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Microsoft shifts WebTV oversight to
Redmond
Confirming a long-running rumour, Microsoft said it is shifting
management of its WebTV service to its MSN unit. “MSN
will assume responsibility for the WebTV Internet-on-TV service
and will become the Internet service for WebTV’s products,”
a Microsoft representative told CNET News.com. The move is
not expected to produce any changes for subscribers to the
television-based Internet service, the representative said.
The company is not planning any job cuts as part of the move.
The Mountain View, California-based unit that manages the
WebTV service will report to MSN General Manager Mark Looi
in Redmond, Wash., according to an internal memo. News of
the changes at WebTV was reported earlier by the site Net4tv
Voice, which tracks the interactive TV market and first published
details of the Microsoft memo. “The primary focus of
the Internet-on-TV team will be to deliver the key areas of
the MSN service for TV-enabled devices,” WebTV Networks
boss Bruce Leak said in the memo addressed to employees. Besides
the WebTV service, Microsoft also is using WebTV’s technology
in its soon-to-debut UltimateTV service. That offering combines
interactive television, a digital video recorder, satellite
TV and Internet access.Microsoft said that the group that
develops the WebTV units will continue to be a part of the
Microsoft TV operation, while UltimateTV will remain in Mountain
View, headed by Leak.
Microsoft acquired interactive TV pioneer WebTV in April 1997
for $425 million. Although WebTV continued to grow after the
acquisition, the number of subscribers eventually hit a plateau
at about 1 million.
Former employees said in a series of interviews last October
that conflicting goals and rising tensions eventually clouded
the company’s vision, stunted hardware innovation and
ultimately led to one of the highest customer turnover rates
on the Internet. “Honestly, the WebTV folks really didn’t
want to be part of Microsoft,” said a former senior executive
from company headquarters in Redmond, Wash. “They had
their own identity, their own vision, and they wanted to maintain
it as separately as possible. The cultures were very different
and hard to blend.”
The conflicts often led to shifts in strategy and clashes
between managers at WebTV and Microsoft. Not all of WebTV’s
failed promise, however, can be chalked up to Microsoft’s
handling of the start-up. In general, the dream of combining
PC technology with America’s favorite entertainment medium
has been a nightmare. Gateway and Compaq have both released
PC-television combinations that met with extremely slow sales.
More recently, AOL Time Warner’s AOLTV has received a
tepid reception.
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