All Things Digital

Project Granola?

Apparently, that’s the jokey nickname that’s been given by some in the company to Microsoft’s (MSFT) new online strategy, in the wake of its failed efforts to acquire Yahoo (YHOO) that ended in a big heap of mess this past weekend.

Now, sources tell BoomTown, it is all about “organic”–hence the image of a healthy handful of granola (except for the fact that, in my experience, nobody really likes granola after eating it as much as they think will before).

In any case, it is a word Microsoft folks have been slipping into the conversations with BoomTown over the past few days, so much so that I have started to feel like I was talking to execs from Whole Foods.

Now Microsoft’s greenness has gone public.

Case in point: Brian Hall, Windows Live General Manager, who trotted out the organic word in front of Merrill Lynch analysts yesterday, as reported by CNET’s Ina Fried, saying: “We’ve withdrawn the offer and moved on, and now are focused on how we grow as fast as possible organically.”

But what does organic mean exactly?

Two things, it seems.

First, stepping up spending on marketing, technology and research to try to find ways to differentiate from Google (GOOG) and get into the No. 2 spot now held by Yahoo.

Of course, that plan has not worked out so well as yet for the software giant, with Microsoft spending billions of dollars with no profits and little gain in online search or ad market share, while its archrival Google keeps growing stronger.

Even so, while in Korea today, Microsoft Chairman Bill Gates backed Microsoft CEO Steve Ballmer’s do-it-yourself path and his move to walk away from Yahoo.

“The key decisions on that will be made by Microsoft CEO Steve Ballmer, who took a look at Yahoo and decided that, on our own, he likes the stuff that we’re doing,” said Gates.

Gates also added what amounts to the second option for Microsoft. “I wouldn’t rule out some partnerships, but we don’t have anything imminent there,” he said.

While a return to Yahoo is a possibility, in fact, buying up Web 2.0 stars is likely to be a bigger focus of the company.

“Yahoo can twist,” said one source. “Microsoft has lots and lots of other options.”

According to sources close to the company, for example, Microsoft’s bankers had been putting out subtle signals to Facebook to see if it would be open to a full buyout.

Microsoft already invested $240 million in the hot social-networking site, an investment that gave Facebook its kooky $15 billion valuation.

And its execs have long told Facebook execs they wouldn’t mind a bigger bite–um, like all of it.

“We just wanted to gauge their interest, more than any real effort,” said another source, who expects Facebook to stick to its longish path to an eventual IPO.

But, as is no secret, Microsoft has selections all over Silicon Valley to help it improve its Internet chances.

Those would include buying bigger vertical sites in strong categories like autos or jobs or finance, and also scooping up smaller but fast-growing socially oriented sites like Digg, Meebo, Yelp or focusing on ad plays like Spot Runner (which just got another big dollop of funding).

There might even be some sense in spinning some of these and all Microsoft Web units off into a separate Internet company, which would be another way of integrating even bigger deals for properties like Time Warner’s (TWX) AOL or News Corp.’s (NWS) MySpace (which are longer shots, I think).

In a post I did in February right after Yahoo rebuffed Microsoft for the first time, I suggested such a course for the company.

As I wrote:

Here’s a list: LinkedIn. Digg. Flixster. Slide or RockYou. Veoh. WordPress. Sphere. Sugar. Some international stuff. And more.

Then, some noted, Microsoft would have to give massive financial incentives to those entrepreneurs to stay and thrive. Most importantly, it would have to keep its Redmond hands from interfering.

Now that would send shivers up the spine of Larry and Sergey.”

And that, most of all, would be more like icing on the cake for Microsoft and be much more tasty than a bowl full of granola.

And, as Martha Stewart says: It’s a good thing.

I am now at the DLD conference in Munich, which is put on by Hubert Burda Media, a gathering that has become one of Europe’s most interesting in recent years.

The three-day DLD–which stands for Digital, Life, Design–focuses on digital innovation, science and culture and has the most cosmopolitan audience of any conference out there.

It is chaired by publisher Hubert Burda and serial Israeli investor Joseph Vardi and hosted by Stephanie Czerny and Marcel Reichart.

It is interesting to be here to garner a lot of different viewpoints from outside the U.S., and I will be visiting a lot of German Web start-ups over the next week.

There is also a lot of Olympic-level schmoozing, of course, since there are precious few such events in Europe compared to the conference-crazy U.S.

There are also, of course, a lot of the usual suspects from the States and especially Silicon Valley.

So far this morning, I have run into folks like former Microsoftie Linda Stone, Yahoo’s Bradley Horowitz, writer and entrepreneur Esther Dyson, Facebook’s Matt Cohler and, yes, Martha Stewart (who needs no introduction).

I am also here to interview onstage for DLD today Kenneth Roth (pictured here), longtime executive director of Human Rights Watch, which investigates, reports on and seeks to curb human-rights abuses in some 70 countries.

To say I am out of my league in interviewing such a serious and substantive figure is an understatement, especially given that I spend all my time contemplating the monetization of widgets (to be more specific, the non-monetization), the fate of content on the Web and the exact date the hype of social networking will end.

Still, I will give it my best effort and perhaps focus on the use of digital tools to get information and stories of heinous injustices out worldwide. After all, the Web has to be more than SuperPoking and dumb online videos on cats skateboarding.

Our session is aptly named: “Inconvenient Stories.”

My favorite kind.

Video, of course, to follow.

Incredibly, it is the 25th anniversary of Martha Stewart’s first big splash with her iconic book, “Entertaining,” which pretty much ushered in the boom in lifestyle content.

While Stewart is known for her focus on home-making skills, some might not know that she is also a bit of a geek, who has been a fixture at many tech events over the years.

For example, she has been an active audience member at our D: All Things Digital conference over the last two years (here she is at D4, grilling Sony CEO Howard Stringer about why there had to be so many wires with her devices).

In this interview with WSJ Online, she talks about her company, Martha Stewart Living Omnimedia, including its many forays into the Internet area.

That will soon mean a new site she has dubbed “Marthapedia,” or–as BoomTown likes to call it–”All Things Martha.”

Charles Simonyi was out of this world onstage, literally.

The early top Microsoft exec, who more recently founded Intentional Software, boldly went where few had gone before, by taking a ride into space. As one of the first space tourists, he spent 11 days on board the International Space Station earlier this year.

Oh, also, good friend Martha Stewart was there to see him off (and also watched him at the conference).

By way of background, D: All Things Digital, the annual tech and media conference Walt Mossberg and I host, has been sold out with a long wait list every year we have put it on.

That has meant only a few hundred people can see the interviews and also demos we do live onstage with some of the tech and media industry’s most interesting and important players and products.

The lineups have included Microsoft’s Bill Gates and Apple’s Steve Jobs, as well as Eric Schmidt of Google, IAC’s Barry Diller, Meg Whitman of eBay, Cisco’s John Chambers and many others.

And we’ve demoed stuff like the Treo when it first came out, as well as digital toilets, Wi-Fi phones and much more.

We usually post the photos and videos of the interviews and demos six or more months after they take place on a separate conference site. This year, our Digital Daily’s John Paczkowski live-blogged D5, and we also posted video highlights from all of the sessions immediately on our newly launched site here.

Now, we are posting videos of every session of the 2007 conference here, in full, and we have made all our photo galleries, hosted by SmugMug and mostly shot by our fabulous Asa Mathat, public too. You can also access our videos via the site’s master player here.

Every day, I have been highlighting a different interview or demo from the conference and this is the final one, although all are still here for good for your perusal and enjoyment.

Here’s Simonyi:

BoomTown has long been a big fan of Martha Stewart.

And we like her 25% more now, after seeing the new pictures she took for Wired’s latest issue, as well as a particularly sassy interview she did with the magazine.

The homemaking empress is on the cover of Wired, pictured here making a Wii-shaped cake. It looks delicious, but apparently is not from these recipe instructions that leave out the baking soda for architectural reasons.

And another picture here by Jill Greenberg has her pruning a robot hedge, along with this interview with Mark Frauenfelder on her gadget-freak status.

That’s been easy to see for many years. I ran into her first more than a decade ago at a Microsoft party at the Consumer Electronics Show in Las Vegas, and she has shown up at a variety of Silicon Valley events from time to time.

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