Sources tell TechFlash that Microsoft (MSFT) will make additional job reductions this week–beginning as early as today. Cuts are expected to number in the hundreds–smaller than those made in January and May, but ugly just the same.

“As we move forward, we will continue to closely monitor the impact of the economic downturn on the company and if necessary, take further actions on our cost structure including additional job eliminations,” Ballmer said in May. Given that Microsoft posted declines in revenue and profits in its latest quarter, I suppose this week’s rumored “action” was inevitable.

UPDATE: Cuts are indeed being made today–800 of them. Here’s the official word from Microsoft:

“Earlier this year, we announced that in order to reduce costs, increase efficiency and prioritize our focus areas, we would eliminate approximately 5,000 positions by June 2010. Today, we are eliminating around 800 positions spread across multiple businesses and locations and have completed our reduction plan sooner than we had anticipated 11 months ago. At the same time, we continue to hire in priority areas, but also understand that continuing to manage our businesses closely, as we always do, can mean additional headcount adjustments.”

“This exclusive partnership offers you the ability to instantly stream movies and TV episodes from Netflix to the television via Xbox 360. Xbox 360 will be the only game console to offer this movie-watching experience, available to Xbox LIVE Gold members who are also Netflix unlimited plan subscribers…at no additional cost.”

– Microsoft on its Xbox 360/Netflix partnership, Aug. 2009

So much for Xbox 360’s game console exclusivity on Netflix streaming. This morning, the DVD-by-mail pioneer said that beginning sometime next month, owners of Sony’s PlayStation 3 game consoles will be able to stream movies and TV shows from Netflix.

The feature, which brings an unlimited amount of online viewing with any subscription worth $9 or more, will initially require an “instant streaming Blu-ray disc” to enable it. Not the most elegant of implementations, but presumably a firmware upgrade will likely follow and bake the feature into the PS3.

For Netflix (NFLX), the deal provides a chance to broaden its subscriber base. About nine million PlayStation 3 systems have been sold in U.S., and more than 25 million worldwide. So the potential for new customers here is substantial. For Sony (SNE), which already offers movies and TV shows to PS 3 users for a $3 to $4 fee, it’s a way of removing an Xbox 360 marketing advantage Microsoft (MSFT) has been lording over it since this past August.

With those words, spoken at a big company event in New York City (see video below), the Microsoft CEO launched the newest version of Windows, the one he hopes will regain the customer goodwill lost with its predecessor, Vista. There’s no question that the stakes are particularly high this time around. Vista was widely maligned as mediocre, and Microsoft (MSFT) needs something to reverse three quarters of declining Windows sales.

By most accounts, Windows 7 fits that bill. Reviews of the new operating system have been largely positive, calling it faster, more secure and easier to use that its predecessors. Our own Walt Mossberg describes it as “the best version of Windows Microsoft has produced…a boost to productivity and a pleasure to use.” Quite an endorsement, but one that was hard won. According to Microsoft, more than eight million people participated in the Windows 7 beta program–more than for any Microsoft beta program ever.

In any event, if any OS has a shot at succeeding Windows XP as the world’s most ubiquitous operating system, it’s Windows 7. “I think Windows 7 will be the biggest, one of the biggest, products to hit the tech industry this year,” Ballmer told CNBC. “Just because Windows is used on about one billion computers around the planet. There’ll be another 300 million machines that ship this year, and the diversity of PCs that ship with Windows 7, the simplicity that Windows 7 brings–I think it’s a pretty banner year.”

With those words, spoken at a big company event in New York City (see video below), the Microsoft CEO launched the newest version of Windows, the one he hopes will regain the customer goodwill lost with its predecessor, Vista. There’s no question that the stakes are particularly high this time around. Vista was widely maligned as mediocre, and Microsoft (MSFT) needs something to reverse three quarters of declining Windows sales.

By most accounts, Windows 7 fits that bill. Reviews of the new operating system have been largely positive, calling it faster, more secure and easier to use that its predecessors. Our own Walt Mossberg describes it as “the best version of Windows Microsoft has produced…a boost to productivity and a pleasure to use.” Quite an endorsement, but one that was hard won. According to Microsoft, more than eight million people participated in the Windows 7 beta program–more than for any Microsoft beta program ever.

In any event, if any OS has a shot at succeeding Windows XP as the world’s most ubiquitous operating system, it’s Windows 7. “I think Windows 7 will be the biggest, one of the biggest, products to hit the tech industry this year,” Ballmer told CNBC. “Just because Windows is used on about one billion computers around the planet. There’ll be another 300 million machines that ship this year, and the diversity of PCs that ship with Windows 7, the simplicity that Windows 7 brings–I think it’s a pretty banner year.”

How nonexclusive is Microsoft’s deal with Twitter?

So nonexclusive that just hours after Microsoft (MSFT) announced it, rival Google (GOOG) lurched forward to say that it has entered into a similar partnership with the San Francisco-based microblogging service.

The search giant may be second to this party, but it’s not going to be late. But make no mistake–this is very clearly a rush job.

Some proof? Microsoft has code running. Google does not.

Twitter and Google announced the deal in posts to their respective company blogs.

“Our friends down in Mountain View want to organize the world’s information and make it universally accessible and useful,” Twitter co-founder Evan Williams wrote. “A fast growing amount of information is coursing through Twitter very quickly, and we want there to be many ways to access that information. As part of that effort, we’ve partnered with Google to index the entire world of public tweets as fast as possible and present them to their users in an organized and relevant fashion.”

Marissa Mayer, Google’s vice president of search, was similarly enthusiastic about the deal.

“We believe that our search results and user experience will greatly benefit from the inclusion of this up-to-the-minute data, and we look forward to having a product that showcases how tweets can make search better in the coming months,” Mayer wrote. “That way, the next time you search for something that can be aided by a real-time observation, say, snow conditions at your favorite ski resort, you’ll find tweets from other users who are there and sharing the latest and greatest information.”

Once Google gets around to indexing Twitter’s real-time data.

Lu also confirmed a similar deal with Facebook.

bing is bringing twitter search to you

October 21, 2009, 10:24 AM by Bing | 0 Comments
One of the most interesting things going on today on the Internet is the notion of the real time web. The idea of accessing data in real time has been an elusive goal in the world of search. Web indexes in search engines update at pretty amazing rates, given what it takes to crawl the entire web and index it for searching, but getting that to “real time” has been challenging.

The explosive popularity of Twitter is the best example of this opportunity. Twitter is producing millions of tweets every minute on every subject you can imagine. The power of those tweets as a form of data that can be surfaced in search is enormous. Innovative services like Twitter give us access to public opinion and thoughts in a way that has not before been possible. From important social and political issues to keeping friends up to date on the minute-by-minute of our daily lives, the web is getting more and more real time.

Search needs to keep up. Shortly after we launched Bing, we did an experiment with the team at Twitter, where we took a fairly small number of “celebrities” from Twitter and provided access to their tweets as part of the search result. Here is a great example.

But what if we take that to the next level? What if we indexed basically the whole public Twitter stream and made it available to customers?

We’re glad you asked that. Because today at Web 2.0 we announced that working with those clever birds over at Twitter, we now have access to the entire public Twitter feed and have a beta of Bing Twitter search for you to play with (in the US, for now). Try it out. The Bing and Twitter teams want to know what you think.

How does this all work?

Were you as fascinated by the 6-year-old boy floating away in a balloon as we were? Was it a hoax? We know that people are going to twitter more and more for information surrounding all the latest chatter.

You can now search for what people are saying all over the web about breaking news topics, your favorite celebrity, hometown sports team, and anything else you use Twitter to stay on top of today.

If you want to keep an eye on this topic, you can just watch the Tweets roll in. Or, click on “See more Tweets about…” to go to a page full of Tweets. On that page, you can change the ordering to “Best Match.” Here we arrange Tweets differently. If someone has a lot of followers, his/her Tweet may get ranked higher. If a tweet is exactly the same as other Tweets, it will get ranked lower. For example, I saw a Tweet from ABC News ranked pretty high in the Best Match mode during the “boy in the balloon” fiasco. By the way, you won’t see any of your tweets if you protected or deleted them, and tweets don’t last more than 7 days in our index.

Are you a Taylor Swift fan? Just think of all the links that are shared on twitter that have to do with Taylor. To help you find these links we sift through and find the most interesting and hot trending links that other search engines usually don’t pick up on. Below you can see a couple of interesting links shared by Twitter users–some news and some gossip.

Instead of the usual captions that are used for links, we decided to give you a “social caption” and show you what people are saying about these links.

Our team has been using this product internally, below are some situations where it came in handy:

Sean Suchter (my boss) and I avoided a closed freeway on a rainy Seattle day and made our flight home.
Eric Scheel (principle program manager on the team) a photo-gear junkie, keeps up on early product reviews and owners’ tweets, which helped him decide on his next purchase.

My wife thinks I am almost cool because I know stuff about Taylor Swift.

We’d love to hear some stories from you about how this may have helped you. Of course, we also want to hear your ideas about how to keep improving this product.

Paul Yiu and the Bing Social Search Team

“The launch of Windows 7 has exceeded everyone’s expectations, storming ahead of Harry Potter and the Deathly Hallows as the biggest grossing pre-order product of all time at Amazon.co.uk,” Amazon’s Brian McBride told the Telegraph. “Demand is still going strong. Over the past three months, only Dan Brown’s The Lost Symbol has sold more copies than Windows 7, which is an incredible achievement for a software product.”

And an incredible achievement for Microsoft (MSFT), especially after that monument to disappointment, Windows Vista. Seems those early discounts and launch parties paid off. Well, maybe not the launch parties.

Again, nice to hear this talk of a full data restoration after T-Mobile’s warning that all personal data had been permanently lost. Clearly, Microsoft (MSFT) is doing everything in its power to remedy the issue, which has led many to question the company’s protocols for redundancy and server failure, and beyond these, whether the software giant can even be trusted to safeguard user data. As Microsoft CEO Steve Ballmer told Network World, the Sidekick fiasco was “not good.”

“It is something we are going to have to address and explain to customers, our method and process and quality approach and what went wrong in that case and how we are making sure that it does not happen again,” Ballmer said. “Non-Sidekick users, we are not earning their trust back but I think people are going to say, ‘Hey, look, show me what you are doing to insure this does not happen to me.’”

Again, nice to hear this talk of a full data restoration after T-Mobile’s warning that all personal data had been permanently lost. Clearly, Microsoft (MSFT) is doing everything in its power to remedy the issue, which has led many to question the company’s protocols for redundancy and server failure, and beyond these, whether the software giant can even be trusted to safeguard user data. As Microsoft CEO Steve Ballmer told Network World, the Sidekick fiasco was “not good.”

“It is something we are going to have to address and explain to customers, our method and process and quality approach and what went wrong in that case and how we are making sure that it does not happen again,” Ballmer said. “Non-Sidekick users, we are not earning their trust back but I think people are going to say, ‘Hey, look, show me what you are doing to insure this does not happen to me.’”

“We are pleased to report that we have recovered most customer data for those Sidekick customers whose data was affected by the recent outage,” Roz Ho, corporate VP of Microsoft’s ironically named Premium Mobile Experiences division, said in a letter to customers.

“We plan to begin restoring users’ personal data as soon as possible, starting with personal contacts, after we have validated the data and our restoration plan. We will then continue to work around the clock to restore data to all affected users, including calendar, notes, tasks, photographs and high scores, as quickly as possible.”

That’s quite a change from what Microsoft (MSFT) said a few days ago when it warned that user data had “almost certainly” been lost and that the likelihood of recovering it was “extremely low.” Still, it’s clearly the best outcome for a bad situation.

“We are pleased to report that we have recovered most customer data for those Sidekick customers whose data was affected by the recent outage,” Roz Ho, corporate VP of Microsoft’s ironically named Premium Mobile Experiences division, said in a letter to customers.

“We plan to begin restoring users’ personal data as soon as possible, starting with personal contacts, after we have validated the data and our restoration plan. We will then continue to work around the clock to restore data to all affected users, including calendar, notes, tasks, photographs and high scores, as quickly as possible.”

That’s quite a change from what Microsoft (MSFT) said a few days ago when it warned that user data had “almost certainly” been lost and that the likelihood of recovering it was “extremely low.” Still, it’s clearly the best outcome for a bad situation.

T-Mobile has pulled its Sidekick handsets off the market following a back-end server failure that resulted in many users losing their personal data. Surf over to the carrier’s Web site and you’ll find that it now lists the entire Sidekick line of devices as “temporarily out of stock.” Evidently, T-Mobile would prefer to resolve the current service issues before it resumes selling the Sidekick–not that anyone would buy one right now anyway.

Microsoft (MSFT) and T-Mobile still haven’t explained why the server failure occurred and more importantly, why they don’t have a backup of lost user data. Meanwhile, speculation is mounting that the failure was caused by an attempted storage area network transition without contingency plans.

Troubling news for Microsoft (MSFT). Hitwise’s latest numbers are the second set of metrics from a Web analytics firm showing Bing’s market share in decline. Last week, StatCounter claimed Bing’s share of the U.S. search market in September had slipped to 8.5 percent from 9.6 percent in August.

As I noted then, while a month of slight decline might herald the beginning of a trend, it certainly doesn’t guarantee one–especially in search, where surges and lulls in market share are quite common. That said, this is the second set of data suggesting that Bing’s traffic may be leveling out. Whether this reflects the end of the big Bing marketing campaign or falling consumer interest remains to be seen.

Incidentally, Microsoft’s new search partner, Yahoo (YHOO), also saw its search share slip for the month, according to Hitwise. Yahoo claimed 16.96 percent in August. In September, it claimed 16.38 percent. Meanwhile, Google (GOOG) took 71.08 percent share for the month, up from 70.24 percent in August.

“I’m absolutely of the opinion that this is a trustful deal that we’re making. I trust Microsoft,” Competition Commissioner Neelie Kroes said during a press conference this morning. “There can’t be a misunderstanding. Here is the final result of a long discussion over a long period.”

Microsoft (MSFT) was equally upbeat on the EC’s decision. “We welcome today’s announcement by the European Commission to move forward with formal market testing of Microsoft’s proposal relating to web browser choice in Europe,” General Counsel Brad Smith said in a statement. “We also welcome the opportunity to take the next step in the process regarding our proposal to promote interoperability with a broad range of our products.”

There were, however, a few that were not so welcoming of the move. Top among them, ECIS, an industry group whose members include Oracle (ORCL), Sun (JAVA), IBM (IBM) and Nokia (NOK). “ECIS notes that the settlement does not appear to deal with the inadequacies of Microsoft’s standards compliance, unfair pricing practices or other concerns related to patent abuse or standards manipulation,” the group said in a statement.

“I’m absolutely of the opinion that this is a trustful deal that we’re making. I trust Microsoft,” Competition Commissioner Neelie Kroes said during a press conference this morning. “There can’t be a misunderstanding. Here is the final result of a long discussion over a long period.”

Microsoft (MSFT) was equally upbeat on the EC’s decision. “We welcome today’s announcement by the European Commission to move forward with formal market testing of Microsoft’s proposal relating to web browser choice in Europe,” General Counsel Brad Smith said in a statement. “We also welcome the opportunity to take the next step in the process regarding our proposal to promote interoperability with a broad range of our products.”

There were, however, a few that were not so welcoming of the move. Top among them, ECIS, an industry group whose members include Oracle (ORCL), Sun (JAVA), IBM (IBM) and Nokia (NOK). “ECIS notes that the settlement does not appear to deal with the inadequacies of Microsoft’s standards compliance, unfair pricing practices or other concerns related to patent abuse or standards manipulation,” the group said in a statement.

Both debuted this morning, along with a Web-based storage and media-sharing service called My Phone. And while they’re certainly better than Microsoft’s offerings to date, the market seems unimpressed. Said Gartner (IT) analyst Carolina Milanesi: “There is nothing in this version that makes drastic changes that will get people to choose Windows who didn’t before.”

And, indeed, that appears to be the case. WinMo 6.5 is very clearly a stopgap on the path to 7.0, which is to be released next year. “Windows Mobile 6.5 isn’t just a letdown–it barely seems done,” Gizmodo’s John Herman complains, adding that its underpinnings reveal “an OS that hasn’t been fundamentally changed in years, and which bears a strong resemblance to Windows Mobile 6.1, and a startlingly not-weak resemblance to PocketPC.”

A startlingly not-weak resemblance to PocketPC. Not the comparison Microsoft (MSFT) was hoping for, I’m sure, especially given the OS’s decidedly flashier competition. But likely about all we could expect when even the company’s own executives are saying privately and publicly that they wish the OS was further along.

So 6.5 is really just a placeholder to keep Microsoft in the game–and just barely. As Windows Mobile Senior Product Manager Greg Sullivan told TechFlash, “It’s not the destination for us, by any stretch of the imagination, it’s a step along the way.”

That’s the conclusion of an NPD survey that suggests that Mac households favor multiplatform environments, buy more gadgets and have the higher income needed to afford them.

“While Apple owners tend to own more computers and more electronics devices, there is also a high correlation among Apple owners and more affluent consumer households,” said NPD’s Stephen Baker. “The average Apple household owns 48 CE devices whereas the average computer household owns about 24.” (See chart below; click to enlarge.)

Not a surprise, really. Presumably, if you can afford to purchase a $1,199 laptop or desktop, you can afford to buy an assortment of other gadgetry to go along with it. A couple of other data points worth noting:

• 66 percent of Mac households own three computers or more, compared to 29 percent of Windows households.
• 63 percent of Mac households own an iPod. The same can be said of only 36 percent of all computer-using households.

Sadly, NPD’s survey didn’t explore how PCs are used in Mac households or how they ended up there in the first place. Are they leftovers from a PC-to-Mac switch? Are they corporate laptops? Entry-level machines for the kids? High-end gaming machines?

New metrics from Web analytics firm StatCounter show Bing’s share of the U.S. search market in September falling to 8.5 percent from 9.6 percent in August. Its share of the global market declined as well, slipping to 3.25 percent from 3.58 percent.

Microsoft’s (MSFT) new search partner, Yahoo (YHOO), also suffered a decline. Its market share fell to 9.4 percent from 10.50 percent in the U.S. and to 4.37 percent from 4.84 abroad. Meanwhile, Google’s (GOOG) September share rose to 80 percent from 77.8 percent in the U.S. and to 90.54 percent from 90 percent globally. (See chart below; click to enlarge.)

“The trend has been downwards for Bing since mid August,” StatCounter CEO Aodhan Cullen said in a statement. “The wheels haven’t fallen off but the underlying trend must be a little worrying for Microsoft.”

Mmm, I doubt it. While a month of slight decline might herald the beginning of a trend, it certainly doesn’t guarantee one, especially in search, where surges and declines in market share are quite common. Furthermore, we haven’t yet seen search metrics from Nielsen, comScore (SCOR), and Hitwise. And all three showed Bing gaining share in August, a month that Statcounter claimed shows the beginning of a downward trend.

For one thing, the Microsoft (MSFT) device is a booklet, not a tablet; in other words, it’s designed to fold. For another, it supports input via multitouch and, in an ironic nod to Apple’s Newton, stylus.

From Gizmodo, which somehow managed to uncover a bevy of information about the device:

“The Courier user experience presented here is almost the exact opposite of what everyone expects the Apple tablet to be, a kung fu eagle claw to Apple’s tiger style. It’s complex: Two screens, a mashup of a pen-dominated interface with several types of multitouch finger gestures, and multiple graphically complex themes, modes and applications. (Our favorite UI bit? The hinge doubles as a ‘pocket’ to hold items you want move from one page to another.) Microsoft’s tablet heritage is digital ink-oriented, and this interface, while unlike anything we’ve seen before, clearly draws from that, its work with the Surface touch computer and even the Zune HD.”

Bing’s share of the search market leaped to 10.7 percent in August, from nine percent in July–a month-over-month increase of of 22.1 percent. Meanwhile, Google’s (GOOG) share grew to 64.6 percent–a month-over-month increase of of 2.6 percent. And Yahoo (YHOO) lost share to its new partner, falling 1.1 percent to 16 percent, a month-over-month decline of 4.2 percent. (Click on table below to enlarge.)

Which makes Bing the fastest-growing search outfit around, with a growth rate more than eight times greater than Google’s. Quite an achievement given Google’s de facto monopoly over search and the fact that Bing launched just a few months ago. Clearly, Microsoft’s new offering is picking up momentum despite Google’s repeated dismissals of it.

“Microsoft has announced a Google killer search product about once a year for the past six years,” Google CEO Eric Schmidt said of Bing after it debuted. “And they need to offer a better product than the one they did last year. I think it’s too early to say with Bing how well it will do. They have some advantages because of the Windows monopoly where they can encourage people–in our view unfairly–to use Bing, but let’s see what the end users choose. We always start from the premise ‘what do the end users want’ and we continue to find in our studies that what Google offers is what they want.”

Yeah, until someone comes along and offers them something better.

And it’s not going to be getting one anytime soon, either, despite rumors that Microsoft is working on one and courting developers to port their iPhone apps over to it. Which is not to say that the company isn’t building an answer to Apple’s App Store–it is. Redmond is just building it for Windows Mobile, not Zune.

“We’re trying to get out of the business of building similar things in the company that don’t work together, and the Windows Mobile team is tackling the challenge of a mobile apps marketplace right now,” Zune marketing manager Brian Seitz told TechFlash. “We don’t necessarily line up perfectly with that, to take advantage of whatever ends up coming out of that from the Zune HD standpoint, but down the line if there’s a way that we can plug into what they’re doing, I’m sure we’ll look into whether that makes sense for the business.”

But by then, of course, it will be too late. Arguably, it’s too late already. As Apple gleefully noted during its annual music event last week, NPD pegs the company’s share of the portable media device market at nearly 74 percent. Meanwhile, Microsoft’s tops out at an estimated 1.1 percent.

Raising that share was already a Sisyphean task for Microsoft (MSFT), and it has only become more difficult now that Apple (AAPL) has introduced not just a new iPod nano with a built-in video camera and FM radio, but also a more inexpensive iPod touch.

Microsoft is pricing the 16GB Zune HD at $219.99 and the 32GB version at $289.99. But you can get a 32GB iPod touch for $299. And you can get an 8GB touch for $199. Now, granted, the touch offers only half the storage of the 16GB Zune HD, but it supports the iTunes App Store. And if you really want that extra 8GB, you can always buy an iPod nano, which shoots video and at $179.00, is $30 cheaper than the Zune HD.

“Well, sure. You think I’m stupid?”

– Yahoo CEO Carol Bartz answers the question, “Would you have taken the Microsoft deal that Yahoo turned down a year ago?”

Kai-Fu Lee’s uneventful departure from Google to start a Beijing incubator really belies the spectacle that attended the beginning of his tenure at the search giant.

Lee’s train-hopping from Microsoft (MSFT) to Google (GOOG) back in 2005 touched off a five-month pitched battle marked by all manner of inanities. Among them was this account of Microsoft CEO Steve Ballmer’s now-infamous alleged chair-tossing tantrum told by former Microsoft Distinguished Engineer Mark Lucovsky:

Prior to joining Google, I set up a meeting on or about November 11, 2004 with Microsoft’s CEO Steve Ballmer to discuss my planned departure…At some point in the conversation, Mr. Ballmer said: “Just tell me it’s not Google.” I told him it was Google.

At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office. Mr. Ballmer then said: “F–king Eric Schmidt is a f–king p–sy. I’m going to f–king bury that guy, I have done it before, and I will do it again. I’m going to f–king kill Google.”

Thereafter, Mr. Ballmer resumed trying to persuade me to stay…Among other things, Mr. Ballmer told me that “Google’s not a real company. It’s a house of cards.”

And there were others as well. Certainly, the sourcing of some of Microsoft’s legal docs was amusing. As I wrote at the time:

Kai-Fu Lee may be a top-drawer research engineer, but his understanding of the mechanics of Microsoft’s desktop environment leaves a bit to be desired. Turns out Microsoft recovered Lee’s employment contract with Google, which figures prominently in its suit against the search leader (see “And, if you’re beaten by Microsoft thugs, our generous health plan will cover you”), from the “recycle bin” of one of Lee’s computers. Odd that Lee would choose to browse offers from his employer’s rivals on his work computer. Odder still that having done so, he would neglect to scrub them with a secure erase program. Clearly, he must have been a bit lightheaded after learning of Google’s promise to allow his stock options in the company to vest even if he was unable to start work for a year.

Then there was Lee’s testimony about a meeting with Bill Gates, during which the Microsoft chairman blew his top, shouting that the Chinese people and the Chinese government had “f—ked” Microsoft.

And, finally, there were the videotaped depositions, like one from Ballmer that included this great bit:

Ballmer: “Kai-Fu had a–a distinct commitment and responsibility on behalf of the company for being the senior executive here in Redmond, with responsibility for godfathering, shepherding all of our R&D activities in China. It’s a structure we also use for India. We have a senior executive with knowledge of India be the R&D godfather for India, encourage work to go there, shepherd, and–and mentor people in the area. Kai-Fu had that broad, important responsibility for China.”

Deposing lawyer: “This term, ‘godfather’–is that an official title within the Microsoft organization?”

Hard to believe Kai-Fu Lee’s tenure at Google China ended with such a whimper, although there are many quiet rumblings of trouble he had with Google’s top execs in Silicon Valley, given the bang it began with.

But it did. And here endeth the history lesson.

In fact, sales of netbooks are growing twice as quickly as those of full-sized laptops. According to DisplaySearch, a division of the NPD Group, netbooks represented 22.2 percent of portable computers shipped worldwide in the second quarter of 2009. That’s up from 5.6 percent a year ago, and 17.8 percent in the first quarter of this year (click on table below to enlarge).

Given Microsoft’s (MSFT) complaints about netbooks in the past, what will the company do now that the machines account for a fifth of the entire portable PC business? What will it do when more ARM-based netbooks, which can’t even run Windows, begin arriving at market?

Those ruthless, conniving bastards. Strategizing to thwart a rival.

I’m sure nothing of this sort goes on over at Google (GOOG), where everything is altruism and Segways and don’t-be-evil happy rainbows. Surely, the lobbyists Google employs are working exclusively to advance the company’s mission of organizing the world’s information and making it universally accessible and useful. They’d never do anything untoward like conspire to protect Google’s interests from a competitor. They’d never, for example, draft an antitrust complaint to the Justice Department that forced Microsoft (MSFT) to make changes to its new Vista operating system.

Please. This is business is usual. And if Google’s lobbyists aren’t holding a weekly “Screw Microsoft” meeting or some variation on that, then Google should get some new lobbyists.