AT&T (again), CAPTCHA's fall, Microsoft’s latest fails

Big business v. small town

We’re starting to think that AT&T is a firm believer in the “all PR is good PR” theory, since this is the second time in a single week they’ve made headlines for pretty sketchy behavior. After Wednesday’s interesting admission that they’re moving ahead with expansion plans regardless of the outcome of the Net Neutrality debate, they’re in the news again for trying to interfere with a city’s plans to build a fiber broadband network. 

In October, city leaders in Chanute, Kansas voted to build a new, super-fast network for the town’s 9k residents. AT&T balked at this, going to the Kansas Corporation Commission and whining that the new network could threaten AT&T’s DSL business in Chanute. But competition is sort of the point of a free market, isn’t it? Monopoly, much?

What’s staggering to us is that AT&T has made no move to upgrade its current, abysmal 6 Mbps DSL service to make themselves more competitive against a new system. Except they’re clearly not interested in being competitive as much as they are in remaining the one, “better than nothing” choice for consumers in Chanute. But AT&T doesn’t want to be regulated, either, as evidenced by their stance on Net Neutrality. This level of hypocrisy is pretty damning, and makes it even clearer why Net Neutrality is such an important thing, regardless of how you feel about Netflix.

Google’s Razor

“CAPTCHA and reCAPTCHA are really easy to read and use!” said no one, ever. In fact, there are whole articles dedicated to mocking unreadable or unintentionally absurd CAPTCHAS. But it looks like the day may finally come when we can stop trying to decode the mysterious smudges and “maybe letters, maybe numbers” blobs of reCAPTCHA.

Research recently showed that artificial intelligence can identify distorted text with startling 99.8% accuracy (what a world we live in), meaning using reCAPTCHA is no longer a viable method for Google to determine you’re not a bot. But if you are a bot, don’t get too comfortable: Google’s newest API incorporates a deceptively simple solution. A check box, and the phrase, “I am not a robot”. It’s one of those Occam’s razor moments where the absolute simplest solution is the best, since as far as we can tell, robot lying would constitute harm to a human.

Fait Accompli

If you walk into any office building, you’ll probably find most users checking their email through Microsoft Outlook. Microsoft has always prided itself on Outlook’s commanding corporate market share. But over the past couple years Outlook’s power has weakened, with iOS devices now solidly in the top spot of most popular email clients, and Android quickly edging its way into Outlook’s second-place position.

To date, Outlook has had no presence at all on iOS (and with only one execrable Android app until just last year), which has been a huge miss for Microsoft and a factor in the widening profit gap between them and Apple. So this week’s acquisition of iOS and Android email client Accompli is an incredibly good move for Microsoft. Email is obviously a vital piece of business tech, so it makes sense that Microsoft would stop ignoring their dwindling numbers. And while $200 million is by no means a small amount, in the mobile space it’s a steal (remember, Snapchat said “no” to Facebook’s $3 billion offer).

But we have to wonder if it isn’t too little, too late for Microsoft. They waited until the world was forced to move on from Outlook (Mail has worked great on iOS for years, why should you switch now?) before making a move. Users had to make do, and make do they did – establishing the iPhone’s 28% email client market share. We have the feeling Microsoft thought they’d starve out iOS, but ended up starving out their own product. Maybe for Outlook it’s fait accompli.

But with every birth there’s a death

The purchase of Accompli wasn’t Microsoft’s only big news this week. Thursday they announced that they’re selling their share of Nook back to Barnes & Noble for $62.4 million in cash and 2.7 million shares. That’s a total value of $115.2 million, nowhere near the $300 million Microsoft invested in the partnership. And while Nook has seen its market share dwindle to almost nothing, in August they announced their first new tablet in two years, and have been making attempts to win back users.

We fear it’s just another instance in a long line of events reinforcing Microsoft’s “rigid corporate culture and structure” that encourages shortsighted, anti-innovation behavior in its employees by giving them large stock incentives. This makes everyone want to juice the stock with short-term boosts to cash cows of old (Windows and Office) rather than creating a more balanced, long-term, horizontal strategy. It sounds to us like Microsoft hasn’t been able to shake off the dust of Steve Ballmer, and is still struggling to recover its pre-Ballmer mojo.

If Microsoft (which has propped up its success on Office for far too long now) can’t learn to diversify and respond to threats in the market (like Mail and Google Docs) they’ll go the way of other corporate dinosaurs and become a footnote. With Satya Nadella’s crazy assertion that it’s “bad karma” for women to ask for raises, we don’t really see Microsoft getting there in time.