Q&A: Windows Live Messenger Marks Milestone in Software-Based Services for Microsoft

REDMOND, Wash., June 19, 2006 – For a fast-growing segment of consumers, logging in to their instant message (IM) service is as much a part of their morning routine as pouring a cup of coffee or a bowl of cereal. With today’s launch of Microsoft Windows Live Messenger, the next generation of the MSN Messenger service used by 240 million people worldwide, the company aims to make this routine even more rewarding and versatile.

Windows Live Messenger is the first core, global service to launch of the more than 20 new services currently in testing for Windows Live, a set of personal Internet services and software designed to give users greater control over how they stay informed, connected and protected on the Web. Microsoft also launched its all-in-one PC care service, Windows Live OneCare, last month in the United States, and expects more services to release in the coming weeks and months. Other core Windows Live services in development include Windows Live Mail, Windows Live Spaces and Windows Live Search.

For an update on the Windows Live initiative and its importance to Microsoft, PressPass recently spoke with Martin Taylor, corporate vice president of Windows Live and MSN.

PressPass: What is the overall progress of Windows Live services so far?

Taylor: Since we first laid out the vision and early glimpses of Windows Live last November, we’ve made tremendous progress. We’ve approached the development of many of our services in a different way than we’ve done in the past – we’ve worked very closely with our community of consumers to design them, soliciting their feedback and feature ideas along the way. Our development team likes to say that they report into consumers; they’re our real bosses when it comes to building these services.

We’ve been “under construction” with Windows Live for the last several months. If you equate it to building a home you could now say the framing is in place, and we’re starting to furnish it with the services that will make Windows Live a great home for people online.

In addition to the global launch of Windows Live Messenger today, we have more than 20 other Windows Live services in various stages of beta testing. Windows Live Messenger is poised to become a daily part of 240 million people’s lives. We’ve made amazing progress with building Windows Live Mail from the ground up in a very community-oriented way, incorporating feedback from more than 5 million consumers who are testing the Windows Live Mail beta on a massive scale. On the protection front, we’ve launched Windows Live OneCare in the U.S. market earlier this month to give consumers one source for securing, maintaining and performance-tuning their PC.

In early May, we launched our adCenter advertising platform in the U.S. as a one-stop shop for advertisers to strategically plan and execute their campaigns across all of Microsoft’s online properties, from Windows Live to MSN and elsewhere. That’s a huge milestone for us because advertising is the business model that will enable Microsoft to continue delivering Windows Live services and offering them to consumers at no cost.

We’ve still got work to do but we’re super excited about how far we’ve come. It’s now time to start inviting a broader set of customers in for the first set of tours with our final services.

PressPass: Why did Microsoft choose Windows Live Messenger as the first core Windows Live service to launch?

Taylor: We regard Windows Live Messenger as one of the most pivotal services within Windows Live, because it’s built to help people connect and share in all kinds of rich, unique ways. Windows Live Messenger offers people the ability to see, talk and share with family and friends in such a seamless way that puts them in control. Windows Live Messenger is also integrated with many of the Windows Live services to serve as a convenient entry point into consumers’ online world so they can do even more than IM right from one place. From directly within Windows Live Messenger, users can launch a shared Windows Live Search query so they can pick out a restaurant with the person they’re talking with, or visit a blog on MSN Spaces to see what their friend has been up to, or browse to their favorite Web sites using Windows Live Favorites, or check their Windows Live Mail. So in many ways Windows Live Messenger is one of the main hubs of Windows Live. Windows Live Messenger also is the first core service that incorporates the sleek user interface and look-and-feel that will be used across all of the Windows Live services.

PressPass: Do existing MSN Messenger and MSN Hotmail customers have to change their current online addresses in order to sign up for Windows Live Messenger and Windows Mail?

Taylor: No, current users of those services can keep their existing @hotmail.com or @msn.com addresses when they upgrade to Windows Live Messenger. Windows Live Messenger is an upgrade to MSN Messenger, so their contacts and more come over with them. Plus, all Windows Live Messenger users will be able to connect with people in even richer ways than before through high-quality video and voice features in IM as well as PC-to-phone calling. Another new feature called Sharing Folders will help people share information even more easily by simply dragging and dropping their files, such as photos of any size, from the Sharing Folder into the Windows Live Messenger window.

As we reach out to our current MSN Messenger and MSN Hotmail customers to encourage them to upgrade, we’re focused on making their transition very smooth.

PressPass: What is Microsoft seeking to accomplish with Windows Live Services?

Taylor: We’re committed to delivering a set of services that puts all users firmly in control of their individual experiences on the Web and enables them to more easily stay connected, informed and protected. Our customers tell us that the Internet is so empowering to them — it makes them feel smarter and helps them relate to people and information in rich ways — but also that the Web is more complicated than it needs to be. By building these services on top of an existing social network that spans more than 12 billion relationships in our contacts store, we’re also enabling totally new forms of connection and social networking for consumers.

What makes this effort so important to Microsoft and its customers is that online services, and communications in particular, are changing drastically. People don’t think in terms of an online world and an offline world anymore; they think first and foremost about the relationships that matter most to them, and going online is a natural extension of their daily life. Experiences like being able to connect a grandmother with her grandchild across the country using video, or making it possible for a father to read his children a bedtime story from the other side of the world really inspire me in terms of what Microsoft is doing with Windows Live services.

Also, there’s tremendous potential for other companies to enhance their marketing, customer service, customer support and revenue through the applications they can build on top of Windows Live. We will continue to open up more of these opportunities for advertisers, developers and businesses as a means of extending the power and rich content within Windows Live services.

PressPass: How big of a role will Windows Live Services play in the future of Microsoft’s business?

Taylor: Windows Live is a huge growth opportunity for Microsoft. The online advertising opportunity will be a big growth driver for Microsoft in the coming years, as the market continues to expand. To ensure we are ready to take advantage of this opportunity, we plan to dedicate roughly US$1.1 billion of the company’s overall $6.2 billion research and development budget toward Windows Live and MSN in the 2007 fiscal year that starts next month. However, this doesn’t mean that Microsoft is backing away from our other core businesses. Windows Live is a distinct growth opportunity.

PressPass: Does this strong focus on Windows Live mean that MSN is going away? If not, what’s the difference between these two sets of services?

Taylor: MSN is alive and well. MSN is our brand for rich content and media experiences, while Windows Live is focused on personalized services. We’ll continue to invest in extending the breadth and depth of content available across the MSN network. The audiences for Windows Live and MSN services, however, have different preferences as to how they access the universe of Web content that’s available.

Generally, there is one group of consumers that prefers a more programmed experience that comes with browsing through packaged Web content — similar to reading a magazine or newspaper. MSN is optimized for that programmed content experience. There is another group of users, which has been growing rapidly, who want a highly personalized Web experience that is tailored to their needs and prefer to build that experience themselves. Windows Live, with its live.com portal site, allows people to create their own personal Web space that centers on Windows Live Search. It allows them to bring in very specific sources of content — stock quotes, sports scores, RSS feeds, blogs, podcasts and almost anything else from across the Web — so they can make their Web exactly what they want it to be.

PressPass: What’s next on the Windows Live roadmap?

Taylor: Over the course of the next year, we are launching final versions of nearly 20 new services with tightly integrated features and a unified look-and-feel that makes them easy for consumers to navigate. Consumers can sign up to participate in beta testing and learn more about these services at Windows Live Ideas (http://ideas.live.com). Windows Live OneCare is currently available for consumers in the United States, we’ve released Windows Live Favorites in 36 markets and we expect to launch Windows Live Custom Domains in the coming weeks. Windows Lives Spaces, Friends-of-Friends Social Networking and Windows Live Expo also are on track to launch globally later this summer, and we have great innovations coming in search and live.com. This is an exciting time for services as well as for Microsoft, and there’s more to come.

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