Microsoft to focus on services, not content, online

Moving away from efforts to become a huge Internet content provider, Microsoft has unveiled a road map of Web-based services focusing on the company's core strengths of providing software tools and services.

Moving away from efforts to become a huge Internet content provider, Microsoft has unveiled a road map of Web-based services that analysts say heralds a sharpened focus on the company’s core strengths of providing software tools and services.

Although Microsoft President Steve Ballmer suggested that Microsoft would eventually provide Web services to enterprise IT customers, most of the company’s initial push will be in the consumer and small business space. "This is the first place we get to pioneer our new platform," Ballmer said.

Services Platform

The "new platform" involves several online technology services designed to make the Web more directly useful to consumers and small businesses, officials said.

As for enterprises, Ballmer said Microsoft isn’t yet ready to discuss in detail the planned services, such as providing Web-based versions of Office and Exchange or eventual revisions to Windows 2000.

Ballmer said Office will become available online “sooner than you'd expect,” while the revisions to Windows, designed to require less code on client machines, will take years to be fully realised.

Companies pursuing business-to-consumer e-commerce strategies will have to weigh whether to bet on Microsoft’s offerings. Analysts said many will, especially now that Microsoft is no longer bent on charging into the e-commerce businesses for itself.

Neil J. Herman, an analyst at Salomon Smith Barney in New York, said Microsoft is better off focusing on its software roots than “in trying to be everything to everyone.” Microsoft can continue the dominance of its core software such as Windows and Visual Studio application development tools, he said, by engaging Web content providers and e-commerce companies rather than competing with them.

As part of its effort to divest its online content and media responsibilities, the company said it will spin off its Expedia travel site in an initial public offering. Microsoft will retain a majority stake.

The spin-off follows an announcement that Microsoft will partner with Ford Motor Co. to drive the formerly all-Microsoft CarPoint car buying site.

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