If you visit Google.com today, you will see a special logo for Veterans Day. The logo is less complex when compared to last years, where Google had to fix their Veterans Day logo. Last year, Google placed hats on top of each letter on the Google logo, the hats included Army, Navy, Air Force, and Marines. But they forgot one, the U.S. Coast Guard, which they added later.

Google also has a logo on Google.co.uk for Remembrance Day:

Bing has a Veterans Day Theme:

Yahoo typically skips adding a special logo for today, which is what they have done today. But you can see more logos, from Ask.com, AOL and others at the Search Engine Roundtable.

Billed as the first major redesign in a decade, Microsoft has introduced a dramatic new look and feel for the MSN portal. The redesign simplifies and cleans up most elements on the site. Among other things, it makes video more central, incorporates Facebook and Twitter, creates a dedicated new local area and emphasizes search.

MSN, which Microsoft says now has 600 million users globally (which would make it larger than Yahoo), is a huge asset for a number of reasons, not the least of which is the fact that it drives roughly 45% of Bing’s queries. Even a cursory look at the old and new MSN homepages reveals the superiority of the new design:

After users log in and grant access to their Twitter and Facebook accounts, the activity streams of both sites appear in the lower right of the MSN homepage (the blank area above):

The new local edition does a nice job of aggregating a range of local content (e.g., restaurants and entertainment, news, film, traffic, gas prices, etc.) and presenting it in a direct and accessible manner, with maps and local search functionality as well.

Microsoft told me that the redesign was prompted by user feedback and a growing internal sense that the old design was cluttered and had grown stale. When I met with Microsoft we also discussed and compared the Yahoo homepage redesign of several months ago. The most prominent feature of the Yahoo homepage redesign is the left column of widgets or apps, which ask users to select and personalize the page accordingly.

Microsoft expressed skepticism that lots of people will in fact get involved with a high degree of explicit personalization like this. There will, however, be personalization on MSN but it will not be as obvious to end users as the personalization elements on the Yahoo site. Microsoft will be offering “smart headlines” based on user location, behavior and demographic segment.

The new MSN will roll out globally over the next several months. Interestingly the look of the MSN portal may be slightly different country to country, depending on variables unique to each local market. Microsoft also says that it will bring the new MSN experience to mobile devices as well.

I haven’t systematically gone through every link and page in the new MSN site but from what I’ve been able to look at, it’s a big improvement over the former design.

If Microsoft enjoys success with the new MSN site it’s likely to directly benefit Bing. Previously many users were reportedly abandoning MSN for Google to conduct search queries. That’s probably less likely to happen now. But we’ll see what transpires over the next month or two. Regardless the new design makes MSN a much better place to visit.

Here’s a review of MSN designs over the past several years. See also related discussion on Techmeme.

Today is Halloween and the search engines have logos up for the special day. Before I post the logos, here are some posts from others in the community on Halloween.

Matt Cutts of Google had a holy costume. Google Blogoscoped noticed Google added trick or treat to their robots.txt file. Bing has a special visual search edition for today. Bruce Clay’s team dressed up and PPC Heros added some funk. Finally, the logos you see below is reposted from the Search Engine Roundtable.

Google has four Doodles:

Yahoo (Flash):

AOL (Flash):

YouTube:

Bing:

Ask.com:

Dogpile:

BruceClay’s design:

Search Engine Roundtable:

For the past logos, see 2008, 2007, 2006, 2005 and 2004 logos.

Microsoft announced quarterly revenues of $12.9 billion, a decline of just over 14 percent from the same period a year ago. Adjusted revenue, which accounts for $1.5 billion in deferred Windows 7 receipts put the quarter at $14.4 billion, just 4 percent down vs. a year ago. Profits were also down. Online services (where Bing is housed) had revenues of $490 million and a $480 million loss vs revenues of $520 million and losses of $321 million a year go.

The conference call is going to start in a few minutes but the company’s slides highlight strong Windows (7) and Xbox demand. PC growth was up 2 percent compared with a year ago but up in the “mid teens” vs. the previous quarter. There have been concerns that the movement of the consumer market to lower-cost PCs and netbooks is going to hurt Microsoft over the long term.

The company also highlights that Bing “market share in US up every month” and “US search revenue up mid-single digits.” For the rest of the year Microsoft predicted growth in Online Services but said that entertainment and devices would be flat.

Microsoft is a hugely profitable company with tons of cash and it will continue to be a force in the markets it competes in. However it faces more competition and greater vulnerability in some of its core markets than in the past. And in the strategic area of mobile it’s not been able to match competitors with its offerings. Windows 6.5 has received tepid reviews at best in contrast to Android, which now has as much or more buzz in the market than every competitor save the iPhone.

Failure by Microsoft to improve its Mobile OS and better compete against the iPhone, RIM and Android will put the company at a long-term strategic disadvantage.

Here’s an interview between the Wall Street Journal and Microsoft CEO Steve Ballmer in which he says, as one might expect, many positive and optimistic things about Microsoft’s competitive position and the future.

First to pounce on the SEC 8-K filing by Yahoo was PaidContent, which provides an extensive bulleted list of many of the deal terms not revealed last week during the frenzy of conference calls and articles that followed the official announcement of the Microsoft-Yahoo search deal. CNET also writes about selected aspects of the deal contained in the filing, specifically an “escape clause” (termination) for Yahoo (see below). And the AP has a short piece on how the deal terms require Microsoft to hire at least 400 Yahoo employees.

Here are some verbatim excerpts from the SEC filing:

Negotiation and Execution of the Definitive Agreements

Pursuant to the terms of the Letter Agreement, the parties will negotiate and execute the Definitive Agreements as soon as practicable but in any event by October 27, 2009 (the “Negotiation Period”). If the Definitive Agreements are not executed during the Negotiation Period, the parties will submit any disputes regarding the final terms of the Definitive Agreements to an arbitration panel.

Conditions to Commencement and Termination Prior to Commencement

Prior to the Commencement Date, the Letter Agreement and Definitive Agreements may be terminated only by (a) mutual consent, (b) if a breach renders a condition incapable of being satisfied by the Termination Date (as defined below), or (c) if the conditions to commencement have not been satisfied by July 29, 2010 (the “Termination Date”); provided that Yahoo!, in its sole discretion, has the right to extend the Termination Date by six (6) months if the required antitrust approvals have not yet been obtained.

Search and Advertising Services and Sales Agreement

For a period of ten (10) years beginning on the Commencement Date (the “Term”), Microsoft will be Yahoo!’s exclusive technology provider for algorithmic and paid search services and Microsoft will provide contextual advertising to Yahoo! on a non-exclusive basis. Yahoo! will be the exclusive worldwide relationship sales force for Yahoo!’s and Microsoft’s premium search advertisers.

The services provided by Microsoft under the Search Agreement will be provided on all web sites, applications and other online digital properties owned or operated by or on behalf of (a) Yahoo!, Yahoo! subsidiaries and Yahoo! joint venture relationships, as well as on software applications developed or distributed by Yahoo! or Yahoo! subsidiaries that provide access to or enable algorithmic search services or paid search services (“Yahoo! Properties”) and (b) Yahoo! Syndication Partners (as defined below), as well as software applications developed or distributed by Yahoo!’s Syndication Partners that provide access to or enable algorithmic search services or paid search services from Yahoo! (“Syndication Properties”). “Syndication Partner” means a third party with whom Yahoo! has contracted to provide algorithmic search services or paid search services.

Subject to certain specified restrictions, Yahoo! will have full flexibility with respect to the user experience, content and look and feel on all of its web pages, and will also be entitled to use the paid search services and algorithmic search services for non-internet search queries with minimal restriction . . .

Microsoft’s mapping services and mobile search services. Yahoo! may implement each of the mapping services and the mobile search services on a non-exclusive or an exclusive basis. Yahoo! also has the option to work with Microsoft to implement the services on other platforms. If Yahoo! elects to receive services for other platforms, it must receive such services on an exclusive basis.

Revenue Share Payments and Other Payments

During the first five years of the Term, Yahoo! will be entitled to receive 88% of the net revenues generated from Microsoft’s services on Yahoo! Properties (the “Revenue Share Rate”). Yahoo! will also be entitled to receive its share (at the Revenue Share Rate) of the net revenues generated on Syndication Properties after the Syndication Partner’s share of net revenues is deducted. For new Syndication Properties during the Term, and for all Syndication Properties after the first five years of the Term, Yahoo! will receive its share (at the Revenue Share Rate) of the net revenues generated from Microsoft’s services on Syndication Properties after the Syndication Partner’s share of net revenues and certain Microsoft costs are deducted.

On the fifth anniversary of the Commencement Date, Microsoft will have the option to terminate Yahoo!’s sales exclusivity for premium search advertisers. If Microsoft exercises its option, the Revenue Share Rate will increase to 93% for the remainder of the Term, unless Yahoo! exercises its option to retain its sales exclusivity, in which case the Revenue Share Rate would be reduced to 83% for the remainder of the Term. If Microsoft does not exercise such option, the Revenue Share Rate will be 90% for the remainder of the Term.

Microsoft will also pay Yahoo! a payment of $50 million annually during the first three (3) years of the Search Agreement. Yahoo! may use these payments to partially cover transition and implementation costs not otherwise covered under the Search Agreement.

Termination Provisions

Yahoo! may terminate the Search Agreement if the trailing 12-month average of the RPS in the United States (the “U.S. RPS”) of Yahoo! and Microsoft’s combined queries falls below a specified percentage of Google Inc.’s (“Google”) estimated RPS measured on a comparable basis or if the combined Yahoo! and Microsoft query market share in the United States falls below a specified percentage; (d) on the fifth anniversary of the Search Agreement, and any time thereafter, Yahoo! has the right to terminate the Search Agreement if the trailing 12-month average of Yahoo!’s U.S. RPS is less than a specified percentage of Google’s estimated RPS; or (e) subject to exceptions, either party may terminate if a law, regulation or order would have a significant, adverse impact on a primary aspect of such party’s intended benefit of the Search Agreement.

Transition and Implementation Plan

Microsoft will hire not less than 400 Yahoo! employees (the “Transferred Employees”) and will offer the Transferred Employees market competitive compensation packages. In addition, Yahoo! and Microsoft will mutually agree on a retention plan to be paid for by Microsoft to assist in retaining the Transferred Employees and an additional 150 Yahoo! employees to be mutually agreed upon between Microsoft and Yahoo! to assist with providing the transition services.

The deal seems broader than the “web, image and video” search scope we heard before. Yahoo can terminate the deal if certain targets aren’t meet surrounding revenue per search, benchmarked to Google. At the five year mark the parties can change who runs “premium sales.” The rev share percentages change accordingly.

On a related note, there’s an opinion piece in the Wall Street Journal that argues these terms give Redmond a bigger win than Yahoo in Microsoft CEO Steve Ballmer’s “win-win” scenario but that, in the larger scheme of things, Google may have already won the game:

The deal is a clear win for Microsoft and a qualified win for Yahoo. The big question is whether it makes any difference in the only contest that really matters, which is the one with Google. The risk for both Microsoft and Yahoo is that the contest is already over. Second place won’t really matter, especially as the competition shifts to Microsoft’s home turf: operating systems.

Related coverage:

• It’s Finally Official, Microsoft & Yahoo Make A Deal, Yahoo Gives Up On Search
• Live Blogging The MSFT – YHOO Search Press Conference
• Microsoft-Yahoo Deals 2008 & 2009, Side-By-Side
• A Search Eulogy For Yahoo
• Micro-Hoo Details: Q&A With Mehdi & Schneider
• The Microsoft-Yahoo Search Deal, In Simple Terms

During the Yahoo-Microsoft conference call with CEOs Bartz and Ballmer and subsequent discussion with Microsoft’s Yusuf Mehdi and Yahoo’s Hilary Schneider we heard repeatedly that although the two engines would share a single index and Microsoft would incorporate elements of Yahoo Search (e.g., Search Monkey) into Bing, Yahoo would continue to be different and vital in search.

Freed from the cost ($425 million reportedly) and ongoing demands of the back end, it would “innovate” around the interface and search user experience.

Many people in the industry were skeptical and  shrugged it off as something akin to wishful thinking or putting a brave face on Yahoo’s exit from the search business. (Danny wrote “A Search Eulogy for Yahoo” thereafter.) But Prabhakar Raghavan, in charge of Yahoo Labs, discussed on Friday, how the company might incorporate Twitter and real-time search into Yahoo results. He again made the case that Yahoo would continue to innovate and present a compelling search user experience.

“In terms of satisfying user intent, the hard work and in some sense the bigger growth opportunities for differentiation are not the back-end of crawling and indexing, but really surfacing and assembling content the right way to satisfy user intent,” he said.

Real Time search is an increasingly popular online activity where Yahoo’s approach to search could provide a compelling user experience, Raghavan said.

It’s theoretically possible but one of the practical challenges will be recruiting and retaining top search talent, as the NY Times points out:

Yahoo will lose some of its most talented engineers to Microsoft and as many as 400 employees through layoffs. The deal also undercuts years of investment around search technology. By selling the technological crown jewels, the company may lose some of its high-tech credibility among employees and others in Silicon Valley, as well as among customers.

Investors, who had been expected to cheer the deal, punished Yahoo for the terms of the transaction. On Thursday, the day the deal was announced, Yahoo’s stock declined roughly 12 percent — although it has largely recovered since then. Financial analysts and investors saw the deal terms as something of a fire sale. According to the Times article:

Microsoft offered $46 billion to buy all of Yahoo. Analysts estimate that the new deal — involving what many people saw as Yahoo’s most important asset — is worth only around $4 billion to $5 billion.

The deal was largely motivated by Ballmer’s persistence and Yahoo’s inability to compete with Google and Microsoft in search at the required levels of investment. There was also lots of additional pressure coming from the market. All of these things, among a couple of others, perhaps made the deal inevitable.

The deal isn’t done until regulators in the US and EU approve it. That process is not, as they say, a “slam dunk.” But let’s assume that it does go through. Yahoo can’t simply ignore search. It will still be forced by the market to pay attention to search volumes and monetization (RPS).

To that end, Yahoo will in fact need to invest in the user experience to maintain its position. If it doesn’t it will lose share to Google or Bing. If that starts happening Bartz and Yahoo will be under intense pressure. So the notion of “innovating around the user experience” isn’t simply an aspiration for Yahoo, it’s a necessity.

Late yesterday Google announced (or finally admitted) that it had developed an operating system, called Chrome OS, not to be confused, exactly, with the related Chrome browser. Everyone and their grandmother seems to have an opinion about it. Here’s a sampling of the reaction, positive, negative and in-between:

The fans, boosters and generally positive takes:

TechCrunch, BetaNews, Computerworld, Mashable, BuzzMachine, Ars Technica, Bloomberg, ArsTechnica, Google Watch, MediaMemo, Linux-Watch.com, Google Operating System, The Register, TheNextWeb.com, Black Web 2.0, BloggingStocks, Gadget Lab, Computerworld Blogs, ContentBlogger, Lockergnome Blog Network, About Mobility . . .

The critics and skeptics:

PC World, CNET News, Search Engine Watch,  AllThingsD, ZDNet, InformationWeek, Techdirt, Traffick, SlashGear, MacDailyNews, SmoothSpan Blog . . .

The “wait and see” or “he said/she said” pieces:

BBC, TheStreet.com, eWeek,  GigaOM, Venture Capital Dispatch, The Microsoft Blog, IntoMobile, Between the Lines, Mercury News, Seattle Times, ReadWriteWeb, TG Daily, Googling Google, New York Times . . .

And now for some verbatims:

This is Google dropping the mother of bombs on its chief rival, Microsoft. It even says as much in the first paragraph of its post, “However, the operating systems that browsers run on were designed in an era where there was no web.” Yeah, who do you think they mean by that? And it’s a genius play.

–TechCrunch

If Google wants to succeed in its boldest product launch to date, the Chrome OS, the company needs to focus on its success with the same intensity it once dedicated to search.  If it doesn’t, Chrome OS will end up just like Chrome: yet another irrelevant skunkworks project used by a handful of digerati and Microsoft-haters and ignored by everyone else.

–Silicon Alley Insider

The privacy implications are, of course, horrendous. And while Google will inevitably dismiss such concerns as paranoid and argue that any data the company might collect at the OS level will be used only to improve its services and benefit users, it should still give us all pause. Because when it is finally launched, Chrome OS will be yet one more deep well of consumer data to which Google will have access

– Digital Daily

[T]his time the networks are more reliable and users are happier than ever to use networked storage and backup systems, so perhaps Chrome OS has come at just the right time. If so, then Microsoft should be worried. The network computer has been a long time coming, but with Google’s backing it could yet be the platform that finally challenges Redmond.

–The Register

It appears the top three hardware vendors have little or no relationship with the search and online advertising giant. But if Google plans to make inroads into Netbooks and eventually notebooks, that will have to change very soon. Every consumer desktop and notebook, and most Netbooks today (excluding computers from Apple) is designed to run Windows. Microsoft has deep hooks in the manufacturers’ design and engineering processes, and the hardware companies’ marketing and product launch cycles always take Microsoft’s plans into account.

–CNET

Microsoft has a number of projects in the works that I’d say are more likely to be competitors to Chrome OS than is Windows 7. The Gazelle OS-in-a-browser project from Microsoft Research is still just a research project and not in incubation or test-release form. But if Microsoft decides it has legs, they could put it on a fast track.

–All About Microsoft

If you want to read Danny’s initial take, here it is.

Postscript: Google has identified some of the companies that it’s working with on the Chrome OS initiative:

The Google Chrome OS team is currently working with a number of technology companies to design and build devices that deliver an extraordinary end user experience. Among others, these companies include: Acer, Adobe, ASUS, Freescale, Hewlett-Packard, Lenovo, Qualcomm, Texas Instruments.

(emphasis added)

Mike Arrington thinks that Google engaged in “a little stealth black ops mission” and blunted the full impact of the Ballmer Bing announcement yesterday by announcing Wave. Whether Wave represents a huge new development in digital communications remains to be seen, but almost every major news outlet had to cover it and divide its attention between Bing and Wave. Indeed, many journalists and bloggers were physically divided between the AllThingsD conference near San Diego and Google’s developer event I/O in San Francisco.

Arrington also cites the lack of access to Bing/Kumo as a PR mistake. But that’s less a function of a PR miscalculation in my understanding than the fact that Ballmer had agreed to appear at the D event and knew that he was going to be probed about Kumo; so Microsoft decided to effectively pre-announce the engine before its public release next week at SMX Advanced. As a practical matter, however, Arrington may be correct: more stories and deeper coverage would have been driven if everybody was able to do what I did and compare Kumo/Bing to Google side by side.

At the press event following the Wave keynote the panel was asked who Google saw as its competition for the product (impliedly Outlook and others). Vic Gundotra, Google Engineering VP, feel back on the position that Google developed the product without any thought to the existing or potential competition. After the close of the session, I was talking to a reporter about Google’s awareness of competitors and its thinking about its competitive positioning. I said I agreed that Google often develops products without thinking about competitors directly.

But I also agree with Arrington that on the PR front Google is more directly engaged in competitive maneuvers. In the same way that before the ill-fated Cuil launch, Google coincidentally announced that its search index had massively increased, undermining one of Cuil’s central PR points and claims against the search incumbent, Google was certainly aware that Bing was going to be announced this week. While the timing of the Google I/O event itself was not scheduled to undermine Bing I’m sure, the Wave announcement was likely calculated to steal some thunder — which it appears to have done.

Arrington discusses in his post the fact that the developer audience cheered throughout the Wave demo yesterday. I was kind of amazed by that myself. There was enthusiastic applause multiple times throughout, much like a political speech is often broken up by cheers or applause. And the decision to give away the HTC Magic/G2 phone to attendees was both a shrewd and practical move that has already paid dividends in Android coverage.

Next week will see the public launch of Bing and a wave of “hands on” stories will be written. As the marketing campaign for Bing rolls out more stories will be written about the campaign itself and whether it’s having an impact and so on. Microsoft will get a good deal more PR and news coverage accordingly. Beyond the so-called search wars there are the “meta-level” PR strategies and wars that mirror the underlying products they’re exposing.

From that standpoint, if the PR goal of Wave was to diminish the focus on the Bing announcement Google appears to have succeeded.

Call it Microsoft Week (or weeks as the case may be). We’ll likely hear the name of the new search engine this week from the AllThingsD conference and next week, to coincide with SMX Advanced, the public will get a chance to actually use it.

While everyone who reads this blog will no doubt test drive the new engine (now called Kumo/Kiev) and form his or her own conclusions about how it compares to Google and Yahoo the larger question is whether it will make inroads with the broader public.

To notify that public about the new engine Microsoft will reportedly be spending lots of money (AdAge says $80 to $100 million) as part of a large-scale branding and marketing campaign. It doesn’t cite a source for those figures. AdAge also reports the brand will be “Bing”:

The software giant is set to launch an $80 million to $100 million campaign for Bing, the search engine it hopes will help it grab a bigger slice of the online ad market. That’s a big campaign — big compared with consumer-product launches ($50 million is considered a sizable budget for a national rollout) and very big when you consider that Google spent about $25 million on all its advertising last year, according to TNS Media Intelligence, with about $11.6 million of that focused on recruiting. Microsoft, by comparison, spent $361 million. Certainly Google has never faced an ad assault of anything like this magnitude.

JWT has been tapped for the push, which will include online, TV, print and radio. Another sign of the campaign’s size: At a time when most agencies are laying people off, JWT added creatives on the Microsoft business last week.

Danny speculated last week that the name would be Bing as well. People I’ve informally spoken with have had mixed reactions to the name. Some people have said that “Bing” sounds like “you got it” (or something similar). The co-founders of a rival search startup told me last week they actually like Kumo and felt that it already had some brand equity around it. But Kumo is not the brand if AdAge and other indications are accurate. (Nobody I spoke with informally brought up crooner Bing Crosby, which is a good thing for Microsoft.)

It will be fascinating to see the ad campaign roll out and how it tries to attack the search market, now all but synonymous with Google. I have put myself in the challenging position of ad execs trying to craft the campaign. It’s no easy task though I have some ideas.

The AdAge article reminds readers of the previous large-scale ad campaign for Ask, “The Algorithm.” There was lots of heated debate about that campaign but the consensus was that it was obscure and generally ineffective. Danny in his “Tough Love for Microsoft Search” post has discussed why he thinks traditional advertising is less effective than other forms of promotion (i.e., word of mouth, incentives). He also has embedded video of some humorous old search commercials in the post as well.

The larger problem for Ask most recently was that it wasn’t in fact a better search engine, despite the provocative Ask3D interface. In other words, the product was not as competitive on the “back end” as it perhaps should have been when the campaign ran. Indeed, the bottom line is the user experience, which is what will generate positive word of mouth. Microsoft is hoping that users like the interface (which has leaked out in several screenshots) but more importantly what it delivers. Fortunately we won’t have long to wait now to try it out.

There’s more discussion on Techmeme.

The Search Engine Land team would like to wish you a Happy Mother’s Day today. As tradition, I like to post the various logos from the search industry, to help celebrate the day. Here are the Mother’s Day logos. Google:

Yahoo (animated):

AOL (animated):

Live.com:

Ask.com:

Google Maps changed the Street Views guy to a mom and son:

Search Engine Roundtable: