Is Windows Me for you?

Scott Hillis

SEATTLE: Microsoft Corp. on Thursday formally launched the latest version of

its Windows operating system for home users, and by stuffing the software with

new music, movie and Internet features, it is echoing a strategy that has

already landed it in legal hot water.

Windows Me, short for Windows Millennium Edition, is the successor to last

year's Windows 98 Second Edition, but it is not a huge leap over its

predecessor, analysts say.

Instead, it plugs a gap in the Windows product line until next year, when

Microsoft is set to unify the business and consumer versions of its core product

in a long-awaited move.

"I really just see it as a placeholder, it's really not all that

important," said Summit Strategies analyst Dwight Davis of Windows Me.

Windows Me will be Microsoft's last operating system based on its 20-year-old

DOS programming technology.

Windows 2000, the powerful corporate operating system launched in February,

is based on Microsoft's NT technology, which is much more stable and secure than

DOS.

Originally, the company was to have scrapped DOS by now, but it faced

mounting technical challenges in adapting NT to include consumer-friendly

features such as video games.

"It comes out at sort of this strange time in the company's product

evolution, the last gasp of the DOS line and Windows 98," Davis said.

Multimedia takes center stage



Windows Me is not considered a must-have upgrade, but it adds new programs, such
as a music player that can record, store and play songs.

Also included are tools for editing home movies, built-in support for home

networking, and a "system restore" feature that returns the PC to an

earlier state if it crashes.

"It's designed solely with the home user in mind," said Microsoft

PC Experience Group that oversees PC versions of Windows general manager John

Frederiksen in an interview.

As digital music players, digital cameras and other such gadgets catch on,

Microsoft wants to make the PC act as a hub for other kinds of computing

activities, Frederiksen said.

"Overall, these new devices are really adding to the value of the

Windows PC and allowing the PC to be a great creativity center,"

Frederiksen said.

Netscape revisited?



The media player takes clear aim at Microsoft's cross-town rival, RealNetworks
Inc., which makes some of the most popular media software and helped pioneer the

market for audio and video on the Internet.

"Interestingly, it sort of raises some of the issues about Microsoft

bundling features into the operating system, which of course has been core to

the whole antitrust issue," said Davis of Summit Strategies.

In June, a federal judge found Microsoft guilty of breaking antitrust law by

using its monopoly in Windows to try to crush rival Netscape, which made

software for browsing the Internet. Microsoft started bundling its own browser

with Windows.

Microsoft says it did nothing wrong and is appealing the ruling, which would

split the company in two. The Supreme Court is expected to decide soon whether

to hear the appeal directly or let a lower appeals court take it first.

"To bundle in (more software) looks to me like a very risky thing to do.

They seem to want to get audio and video players into the operating system

before they get to the Supreme Court in case the court orders them not to,"

said Brian Livingston, author of the book Windows Me Secrets.

The road to .NET



Even if current Windows 98 users don't shell out the $59 charged for an
upgrade, Windows Me is still expected to do well since most PC makers will

include it with almost all new computers going out their doors.

With consumer confidence still buoyant in a strong economy, Microsoft could

sell 100 million copies of Windows Me over the next year and half, Livingston

projects.

"This kind of penetration is what Microsoft sees as far more important

than people buying it as upgrades in the store," Livingston said.

Many people, however, are expected to hold out until the NT-based consumer

Windows, being developed under the code-name "Whistler", become

available.

Whistler will also weave in the first threads of Microsoft's new

".NET" strategy to retool its entire product line for the Internet and

start delivering software as a subscription service rather than in

shrink-wrapped boxes.

Whistler will make it easier for users to swap data between devices, and will

blur the line between using a PC and using the Internet, Frederiksen said.

"The online experience is changing from one of passive, where you go to

the Web, to more active, where you program your Web sites," Frederiksen

said.

But for now, Microsoft is pumping the Me generation.

"Our message is that Windows Me is a timely upgrade," Frederiksen

said. "Our focus between now and the end of year is really about

communicating the great products that are available today."

(C) Reuters Limited 2000.