Microsoft aquired Starwave and Lucent in late 1999 and consolidated them
with its previous WebTV and General Magic ('98) purchases to form
Microsoft Communications. By striking tight, exclusive relationships
with TCI, Time-Warner, its hardware OEMs, and the entire cadre of
consume electronics manufacturers that didn't camp out in the
Sun/Corel/Sony Linux/Java camp, Microsoft has become the essential
infrastructure for the new "wired homes" that are the hot growth trend
these days. The basic gist is this: about 30% (and growing *rapidly*)
of all homes with cable service now get their basic Web/cable TV/
telephone service/virtual digital assistant service through MSC. Most
of the consumer electronics now purchasable --- from VCRs to microwaves
--- are now networked with low-cost spread-spectrum RF using a patented
and proprietary Microsoft wireless networking scheme. Two essential
pieces of hardware are present in every home: an MSC "smartbox" which
sits on the TV, and the MSC "smarthub" --- a dedicated PC which acts as
the home "server" and "router." The bottom line: at every step of the
way, from hardware purchases to online software "leases" (application
leasing is now the norm) to the monthly consolidated communications bill
(cable, phone, and Internet) money flows towards Redmond.
Also, Microsoft spent a substantial amount of time and effort in '99-'01
broadening its presence in the consumer financial services arena. As
smart cards and online shopping grew substantially, MS managed to
leverage its growing presence and strategic alliances in the home to
become, essentially, the financial transaction middleman for most
home-based electronic banking and commerce. Charging micropayments from
each transaction mediated by their financial services network, Microsoft
has grown into a banking industry dynamo to rival the Pulse and Plus ATM
systems. Further, being in this position allows Microsoft to collect
detailed demographic information about the purchasing and usage patterns
of its individual users; as of 2002, Microsoft is said to have the most
extensive and detailed demographic database on the planet.
It's a happy world. I'm sure glad Uncle Bill is here to take care of
us.
;-)
jb