Fazny Zavahir: Microsoft Uses Kinect to Combat Nintendo Wii, Lure Casual-Gaming Moms

Microsoft Corp. today starts selling Kinect, a device that lets consumers play video games with their bodies, to help it lure casual gamers and add years to the life of its Xbox 360 gaming console.

Kinect, shaped like a flat, black box, tracks a player’s movement and voice and costs $149.99 by itself or starting at $299.99 when purchased with an Xbox 360 console. Microsoft yesterday boosted its forecast for Kinect sales this year to 5 million units from 3 million after the device sold out in pre- sales at retailers such as Amazon.com Inc. and Best Buy Co.

Chief Executive Officer Steve Ballmer is depending on Kinect to catch Nintendo Co., which pioneered the motion-sensing gaming market with its Wii controller, and Sony Corp., whose Move controller hit stores in September. The product is also designed to help Microsoft goose sales of the aging Xbox 360, released in 2005, and improve margins of a unit that lost about $8 billion before reaching profitability in 2008.

“It’s a very intuitive and innovative product,” said Gregg Moskowitz, an analyst at Cowen & Co. in New York, who has an “outperform” rating on Redmond, Washington-based Microsoft. “It’s not ideal for every video game, but it has that potential to tap into a new market where we haven’t seen Microsoft before.”

Microsoft may generate $500 million in Kinect sales this quarter and $1 billion this fiscal year, which ends in June, according to Moskowitz. If Microsoft can meet its new forecast for holiday Kinect sales, the company will exceed his estimate by about $250 million for the quarter, Moskowitz said.

Casual, Social Gamers

With Kinect, Microsoft is aiming at users of so-called casual games, which tend to be more family-friendly than traditional shoot-’em-up video titles, and social games, played on social networks such as Facebook Inc. Consumers may spend $2.4 billion on casual games this year, according to Parks Associates, a research firm in Dallas.

Microsoft, which pioneered the market for online multiplayer console games, will try to extend its advantage with Kinect games such as “Kinect Sports” and “Kinect Adventures.” Many of the 17 games available at introduction let gamers snap photos of themselves playing and post them online.

As a company that hasn’t traditionally attracted casual gamers with Xbox, Microsoft may need to take pains to win over wives, mothers and teenage girls who may already have an Xbox in the house but don’t use it, said Michael Pachter, a video-game analyst at Wedbush Securities Inc.

Ellen, Oprah

To do that, Microsoft has previewed the device on daytime talk shows hosted by Oprah Winfrey and Ellen DeGeneres. A clip of DeGeneres doing Merengue moves along with Kinect’s “Dance Central” game — from the makers of the classic title “Rock Band” — led Pachter’s non-gamer wife to ask when the family was getting one.

It worked in Ballmer’s household too, the executive told a group of students at the University of Washington last month. His wife, Connie, had banished the Xbox from the main part of the house, saying it was distracting the kids from homework, until she saw Kinect, Ballmer said at the time.

“They have a lot riding on it,” Pachter said. “If they can get every Wii household to upgrade to this, they can sell another 50 million consoles. They won’t succeed in that, of course, but that’s the goal.”

Microsoft fell 36 cents, or 1.3 percent, to $27.03 yesterday in Nasdaq Stock Market trading. It has declined 11 percent this year.

Microsoft’s ‘Confidence’

Microsoft’s higher Kinect sales forecast “shows a lot of confidence,” Pachter said. In that same period, Sony may sell about 3 million Move units, he said.

Microsoft’s Entertainment and Devices unit, made up mostly of Xbox sales, had a profit of $679 million for the year that ended June 30, only the third year the business has turned a profit. Kinect is key to expanding margins. Consoles typically lose money for the first several years before turning profitable and the Xbox 360 is now narrowly profitable, Microsoft has said.

Unlike a new console, Kinect won’t lose money from the time of its release, according to Moskowitz. When it reaches full sales capacity, Moskowitz expects Kinect to be more profitable than the Xbox. Microsoft unveiled Kinect in June 2009.

Still, many hard-core gamers like Pachter himself “won’t really care” about Kinect, he said. Pachter said he’d rather spend the money to buy “Vanquish” and the latest installments of “Gears of War” and “Call of Duty,” three shooting games.

Don Mattrick, president of Microsoft’s Interactive Entertainment Business, said in an interview that he’s confident “Xbox and Kinect is for everyone, whether you are 8 or 80.”

Fazny Zavahir: Two-year wait for Windows 8, MS blurts; Console yourself with a Windows 7 SP

A posting on Microsoft’s Dutch site suggests we’ll have to wait until 2012 for the next release of Windows.

Microsoft declined to comment and the message was rapidly deleted, but was grabbed by Ina Fried at CNet and a host of bloggers.

The post, celebrating the first birthday of Windows 7, said that Microsoft was hard at work on Windows 8 but the release was about two years away.

In place of the offending paragraph the Dutch site now says that Windows 7 Service Pack 1 is currently in testing and will be released in the first six months of next year.

Microsoft might still be an expert in making cash but is perceived as failing to innovate, or to cash in on that innovation, compared to a renewed Apple and an ever-expanding Google.

Windows 8 will have a heavy burden to carry – Ballmer recently said it would be the company’s riskiest ever release. ®

Google Fights Facebook, Microsoft in Social Search

Google is preparing to pick up the gauntlet Microsoft Bing and Facebook threw down with their social search arrangement. Google CEO Eric Schmidt doesn’t like private data deals.

Microsoft and Facebook have temporarily one-upped Google in social search with their new integration but, Google isn’t going quietly.

Facebook Oct. 13 agreed to open its data feeds to let Microsoft’s Bing search engine index and serve profile information and Liked Results in relevant situations.

The integration goes well beyond what Google has done with its own Social Search functionality, which lacks a large, cohesive network of user data.

The Facebook-Bing deal, then, is a big stepping stone to boosting social advertising, IDC analyst Hadley Reynolds told eWEEK.

“[Bing] can leverage the social info it lacked to keep people on their sites longer, with more exposure to ad inventory and the business it generates.”

Google recognizes this as much as any other company. On Google’s third-quarter earnings call Oct. 14, Google CEO Eric Schmidt was asked about how Google will capture signals in social search without accessing to data feeds similar to the deal Bing has struck with Facebook.

Schmidt paused a few seconds and noted that Google is careful about how its signals are assembled, but said there “are ways in which we could do that.”

“We also have in development other ways in which people can give us that sort of information that can make it even more personal,” Schmidt said.

Schmidt was clearly referring to Google’s supposed Google Me project to socialize its search and Web service properties in many layers.

If that sounds like a veiled challenge to Bing and Facebook, it is. Schmidt has made no secret about Google’s disdain for one-to-one arrangements where one company cedes data to another but not to the Web at large. He’s also intimated he would like access to Facebook’s data.

“There is always a concern that large, private collections of the data are not accessible to Web search engines,” Schmidt said.

“We’ve take the position in a religious and business perspective that the world is better off if you take the info you’re assemlbing and make it searchable, it provides a larger audience and drives more traffic to your site.”

Unfortunately for Google, Facebook CEO Mark Zuckerberg is hardly in a rush to release Facebook data to any more search engines at this point.

That puts Google on the outside looking in, Altimer Group analyst Charlene Li told eWEEK.

“This is not a knock-out punch to Google, but it is significant that they are not the leaders in social search – Bing + Facebook are,” Li said.

“Although [Bing] don’t have the mass and scale to have an impact on Google, the fact that they have already gained ground over the past year is indicative that Google has vulnerabilities.”

Another scary prospect for Google about the Facebook-Bing thing: Both Bing officials and Zuckerberg himself noted this new social search functionality is just a first step toward making search more useful, personalized and relevant using searcher’s social graphs.  

“As more people collect, post, share and add more “likes” and social content, the value of social search will improve,” .
 

Google URL Shortener Opened To The Public; Comparing To Bit.ly & Twitter

 

Just what the world needs, another URL shortener, right? Google seems to think so, and it’s now making its own Goo.gl service widely available to anyone — complete with tracking and statistics — for free.

Below, more about the new entry, how it compares to the more established Bit.ly plus a look at Twitter’s “wrapping” service.

Dashboard To View What You’ve Shortened

Google began offering its own shortening service last December, saying it was something they especially thought Google Toolbar users and those using its Feedburner service would want. Now it’s being offered to anyone much more easily through a dedicated web site. How’s it measure up?

I’ll compare it to the shortener I’m most familiar with, Bit.ly, one that I also consider the market leader. As with both, you can keep a running record of all URLs you’ve created.

Here’s my dashboard from Google’s URL shortener:

Here’s my Bit.ly dashboard:

In both cases, I have a record of what I’ve shortened. That requires having a Bit.ly account at Bit.ly. With Google, it requires signing in using your Google account. If you don’t sign-in, you can still shorten URLs, but Google won’t keep track of what you’ve shortened and provide easy access to statistics.

Drill Down For Stats

In both cases, you can click into a shortened URL to see who has been clicking. For example, here are stats for this story that you’re reading, which I shortened and tweeted:

It’s a nice collection of basic information, showing me things like:

• Countries of those clicking
• Browsers they used
• Operating system they use
• Where people were referred from (such as seeing the shortened URL at Twitter.com or in a Twitter client like HootSuite)

You can also see the number of clicks generated from the URL you’ve put out and over various time ranges, from two hours, through the past day, week, month and “all time.”

Bit.ly provides the same type of stats. I like that Google presents them in an at-a-glance view versus Bit.ly, where you have to click tabs in the “Traffic” section to drill in:

But still, the same data is there. Google gives you a “past day” time range option that Bit.ly doesn’t have. But Bit.ly gives you a “Conversations” view that I find helpful, a list of anyone who has tweeted your shortened URL and what they said:

Same Page, Different URLs

A great thing that both Google and Bit.ly do is allow you to shorten a URL and track the clicks you generate, using your unique short URL, versus the total number of clicks to the long “destination” URL that have gone through each system.

That make your head hurt? Consider this. Here’s the URL of Google’s blog post today on the new shortening service:

http://googlesocialweb.blogspot.com/2010/09/google-url-shortener-gets-website.html

When I shortened that URL and tweeted it, this is the short URL I was given:

http://goo.gl/dWpW

But Google also tweeted the blog post, with this URL:

http://goo.gl/k4Gj

That’s at least two short URLs leading back to the same page. How many clicks did my tweet drive, versus Google’s own shortened URL plus other shortened URLs that might be out there? Here you go:

In the “Clicks” section, you can see that I’m told my shortened URL drove 60 clicks out of the total 3,347 clicks to the destination URL (at the time I made this screenshot).

As I said, this is something that Bit.ly already has offered, too:

No Custom URLs Or Custom Domains

What’s missing? The ability to create custom short URLs. Google offers nothing like this, while Bit.ly offers three different options.

The first method, which is free, allows anyone to add a custom ending to the bit.ly domain (or to the j.mp domain that Bit.ly also operates). For example:

In the example above, I gave Bit.ly the address of today’s blog post from Google. It generated one of those usual URLs that are a mishmash of letters and numbers. But then by using “Customize, I was able to select a custom ending as shown:

http://bit.ly/shortgoog

Of course, if anyone else had already used the “shortgoog” ending, it wouldn’t have been available to me. But it’s a nice option to have.

Bit.ly offers an even nicer option, also for free, where anyone can have their own custom domain. Those who take our Twitter feed may have seen how we shorten URLs for Search Engine Land in this way. All our URLs use the selnd.com domain, like this:

http://selnd.com/aVOcLh

That URL leads to this page, this story that you’re reading now. As a publisher, I like it, in that it allows me to maintain my own brand. Other publications do similar things (either through Bit.ly, through other services or on their own), such as:

• Los Angeles Timees (lat.ms)
• Foursquare (4sq.com)
• PBS (to.pbs.org)
• New York Times (nyti.ms)
• TechCrunch (tcrn.ch)

The custom domain service above, while free, is offered through Bit.ly Pro. There’s also an enterprise version of Bit.ly Pro that offers what’s called “end-to-end branding.” This means that if you have a custom domain, if anyone else tries to shorten your URL using Bit.ly, they’ll be given a shortened URL using your domain.

You can try this with any of our stories or any of TechCrunch’s stories, to see it in action. Both sites have end-to-end branding. Make a short URL to a story, and you’ll get either selnd.com or tcrn.ch the domain.

The enterprise version is pricey, $995 per month, but Bit.ly has provided it to us so far for free (we were one of the original beta testers). If we had to pay, I doubt we’d spend that much (other benefits also come with it). But for bigger publishers, I can see it being well worth the price.

What About Twitter’s Shortener, Er, Wrapper?

At this point, some readers may be wondering about Twitter. Doesn’t it have its own shortening service? Doesn’t that make whatever Google or Bit.ly or anyone else does sort of superfluous? No.

Technically, Twitter offers a “wrapper,” not a shortener. That’s because in some cases, it might actually make a URL slightly longer (such as if you try to shorten an already short domain name, like cnn.com). More important, it’s because Twitter tells me it sees one of the service’s main functions as putting a protective wrapper around URLs rather than trying to shorten them.

In March, Twitter rolled out its wrapper, which used the twt.tl domain. This was originally implemented to change URLs that were in direct messages or in email notifications and done, Twitter said, for security reasons.

Twitter Gets Its Own URL Shortener To Stop Scams; Good Marketers Need Not Fear explains more about what happened. Any branding, as with the custom domain situation above, was lost. But any link credit for search engine purposes was kept (more about this below).

In June, Twitter announced that a different domain would be used (t.co) and that all links would eventually be “wrapped” with this. That was supposed to happen by the end of summer but to date, it still hasn’t been fully implemented. Two reasons were given for this change: security and better tracking for advertising purposes.

What Wrapping Means

To understand wrapping, let’s say you take an article from Search Engine Land, like this long one for the story that you’re reading:

http://searchengineland.com/google-url-shortener-opened-to-the-public-51964

You shorten it through Bit.ly, which applies our custom domain like this:

http://selnd.com/9DTLtc

Then you tweet that URL. When Twitter sees the tweet, when wrapping is fully implemented, the original URL will be rerouted through the t.co domain, like this:

http://t.co/oOsb16s

What you see in your tweet stream will depend. At Twitter.com, Twitter’s goal is to still show some sense of the original URL, and that’s what supposed to happen to those using the new Twitter interface that is rolling out.

Wrapping In Action

Consider this tweet that I did:

There are three URLs in that tweet, all of them leading to the same page — this article that you’re reading. The first I made using the Twitter wrapper, the second using Bit.ly and the third was the original URL to this page. The tweet was 138 characters, in all.

If you go to the tweet directly, regardless of whether you have the new or old Twitter interface, that’s what you’ll see. But if you view it using the new Twitter, as it appears in your tweetstream, it looks like this:

Look at what happened to the t.co URL. It’s been expanded. It changed from:

http://t.co/oOsb16s

to:

searchengineland.com/google-url-sho…

Even though I tweeted a t.co URL, that URL was “unwrapped” to show me some of the original URL. Twitter says it is doing this so that people will have a better idea of where they are heading to (and Bit.ly tells me Twitter is encouraging developers of Twitter applications to do the same).

Meanwhile, the click itself will still go through the t.co domain, like this:

http://t.co/oOsb16s > http://searchengineland.com/google-url-shortener-opened-to-the-public-51964

Also notice that by unwrapping the URL, Twitter actually shows a tweet that becomes 155 characters in all. The original tweet was still 140 characters — tweets can’t be entered that are longer than this. But what’s displayed can go longer, in this unique situation.

Again, things are still in a bit of flux right now. You’ll still see t.co domains “displaying” at Twitter.com, but that’s supposed to change in the near future.

Advertising, Tracking & Safety

Back to the advertising and safety aspects. On the advertising and tracking front, what Twitter’s doing make a lot of sense. It something other companies like Google have long done. Click on any search result in Google, and it registers that click and redirects you through a system that records it:

In the example above, you can see that our “searchengineland.com” domain is displayed when our site is listed at Google. But if you click on the blue hyperlink, you’re actually routed through Google’s URL processor, which tracks the click and then sends you on your way.

This tracking gives the company valuable information about how people are interacting with its service. Heck, many “mere mortal” web sites use outbound link tracking. To me, it’s hard to begrudge Twitter doing the same.

On the safety front, this is a nobrainer. If a malware URL gets tweeted, by using wrapping, Twitter can stop that dead in its tracks. It can simply turn off the redirection and protect many people. Sure, there’s the possibility that Twitter might abuse this feature. I think that’s a very slim worry.

Back To Google: Why?

Now let’s head back to Google. Why do this? Google gives three reasons in its blog post:

• Stability: People want a stable URL shortening service
• Security: People want a safe service
• Speed: People want a fast service

On stability, my initial thought was that we had plenty of good services out there already. But looking through my review from last year of URL shorteners, two of the three top choices (tr.im and cl.igs) have died.

Bit.ly still seems to thrive, of course. And Twitter offers its wrapper, that can also be used to shorten. But Twitter’s not offering tracking nor an easy standalone service. Ow.ly is backed by Hootsuite, and I like the stats within HootSuite that it provides — but as a standalone service, I don’t see stats and find it clunky to use. As for Awe.sm, it seems to offer nice features, but only for those who pay.

So yes, I can see where Google is filling a need here. I have little reason to fear that a URL shortened through Google is going to fail to work in a year, something that was a real concern when I did my review of URL shorteners last year (and phew, my top choice of Bit.ly was the one that survived!).

On the security front, Twitter’s plans mean that Google’s not bringing anything to the table. Twitter will secure links shortened through its own service, thank you very much. Of course, people do shorten URLs for use elsewhere.

As for speed, I’ve just not heard many complaints that Bit.ly was somehow resolving slowly. Google did email me a link to a TechCrunch article about how a third party firm found that its service was much faster than others. OK, but anecdotally, I just don’t hear many complaints on this issue in general.

Google’s said in the past that it doesn’t want to launch “me too” products. I’d say this is 50% “me too.” It offers basically what Bit.ly is already providing, not bringing anything particularly new or unique to the table. But as I’ve said, with all the consolidation on the standalone URL shortener front, I’d say it’s nice to have this additional option.

But Really, Why?

I talked with the head of Google’s web spam team, Matt Cutts, a bit about the reasons behind the service. Sound odd to be talking to him about Google’s URL shortener? Well, the service began as a “20% time” project by engineers in his group, time engineers at Google are allowed to spend working on whatever they’d like. So Cutts is knowledgeable about the project and serving as one of the de facto spokespeople for it.

Why do this, in his words?

“If people are that excited about it, we figured why not open it up to the world,” Cutts said, explaining that about 70,000 people were making use of an extension in the Chrome browser to shorten URLs. Cutts also reiterated the safe, speedy and secure mantra of the official blog post.

And is it taking aim at any particular product?

“By just showing up at the table and providing a really nice service, you can motivate everyone to improve in the space,” he said. “We definitely don’t want to kill anyone.”

And benefits in terms of helping Google better track links? Cutts wouldn’t go into that. But the benefits are obvious. Seeing what people are clicking on in tweets is useful information for improving real time results, as well as search results in general. Google can’t see much of that data now. But if more people use its own URL shortener, suddenly, it does. Offering one definitely puts Google at the table for any Twitter client maker that’s looking for a shortener option.

Bit.ly’s Response

Meanwhile, how’s the reaction from Bit.ly, which has watched Google suddenly roll into a space it dominated? John Borthwork, CEO of Betaworks, which owns Bit.ly sent me this:

Like I said to Marshall K. the imitation is flattering, sincerely. Google are a great company who understand workflow and user needs very well. The team at bit.ly work very very hard to understand what users want. The fact that Google copied the basics of bit.ly says they think we got most of it right. A complement indeed.

We have come a long way since Goog first launched Goo.gl. We now have 4000 pro customers, and over 20k in the pipeline, from Yahoo, to Amazon to NPR to Search Engine Land.  All use bit.ly’s white label service. 36 billion links clicked on so far this year, 4 billion+ URLs in total have been shortened.

That’s a lot of data to manage in real time, and we have done all of that for years now, without a hiccup. Users and publishers — everyone should have a choice of what service to use, and who they want to have access to their data.

Time To Think Carefully About Which Country Hosts Your URL Shortener

Libyan Registrar Takes Back Domain

Earlier this week, Nic.ly — a domain registrar in Libya that handles Libyans domains — took back the vb.ly domain from its American owners, after it was in use for a year.

Reason? The owners, Ben Metcalfe and noted sex blogger Violet Blue, were told the domain was violated Nic.ly’s terms as it was being used to point at adult content. From Blue’s blog post, citing what Nic.ly told her:

Pornography and adult material aren’t allowed under Libyan Law, therefore we removed the domain, and before doing so we warned you thru our Resellers and gave you a relatively long grace period to rectify your situation. Being that you didn’t receive/ ignored our warnings is your problem not ours

When we have an out cry from within our Community and even from places as remote as Morocco (a sister Muslim and Arab state) asking us how such a ‘scandalous’ domain is allowed to exist under our National extension we are left with no option but to apply the rules. I invite you to conduct a simple search to see if domains such as (what was) yours are allowed to exist under the ccTLD of other Arab and Muslim Countries.

They don’t. Why should Libya be the exception?

Metcalfe also blogged about the situation here.

Nic.ly: It Was A Porn Site, Not A Shortener Service

Nic.ly has also put up its own post on the situation today to suggest that where vb.ly went wrong was being “different” that other shorteners by focusing on adult content:

In reference to the vb.ly incident: the domain’s purpose (proclaimed by its registrants themselves) was to serve as a ‘sex friendly URL shortener’, mainly for adult uses. This means that vb.ly had a policy different than the other URL shorteners, not using filters and encouraging the use of this service for creating links to adult sites and other “NSFW” links, thus placing vb.ly by definition in the porn/adult site category.

This use was deemed as unacceptable by our local internet community, regardless of whether or not the site hosts adult material or redirects traffic to 3rd party sites

No Porn.ly, No Problem?

Effectively, Nic.ly calls vb.ly a porn site. That’s important, because it implies that the biggest shortener using the .ly domain, Bit.ly, won’t have similar problems. Since it (or other domains using .ly) aren’t trying to promote the shortening of adult content, it is seemingly in the “safe” category.

Moreover, looking at Bit.ly’s terms, the service does have rules against “pornographic” or “obscene” content. So technically, if Bit.ly found itself in the same situation as vb.ly, it could point to its terms to say it complies with the spirit of Libyan law and might look to do a better job in filtering (to my understanding, it currently doesn’t try to filter out adult content at all, only malware or similarly harmful links).

Time To Say Goodbye To .Ly Shortening, Hello J.mp

Still, it all leaves me unsettled. What’s to prevent a Libyan registrar down the road from deciding that just pointing at any adult content through your domain, even if that’s not your main purpose, is a violation worthy of pulling your domain?

The reality is that I can’t recommend anyone using the .ly extension any longer. In the case of Bit.ly, they also run the J.mp service. It works just like Bit.ly does, but the domain name is out of the Northern Mariana Islands. I’m going to trust them more than Libya, at this point.

Twitter Clients: Support J.mp & Goo.gl!

That also means I’d like to see Twitter clients ensure they are supporting J.mp as well as Bit.ly. In my Twhirl client from Seesmic, I’ve got no option to use J.mp. The same is true for TweetDeck. Adding in the new Google shortener also makes sense. Goo.gl makes use of the GL domain from Greenland.

Personally, when I had to pick a short, custom domain for Search Engine Land, I went with .com. Even though selnd.com meant I gave up a few characters, I had the security gained from my own name, using the long-standing .com out of the US.

I did ask Bit.ly about these issues, by the way, but the company wouldn’t comment on the record.

Fazny Zavahir | Microsoft, Facebook Announce Integrated Social Search

Bing searches will include pictures of Facebook friends next to the web pages that they recommend.

Facebook, which is drawing closer to Microsoft as competition with Google heats up, is making it possible for Microsoft to display in web search results the recommendations of a person’s Facebook friends.The new capability, introduced Wednesday, marks an expansion of the partnership between Microsoft and Facebook. Microsoft is the exclusive web search provider on the social network.

Facebook users who use Bing or web search within the site will get with results the pictures of friends next to web pages they recommend. The Facebook results will be gathered from what people have indicated they “like” on the social network.

“Your friends have liked lots of things all over the web, and now instead of stumbling across a new movie or having to look at a friend’s profile to see which restaurants they like, we’re bringing everything together in one place,” Bret Taylor, chief technology officer for Facebook, said in the company’s blog.

In addition, Microsoft and Facebook are improving results when people search for other people. Searching for a person on Bing will include crawling through the friends of friends on Facebook to look for mutual connections. Bing will also make it possible to add such people as Facebook friends directly from the search engine.

Microsoft and Facebook plan to roll out the new features in the U.S. over the coming weeks. The new features are worthwhile enhancements to Bing, but are not a game-changer, Ray Valdes, analyst for Gartner, said in an e-mail to InformationWeek. “This alone won’t change the dynamics of search engine competition between Bing and Google,” Valdes said. “Google will remain dominant, although likely Bing will gain a bit — especially if it keeps following up with additional improvements.”

The real importance, according to Valdes, is the “emerging strategic conflict” between Facebook and Google, which are gradually encroaching in each other’s turf. Google Buzz, launched in February, was an attempt by Google to turn its Gmail email service into a social communication hub. While that effort failed to take off, Google is expected to make another attempt at online social networking soon.

In the meantime, Facebook is growing in importance. The site in August dislodged Google as the top online destination in the U.S., with Americans spending more time virtually visiting friends than they did on all of Google’s sites combined, according to ComScore.

“Google has made mistakes in the social arena in the past, but has tremendous resources that it is marshaling for a new assault on this market territory,” Valdes said. “For Facebook to hold on to its leadership position in the face of the challenge from Google, it needs to make more alliances such as the one with Microsoft.”

As the market in online social networking matures, companies in leading positions stand to make much more money from advertising. Linking ads to search results that include the recommendations of friends is considered a powerful marketing tool.