ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Friday, December 8, 1995 TAG: 9512080065
SECTION: BUSINESS PAGE: A19 EDITION: METRO
DATELINE: REDMOND, WASH.
SOURCE: ASSOCIATED PRESS
Microsoft Corp. is big, but the Internet is bigger.
Faced with the rising appeal of the global public data network and erosion of its own influence in computers, Microsoft will revamp its on-line service and buy the rights to another company's idea for exploiting the Internet.
In a remarkable capitulation announced Thursday, the world's biggest maker of personal computer software also disclosed plans to change its core operating-system products to be more Internet-friendly.
The announcement capped months of turmoil inside the company and speculation outside about how Microsoft will adjust to changes driven by the Internet, particularly how software is delivered and used.
The perception of weakness at the company, reflected in a 17 percent stock price decline since July, contrasts sharply with the popular image of Microsoft as a technology juggernaut. Government antitrust investigators have been questioning Microsoft's aggressive business practices for years.
Microsoft scheduled Thursday's news briefing to discuss Internet strategy weeks ago. But, unlike the carefully designed rollout of Windows 95 this summer, key decisions about the Internet weren't made until the last minute by Microsoft chairman Bill Gates and his aides.
The most important decision was an endorsement of Java, a computer programming language by Sun Microsystems Inc. for designing software that can be easily distributed on the Internet.
Because Java works on any kind of computer, it threatens the dominance of PC software that Microsoft achieved through Windows. Only test versions of Java are on the market, though, making Microsoft's bow to the product even more unusual.
``They don't like to license things,'' said Jeff Henning, vice president of development at Perseus Development Corp., a market research firm in Needham, Mass. ``Microsoft is a company that likes to set standards.''
Microsoft will also change The Microsoft Network, an on-line service that became available in August and has signed up 500,000 customers, to be available on the Internet. Much of its content will be free.
The company plans a new program to make Windows 95 work more directly with the Internet. It is to be available for free some time next year.
The so-called ``add-on'' product was conceived by Gates Wednesday night, said Rich Tong, a general manager of product marketing.
Microsoft also will bundle a program known as a Web server - used for storing and serving data to other computers through the World Wide Web - with future versions of Windows NT, its operating system for advanced PCs.
That decision presents a challenge to Netscape Communications Corp., Quarterdeck Corp. and others that design Web-server software, because Microsoft could exploit the growing popularity of Windows NT to gain position. Microsoft had been expected to sell its Web-server program separately.
LENGTH: Medium: 58 linesby CNB