Don't know if anybody posted this yet if so sorry for the repeat. Found it on the SUNW thread.
A Gloomy Day in
Redmond
By Alex Lash
On a day when two of Microsoft
(MSFT) 's most important initiatives
had setbacks, one of the company's
most noteworthy executives of the
decade finally called it quits. Brad
Silverberg, responsible for bringing
the wildly successful Windows 3.1,
Windows 95, and Internet Explorer
products to the consumer market, is
leaving the company Friday.
The news of Silverberg's departure
coincides with Microsoft's admission
that the massive Windows 2000
operating system, perhaps the most
ambitious software development
project in history, will not
reach most customers until
February. Until now, officials had
promised to ship the new Windows,
which will be the company's
technical cornerstone of the next
decade, before the millennium. The
delay, one of several in the lifespan
of the product, will practically
ensure that Microsoft gets little or
no revenue from Windows 2000 in
the current fiscal year, a warning
chief financial officer Greg Maffei
gave analysts in last week's
quarterly earning call.
Also, Microsoft signed a deal with
e-mail outsourcer CommTouch to
provide Web-based e-mail to
Microsoft's MSN portal customers.
CommTouch can also integrate MSN
Messenger chat software and
Passport online wallet into its
e-mail offerings. But while the deal
gives Microsoft a new distribution
channel for those products, it's also
evidence that Microsoft's
in-house e-mail technologies aren't
gelling with its Web services
strategy.
Last January Microsoft said it would
turn Hotmail into a Web-based
communication platform with
instant messaging and
communities, and make it available
for other companies to license.
AltaVista was announced as the
first customer. Nothing came of
that announcement, however, and
AltaVista eventually signed with
other partners.
"Hotmail was built for something
different," says Hany Nada,
managing director at US Bancorp
Piper Jaffray. "It'd be difficult to
take a bus and use it as a limo
service for four people."
Microsoft, which says it is working
with AltaVista to augment the MSN
Search feature, refuses to say that
the Hotmail deal fell through.
"We're exploring other opportunities
with AltaVista but I don't have any
more information at this point,"
says Deanna Sanford, a product
manager for the MSN.com portal.
Still, the CommTouch deal gives
Microsoft a customer for its MSN
Messenger chat software, which
currently has 2.8 million users, and
Passport online wallet, which has
45,000 users. Microsoft also has the
option to purchase 708,000
CommTouch shares at $28.25 per
share before December 29.
Despite its status as the most
popular free e-mail service, with
more than 40 million users, Hotmail
has proven a mixed blessing for Microsoft. Since buying
it for an estimated $400 million in December 1997,
Microsoft has been unable to shift the service from Unix
to Windows-based servers. The snag is like a black eye
on the company as it positions the upcoming Windows
2000 against number-crunching systems from Sun
(SUNW) , IBM (IBM) and others. Hotmail has also been
at the heart of executive complaints that the MSN online
group has been slow to convert traffic to dollars.
Silverberg left an indelible imprint on Microsoft's
Windows and Internet strategies. The well-respected
executive came to Microsoft from development
toolmaker Borland in 1990. He made his mark running
large, complex consumer projects, including Windows
95, which redefined the computing market. He then set
his sights on the Net, taking the reins of Microsoft's
browser development. But a philosophical split led to a
leave of absence in 1997. A Silverberg-led faction
argued that Microsoft should focus its development
efforts on the Internet, while others argued to continue
to focus on Windows. The Windows faction won out;
Silverberg went on leave.
In 1998, Silverberg returned as a part-time advisor to
president Steve Ballmer. He turned down an offer to run
Microsoft's new-media consumer and commerce group,
or CCG, which went through an overhaul and lacked a
top executive for several months. Once Microsoft settled
on former Hewlett-Packard (HWP) executive Rick
Belluzzo to run CCG, Silverberg felt the time was right
to step away, a Microsoft spokeswoman said.
The company's recent shift to make Web services a
primary development concern partially vindicates the
arguments Silverberg made before taking his leave of
absence. The CommTouch deal is an indication that the
company is determined to offer Web services, whether it
builds them or partners with others to provide them.
Silverberg and other Microsoft executives were not
available for comment at press time.
Silverberg also recently agreed to make public his
investment in TellMe Networks, a Silicon Valley startup
run by former Netscape employees. The spokeswoman
said Silverberg will continue to work with small
companies and spend more time with his family.
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