Not long after releasing Windows NT 4 in 1997, Microsoft announced a successor to that product called 'Cairo' they scheduled to ship in 1998. Last Thursday, February 17 2000 - after three years, two name changes and at least four release date changes - Microsoft officially unveiled that product to the world as Windows 2000. In front of a noticeably bored audience inside San Francisco's Moscone Center, Bill Gates introduced the new system with one of his increasingly-uninteresting speeches. During the address Gates heaped praise on 2000, repeatedly mentioned that it cost Microsoft $2 billion to develop, and then promised to deliver a 64-bit version of the system by the fall of this year. The speech was preceded by videos promoting 2000 and guest appearances by Star Trek actor Patrick Stewart and a performer who played a minor character on the television show Seinfeld. (One wouldn't think Microsoft is worth $480 billion by looking at the roster of stars appearing to promote its latest product - especially when compared to the ones hired to push Windows 95.) The only star of any real significance was Carlos Santana, but he only performed after Gates' introductory speech - presumably to wake the audience back up.
Surprising to some, Microsoft's stock price took a significant hit on 'Launch Day' and has been dropping ever since. Apparently investors have been scared by comments from the Gartner Group and Michael Dell about Windows 2000's usability and a report of 63,000 bugs present in the finished product [see NewsSource, Feb. 14]. On Launch Day the Gartner Group released a second report filled with predictions of hidden fees inside the 2000 license, while Michael Dell and his company backtracked and denied the earlier statements. Unfortunately for Microsoft's poor stockholders, the denials did nothing for their holdings and MSFT continued dropping throughout the week. Investors may have also been disappointed when Windows 2000 failed to receive the same amount of media coverage and consumer demand as Windows 95, since that event drove Microsoft's stock up by record amounts. Whatever the reason was, with Microsoft part of every major stock index - including the Dow - Windows 2000 may do more damage to the market than Y2K or the government antitrust trial combined.

COURT NOTES: One week before its scheduled return to the courtroom, Microsoft sent letters begging for help to members of the United States Congress. According to those letters, the antitrust trial is "entering a critical stage" that could result in a breakup of the company, something Microsoft considers as a "regulatory death sentence" that would benefit competitors but "would be harmful to consumers." The message goes on to claim Microsoft is serious about reaching a settlement, but only one that would prevent such a damaging breakup. The letters were a waste of paper since no member of congress can affect any case being handled by the Department of Justice anyway. Considering the company's recent restructuring moves, this may just be a red herring to make the DoJ push harder for a breakup Microsoft really wants to see happen.

As part of Microsoft's unending renovation of MSN, the company is spending $150 million on a new ad campaign for the loosely connected network of Web sites. That campaign, dubbed 'The MSN Project', is designed to advertise MSN services in action by showing a group of strangers using them to furnish an empty home and complete simple tasks. The new ads also introduce MSN's latest logo, the network's fourth in five years. The icon with the letters MSN and a multicolor butterfly appears in the ads and at the top of msn.com, but Microsoft has not yet implemented it on other MSN sites.

And adding a competitive edge to MSN's poorly-rated Internet access service, Microsoft invested $50 million for a 26% stake in Israel's Gilat Satellite Networks. The cash infusion will be used to create a subsidiary company called Gilat-To-Home that will provide two-way satellite Internet service for home users. The service - only for MSN, only on Windows 9X, and only in the USA - will compete head on with iSky, EchoStar, and a service currently being developed by DirecTV and America Online. Gilat-To-Home services will be marketed in Radio Shack stores as part of Microsoft's deal with the electronics chain [see NewsSource, Nov. 22 '99].

During the Visual Basic Insiders Technical Summit (VBITS) tradeshow in San Francisco last week, Steve Ballmer took the stage to give his first major speech since being named Microsoft CEO last month [see NewsSource, Jan. 17]. In the speech Ballmer discussed the next versions of Microsoft's development products, particularly Visual Basic. According to his statements the next generation of object-oriented tools from Microsoft will be Web-centric, for building Internet-based applications in HTML, C++, XML, and ASP (Java was almost unmentioned). Disappointing developers eagerly awaiting the new products, Ballmer's announcement is more than a year premature since Microsoft is not expected to release any new versions of its Visual development tools until 'Whistler' ships in March 2001.

Internet bill payment service CheckFree has agreed to buy TransPort, a competing company owned by Microsoft, First Data and Citibank. CheckFree will buy TransPort for 17 million shares of stock worth about $1 billion, resulting in Microsoft owning 11% of the combined companies. CheckFree's only remaining large competitor is Spectrum, a service backed by Chase Manhattan, First Union, Wells Fargo, and the Sun-Netscape alliance.
Switzerland's PreisŸberwacher (price regulator) has launched an investigation into what he calls "significant price differences" between Microsoft products for sale in Switzerland and the US. His office can, if necessary, enact pricing restrictions on any Microsoft products sold in the country. Microsoft defends the pricing by saying everything in Switzerland costs more, not just software.

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