On Friday March 10, Bill Gates ended speculation about a Microsoft game console when he unveiled such a device to the crowd at this year's Game Developers Conference. The Microsoft X-Box is supposedly a game console designed to compete head on with the Sony PlayStation II and Nintendo's forthcoming Dolphin system, although the device will be nothing more than a high end computer running Windows Millennium with a superior nVidia graphics chip and a fast Internet connection. The main difference between the X-Box and high-end computers on the market today is the price ($300), the design (Microsoft had a ridiculous looking shiny x-shaped box to use as a demo), and the marketing hype.
While the X-Box could be produced now with off-the-shelf components, Gates says that it won't be ready to ship until fall 2001 - meaning that Microsoft has no intention of actually producing the device. So what's the big deal? Sales of game consoles like the PlayStation and Sega's Dreamcast cut into Microsoft's sales of Windows, so the noneXistant-Box is an attempt to hurt the market for real game consoles. Stick this one into the vaporware file.

The MCSE revolt we have expected for a while has finally begun, with one of the largest certification material companies publicly questioning Microsoft's motivations. Coriolis CEO Keith Weiskamp wrote an open letter to Bill Gates and the media criticizing Microsoft's behavior towards professional MCSE's and MCA's who have to study and take expensive tests to get their certification. Weiskamp's letter particularly addresses the way Microsoft is expiring NT 4 tests and using free testing to "provide a leverage point" that forces professionals (and companies they work for) to adopt Win2K prematurely [see NewsSource, Sep 27 '99]. Microsoft issued an official reply to the letter, but it was a simple refusal to change any policies - a stand that could prompt thousands of certified professionals to head towards Linux, Unix, or NetWare.

Streaming media pioneer RealNetworks last week licensed Microsoft's Windows Media technology, possibly to use in its own products. While Real refused to make any comment about its plans, Microsoft made much ado about the licensing and tried to play it up in the media as a major victory. But assuming Real actually uses the codecs, it could result in a defeat for Microsoft since adding support for another major file format to Real's existing products could make them more popular while Microsoft's own Media Player remains a one-act show. Nevertheless, Real stock dropped by 12 percent on the news.

Adding some meat to the Windows CE/PocketPC systems announced last month [see NewsSource, Mar 06], last Tuesday Microsoft unwrapped three major applications to run on the platform. The new applications are Pocket Excel, Pocket Word, and Pocket Inbox, a combined e-mail, contact management and messaging program. While the mini programs are fully compatible with their parents' file formats, one wonders how useful a spreadsheet and word processor will be in a device with a three inch screen and calculator-size keyboard. The pocket programs will be bundled with PocketPC systems when they begin shipping in late May or June.

After 14 years of membership, Microsoft has finally quit the Software and Information Industry Association trade group. Microsoft's participation in the 1200-member group was already scheduled to end in September of this year, but The Behemoth was apparently driven to quit prematurely when the SIIA filed a legal brief in the antitrust trial last month to support the government's case [see NewsSource, Feb 07]. According to Microsoft's official statement, COO Bob Herbold will also be resigning his seat on the SIIA board. That statement also included several attacks towards the association, referring to it as irrelevant and weakened.

Becoming the first foreign company allowed to invest in a Malaysian broadcaster, Microsoft on March 14 invested an unspecified amount for a share of MEASAT Broadcast Network Systems, which operates television and Internet services across Asia under the Astro brand. MEASAT is primarily owned by Ananda Krishnan, who also controls Malaysia's second largest mobile phone company and a gambling corporation. According to Malaysian news reports, Microsoft and MEASAT plan to develop cobranded Internet, television and hosted software services for the entire Asian continent.

MSNBC, the news service half owned by Microsoft and NBC, is rumored to be talking with several investment banks about a possible IPO of its Internet assets. The spinoff would create a 'tracking stock' that MSNBC could use to make acquisitions and entice employees, but considering the recent performance of similar stocks it isn't likely. An MSNBC tracking stock would also compete with NBCi, the tracking stock issued by NBC for Internet properties it completely owns.
Earlier this month Microsoft bought 20 percent of RealNames, a company developing keywords for Web sites similar to the ones already present in online services like AOL. Following the investment, Microsoft and RealNames announced that they will push for a set of Internet keyword standards.
According to several sources, Microsoft is preparing to eliminate Windows CE/PocketPC licensing fees to build market share for the struggling handheld OS. While the media has played up the rumors as an 'open source' move by The Behemoth, it will actually be nothing more than another anticompetitive product giveaway similar to the way Internet Explorer was originally distributed.
Electronic translation and speech recognition giant Lernout & Hauspie is spending $511 million to purchase Dictaphone, a manufacturer of dictation equipment founded in 1888 by telephone inventor Alexander Graham Bell. L&H, which is 8% owned by Microsoft [see NewsSource, Sep 15 '97], is expected to finalize the deal sometime next month.
Microsoft is expanding its MSN HomeAdvisor site from a simple real estate listing to a full-blown mortgage application tool. The expansion will be aided by mortgage loan providers Freddie Mac, Bank of America, Norwest Mortgage, and several others. This aligns HomeAdvisor as a competitor to existing home mortgage services provided by Intuit on its quicken.com site.

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