When Microsoft snagged a little Silicon Valley start-up called
WebTV Networks for $425 million in April, the acquisition was duly
noted, but no one seemed to completely understand the attraction.
The company, which sells World Wide Web and e-mail access
delivered via television sets rather than desktop computers, had
fewer than 100,000 subscribers when the deal was struck. As one
might expect from the first product in a new category, the WebTV
Internet Terminal set-top box was slow, expensive (more than $300)
and awkward to use. It was widely assumed that Microsoft was buying
little more than patents to a promising technology.
Instead, as the company's new WebTV Plus Receiver begins
in retail outlets, it is apparent that WebTV is now central to
Microsoft's drive into the global market for interactive digital
media. At $299 for the device and $19.95 a month for the service,
the WebTV Plus Receiver is a significant improvement over its
predecessor and much more advanced than its competitors -- the most
notable of which is the Network Computer from Network Computer, a
company owned by two Microsoft archrivals, Oracle and Netscape
Though WebTV Plus Receiver's significance was largely overlooked
when it was announced in September, the product has redefined the
genre it created. Unlike the original Internet Terminal (which the
company now refers to with a twinkle in its eye as "the Classic" and
sells, with rebate, for $99), the Plus identifies itself as much
television as it does with the Internet.
In fact, the product's long list of improvements begins with a TV
tuner -- which, among other things, allows WebTV to create a
sophisticated interactive program guide for anyone who uses the
product's set-top box in conjunction with cable television service.
Another intriguing feature is the Plus' enormous 1.1 gigabyte
internal hard drive, which WebTV says can store up to 12 hours of
compressed video and other digital material. Steve Perlman,
president and co-founder of WebTV, says the hard drive will be used
to store updates of Web pages that customers look at most
so those pages can be called up more quickly.
In conjunction with the Plus' privacy and security software --
128-bit public key encryption technology, a type nearly impossible
crack, is built into every box sold in the United States -- the hard
drive will enable the system to securely capture and store all sorts
of digital media, from independent films to video games to music, on
a pay-per-use basis.
The Plus also has a new, custom graphics chip that has completely
changed the look and feel of the WebTV service, making it behave
more like a television than a computer.
Just as important, the chip is programmed to tidy up every Web
page it displays: It increases the type size where necessary,
reformats pages to fit the shape of a TV screen and so on. …