New Flights of Fancy

The sky over San Francisco is cerulean blue as you begin your descent into the city from 2,000 feet. As you pass over the southern hills, the skyline of the Financial District rises into view. On the descent into downtown, familiar skyscrapers form an urban canyon around you; you can even see the trolley tracks running down the valley formed by Market Street. But then a little pop-up box next to the Bay Bridge explains that an accident has just occurred on the western span, and a thick red line indicates the resulting traffic jam along the highway. A banner ad for Emeryville, Calif., firm ZipRealty hangs incongruously in the air over the Transamerica Pyramid. You are actually staring at your PC screen, not out an airplane window.

Virtual Earth 3D, the online service unveiled last week by Microsoft, is both incomplete (only 15 cities are depicted in 3-D) and imperfect (some of the buildings are shrouded in shadow, and you need a powerful PC running Windows XP or the new Vista to use it). But it is also the start of something potentially big: the 3-D Web. Traditional Web pages give us text, photos and video, unattached to real-world context. Now interactive mapping programs like Google Earth let us zoom around the globe on our PCs and peer down at the topography captured by satellites and aerial photographers. Both Google Earth and Microsoft's Virtual Earth are hugely popular and have been downloaded more than 100 million times each.

With the upgraded Virtual Earth 3D, Microsoft has edged ahead of Google in at least one aspect of the race to bring immersive maps to the Net. It has added a missing piece--photorealistic buildings that sprout from the ground and evoke the lifelike but illusory world of "The Matrix." The service lets you use your mouse (or Xbox controller, if it's plugged into your PC) to navigate up, down and through America's urban jungles, and to see real-time traffic data and the occasional billboard ad. For now, it's merely a novel way to spend some time. But if Microsoft continues to add new cities and improves an already expensive project, the 3-D Web could become a carbon copy of the real world and a powerful new platform on which to blend advertising, social networks, search and e-commerce. "A seedling is being planted that could grow into a range of things that will be very interesting," says Internet analyst Greg Sterling. "We probably don't even understand all the implications right now."

Engineers at Microsoft understood that creating a navigable replica of the planet might give users a more intuitive way to surf and search the Internet. Need to get driving directions? Instead of following lines and written directions on a map, Virtual Earth might, one day, take you on a run-through of your route, showing the precise landmarks where you'll make turns. Can't remember the name of that beer pub on Broadway in Baltimore's inner wharf district? You can visit that neighborhood in Virtual Earth 3D and see the actual name on the front window of the building (Max's Taphouse). "The most common-sense user model for the Internet is the real world," says Microsoft general manager Stephen Lawler, who heads up the Virtual Earth project. Microsoft is also opening Virtual Earth to third-party developers. So for example, one day a programmer might find a way to let users book a reservation with a mouse click right on the restaurant's front door--and even wander inside into a 3-D simulation of the dining room to pick a table.

Virtual Earth 3D was conceived more than two years ago. In September 2004, Microsoft VP Alexander Gounares, Bill Gates's technical assistant at the time, wrote an internal paper proposing that Microsoft build a digital simulation of the reality we experience outside our doors every morning. The paper began, "Imagine an online virtual earth, a common repository for any information about the real world [with] detailed 3D models of every location on the planet." A month later, rival Google showed it had a similar idea, acquiring San Francisco satellite-imagery firm Keyhole, which turned into the blockbuster free service Google Earth. A few weeks later, Gates took an expanded version of Gounares's paper to his annual ThinkWeek retreat, where he ponders future technology directions, and afterward greenlighted Virtual Earth, which was internally dubbed "Spaceland."

The Spaceland team's biggest challenge was generating a realistic 3-D world without breaking the bank. Hollywood is adept at urban simulations, but special-effects designers typically create the scenes by hand, laboriously combining dozens of photos into a singe 3-D model. Such a process can cost millions of dollars for just a few city blocks. Games like the online multiplayer universe "Second Life" and "World of Warcraft" also offer rich three-dimensional environments, but those are illustrated by programmers and don't rely on realistic pictures.

Microsoft found the answer in Boulder, Colo.'s Vexcel, a 21-year-old digital-imagery firm that sells a specialized digital camera to aerial photography companies. During the late '90s boom, Vexcel had a side business making 3-D recreations of urban areas for telecom firms that needed to know precisely where to position their line-of-sight antennas. Vexcel's trick: using data from its cameras, which track precisely when and where each aerial photo is snapped. The firm's software then combines the photos, accounting for overlapping features in each picture to generate a 3-D image--"taking a decimal off the price" of building the 3-D Web, says Microsoft's Lawler.

The acquisition almost didn't happen. Vexcel CEO John Curlander, a former researcher at NASA's Jet Propulsion Laboratory, was nervous that Microsoft was buying the software and would lay off many of his 135 employees. He asked for a personal meeting with Gates, and was charmed and impressed by the Microsoft founder's commitment to the 3-D vision. "That's the one thing Microsoft does have--star power," Curlander says. Microsoft didn't disclose what it paid for Vexcel, but analysts say it was north of $50 million.

Curlander and his crew now have serious work ahead. Microsoft wants to add 100 more 3-D cities to Virtual Earth by next summer. It has also hired Minnesota-based Facet Technology to drive city streets and take millions of high-resolution photographs of stores, homes and street signs. Sometime in the near future, Microsoft will begin blending those street-level images into Virtual Earth 3D, which will improve detail on the ground--and help users recognize more of their favorite restaurants and stores.

That will be cool, but it won't be cheap. Building out Virtual Earth 3D will cost hundreds of millions of dollars, analysts say, and inevitably test Microsoft's dedication to the effort. To pay at least some of the bill, Microsoft has introduced banner ads into Virtual Earth, served up by another Microsoft subsidiary, Massive, which delivers ads from major companies like Coca-Cola into videogames like Splinter Cell. Ads in the service hover over major landmarks like SBC Park in San Francisco and the Institute of Contemporary Art in Boston (Microsoft is careful not to let the banners touch any photorealistic buildings to avoid any legal complications). For now, the ads will defray only a fraction of the cost. "Building out the entire world will be a major commitment," says geospatial-technology analyst Edward Jurkevics. "Microsoft is signing up for a very big long-term effort."

It's also buying into another footrace with search giant Google, which has the more popular and easier-to-use Google Earth. Google GM John Hanke says that giving content like photographs, weather and traffic information a geographic context by bringing them into maps is just as important as adding a third dimension. Still, Google is hedging its bet and last March bought SketchUp, a Web tool that lets users manually create textured 3-D images of homes or buildings; later this year Google plans to add the best of those images into Google Earth. Microsoft hopes Vexcel's technology can help it move more quickly into the 3-D Web than Google will with its reliance on community submissions.

Google is improving Google Earth in another way as well. This week the company will announce that it is adding 16 historic maps of six cities, including New York, London and Tokyo, from the collection of San Francisco map collector David Rumsey. Users exploring those cities in Google Earth will be able to click on a link and be transported more than 100 years into the past to a forgotten landscape. In other words, while Microsoft is stretching out in the third dimension, Google is leaping ahead into the fourth (time). Pay attention to this high-tech mapping race--it promises to take us all in some remarkable directions.