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404 for Microsoft's latest decision

Redmond is winding down its book digitization projects. But the timing is even more curious than the move itself.

In the middle of a gritty search war, did Microsoft's Steve Ballmer just commit the mother of all mistakes?

I've been wondering about that ever since Microsoftsaid it would close its Search Books and Live Search Academic projects, thus ceding the field of book digitization to Google. (While both Live Search Books and Live Search Academic are going dark, both Google's Book Search and Google Scholarcontinue to operate.)

Satya Nadella, who runs Microsoft's Search, Portal and Advertising Platform Group wrote in a blog post that "given the evolution of the Web and our strategy, we believe the next generation of search is about the development of an underlying, sustainable business model for the search engine, consumer, and content partner."

I tried getting through to Nadella on Tuesday for a better explanation, but Microsoft pulled up the drawbridge. Left on my own to speculate, it appears that Microsoft was being penny-wise but pound foolish. (After all, the company was ready to buy nearly $45 billion worth of trouble integrating Yahoo.) Memo to Nadella: When you get sick of hunkering in the bunker, let's talk.

Reading through Nadella's blog post, this much is clear: Microsoft wants to put its search marbles into programs like Cashback (the new Microsoft service that rebates people to buy products online) where there's better potential for a material payback. But the search competition with Google is also partly a popularity test. Consider the following:

•  Danny Sullivan of SearchEngineLand rightly pointed out to The New York Times that while the number of people using search book services is relatively small, it's an influential lot with researchers and librarians and other earlier adopters. Don't underestimate the prestige factor.

• Participation in the project allowed Microsoft to promote itself as being one of the good guys. The Open Content Alliance says it won't scan books without first receiving permission of copyright owners. Google was sued by authors and publishers over its decision to scan copyrighted snippets without permission. Google argued that the works fell under the category of fair use. Rightly or not, however, Google was pilloried as a bad actor in this novella.

Sullivansums it up nicely when he writes that "Microsoft got mileage out of the idea it was working with the Open Content Alliance as the "good" book search partner not encumbered by controversy that the Google Book Search service has encountered.

Now Brewster Kahleof the Internet Archive is left scratching his head how to replace Microsoft's financial support for the consortium. A decade removed from its antitrust battle with the government, Microsoft's not as uniformly dreaded as it once was. Maybe Microsoft believes it's in a position where it doesn't need to buy goodwill any more. Still, you can never have enough friends.