Microsoft and RadioShack Bring the Everyday Web to Millions of Consumers

REDMOND, Wash., Nov. 11, 1999 — Microsoft and RadioShack today announced a strategic alliance to speed Internet adoption and broadband Internet access so that consumers in homes and small businesses across the country can get connected to the people, information and services they want to reach. The five-year agreement will establish a Microsoft “store-within-a-store” in as many as 7,000 RadioShack locations, so that consumers can experience directly the power of the Internet, broadband connectivity and home networking, and speak with trained sales associates who can help them choose the solutions and services they want to have installed in their homes.

PressPass asked Rick Belluzzo, vice president of Microsoft’s Consumer and Commerce Group, to talk about the company’s alliance with RadioShack and its commitment to deliver the Everyday Web to consumers.

PressPass: Why is Microsoft entering into this alliance with RadioShack?

Belluzzo: Microsoft’s goal through the “Everyday Web” vision is to enable millions of people to connect to the world of information, commerce, entertainment and services, regardless of whether it’s from a PC, a TV or a mobile device. A key to achieving this is to bring the Web to consumers, so they can experience its benefits and understand how the Web fits into their lives. Our strategic alliance with RadioShack brings us closer to achieving this goal. RadioShack’s 7,000 stores are within five minutes of 94 percent of U.S. homes and businesses, with about a million people visiting per day. This is an unparalleled opportunity for consumers to explore Microsoft’s many solutions and have their questions answered by trained RadioShack store personnel

Microsoft and RadioShack share a vision of moving toward a world of connected homes, where the Everyday Web is accessible to all consumers, anywhere, any time, over any device. Consumer devices such as the home entertainment system, the cell phone and the computer will become part of one integrated network via broadband connection to the Internet. So this alliance is about making the benefits of the Internet and broadband connectivity understandable to consumers, and giving them an easy way to get signed up and installed at home.

PressPass: How will Microsoft and RadioShack implement this partnership?

Belluzzo: It’s a “try before you buy” approach. A Microsoft store-within-a-store will be set up at each RadioShack location, where customers can walk in, view interactive demonstrations and try devices of all types. RadioShack salespeople trained by Microsoft will answer questions about the variety of connectivity options available, including MSN Internet Access, Microsoft Web TV, Microsoft Windows CE palm-size devices, MSN mobile solutions and Microsoft home networking. The store-within-a-store is a proven and successful concept at RadioShack, which pioneered this concept years ago. They first partnered with Sprint and created The Sprint Store at RadioShack, and then the Compaq Creative Learning Center. And now they’re preparing to deploy the RCA Digital Entertainment Center.

In addition to demonstration and purchase, consumers will be able to have installation and configuration done for them right in their homes. RadioShack has installation capabilities through their acquisition of Amerilink, the largest national chain of installers. This allows them to install and set up any of the home electronics and connectivity solutions a customer may purchase in the store.

PressPass: Why is it necessary to educate and connect consumers in this way?

Belluzzo: Despite the Internet’s huge play in the media, a large percentage of the population is still not yet online. There are currently 98 million Internet users in the U.S. – only 36 percent of the total population.

There are three reasons. First, there is no good place to see these solutions in action (besides looking over the shoulder of an early adopter). Second, it’s not easy for consumers to sign up for services. And finally, there’s no easy way to get everything installed and connected at home, especially for first-time Internet users.

Technology is evolving incredibly rapidly, and it can be difficult for consumers to understand all the options available and identify what is right for them. We want to provide consumers easy access to the emerging world of rich media, so they can enjoy the full power of the Web at home using a high-speed broadband connection. We believe that by letting consumers see before they buy how the benefits of high-speed, always-on access can increase the pleasure of their online experience, and by giving them a painless way to get solutions installed, we will greatly accelerate broadband adoption in the home.

PressPass: Why would it be easier for a consumer to connect to the Web this way than through the many other methods already available?

Belluzzo: This alliance offers a solution from the point of purchase all the way to getting connected at home. For many consumers, these technologies are very new and can be intimidating. The store-within-a-store will allow them to learn all about what is available and have all their questions answered by RadioShack’s trained salespeople. In addition, once they’ve chosen the right solution for their needs, RadioShack’s new home installation capability will make it super easy to get the services up and running. For many of today’s rapidly changing technologies and devices, people have to see and try before buying, and would feel more comfortable knowing a technically savvy installer will help set it up in their homes.

PressPass: For 36 years, millions of American consumers have relied on Radio Shack for that extra-long phone cord. Why is Microsoft partnering with RadioShack in particular?

Belluzzo: The reference to that extra-long phone cord underscores the fact that RadioShack’s first line of business was in connecting devices. Consumers began trusting RadioShack for their home electronics needs decades ago. But RadioShack is about a lot more than phone cords now. They are a leader in mobile communications, and are the largest retailer of cellular phones, with a 70 percent market share. They have also made a huge commitment to home connectivity, and sell a wide array of the products and services to deliver that: state-of-the-art digital audio and video products and services; the latest computer technologies; and high-speed broadband services.

And of course RadioShack’s tremendous retail presence of over 7,000 retail outlets nationwide is a major asset. In fact, over 94 percent of Americans are within a five-minute drive of a RadioShack store. And once they get there, one of RadioShack’s knowledgeable sales associates is ready to answer all their questions. The accessibility of RadioShack stores and salespeople help put technology into the hands of millions of consumers.

This year alone, RadioShack’s sales associates have signed up almost 5 million consumers for cellular phone and other services. Literally millions of people have wireless phones who never would have thought about it if their local RadioShack store hadn’t let them see what a cell phone could do for them, and then provided an easy way for them to buy one and sign up for service. Now we’re going to do the same thing for Internet access and home connectivity.

So it makes sense for us to partner with them as we enter the broadband era, to help the broadest range of consumers take advantage of the power of the Internet and high-speed access.

PressPass: How does RadioShack benefit from this partnership?

Belluzzo: RadioShack benefits in several significant respects. First of all, Microsoft has agreed to improve and enhance RadioShack’s technology infrastructure by giving broadband access to every single company-owned RadioShack store. This will allow RadioShack’s sales associates to demonstrate and use broadband themselves to help consumers understand the full power of the Web and the available products and services.

Second, RadioShack has a presence on the Internet, RadioShack.com, that combines technical support with product selection information. This can be a major Internet shopping destination for consumers, and we see this as an extraordinary customer benefit. We’re putting our money where our mouth is by investing $100 million in RadioShack.com. We intend to make RadioShack.com a top-tier showcase for new and emerging technologies, as well as a premiere e-commerce site. RadioShack.com will be a premier merchant in MSN’s recently launched eShop online shopping service, and the site will be built around Microsoft’s leading e-commerce technologies.

So we’re bringing our online products and services into the physical RadioShack stores, and at the same time we’re helping RadioShack.com become a premier presence in MSN and on the Web.

PressPass: How will this alliance be marketed by both companies?

Belluzzo: There are three components: retail, traditional media and online. When consumers walk into a RadioShack store, they will hopefully be drawn to the “store-within-a store” by the displays and layout we are going to design together. Second, once the “stores-within-a-store” are in place in the vast majority of RadioShacks next year, we’re going to launch an intensive media advertising campaign.

Finally, RadioShack will have a major online presence on MSN. Everyone who signs up for MSN services at RadioShack will access the Web via a co-branded MSN start page. There will be an area for RadioShack to present new offers, etc. And, RadioShack.com is becoming one of our premier partners in MSN eShop and will have a major advertising presence across MSN.

PressPass: This is a new partnership between RadioShack and Microsoft, but doesn’t the relationship go back for decades?

Belluzzo: Microsoft has had a very important relationship with RadioShack for more than 23 years. We’ve worked together in strategic ways at key points in the history of the computer business, such as the agreement Bill signed 23 years ago to put Microsoft Basic in the original RadioShack computer. The very first notebook computer was designed jointly by Microsoft and RadioShack. And when we created the first Microsoft mouse, we used a manufacturer introduced to us by RadioShack.

The two companies share a common vision of connectivity, encompassing all of the components involved in bringing enhanced learning, entertainment, commerce, communications and other lifestyle technologies into the home and onto the Web. This agreement is all about combining our consumer, technological and physical assets to make the Everyday Web and broadband Internet access a reality for consumers nationwide.

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