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Microsoft to Enter Online Services Market

Posted by inet - 2005-11-02

Microsoft Corp. unveiled a new strategy Tuesday to move software and services online, seeking to fend off a growing threat from Google Inc. and other nimble upstarts born on the Internet.

With a new Web site called "Windows Live," Microsoft hopes to create a new platform that will unfasten some of its applications from computer hard drives.

The site, available at http://www.live.com, repackages some of the features Microsoft already offers at its heavily trafficked MSN.com, adds more customization tools and makes it easier to view the same products and services at any time from any place whether it be a home computer or a mobile phone in a shopping mall.

"It's a revolution in how we think about software," Microsoft Chairman Bill Gates told reporters and industry analysts Tuesday. "This is a big change for .. every part of the ecosystem."

Redmond, Wash.-based Microsoft also provided a preview of "Office Live" a Web site that will provide online access to nearly two dozen applications designed to appeal to the estimated 28 million small businesses with fewer than 10 employees. That site will be offered on an invitation-only basis early next year.

Likewise, many of the Windows Live services were not yet available on Tuesday.

Microsoft's online push represents its most ambitious attempt yet to adapt to the challenges and opportunities posed by the Internet while protecting its core franchise of licensing software for installation on a single computer a business that made it one the world's most profitable companies.

But Microsoft's long-running dominance is being threatened by rapidly growing companies like Google and Yahoo Inc., which are offering more Internet-based applications and services for free, blurring what's being hosted on the Web and what's stored on a computer hard drive.

The trend makes a computer's operating system less relevant to consumers.

"This is all about Microsoft really pointing all its resources at Google," said technology industry analyst Rob Enderle.

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