Here is the BIG News: MSFT walking away from Expedia concept Here is article from Seatle Times
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Tech News : Sunday, September 05, 1999
Microsoft: 'We're not a media company'
by Jay Greene
Seattle Times technology reporter
For Microsoft's Internet operations, the biggest news last week wasn't the hiring of Rick Belluzzo as its top executive. That was expected.
The real news is that Microsoft is willing to part with its pioneering online-commerce sites, CarPoint and Expedia, as the company refines its vast Internet operations.
Microsoft President Steve Ballmer said CarPoint, which helped create the online business of connecting car buyers to dealers, and Expedia, one of the first online travel agents, are not "tied to our core competency."
In an interview last week, Ballmer said the company would consider offers to sell the two business, just as it sold a piece of its Sidewalk city guide site in July.
"We would be open to it," Ballmer said.
The possibility of selling such marquee businesses as CarPoint and Expedia signifies an important shift in Microsoft's Web strategy. The company has spent much of the past four years developing and buying a variety of Internet businesses - everything from the failed online soap opera "475 Madison" to the most widely used online e-mail service, Hotmail. It now seems likely that Microsoft will move away from businesses not directly related to Internet infrastructure.
Leading that charge will be Belluzzo, the former chairman of Silicon Graphics, who joined Microsoft last week as group vice president of its Consumer and Commerce Group. Belluzzo managed to turned the money-hemorrhaging Silicon Graphics into a profitable business in less than two years.
While he won't be asked to re-create that feat with Microsoft's Internet operations, which have lost hundreds of millions of dollars since their creation, he will be charged with focusing the business.
"We've had a bit more fits and starts than we should have," said Ballmer, who moved his office nine months ago to RedWest, the satellite campus that houses Microsoft's Internet operations.
To stop those "fits and starts," Microsoft seems intent on becoming more of an Internet backbone than a content provider. That means providing services to connect people to the Internet, and services to help them get things done on the Web.
"We're not a media company," Ballmer said. "The core thing we can do is transform the way people communicate, the way people publish information, the way people share information, the way people find information. We're going to put our heads down on that."
While Microsoft's Internet strategy is becoming more defined, it is not without its detractors. Sources say the internal debate over how closely Microsoft ties its future to Windows and how committed Microsoft is to the Internet continues to rage.
Two years ago, that battle came to a head when former executive Brad Silverberg took an extended sabbatical after failing to persuade other Microsoft's senior managers to embrace the Web more than it wanted.
The question remains: How closely should Microsoft hitch its future to the Windows operating system? As the Internet grows in popularity, there may be less need for a rich and complex operating system such as Windows.
Ballmer scoffs at the debate. Computers and other devices, he said, need some sort of computer code to work and connect to the Internet. That will always be key to Microsoft's business. "It's a silly religious debate," Ballmer said.
While Silverberg rejoined Microsoft in March, he came back as a part-time consultant, having turned down the job that Belluzzo now holds.
A number of Microsoft's Internet pioneers who worked alongside Silverberg have recently left the company or taken extended leaves. Ben Slivka, one of the early architects of Microsoft's Internet strategy, is the most recent, leaving days before Belluzzo started to work as Amazon.com's director of information technology.
For his part, Belluzzo recognizes he has much to learn. His background, starting a turnaround at beleaguered Silicon Graphics and developing the huge computer-printer business at Hewlett-Packard before that, has little Internet about it.
"There are certainly areas I would like to learn more about," Belluzzo, 45, said. But he believes that his background working on the huge consumer business of printers and the challenges of reviving Silicon Graphics make him well-suited for the quick-changing business of Microsoft's Internet operations. "So much is undefined," Belluzzo said. "So much continues to be developed."
For the 22 years before working at Silicon Graphics, Belluzzo cut his teeth at H-P. He started at the company's printer business in Boise in 1977 and rose to the company's No. 2 job 18 years later.
Unlike Ballmer and Microsoft Chairman Bill Gates, who had privileged youths and attended Harvard University, Belluzzo is the son of a machinist and holds an accounting degree from Golden Gate University in San Francisco. As a child, he took odd jobs to help the family out, occasionally working in the prune orchards near their Santa Rosa, Calif., home.
At H-P, Belluzzo overhauled the printer business. He cut manufacturing costs, driving down the prices for the machines, and making them available for consumers. Today, H-P is the predominant printer maker worldwide.
Though his time at Silicon Graphics was brief, it was marked by the same drive Belluzzo showed at H-P. He moved Silicon Graphics, whose sleek, powerful computers are known for their dazzling graphics, toward lower-end machines, cutting costs and laying off workers in the process. In his first full year there, Silicon Graphics eked out a scant $54 million profit, compared with a $460 million loss the year earlier.
Belluzzo earned a reputation for his intensity. His focus, and rapid rise through the ranks at H-P, gave him a nickname he reportedly hates: "Rocket Rick."
"He's a great leader," Ballmer said. "He is a very focused and intense business manager."
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