Microsoft's Ambitious Plan to Dominate Online Transactions

As Microsoft prepares to launch its Windows 95 software, it is also setting the stage for its most ambitious venture since Bill Gates took the reins in 1980 - the Microsoft Network (MSN). The MSN is not just an upgrade to Microsoft's existing Windows operating system software, but a distribution vehicle for a simple icon that allows users to connect directly to the Internet and a range of online services. This strategy is aimed at securing a significant share of the lucrative online transaction market, potentially generating millions of dollars in revenue.

Key Takeaways:

• Microsoft expects to sign up tens of millions of customers worldwide in the next few years, surpassing the current on-line market leaders.
• The MSN icon will be pre-installed on personal computers, giving Microsoft a significant advantage over its competitors.
• Microsoft's pricing model will take a small cut of each transaction between the customer and the service provider, in contrast to other on-line providers that charge a setup fee to put their material on the network.
• The company's dominance in personal computer software has allowed it to put its MSN icon in the face of millions of Windows users, creating an unfair advantage.
• Rivals such as America Online, Compuserve, and the other established on-line providers fear that Microsoft's strategy will make it difficult for them to compete on an even playing field.
• The Justice Department is investigating whether Microsoft is using its dominance to compete unfairly with other online businesses, potentially leading to an antitrust suit.
• Microsoft's competitors in the on-line universe do not want the MSN icon staring out at computer users, as it makes it too easy for consumers to connect to Microsoft's cyberspace.

Statistics:

• Microsoft has plans to sign up tens of millions of customers worldwide in the next few years, surpassing the current market leaders.
• The current on-line market leaders, such as AOL and Compuserve, have about 8 million customers, almost all of them in North America.
• Microsoft expects to charge a low monthly fee, perhaps as little as $5, for a few hours of access to a collection of services on the MSN.
• Additional hours online will be added to the bill.
• Microsoft's competitors in the on-line universe have expressed concerns that the company's pricing model, which takes a small cut of each transaction, is unfair.

Sources:

• Adam Schoenfeld, vice president of Jupiter Communications, from the article.
• Mary Modahl, analyst with Forrester Research Inc., from the article.
• Russell Siegelman, general manager of MSN, from the article.