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To: Barry Grossman who wrote (82101)	5/30/1999 5:52:00 PM
From: Jim McMannis	Respond to of 186894

RE:"Amy, Re: WebTV currently counts about 800,000 subscribers, adding new users at a rate of 20,000 per month. These numbers imply growth of 240,000 additional users in the next 12 months - a growth rate of only 30%. With the internet growing at a much faster rate than that, it would seem that the WEBTV channel is taking a decreasing and not increasing share of the connected world. Just an observation."... Internet has grown 50%/year since 1995. You you are correct, as usual,

To: Barry Grossman who wrote (82101)	5/30/1999 10:12:00 PM
From: Amy J	Respond to of 186894

Re: "growth rate of only 30%. With the internet growing at a much faster rate than that, it would seem that the WEBTV channel is taking a decreasing and not increasing share of the connected world." Hi Barry, Great eye/catch. It appears there could be some issues here. Although, their sales figures are significantly higher than the 120 sold through one retailer before the acquisition (according to someone who did a WebTV report.) So, I'm not sure if these are early adoption issues, or something like channel (isn't KMart a new channel for MS?), product design (is it easy?), positioning, pricing ($20/mo = AOL's $), packaging (e.g. buying the product/access from two different places?) or promotion issues (no ISPs/phone co. promotions?). I'm sure MS has identified the issues and will take the necessary action. MS is the type of company that's willing to take a lot of risk by trying out a lot of new things. Amy J