steve Ballmer last week downplayed his company’s rivalry with Google, saying Microsoft is more focused on creating Internet content and other services that will lure advertising revenue than on what Google specifically is doing. The thought echoed a comment made by Larry Page, Google co-founder and president of products, at a Google press event the day before. Page said that Google is too busy creating its own services to cast more than a wary eye on Microsoft. Despite his comment, Ballmer said Microsoft is determined to climb to the top of the Internet advertising revenue chain from its current No. 3 position. That means Google, which is No. 1 in Internet advertising revenue, is in the company’s way. “We’d like to be No. 2 and then No. 1 in advertising,” he said, adding, “Let’s not focus on Google. The key is, what about the advertising business model? Have we done everything we need to do to drive advertising as a business model?”

Sometimes innovative ideas are simple. Here’s one: an RFID chip with a perforated edge that lets consumers tear off part of the antenna after purchasing an item, reducing the distance of the signal and easing privacy concerns. The Clipped Tag label is the brainchild of Paul Moskowitz, an inventor and researcher at IBM. Ultrahigh frequency radio frequency identification tags are generally readable at as much as 30 feet, but the Clipped Tag innovation reduces that distance to between 1 and 2 inches. “This means that the tag can only be read if the consumer holds the tag up to a reader,” Moskowitz said Wednesday. “It puts choice in the hands of the consumer.” IBM has tested the commercial adaptability of the Clipped Tag system with Marnlen Management, which manufacturers RFID labels, and Printronix, a producer of printing systems.

A U.S. Department of Defense agency and Microsoft will collaborate to improve Microsoft’s Virtual Earth mapping program for military and nonmilitary purposes, the company announced last week. Microsoft signed a letter of understanding with the National Geospatial-Intelligence Agency, which is a Department of Defense combat support agency, the company said. Microsoft and NGA will use Virtual Earth, part of Microsoft’s Windows Live, for tasks such as guiding relief efforts for natural disasters. The program was used during Hurricane Katrina last year to direct first responders and government branches, Microsoft said. Neither party specified the potential military applications of Virtual Earth or its APIs beyond “national security efforts.”

Philadelphia’s City Council has approved a contract for a citywide Wi-Fi network it hopes will stimulate the economy of the fifth-largest U.S. city and bring broadband Internet access to poor neighborhoods. The council unanimously approved the deal, under which ISP EarthLink will pay for the network and operate it at no cost to the city, said an EarthLink spokesman. The contract must still be signed off by the city solicitor, or attorney, and by Mayor John Street, but there are no more major political hurdles to be crossed. Philadelphia’s wireless plan inflamed a national debate over municipal networks, with established broadband providers criticizing the fairness and the business wisdom of governments getting involved in owning, operating or maintaining broadband systems. Once Philadelphia’s wireless plan is approved by the mayor, EarthLink will seek permits and hopes to start rolling out the network in mid-June.

IP PBX maker Mitel Networks last week filed for an IPO in the United States and Canada. The VoIP vendor said that Morgan Stanley, RBC Capital Markets and Merrill Lynch will be among the underwriters, according to documents Mitel filed with the U.S. Securities and Exchange Commission. A Mitel spokesman said the company could not comment on the financial details of the offering. According to financial documents filed with the SEC, Mitel had $285.2 million in revenue as of Jan. 31 and a net loss of $21.9 million (the company’s fiscal year ended in April 2006). At the same time a year ago, Mitel made $251 million in revenue with a loss of $34 million. Hardly a nascent start-up, Mitel was founded in 1973 as Mitel Corp. and was a pioneer in the PBX market, making telecom equipment and semiconductors, among other products. In 2001, the company divested its telecom business. The company’s founder, Terence Matthews, acquired 90% of that business and took the company private, renaming it Mitel Networks.