Microsoft Moves Fast and Smart: Twitter and Facebook

(MoneyWatch)  If there was any doubt that Microsoft would be creative about search and get beyond spooning Yahoo and spending money, then this tidbit is it. The company is going to announce deals with both Twitter and Facebook to put their realtime status feeds into Bing for searching. This is major and likely to wipe the smile off the face of Google's CEO Eric Schmidt, at least for an hour or two. Or a lot more.

This isn't happening today. Or tomorrow. But the timeframe -- sourced to the president of Microsoft's Online Services Group, Dr. Qi Lu, so this is as solid as it comes -- is weeks, or maybe a few months. The deals are non-exclusive, and supposedly both Twitter and Facebook have been talking independently to Google, but make no mistake, this is huge. It's the sort of thing that can start upsetting the normal balance of power in a market. Here are the reasons why:

• Microsoft will be able to say that it has data that simply isn't available in Google. That is the brand war equivalent of showing that FedEx wasn't able to deliver to an entire continent or two.
• For once, Microsoft has established a lead, making Google the follower. That could change, with the latter catching up, but it changes the market dynamics.
• It's all about the advertising, and suddenly Microsoft has a whole mess of material valuable to many (whether to do market research or just check something casually) that means a great draw for advertisers.
• Microsoft shows that it's beyond checkbook serious about search, which is also important to advertisers.
• Google's mantle as the single leader in the field now falls, and a tarnished idol is one that is in danger. Crowds can easily turn, and while many use Google out of habit, I get the feeling that it's not out of loyalty. Start changing the habit, and inertia could let people settle down with Bing.
• For perhaps the first time in the last decade, Google is in a position where it has to catch up to someone else. That means a deal it must have, make no mistake. And when you gotta have the deal, you gotta pay what you're asked to. That could be costly in more ways than one.

This isn't going to be a cakewalk for Microsoft. Can you picture how irate many people will become about the intrusion into privacy? Twitter is more an open field for seeing what people say, but can Facebook has already seen some major concerns about privacy issues among users. This is likely to heighten that displeasure. But that is a hurdle, albeit a tricky one, to clear. Overall this was a work of business genius, and I suspect Lu, who was previously president of engineering at Yahoo's search and advertising technology group, is behind it. Shows that sometimes a star "get" in the hiring world brings along the value that the employer expected.

Image courtesy Gopal Raju.