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Quick, think about what you do on your MacBook. In addition to web surfing and email, I bet a large number of you use it to organize photos, watch movies or online video, and maybe transfer files to your iPod. And those last three use cases are why Apple’s new line of MacBooks, unveiled today, include Nvidia’s graphics processors.

The more visual our computing and web surfing activities become, the more often we use the GPU rather than the CPU. This move to the GPU started a few years back, when software firms from Microsoft to Adobe starting using it to process imagery in programs ranging from Acrobat to PowerPoint. Last month, Adobe said that its Creative Suite software would run from the GPU rather than the CPU; web applications such as Google Earth, meanwhile, already tap into the GPU to render images. For Nvidia this means its chips are moving out of the creative, scientific and gaming niches and into everyday computing.

It’s also a nice jab at its rival Intel, whose integrated graphics chips are what Nvidia is replacing. However, Intel plans to launch its own standalone graphics processor in 2009, which means Nvidia’s success could be short-lived. Especially if computer makers continue to see problems related to Nvidia’s chips in their desktops and laptops.

For more on Apple’s new laptops, check out these posts on The Apple Bog:

• Apple’s Laptop Line Gets a Graphics Boost
• MacBook Air Updated: Spec Bumps All Around
• Macbook: Something Old, Something New, Something Borrowed, Nothing Blu
• Apple Announces New 24-Inch LED Cinema Displays
• Comparing New to Old, Apple MacBook is Killer; MacBook Pro Less So
• Mac by the Numbers: Apple’s Market Positioning

And from jkOnTheRun:

The New Macs Have Landed

The past has a certain way of knocking on the present’s door. This week has been proof of that. First, Google turned 10 (or 13), sending me down memory lane back to when “Silicon Alley Insider” meant Fred Wilson and Scott Kurnit, not the blog by that name.

And now here comes news that Microsoft is shuttering Ensemble Studios. This is the same studio that created the only game franchise I have truly loved: The Age Of Empires. It is the only Microsoft product I honestly can say I truly enjoyed. Maybe that is why the Ensemble shutdown news caught my eye.

It wasn’t clear from today’s news what was going to happen to The Age of Empires and its sequels including the Age of Mythology. So I emailed Microsoft to get some clarification. “Microsoft will continue to sell the Ensemble games, including ‘Halo Wars,’ but is not commenting on future plans for the Age franchise,” Microsoft spokesperson emailed back. (Read the full statement at the end of the post.) That left me where I started -– confused, like many Age of Empires fans.

Given that the Age of Empires has sold over 20 million copies, I am betting some kind of deal might be in the works to keep milking the franchise, which began in 1997 when the game was first released by Ensemble and sold by Microsoft. Microsoft eventually bought the studio in 2001 and followed up with The Age of Mythology.

Still,  the possibility (however remote) that the game would soon be gone conjured up images from the past. While there are many great real-time strategy games, Civilization, for example, I don’t have an emotional bond with the game that starts in the Stone Age and progresses through history giving players an option to pick from different civilizations.

What I loved most about it was the fact that each civilization had its skills (economic or military) and you needed to be aware of their “edge.” Most importantly, the game had easy to set-up network play features. After our day was done at Forbes.com’s, I would team up with my editor-boss David Churbuck and play the game over the network against the business guys, led by Dewayne Martin, before going off for dinner. Now that was some serious fun!

I even had a whole list of cheats written out on a piece of paper that was stuck to the 17-inch Gateway monitor. It became such an obsession that I would think of strategies to outwit our competitors on the business side. And I can’t even remember how many hours I practiced and then got really good at it. I spent many weekends playing the game online, using the experience to figure out that online gaming would one day be the big driver of broadband usage and demand. Of course, knowledge would come later. Memories came sooner.

The Age of Empires was part of the whole Forbes.com-as-a-startup experience, and since then the game has become part of my memories at Forbes.com and the early days of the Internet boom. These days I just play whenever I have time and inclination. The Rise of Rome add-on was my favorite. Still is. Maybe today I am going to fire up the BootCamp and play for a while before I go to sleep.

Microsoft statement on why it closed Ensemble.

Microsoft has decided to close Ensemble Studios following the completion of “Halo Wars.” After the closure, the Ensemble leadership team will form a new studio and has agreed to provide ongoing support for “Halo Wars” as well as work on other projects with Microsoft Game Studios. Microsoft will continue to sell the Ensemble games, including “Halo Wars,” but is not commenting on future plans for the Age franchise.

The team at Ensemble has made invaluable contributions to the games industry with their “Age of Empires” and “Age of Mythology” games and with the highly anticipated release of “Halo Wars.” This decision does not reflect at all on Ensemble’s talent or the quality of “Halo Wars” - in fact, many people who have had a chance to test drive “Halo Wars” agree that it is on track to being a fantastic game.

This was a fiscally-rooted decision that keeps MGS on its growth path.  While the decision to dissolve Ensemble was not an easy one, Microsoft is working to place as many Ensemble employees who do not move to the newly formed studio into open positions within Microsoft as possible.

As to our overall strategy at MGS, it remains the same. We are committed to growing MGS with world-class talent both internally and with our external partners around the globe.  We have recently added some well-known developers to our team and will continue growing the team. We’re particularly excited about the titles we have in the pipeline and continue to evaluate additional opportunities to bring incredible games to life with the industry’s best. Our investment in games has never been greater than it is today.

Put this in the category of “you gotta be kidding me.” Microsoft has applied for and received a patent (U.S. Patent #7,415,666) that essentially patents “Page Up/Page Down” functionality. The patent (Timothy D Sellers, Heather L. Grantham, Joshua A. Dersch) that was filed in March 2005 is yet another proof that our patent system is as (if not more) dysfunctional as Britney Spears.

Method and system for navigating paginated content in page-based increments

A method and system in a document viewer for scrolling a substantially exact increment in a document, such as one page, regardless of whether the zoom is such that some, all or one page is currently being viewed. In one implementation, pressing a Page Down or Page Up keyboard key/button allows a user to begin at any starting vertical location within a page, and navigate to that same location on the next or previous page.

For example, if a user is viewing a page starting in a viewing area from the middle of that page and ending at the bottom, a Page Down command will cause the next page to be shown in the viewing area starting at the middle of the next page and ending at the bottom of the next page. Similar behavior occurs when there is more than one column of pages being displayed in a row.

Jerry Yang, Yahoo’s CEO, may be learning something about the hard-driving style of management it takes to go it alone after an attempted takeover, especially if he follows Om’s logic and thinks Yahoo is about more than search. This morning, Yahoo said it will allow corporate raider Carl Icahn three seats on a newly expanded Yahoo board in an effort to settle the disagreement that is taking up so much of the web portal’s attention this summer. This ends the proxy battle, and Yang has brought Icahn in-house despite — or perhaps because of — the trouble he’s caused.

The deal gives Icahn and two other board members of his choosing spots on an 11-member board. Shareholders will choose from Icahn’s previously named slate of potential directors and newly named Jonathan Miller, currently a partner in Velocity Interactive Group and former chairman and CEO of AOL. This will settle the proxy battle Icahn began after Microsoft’s failed bids for Yahoo earlier this year, and make the Aug. 1 shareholder meeting a less contentious one.

However, it’s unclear what this peace offering means for Microsoft, which has expressed interest in doing a deal with Icahn should he gain control of Yahoo. Icahn’s board presence isn’t likely enough to sway Microsoft to put up the cash required to do a deal that Yahoo might sabotage while waiting for the closing. We’ll update the story as Microsoft comes out with its stance.

When visiting Israel in the middle of summer, it’s generally not a good idea to go for a walk in the afternoon, even if it is along the sea. The heat and humidity sap your energy, making you feel as if you spent nearly three hours in the gym. But that wasn’t enough to stop me from writing a post about Microsoft buying Powerset for what is rumored to be around $100 million.

I’ve been unable to stop wondering why founder Barney Pell decided to take the money and run — after all, he used to turn blue in the face telling people how superior Powerset’s approach to search was. If it was so superior, Mike Masnick of Techdirt put it best when he wrote that “[T]he exit certainly falls well short of the hype around Powerset. If Powerset was actually seeing any traction at all it never would have agreed to sell at that price.”

To some extent, Mike is right, but I would add another reason: infrastructure, specifically how expensive it is to build. At our Hadoop meet-up earlier this year, Chad Walters, director of engineering at Powerset, noted that their search “requires 100 times more processing than simple keyword searching and indexing (about one second per sentence is required for processing).”

Powerset used some pretty nifty technologies to build out their system, but in order to really scale, they would have needed more money — a lot of it.

And Powerset would have had to scale; there’s no other way to compete with search’s 800-pound gorilla, Google. That’s why Microsoft is building a gigantic data center in the Chicago area focused almost entirely on search. (Which it can now use to help roll out Powerset’s search technology to a larger audience.)

This is an abject lesson for every startup looking to get into the business of search: No matter how good your algorithms are, you still have to deal with the cost of queries, which need to be low enough to be offset by some kind of advertising in order to make a profit. (The conspiracy theorist in me says that if your results are really good you won’t be able to generate enough inventory to serve up ads that bring in the dollars, but maybe I’m just too cynical.)

One of our readers believes that it is possible to build a search engine that surpasses Google’s. Nevertheless, as I’ve noted in the past, “[P]rocess-optimized infrastructure ensures that Google???s cost of executing a query keep going down” — and that allows the company to wring more dollars from the system.

Given all that, Powerset has done a good job of wringing a hundred million from Microsoft. Not that there’s anything wrong with that.

Bonus Link: Don Dodge of Microsoft explains the logic behind the deal.

A few minutes after she delivered a speech at our Structure 08 conference in San Francisco, I caught up with Microsoft’s corporate VP of global foundation services, Debra Chrapaty, for a video chat. I think a more appropriate title for her would be Mr. Softie’s Internet Infrastructure Czar. I found her very knowledgeable, engaging and open with her opinions. “We have some new innovations up our sleeve that are going to knock the socks of anything anyone is doing, including our friends down south,” she told me. She didn’t name Google, of course, but we all know who she was talking about.

Her candor was one of the reasons I wanted decided to share the video with you guys. The common theme of the conversation: Microsoft is spending liberally to build out its Internet infrastructure, including upgrading its backbone network and scaling out its data center infrastructure by adding new technologies.

When I asked her exactly how much Microsoft was spending on it, she dodged the question, saying just that it was a big number. This much we do know: Two years ago, the company was spending close to $2 billion on its infrastructure; it has since undertaken the development of six data centers, with parts of two networks already online.

Facts About Microsoft-Owned Data Centers

Adding 10,000 servers a month

New data centers being planned/under construction are equivalent of over 15 US football fields of data center space.

Plans to cut of 30% to 40% in data-center power costs company-wide over the next two years.

Current network backbone runs at about 100 gigabits per second, but soon Microsoft plans to bump it to 500 Gigabits. I think this could be big for Level 3, long time partner of Microsoft.

Building out its own CDN (Edge) network - 99 nodes on a 100 gigabit per second backbone.

For Microsoft, total data grows ten times every three years. The data in near future will soon approach 100s of petabytes. This includes data from all of their online services.

Source: Microsoft, GigaOM

Location Status Quincy, Washington Opened April 2007, construction continues San Antonio, Texas Under Construction, planned opening September 2008 Dublin, Ireland Under Construction Northlake, Illinois Under Construction, Phase one to go live in October 2008 Iowa TBD

When complete, it will consume 48 megawatts of energy. Microsoft can tap up to 72 MW of energy coming from hydro power. Microsoft is paying about 1.8 cents per kilowatt, but will rise to between 2.6-to-2.9 cents per kilowatt as more capacity goes online. Two data centers in this location.

It will be 447,000 square feet on 44 acres. Microsoft is building two data centers here

first Windows Live data center outside the U.S.

The first floor of this facility is going to be entirely made of containers and would house Microsoft search.

Source: Microsoft

Watch the video to get the full low-down, but if you’re in a hurry, here are some highlights, including her quotes from our conversation.

• “We are building data centers but I don’t want to say not just data centers. We are already on to our second generation data centers. More utilization, better density and more power efficient.” For Chrapaty, power efficiency is not just talk, it’s her mission — she is the driving force behind Microsoft’s server utilization.
• “Infrastructure is a differentiator. I use FedEx as an example. They are world’s most predominant distribution company. It wasn’t that they had a great brand or they had all these plans. No, what they did was find these strategic landing fields where they could get in and out quickly to key distribution points across the globe. It defined their company. I think the same is true in the infrastructure now. Data centers are already becoming a scarce resource.” Google realized this a long time ago; Microsoft is now demonstrating how it can put money to work and build an advantage over others.
• Like Google, Microsoft is taking the design of servers into its own hands. “We are doing some unique things in the mother board designs, server designs, and because we are Microsoft, operating systems.”
• She’s a big champion of container data centers, which essentially act like the trailers on long-haul trucks, optimized and packed with all sorts of gear — servers, switches, storage systems — that’s wheeled in and plugged into the power grid and the network. Sounds like Rackable Systems and Verari are major suppliers of these containers to Microsoft; the company is making extensive use of them in their Chicago facility.
• Her comments indicate that Microsoft has plans to offer managed services to large corporations.
• She lets us know first that they are building a IOWA data center, which is huge for Iowa. Google has one in Iowa too.

Microsoft Corp., in its effort to woo telecoms has come up with yet another project, Echoes, a services platform that will likely to be sold to telecom carriers. It combines Microsoft’s Live Messenger, with over the air syncing of people’s address books with presence and gift wraps it as unified communications platform.

Mary Joe Foley points out that Bill Gates has been referring to Echoes in his speeches recently. Echoes was incubated by Microsoft Israel Research’s Corporate Vice President Moshe Lichtman and is being developed by Microsoft’s Israeli Strategic Development Center, Foley reports. According to one of her sources, the new platform will be able to:

• Syncs Address book contacts over the air.
• Ensure that IM messages work seamlessly with SMS.
• Windows Live Messenger contacts get local numbers.
• Voice calls from Messenger on PC to mobiles.
• Some sort of presence.

Skype, GrandCentral and others already deliver many of these services. From that perspective there is nothing new here, except for the need of being tied to Microsoft’s platforms. Echoes’ outlines Microsoft’s biggest challenges: the inordinate amount of time they spend on developing products that are either a platform or a suite forces them to make too many compromises. One can’t blame the company whose DNA is Windows (Platform) & a Suite (Office.) This is a malady which makes them unable to move ahead and define the future.

Yesterday, I read a post on Google’s blog about their focus on improving search quality. Today, I read a press release from Microsoft in which it said its Live Search product will be used to give “cash back” to those who use it to find and buy things. Innovation vs. buying your way into the market…in my book, that kinda speaks for itself.

Microsoft’s “Live Search cashback” site…promises to pay back a portion of the purchase price — ranging from about 2 percent to more than 30 percent — to people who use it to find designated products and buy them online from participating retailers…including the online sites of large retailers such as Barnes & Noble, Sears, Home Depot, J&R Electronics, Office Depot and others. [via]

Instead of jumping to conclusions, I decided to make a list of my thoughts on this, many of which the folks at Microsoft are not going to like.

• We shouldn’t be surprised that Microsoft is using the lure of the cash. When it comes to beating Google in the search game, cash is the one asset it already has.
• Microsoft Chairman Bill Gates is still running the company, despite not being the CEO. He talked about paying people to search almost three years ago.
• eBay is using Microsoft to generate traffic. That leaves lead-generation players on a slippery slope.
• TechCrunch notes that this program is based somewhat on Jellyfish, a company that Microsoft bought back in 2007. In other words, this isn’t a new idea, just new spin.
• Will this work? That remains to be seen. Remember a company called iWON? Well, despite all the cash and prizes it handed out, it failed miserably. Will Microsoft’s size and online presence give it a leg up? Maybe.
• It really doesn’t address the issue of Microsoft continuous loss of market share in search.
• Microsoft will need to find a way to overcome resistance to register for the service.
• Microsoft Live Search Cashback has 200 merchants, compared with the average comparison shopping engines, which each have about 10,000 merchants.
• Microsoft is pretty serious about what amounts to little more than a gimmick. They recently bought Cashback.com, showing how committed Microsoft is to this effort.
• What Microsoft is indicating: It will shift to a cost-per-acquisition model, instead of the more generic cost-per-click model, which I think is actually a good thing.
• What they really need to do is to upsell merchants to other types of online advertising they offer — search, contextual, content and display. Now that could prove to be a very big opportunity

Final thought: Microsoft’s traditional strategy of “We will charge less and crush the competition” really doesn’t cut it anymore. How long do you think merchant partners are going to stick around and waste their resources if they can’t make money? This is not some PC-maker-schmuck they have in a headlock. Take a look at all the other new technologies where Microsoft hasn’t been able to dominate — this is a sad reflection on that trend.

Kevin Johnson, the president of Microsoft’s platforms and services division, sent out this memo to company employees in which he outlines the Microsoft’s strategy in online advertising. He also refers to the press statement issued in reference to Yahoo. The company is sending mixed messages, both to the outside world and its employees. You can read the memo (below the fold) and decode it for yourself :-)

We have been executing against the core strategy I first presented at our Financial Analyst Meeting in July 2007 to go after the growing opportunity in online services and advertising. Four pillars have formed the basis of our strategy:

1. Consolidate ad platform and win in display

2. Innovate and disrupt in search

3. Deliver end-to-end user experiences across PC, phone, and web

4. Reinvent portal and social media experiences

We have many options that support acceleration of our strategy. As announced earlier today, we are also considering new alternatives for a transaction with Yahoo! which do not involve a full acquisition. At this time, we have not made a new bid to acquire all of Yahoo!, but we reserve the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo!, shareholders of Yahoo! or Microsoft, or with other third parties.

Regardless of the outcome of any new discussions, it is important that we continue to move forward to strengthen our online services business. The fact is that we are not where we want to be in this business yet and we’ve been in this position longer than we’d all like. To that end, we will be accelerating elements of our core strategy, and breaking ground in new areas.

On Tuesday, Brian McAndrews is hosting advance08, our annual advertising conference here in Redmond. Over 400 leaders from across the media, technology and advertising landscape will be here for two days to engage in dialogue on industry trends and opportunities. These leaders are some of our closest partners in the digital transformation of the advertising industry, and they recognize the increasingly important role Microsoft plays in this transformation. We are very excited to have these customers and partners on campus.

Brian’s keynote will highlight our unique position in the advertising industry. It’s amazing to see how far we’ve come with the aQuantive acquisition in differentiating our advertising platform. This foundation is paying off, with Q3 advertising revenue growth of nearly 40%, a rate that has accelerated over the past two quarters while growth rates at Google, Yahoo and AOL have slowed.

On Wednesday, we will be announcing a major new initiative that our search teams have been driving. We are getting better and better with our core algorithmic search, and at the same time, we are investing to differentiate in vertical experiences and to disrupt the current model. You’ll hear more about our plans Wednesday.

advance08 will underscore our commitment to search and online advertising, and you’ll continue to see announcements demonstrating our progress in this space. Earlier this week, I spoke to leaders across our online services business about our core strategy, the importance of acceleration and a set of actions we are taking, including:

1. Innovate and disrupt in search – We will disclose some elements of our plans with this week’s release of search and sharpen our focus on user experience and business model innovation. The work we have done over the last 4 years on search has established a solid foundation to build upon.

2. Win targeted distribution – With this release of search, we are now ready to throttle up broader distribution initiatives.

3. Reinvent portal and deliver new experiences across PC, phone and web - We are building our new releases of Windows 7, Windows Live wave 3, Windows Mobile 7, Internet Explorer 8, Search and MSN with an eye towards optimizing and unifying experiences and scenarios.

4. Fix our online branding – Our brands are fragmented and confusing today, and we recognize a need to clarify and align our online branding . We are now driving forward to address this opportunity.

5. Win in display advertising - We have an advantage in tools, agency assets/relationships and a team laser-focused on capturing the display ad platform opportunity. As we build from a position of strength, we will increase engineering resources to drive even more innovation.

6. Build on our strengths in Europe – As measured by comScore in March, our online business in Europe is doing well. We have over 3 times the page view volume and nearly 7 times the minutes of usage compared to Yahoo!, and 68% reach to internet users throughout Europe. We will double down on our investments in Europe and expand on this strong position.

7. Expand strategic partnerships – In addition to our organic innovation agenda, we will expand strategic partnerships that increase inventory on our display ad platform, enable new paradigms in search and accelerate growth in key geographies.

8. Pursue small, targeted acquisitions – Looking forward, we will focus on small, targeted acquisitions that support our work in search, complement our value in the ad platform and help us grow scale in key geographies. Recent acquisitions including Rapt and YaData are examples of these types of acquisitions.

The PSD leadership team is actively working on the FY09 budget, including resources and investments to support the actions above. Additional elements of our work will be revealed in the coming weeks, leading to our Financial Analyst Meeting in July where I will share more details on our strategy and business/financial outlook.

As we move forward, I want to remind everyone that we are well positioned to compete. We have some of the industry’s best assets on our side: technical and business talent, global scale, a culture of self-criticism and tenaciousness, a healthy balance sheet and an unparalleled product portfolio. It’s time for us to seize the opportunity.

Thanks again for your continued leadership and focus on our business.

Nvidia has plans for a mobile chipset that will change the look and functionality of smartphones when it hits in mid-to-late 2009. While many of the big chip vendors are placing bets on the concept of a mobile Internet device that’s larger than a smartphone, but smaller than a laptop, Nvidia’s APX 2500 chips could enable devices that are so sexy, they might render the need for an MID obsolete.

However, I’m told the company will announce an expansion of the APX chips into MIDs soon, so I could be wrong on that last point. Nvidia launched the chips that will make a smartphone function like a PC (or an iPhone) at the Mobile World Congress in February, and I can’t believe I missed it.

This is Nvidia’s first move into making the “brains” of a mobile device, and it’s using its graphics expertise to turn the devices containing the chips into portable media players that can play 10 hours of HD video (on an external screen) and 100 hours of MP3s on a single charge. All while the 750 MHz processor consumes less than a watt of power.

In a demo at Nvidia headquarters two weeks ago, I saw a device slightly larger than an iPhone power an HD rendering of a Pixar short called “For the Birds” on a big-screen TV. It was connected via an HDMI cable and it looked good at 720p. I get that some people don’t mind watching movies or TV on their cell phone or iPod screens, but if I’m able to download that content and plug it into a TV, that’s an entirely new ballgame for travel and sharing. I want that device.

The demo I saw was powered by Nvidia’s chipset running on Windows Mobile, creating a chip/OS combo that mimics some of the visual pizazz of the iPhone, but on a more business-friendly operating system. Sure, as far as mobile operating systems go, Windows Mobile isn’t exactly tearing it up, but the integration of business and pleasure could make the current angst of choosing between a BlackBerry or an iPhone a thing of the past.

The chipset will first appear at the end of this year in personal navigation devices and personal media players, with a smartphone due out in the middle of 2009. Unfortunately, the APX 2500 contains an HSDPA RF chip, so it won’t be deployed on my network, but TMobile subscribers should keep their eyes open. Like the iPhone, the APX is modem agnostic, which means it’s not tied to any particular cellular network. There’s plenty of room for Nvidia to stumble, since it doesn’t have the experience designing for the mobile space, but I’m hoping it can succeed right about the time my current mobile contract is up.

In this new millennium, our lives are becoming increasingly digital, thanks to proliferation of devices — from MP3 players to digital cameras to cell phones and of course computers. The challenge is to keep a handle on the data on these digital devices and the software programs that go with these devices. Microsoft thinks it has the answer, and it is called Live Mesh.

The much-talked about technology is a service platform that allows users to manage and access different devices, share and synchronize files and stay in touch with others from any computer by using the Web as a hub. Live Mesh users can, for example, access photos on their mobile phone from their computer and make them available to friends by placing them in a shared folder. In order for devices to talk to each other, you need to install Live Mesh software.

It is also possible to follow a newsfeed that informs the user about the activities taking place in their Live Mesh; the status of different devices, the use of different files and people using them. People who share a folder can also chat with each other. In a demo given to us, Live Mesh seems well designed and easy to use. In a blog post, Microsoft gives all the details on the product.

Many have tried to fix the problem of digital complexity before. Apple has come closest to solving the e-riddle of devices. In many ways Live Mesh does remind us of Apple’s Digital Hub strategy, that included iSync software and dot.Mac service. It tried to solve the syncing riddle. There are many start-ups which are trying to solve this problem, most prominent of them being Sharpcast, that recently introduced its Sug