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Microsoft’s New Lab Hunts for Value in User Data

The New York lab will search for patterns in aggregated user data, and suggest new revenue sources for Microsoft’s existing products.

Microsoft has begun a new effort to understand how people interact and spread information online—and how such social interactions could be valuable to the company. 

A new research lab that opens in New York City today brings together researchers studying such questions as how to identify the most influential users of a social network and how to measure the sway they hold over other users.

The lab will not be tasked with solving the problems facing Microsoft as a business. However, the program of research in New York could help the company come up with ways to extract revenue from a vast, largely untapped resource—the large quantities of data generated by people as they use Microsoft products to interact with others.

“We have all these implicit social networks in Hotmail, Outlook, Xbox Live [Microsoft’s service that connects users of its games console], and Skype,” says Jennifer Chayes, who is managing director of the new lab and was already in charge of Microsoft’s New England research lab in Cambridge, Massachusetts.

Chayes says that Microsoft is not alone in wanting to better understand and potentially build products around the interactions and information flow in their data. “There is such a large potential for this research to have an impact on many technology companies,” she says. Other companies making notable investment in such research are LinkedIn and Facebook (read our interview with the leader of Facebook’s effort to understand behavior captured in its data).

Microsoft Research is tasked only with “advancing the state of the art,” not working on specific products or business problems, but Chayes says that this could yield valuable new ideas. “The by-products can have a really significant impact on the company.” One notable recent example is Microsoft’s Kinect motion control accessory for the Xbox games console, which originated as a research project and became the fastest selling consumer device of all time.

Duncan Watts, a leading researcher in the field of computational social science, is one of the three research leaders in the new lab. He joined from Yahoo’s New York research lab, where he worked on identifying the structure of social links in sites such as Twitter, and exploring how those links shape the influence people have over one another. Watts will continue such work, and also look at questions such as whether the use of personalization by social networks or search engines creates “filter bubbles” that change the types of information a person is exposed to and influenced by.

Access to social data is crucial to such research, and Watts says that Microsoft is in a good position in that respect. The company has large pools of data on social interactions from widely used products such as Hotmail and MSN Messenger, as well as active partnerships with Facebook and Twitter.

Watts says that the recent boom in online social activity offers a lot to not just companies like Microsoft but society’s knowledge about itself. “The present time is a very special time in the history of social science because we are witnessing a dramatic transformation in our ability to observe and understand human behavior,” he says.

The two other research leaders alongside Watts in the new lab are computational economist David Pennock and machine learning expert John Langford. These three, and at least five others of the 15 that will make up the lab also recently left Yahoo Research. Chayes says the effective size of the lab will be larger than Yahoo’s, thanks to close collaboration with local universities, such as Columbia University, New York University, and the new technology campus to be opened jointly by Cornell University and the Technion Israel Institute of Technology.

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