Microsoft Network grows in sea of red ink

Brave talk, but no numbers from Belluzzo...


MS Analysts Consumer group vp Rick Belluzzo has the unenviable task of running Microsoft's billion dollar consumer business, and it continues to bleed. At last week's analysts meeting hee painted a picture of an improving situation, but gave the game away when he said: "our numbers continue to grow through the distribution agreements that we have".

So if nothing else, the deals and acquisition strategy is pulling in users.

The doubling of the ad sales force probably accounts for the 70 per cent increase in revenue per user in the US in the last financial year, most likely from a very low initial base, but it is not revealed if the improved sales yielded an operating profit for MSN's current operations. Judging by the absence of such a claim, it is still making a loss, and with the huge loss over the last five years or so, it will be very hard for Microsoft to see a return on its capital for the service.

It was also hard to see what Belluzzo has in mind for "the .NET user experience" except that it would empower people "beyond the PC" giving access to a service "at home and at work". In other words, Microsoft is promoting the playing of games, and is wishing on the ASP star. Games division vp Robbie Bach confirmed the intention: one of his slides set out his desire to "Accelerate success in gaming market - PC gaming in the den/office".

Belluzzo is a Gates sycophant, very sensitive to Gates' feelings for consumer media. It was no surprise to hear him making the claim that "we are the leader in TVs". There were three aspects: "The first one is personal TV, giving the TV viewer more choice and control over what they watch and when; secondly, interactive TV, the ability to participate in richer TV programming; and then, thirdly, Internet on TV, the communication aspect, the convenience aspect of the experience."

If this is true, it's rather scary, especially with Ballmer commenting that "ten years from now every TV will be connected". Belluzzo also repeated the boast that MSN had 201 million unique users, which still sounds like something from the Department of Fiction of the Ministry of Truth (Story:How Microsoft played the numbers game to boost MSN). ®


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