By Jo Maitland
In a bid to lure customers onto its MSN.com portal and away from rival giant America-On-Line, Microsoft Corp yesterday announced it plans to install internet kiosks in all 7,000 RadioShack stores across the United States. According to recent figures, AOL has roughly 18.7 million subscribers, while MSN trails way behind with just two million, something CEO Bill Gates is eager to rectify. One million customers a day visit RadioShack stores and 94% of Americans live within five minutes of one, Gates said. This deal will help them get online.
Under the deal, Microsoft said it will set up Microsoft-branded stands within each RadioShack store. Each store will get what Microsoft’s calling an internet kiosk – it wouldn’t give any specific details about hardware, but indicated a tie-up with Compaq – as well as dedicated broadband internet access to every RadioShack shop. In addition, Microsoft said it will train RadioShack’s salespeople to answer questions about Redmond’s web products, including MSN internet access, Web TV, Windows CE palm- size devices, MSN mobile solutions and Microsoft home networking.
In return for the floorspace and marketing, which Microsoft is essentially getting for free, Gates said Redmond is investing $100m in RadioShack’s newly-launched web site, RadioShack.com, to help the consumer electronics store establish itself as a powerful e-commerce vendor. As a bonus, Microsoft will also give RadioShack, owned by Tandy Corp, a prominent position on MSN.com, and refer customers looking for consumer electronics goods to RadioShack’s web site. The deal has been signed for at least five years. It’s still not clear whether RadioShack will actually use Microsoft’s technology – or just its cash – to further develop its web site and neither company could give any us more details as we went to press.
It is still too hard for consumers to sign up to the internet and we hope our agreement with RadioShack will demystify the technology issues involved in getting on the net, Gates said during a conference on Thursday. He said the deal with RadioShack is part of Microsoft’s Everyday Web vision and is key to its strategy to expand beyond its core software business, a strategy which over the last few months has seen the software giant invest billions of dollars in such companies as AT&T, NTL, United Pan- Europe Communications, Rogers Communications and Qwest Communications.
Jeff Sadler, an analyst with FAC/Equities said Microsoft had let MSN slip badly over the last two years, it had no helpdesk and very little content of any use. Because of that he said AOL had been able to pick up customers by the minute. But of the deal, he said: This is another avenue for Microsoft to try and around and pull in more subscribers to MSN.
Microsoft’s digital subscriber line partner, Northpoint Communications will be the first service provider lined-up to offer MSN internet access from the RadioShack outlets. Currently Redmond only has relationships with NorthPoint and Rhythms, but in the next few months, a spokesperson said Microsoft will be doing a number of deals to create nationwide broadband coverage. In most cases this will be DSL, but where that’s not available Microsoft will look to other transports. The company hopes to have kiosks operational in all stores by next fall.
Microsoft’s move comes less than a week after a federal judge found the company’s Windows operating system was a monopoly in the desktop OS market and that Microsoft had used its power and money to stifle competition. Speaking of the Judge’s findings during the call Gates stressed the deal with RadioShack was very good for consumers. Tandy Corp closed up 6.42% at $69.375 on the news.
