Speculation about a potential Google/Bing swap on Apple’s platforms has swirled for months, but Barclays Capital analyst Douglas Anmuth notes that we’ll get our first real clue in a couple days.

When Apple ships its first iPads on Saturday, lots of Google (GOOG) investors will head straight to the gadget’s Web browser to see which search engine Apple (AAPL) is using as its default choice. Straightforward logic: If Bing ends up on the iPad, then the iPhone–with its installed base of 48 million units–would be next.

Microsoft (MSFT) would certainly like to have pole position, and Anmuth notes that the company has bought Bing some distribution via toolbar deals with HP (HPQ), Dell (DELL), Verizon (VZ) and others. So what does he think will happen this weekend?

Overall, we believe there is a better than 50% probability that Google remains the default on Apple mobile devices–if nothing more because Apple is extremely focused on the user experience and Google’s 65%+ search market share speaks for itself. As a result, Apple may not want to risk disrupting the iPad or iPhone user experience with a shift to Bing.

Shorter version: Google may stay. Or go. We’ll see.

Implementation of the deal, which will see Microsoft’s Bing powering Yahoo searches and Yahoo handling sales of search ads for both companies, is “expected to begin in the coming days.” The companies have set a goal of completing it in the U.S. by the end of 2010.

It is worth noting that while Yahoo (YHOO) is transitioning its algorithmic and paid search platforms to Microsoft (MSFT), the search user experience is still its responsibility. In other words, this deal is no quick panacea, and Yahoo must remain on point and innovating if it is to make the most of the alliance.

Anyway, approval of the deal in the U.S. and abroad was clearly a relief to both companies, and Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer applauded it in dueling banjo remarks.

“This breakthrough search alliance means Yahoo! can focus even more on our own innovative search experience,” Bartz said. “Yahoo! gets to do what we do best: combine our science and technology with compelling content to build personally relevant online experiences for our users and customers.”

Ballmer was equally enthusiastic. “Although we are just at the beginning of this process, we have reached an exciting milestone,” he said. “I believe that together, Microsoft and Yahoo! will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”

Yahoo! and Microsoft to Implement Search Alliance
Completion of U.S., European Review Clears Way for Agreement to Move Forward

SUNNYVALE, Calif. & REDMOND, Wash., Feb 18, 2010 — Microsoft and Yahoo! announced today that they have received clearance for their search agreement, without restrictions, from both the U.S. Department of Justice and the European Commission, and will now turn their attention to beginning the process of implementing the deal.

Implementation of the deal is expected to begin in the coming days and will involve transitioning Yahoo!’s algorithmic and paid search platforms to Microsoft, with Yahoo! becoming the exclusive relationship sales force for both companies’ premium search advertisers globally. Once the transition is completed, the companies’ unified search marketplace will deliver improved innovation for consumers, better volume and efficiency for advertisers and better monetization opportunities for web publishers through a platform that contains a larger pool of search queries.

“This breakthrough search alliance means Yahoo! can focus even more on our own innovative search experience,” said Yahoo! Chief Executive Officer Carol Bartz. “Yahoo! gets to do what we do best: combine our science and technology with compelling content to build personally relevant online experiences for our users and customers.”

Microsoft CEO Steve Ballmer concurred with Bartz’s assessment. “Although we are just at the beginning of this process, we have reached an exciting milestone,” Ballmer said. “I believe that together, Microsoft and Yahoo! will promote more choice, better value and greater innovation to our customers as well as to advertisers and publishers.”

Consumer Search Experience

Under terms of the agreement, which was announced in late July 2009, Microsoft will provide Yahoo! with the same search result listings available through Bing, and Yahoo! will innovate around those listings by integrating rich Yahoo! content, enhanced listings with conveniently organized information about key topics, and tools to tailor the experience for Yahoo! users.

Yahoo! will focus on providing a compelling and innovative search experience that allows people to find and explore the things, people and sites that matter most to them. While Microsoft will provide the underlying platform, both companies will continue to create different, compelling and evolving experiences, competing for audience, engagement and clicks.

Transition Timeline

Yahoo! and Microsoft will work with advertisers, publishers and developers on a customized plan designed to make the transition as efficient and seamless as possible. Both companies will begin working closely with most partners well in advance of their planned transition to the Microsoft platform and will communicate important information to partners about the transition periodically via phone, email, webinars and a newly created website at www.searchalliance.com.

The companies will begin the transition of algorithmic search and have set a goal of completing that effort in at least the United States by the end of 2010. The companies also hope to make significant progress transitioning U.S. advertisers and publishers prior to the 2010 holiday season, but may wait until 2011 if they determine that the transition will be more effective after the holiday season. All global customers and partners are expected to be transitioned by early 2012.

Customer Relationships

Once the transition is in place, Yahoo! and Microsoft will each represent and provide customer support to different advertiser segments. Yahoo!’s sales team will exclusively represent and support high volume advertisers, SEO and SEM agencies, and resellers and their clients. Microsoft will represent and support self-service advertisers.

Regulatory Summary

Although the transaction previously was cleared by regulators in Australia, Brazil and Canada, the terms of the agreement required clearance by U.S. and European regulators before it could commence. Meanwhile, Microsoft and Yahoo! continue to work with regulators in Korea, Taiwan, and Japan to ensure that they have all relevant information necessary to evaluate the transaction before the deal commences in those specific jurisdictions.

Though Microsoft (MSFT) has taken responsibility for the offense–perpetrated by a third-party vendor with which it contracted–it has not offered accountability, says Plurk. And that makes the microblogging outfit inclined to pursue legal action, or threaten it, anyway.

“We are currently looking at all possibilities on how to move forward in response to Microsoft’s recent apology statement,” Plurk co-founder Alvin Woon wrote in a post to the company’s Web site. “We are still thinking of pursuing the full extent of our legal options available due [to] the seriousness of the situation….”

Elaborating, Woon added, “This event wasn’t just a simple matter of merely lifting code; Due to the nature of the uniqueness of our product and user interface, it took a good amount of deliberate studying and digging through our code with the full intention of replicating our product user experience, functionality and end results. This product was later launched and heavily promoted by Microsoft with its big marketing budget.”

It would seem, then, that Plurk is angling for some sort of financial settlement. And given the situation, it may get one–though perhaps it would be better off seeking it not from Microsoft, but the vendor that actually pilfered Plurk’s code. Not as good a PR angle there, though, I suppose.

His speech was directed to corporate customers, and he avoided the dancing and iPhone demolition that have made his prior appearances viral hits on YouTube and the blogosphere. He was most fired up discussing security on Windows 7, saying he wanted to “romance” its features more than an earlier demo did.

Windows 7, which goes on sale next month, will achieve the estimated cost savings because it won’t cost as much to support, Mr. Ballmer said. Its most popular new feature is the user experience, he said, though he personally is a fan of its wireless networking capabilities.

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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.”

Asked by the Federal Communications Commission in August if it had rejected Google’s Voice app from its iTunes App Store, Apple (AAPL) claimed it had not and that the app was still under review.

“Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it,” Apple explained to the FCC. “The application has not been approved because, as submitted for review, it appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail.”

The FCC put the same question to Google (GOOG) and received a very different answer, which was revealed this morning when Google allowed an unredacted version of the document it submitted to the commission to be made public. Here’s how Google responded to the FCC’s question:

Apple’s representative informed Google that the Google Voice application was rejected because Apple believed the application duplicated the core dialer functionality of the iPhone. The Apple representative indicated that the company did not want applications that could potentially replace such functionality.

… In a series of in-person meetings, phone calls and emails between July 5 and July 28, 2009, Apple and Google representative discussed the approval status of the Google Voice application that was submitted on June 2, 2009. The primary points of contact between the two companies were Alan Eustace, Google Senior Vice President of Engineering and Research and Phil Schiller, Apple Senior Vice President of Worldwide Product Marketing. On July 7, Mr. Eustace and Mr. Schiller spoke over the phone. It was during this call that Mr. Schiller informed Mr. Eustace that Apple was rejecting the Google Voice application for the reasons described above.

Ah, I see. So by “delayed,” Apple apparently meant “rejected.” Interesting. The full document, below.

UPDATE: As I report in a later post on this unfolding story, Apple has denied Google’s assertion to the FCC that it rejected the Google Voice app.

9182009_Google_Filing_iPhone –

Now, a one percent increase in market share isn’t a spectacular achievement, but it is meaningful growth. More so since Google posted a slight decline in share in June, its third in as many months.

Google still rules search in the U.S., but Bing appears to be making some modest headway. “Steady if not spectacular might be the best way to describe performance to date,” said Aodhan Cullen, CEO of StatCounter.

Which is fine. Particularly when you’re coming from as far behind as Microsoft (MSFT). Of course, as I’ve said before, early successes like these are driven as much by marketing as by technological prowess and positive user experience. And right now, Bing’s got between $80 million and $100 million dollars behind it. But those dollars will only last so long.

And as Google (GOOG) CEO Eric Schmidt likes to point out, you really can’t expect to buy your way into the search market. “You don’t just buy it with ads,” Schmidt told Fox Business earlier this week. “You earn it, and you earn it customer by customer, search by search, answer by answer.”

Perhaps that’s exactly what Microsoft is doing here with Bing.

Gabriel Stricker, Google’s Director of Search Communications kicks things off by noting that the company will be sharing a number of new developments that cater to the growing demands of its users. With that, Udi Manber takes the stage to offer a big-picture overview of search.

Manber says what Google does is the new “rocket science.” Search has to be fast, relevant, and fresh, he explains. But even that’s not enough. The real goal is to solve users’ problems. If users can’t spell, it’s our problem. If the content is there but in a language the user doesn’t speak, that’s our problem. If the Web is too slow, it’s our problem. Manber offers a few examples of how Google works to address these challenges: real-time data, translation, etc. With these services nailed down, he says, Google can move on to the more important task of working on “understanding.”

Manber invites Pat Riley, senior search quality engineer, to the stage to talk a bit about Google’s “did you mean” link. Lots of people use the link, Riley says, and Google has been working to improve it. Called “spellmillion,” the project provides not only related results for a misspelled query but for alternate ones as well (think labor as in “work” and labor as in “pregnancy”). But it requires Google to process multiple searches for a single query and demands a lot of processing power.

Riley notes that the project has been somewhat contentious because it also potentially questions user intent. He offers the example of “Macy Ray.” Some users might be searching for “Macy Gray,” the singer, others for a person actually named “Macy Ray.” How do you address those two potential queries on a single search results page?

Riley is followed by Engineering Director Scott Huffman, whose subject is mobile search. Huffman starts things off with a few truisms. Mobile search is often local. It should be easy to use. Effortless. And it should provide all that Google has to offer. Huffman notes that this is quite a task since Google must optimize its search for different mobile experiences and different user interfaces: Google’s own Android, Apple’s (AAPL) iPhone, etc. Some of these platforms require gestures–touch, swipe–others use a keypad. All must provide access to the Web and the mobile Web–sites that have been optimized for mobile devices. On the screen behind him, Huffman displays an example of Google search that displays desktop Web results and mobile Web results, the latter denoted by a red square.

Mobile search must also be easy. Huffman demos a shared desktop-mobile search for a flight number. Since he’s logged into his Google account, his search for “ba 284? SF-London on the desktop is immediately shared with the Google app on his mobile device. An unreleased feature, but it’s on its way. A quick look at local listings automatically delivered to devices on the basis on GPS/cell tower location, and then Huffman brings Mayer on stage.

Mayer talks a bit about universal search before moving on to Google’s “bento box” of search results. She talks about Google’s focus on the importance of presentation and its efforts to make search results more usable for the user. An example of this SearchWiki, a tool that allows users to annotate their searches, to “keep their train of thought,” says Mayer. We need to help our users find more and do more with it, she says, noting that the company is still working to address some longstanding user problems:

• Finding recent information
• Expressing that you want just one type of result
• Assessing which results are best
• Knowing what you’re looking for
• Expressing your searches in keywords

Mayer introduces Google Search Options, a feature that appends a search option panel to results, allowing users to “slice and dice” the results as they choose. A demo of the feature, in a search for “Hubble Telescope,” allows for search calibration by time, pages that include images, etc. Another search for “solar oven” is filtered down to specific genres–videos, discussion forums, reviews. Click on those links and that new search context is immediately displayed on the page.

Interestingly, the reviews feature uses something called “sentiment analysis” to extract sentiments from a review and present them in displayed snippets.

Search Options also includes a timeline feature that allows users to visualize results over time. And there’s something called “Wonder Wheel,” which presents a visual representation of a query surrounded by potential refinements (hence “Wonder Wheel”). Click on a refinement and results update automatically. Search Options should be going live now, says Mayer.

A bit of geometry monomania here today at Google Searchology. First the Wonder Wheel and now “Google Squared,” a sort of spreadsheet visualization of search being cooked up in Google Labs. Unstructured data pulled directly from search and organized according to the whim of the user. A search for “small dogs” pulls up a lists of–wonder of wonders–small dogs organized by size, weight, breed, etc. Click on an individual cell and you can change its source. Pretty slick. Still a work in progress, though. It should be available later this month, Mayer says during the Q&A.

Another new feature: Rich Snippets. A search for “drooling dog BBQ” returns your standard Google results along with a list of metadata–average user reviews, for example. A search for a GPS system includes an additional pointer to a recent CNET review of the unit in question. Rich Snippets is open API, incidentally.

Last up, an Android star map app that uses GPS to create a star map “local to your place on earth” and to your position. Move the phone and the map adjusts to your view–essentially the app transforms the device into map overlay for the sky. And how does this tie into search? Search for “Gemini” and a sort of pointer appears onscreen directing you to its location in the sky. And with that, Mayer wraps things up.

IACI said the weak quarter reflected “broader economic pressures on advertising,” as well as actions taken at Ask.com to improve the user experience which have reduced monetization near term.

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It’s also apparently raised Palm’s profile as an acquisition target. Says Abramsky, “Given Pre’s and webOS’s competitive advantages and the rising importance of the Smartphone market, we foresee Palm’s rising attractiveness as an acquisition candidate.” The companies most likely to consider it as such: RIM (RIMM), Microsoft (MSFT), Nokia (NOK), Samsung, LG, Sony Ericsson, Hewlett-Packard (HPQ) and Dell (DELL).

Quite an endorsement–especially for a company that hasn’t yet launched the product capable of working the restorative magic Abramsky describes.

Palm shares are up well over two percent this morning at $8.07.

We like competition, as long as they don’t rip off our IP, and if they do, we’re going to go after anybody that does….We will not stand for having our IP ripped off and we’ll use whatever weapons we have at our disposal [to make sure that doesn't happen]. I don’t know that I can be more clear than that.”

– Apple COO Tim Cook’s on the company’s iPhone intellectual property

Turns out that when Apple (AAPL) COO Tim Cook said the company would use “whatever weapons we have at our disposal” to pursue anyone who “rips off” Apple’s iPhone intellectual property, he had a very specific weapon in mind: United States Patent #7,479,949. Awarded just days before Cook made that statement, the vast 358-page patent describes the touchscreen, graphical user interface and technologies that define the iPhone user experience, including at least one that may define an element of the Palm (PALM) Pre’s as well. From the patent abstract:

A computer-implemented method for use in conjunction with a computing device with a touch screen display comprises: detecting one or more finger contacts with the touch screen display, applying one or more heuristics to the one or more finger contacts to determine a command for the device, and processing the command. The one or more heuristics comprise: a heuristic for determining that the one or more finger contacts correspond to a one-dimensional vertical screen scrolling command, a heuristic for determining that the one or more finger contacts correspond to a two-dimensional screen translation command, and a heuristic for determining that the one or more finger contacts correspond to a command to transition from displaying a respective item in a set of items to displaying a next item in the set of items.

Also described in the patent, a gesture area separate from the iPhone touchscreen UI itself:

In some embodiments, in addition to the touch screen, the device 100 may include a touchpad (not shown) for activating or deactivating particular functions. In some embodiments, the touchpad is a touch-sensitive area of the device that, unlike the touch screen, does not display visual output. The touchpad may be a touch-sensitive surface that is separate from the touch screen 112 or an extension of the touch-sensitive surface formed by the touch screen.

A touch-sensitive area of the device that, unlike the touchscreen, does not display visual output. Hmm. That sounds awfully familiar, doesn’t it? Where have I heard that before… Oh, I know, in Palm’s announcement of the Pre.

Palm Pre features include the following:

…Gesture area, which enables simple, intuitive gestures for navigation”

Makes you wonder what’s going on in the bowels of Apple legal right now, doesn’t it? Palm legal, too. The company could certainly challenge the validity of the patent if it chose to.

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• Palm to Apple: Bring It
• Apple COO: “We Will Not Stand for Having Our IP Ripped Off”