The Microsoft Story Part Two

course of just a couple of decades. Yep. And we stopped last time at nine when Bill Gates and Melinda French tied the knot. So we're picking up with nineteen, which was a big year. Big year they released Windows shockingly enough, yes, And for those of you who can remember the commercials back then, these, of course were the ones that featured the Little Band and from across the Pond called the Rolling Stones that did a song called

start Me Up. And it's because Windows introduced a new feature to Windows but the start button, which uh, some people didn't care for it first. Um. It's kind of funny how technology works. Usually a change gets rolled out, everyone reacts like it's the end of the world, and then within a few years they count on whatever it is that was changed, and then it gets changed again, and then they act like it's the end of the world, Rinse and repeat. We see this usually at a very

frequent basis with Facebook redesigns. Um so Windows showed a lot of new develops, new features that some people kind of balked at at first. But Kates sent out a memo that same year he was seeing that there was a new trend coming up. And this keep in mind ninety This is again a couple of years after the Worldwide Web start to develop, a couple of years since the general public has become aware of a thing called

the Internet. The Internet itself had been around since the eighties, but very few people knew about it until right around this time, and he sit on a memo called the Internet tidal Wave to the senior staff of Microsoft, and he said that he thought that the Internet would be the most important thing for the company to concentrate on, and that in fact, was going to be the most important development since the advent of the PC. Yeah. So, uh, it turns out that, you know, he's very he was

very much right. Uh. It was an early call to make, but he saw it. You know, he read a little bit of criticism that he could have jumped on that a little bit earlier. Yeah, it's actually yeah, the biggest criticism is that he waited too long for this, and uh, in fact, you could since this is after the World Wide Web has become a thing, you could see why. I mean, this is before they've had their own web browser,

so there's no browser. I believe that the summer of that year was when first version of I e. Internet Explorer was released, So yeah, but when we're finally getting there, whereas like everyone else is dependent upon other browsers from other companies and Microsoft could have been on the ground

floor earlier. But at the same time, he definitely saw that this was going to be something that Microsoft could not ignore and that that sort of set the company in motion to really think about how they were going to approach the Internet, and they actually held Internet Strategy Day, so hooray for that. Also the same year that Forbes said that Gates is no longer the richest man in America,

he is the richest man. They were German apparently that year, but I don't know why I said it that way, But yes, in the world, in the entire world, Bill Gates richest man, and it's a title that he retains until two thousand and eight, when he lost it in a battle royal against Randy Macho Man Savage. I would watch that, I would watch that. I made that part up, but yes, he did hold the title of richest man in the world from nine to two eight h less successfully.

It's also the year that he announced one of your favorite bits of Microsoft history. All right, Bob, Microsoft Bob, Microsoft Bob. We did a full episode about Microsoft Bob, and really I meant to say this in the last episode. A lot of the stuff we're talking about, we could clearly do a full podcast on just any of these. Oh absolutely, We've done full podcasts on on versions of Windows, much less on the Windows operating system itself, and uh, you know, we could. We have done a full episode

on Bob. So we won't go over it again other than to say it was and a special type of graphic user interface designed for people who were not at all familiar with computers, and it was meant to make it a much more welcoming, intuitive experience. But just go back and listen to that episode to learn how it wounded up. It wounded it wound up being extremely unsuccessful and kind of play cating in a way. It just wasn't it just was. It was just a massive failure.

It was a massive failure, and it had some terrible features, including a security feature that did not work. So um but but yeah, as as of as, Microsoft's overall revenue was five point nine billion and the company had over seventod employees, so they were doing all right. So by Microsoft releases explore three point oh, so they have really gotten into the browser biz at this point, and three point I was really kind of the first consumer based

browser that people really get a chance to see. Netscape, which was the company behind another browser called Navigator, send a little message to the United States Department of Justice to say, um, Microsoft's kind of being unfair. They're essentially, uh saying that since we're the ones who's provided the operating system to all these different computers that various manufacturers are building, maybe you should include our web browser and

not include anyone else's web browser. So, in other words, they were saying that they were being anti competitive. They were using their influence as an operating system designer to muscle out other browsers, including Navigator, and so uh, this starts another round of investigations from the Department of Justice into Microsoft's business practices. On July fifteenth, ms NBC debuts. So that's a news network. It was a partnership between NBC News and Microsoft, and at first it wasn't a

twenty four hour news channel. It would eventually become that, but at the time it had a certain block of hours that were available on a per day basis, and it would grow from there and it became sort of a competitor to companies like CNN. UH. And then that's the same year that Microsoft stock split. Again we're doing so well that, Yeah, and they also launched Windows CE. Now whendows CE is different from the other operating systems that we're talking about here. This was one that was

designed to work on devices that had minimal storage. So this would become the foundation for future operating systems built for mobile devices. UH, particularly the pocket PC, which I have fond memories of reading about. I never actually owned one, but it was one of those devices that was ahead

of its time. Pocket PC was sort of the precursor to the tablet computers that we use today, but the implementation was never quite such that it would resonate with consumers, so people didn't didn't buy them, is what I'm getting too. But when does CE was like that, that was sort of the that was the operating system that kind of started down this this branch in the evolutionary secure and it was around that time. And I don't have specific notes about this, but but correct me if I'm wrong.

That add that like palm pilot and other mobile devices were starting to um personal digital assistants were starting to pick up. This is this is really before smartphones had started to become Yeah, there were a few early examples, but really personal digital assistants were more common, and these were devices that were very similar to smartphones, just without the phone part. They were able to run applications, they

could hold your contact information, but they weren't smartphones yet. Really, the problem was that that that wireless technology had an advanced to the point where it was useful. Yeah, I mean, you could get basic information like text information, but anything like more, anything beyond some text was gonna be it was gonna take you a while to receive it on

these old cellular networks. In seven, they released Internet Explorer four point oh and also they released Office, which was another one of those product productivity software suites, and the company acquired another company called Interse Corporation, which made analysis software for web activity. So this is again the company following through on that that memo that Bill Gates and saying we need to focus on the Internet. That's where

our future business is going to be. Uh. They also agreed to acquire web TV Networks for about four d twenty five million dollars in stock in cash. Web Tv I remember web Tv had a friend who actually had web TV, So this was a way of accessing the World Wide Web on a television. You would get a remote control that was essentially a keyboard, and um didn't really do so well, as I recall. I mean, apart

from my friend, I don't know anyone who used web TV. Sure, sure, well this was I mean, you know, it was a kind of prescient move on behalf of of of everyone involved, UM because you know, again they there wasn't an of an Internet connection for people to really Um yeah, they's some find it useful yet. But but it was also coming on the tail end of um that Telecommunications Act that looped internet services in with cable services and allowed

a lot of partnerships to start developing. And it's a good example was the partnership that Microsoft entered into with Comcast. They put invested one billion dollars for about eleven and a half percent ownership in Comcast to help deploy high speed data and video services. Now, this was in Microsoft's

best interests as well as Comcast. The idea being that we need to build out this infrastructure because the Internet is getting more and more important, but in order for it to be useful, we need to increase bandwidth and accessibility. You know, the more customers have access to the Internet, the more product we can sell. So therefore, this makes

sense from a business perspective. Um. And they also invested a hundred fifty million dollars in another company that might surprise you considering the fact that they had a little kerfuffle in our last episode, Apple back back in with Apple to another software development deal for Apple platforms. And uh, that's when Bill Gates announced the formation of the Gates Library Foundation. Of this was a predecessor to some of the philanthropic organizations that Bill and will Inde Gates would

launch in the future, right right. Uh. This was also the year that the Department of Justice announced its intent to hold Microsoft and contempt of the decree that they had agreed to UMI, which which was one of those antitrust decrees which you can go back and hear a little bit about in the previous episode. Uh but but but I mean to the tune of like a million dollars per day. Yeah, until contempt, they stopped bundling I e. With their oating operating system. This was this was a

big deal. I remember this unfolding at the time when uh, um, you know, I I had entered into the workforce at this point, and I just remember following it and and being kind of uh knowing the basic details. But it's really in retrospect, being able to look at it more thoroughly, you really can see how without this intervention the landscape would be very different right now as far as the

way the Internet and the way browsers work. That was the same year that Microsoft also acquired hot Mail, which of course is a web based email service. Hotmail existed for quite some time. It does technically still exist, although now it is officially part of Outlook dot com, so it's part of the web based Outlook sweet as opposed to its own Hotmail thing. I still have a hotmail address. I never had a hotmail address. I shot it, well, did you have a yellhoo? Man? I still have? I

still have. I can't really complain, but no, I have a I have a hotmail address. That the only reason I haven't just completely told people to stop using it because there's there's like three people who know me who's still send me messages via hotmail, and I like to pretend that I care about what they have to say, so I keep it going. That's when things things get real, yo. Yeah. Yeah.

The The official UH anti test lawsuit against Microsoft was filed by the Department of Justice and twenty state attorneys general in the United States. They file an anti competitive lawsuit against Microsoft. That's also the same year that Microsoft launched Windows and also the year that they decided to

do away with the office of the President. Now, if you remember from our last episode, Microsoft had originally Bill Gates had served as the president of Microsoft for a while, and then they got some presidents from other companies to come in and become the president of Microsoft, and then they switched to this the strategy of having an office of the President, where the the UH the duties of the president were split into three roles, and so three

different executives held positions within the office of the President rather than having a single president. This is when they go back to having a single president, and that first single president is Balmer. Steve Bomber becomes president of Microsoft. Bill Gates remains on as chairman and CEO. And uh So, now the corporate structure has changed again, and this would be the way that the corporate structure would remain for

about ten years more or less. Uh. Spoiler alert, please stay tuned for the exciting conclusion because we've got a lot to say. Uh. That's also when Microsoft launched MSN Search, which was a web based search engine. This is what would eventually turn into what we now know as Yeah, I'm glad you said I didn't have to. Um, it's perfectly legitimate web search engine. Even if being itself is not a cromulent word, but it's a it's a it works well. I have no complaints against the way being works.

I still tend to use Google more frequently, but I don't have anything against being. Um N Okay, So when something really bad happened, uh and I did. This was a virus that broke out so virus called the Melissa virus ran rampant across the Internet. Now, this virus was, in the grand scheme of things, not that malicious and that it didn't try to break your computer necessarily or wipe out all your data, although you know, you could always tweak the malware to make it do worse things

than what it was designed to do. What it was designed to do was really just copy itself and send itself to other computers within a person's contact list. And it worked within Microsoft Word or Microsoft Outlook, and it exploited vulnerabilities there. So if you were to try and open this document either in that Look or in Word, what it would then do is copy itself and mail itself out to all of the contacts that you had.

So if this hit an executive who happened to have hundreds of business contacts in their Outlook, that's that email would go out to hundreds of people, and uh, the email traffic alone ended up bogging down parts of the Internet during this also really kind of open people's eyes to the fact that some that that a lot of the software we depend upon heavily from Microsoft could have vulnerabilities in it, and that if you were to exploit those vulnerabilities, you could cause quite a bit of damage.

It was not the first example of a computer virus by a long shot, no, but it was kind of the most propagated at the time. And also, um, it received you know, the the internet was was really in the news at this point where everyone was very excited about what was going on. It was right before that, um, that dot com crash and um, and so it was it was really big. Yeah. Yeah, this is a point where you know, we've finally gotten beyond just the college

students and nerds who know what the Internet is. Right. So I was both a college student and nerd in the early days of the Internet, so I was doubly aware of it. But this is the point where you would say things like, oh, you know, my parents know what the internet is because it's gotten that big. So when a virus hits, and a virus spreads this quickly, it's one of those black eyes against the Internet, it's a black eye against Microsoft. This was this was just

bad news for the company. Sure, although that was the year that Microsoft stock value peaked for all time on December at a round fifty nine dollars per share. Now keep in mind with whenever the stock splits, the value of the stock goes down, but the value of the company remains the same because you've added more stock. So this is not to say that the value of the company has decreased over time since then, rather than just the price of the shares, the individual will shares themselves.

Because it gets kind of complicated. But so, yeah, that was a big year for Microsoft, and not because of product releases. It was just because of the way the business was going and also this this virus outbreak. The year two thousand, however, was a big year for product releases. It was that was when that was when Windows two thousand again shocking that those numbers lineup like that was debuted. Yeah, Windows two thousand Professional and server business os, very snappy name.

And also that's the year that Microsoft celebrated its twenty fifth anniversary. Uh. They also unveiled the dot net platform for web services, and that was the year that you know, I kind of lied when I said that Bomber became president and Gates remained chairman and then that would remain the same till two thousand eight. Not entirely true actually, because Bomber then stepped into the role of CEO, and

Gates became the chief software architect for Microsoft. I think most people still viewed Gates as being kind of the leader of Microsoft, especially when you consider that at big events like ce S it's always the personality I mean, was always quiet and well, okay, now that's quite the wrong word. You're very correct. Developers, developers, developers, developers, developers. Do a search, folks, you've heard me say it before. If you have not seen it, go to YouTube. Type

in Steve Bomber developers and you can see. Now. Remember, Bomber comes from this from a salesman kind of perspective. Dude gets pretty loud if he wants to be. But but your point being that he was not the kind of the voice of leadership for excellent reasons. He was not really the personality that was driving Microsoft. Yeah, he's definitely a very savvy businessman, extremely savvy businessman. That's also year that the Department of Justice Judge Jackson ruled that

Microsoft should be split into two units. That that's why today we have two different companies of Microsoft. Why Microsoft cannot be us Wait this was struck down later on. But but but yeah, but the concept was to Uh, to have one half that would be doing the operating systems and the other half with what with a software, other software, other types of software besides operating system Yeah.

He Jackson, Judge Jackson actually said that Microsoft was an abusive monopoly and uh, like like Lawrence said, this decision would eventually be overturned. It's so. So that's why there's not like two different versions of Microsoft out there, one just doing Windows and the other one doing everything else. Revenues from Microsoft that year hit two d twenty nine billion dollars with over thousand employees. That's a lot of employees. And that's when Bill and Melinda Gates launched the Bill

and Melinda Gates Foundation. It's also when Microsoft acquired a company called Video Corporation, So those of you who are familiar with videos products that that will ring a bell.

And Microsoft introduced the Pocket p SEE two thousand, and that's the the one that had an operate system that was based on Windows CE and the operating system on the Pocket PC two thousand would evolve into what would become Windows Mobile, which has we could do a full episode just on Windows Mobile as well, because that's that's one of those upbring system stories that has its own, uh interesting rise and fall narrative. Um, of course Windows Mobile not a thing anymore. Uh that instead we have

Windows Phone. I'll talk about that in a little bit. But in two thousand one, that's when the Court of Appeal overturned Judge Jackson's decision to break Microsoft up into two corporations. They but the Court of Appeal did say that the company legally illegally used licensing agreements to lock out Netscape from computer manufacturers. Right right. Microsoft ends up settling by agreeing to to disclose its application programming interfaces

with third party software companies. So that that was the resolution to that very long process of investigation and litigation. Microsoft that same year launched Windows XP, which two one Windows XP launches, and it was an incredibly popular operating system, so much so that there's probably some machines here in this office that are still running Windows XP. I was running Windows XP personally until Yeah, well, I was running Windows XP on my work computer until I destroyed I

don't know, maybe three computers ago. I've gone through a lot of computers while I'm here at now stuff works. I'm a little hard shocking. Yeah, well I did seem Yeah, well, I take it out on the machine, so when the

machines rise up, I'll be first. Yeah. So Office XP also launched that year, which was another one of those Office Suite updates, right and uh and yeah, so the Windows XP is up becoming So it's such a strong rule lease that it would actually cause Microsoft some problems down the line when they tried to move to the

next generation of operating systems. Um. But this was also a year that was very important for both Microsoft and for Lauren and myself, for me specifically two thousand one, that is the year Microsoft launched the Xbox, the Xbox that's and and one of the launched titles for Xbox was Halo. Halo, Yes, yes, so the video game that Lauren and I both share a deep and abiding love for.

And I don't think I played it until two actually, yeah, well that was one of the It was one of the earliest titles for the Xbox was was Halo, and it was one of the most successful. I mean clear, Halo originally was developed as a game that was going to be on the Macintosh or the mac computer at that time, and instead, you know, no one had ever seen any any uh, AI software quite like that in a first person shooter. Yeah, it was. It was. And also the capacity to uh to land local area network

boxes together. It was. It was stuff that people had were excited about on the computer front, because of course on computers you could have done this for a while, and also on games like Golden I for the Nintendo platform. Um, it was. It was sort of the next step in first person shooters. Now people who are first person shooter uh aficionados on the computer looked down their nose at us, and we totally understand. But Lauren and I like to

play with controllers, not with a mouse and keyboard. There's not that was. That was the first first person shooter that I that I played with a controller, and I didn't know how it was going to I could not comprehend how it was going to work at first, because I was just like, how I have I don't have a mouse, how do you make it work? How how does it do? But it but it turned out to work really well. So although the Xbox you know, it did pretty well in the United States worldwide. Uh. It was.

It was kind of a runner up to the PS two, A distant runner up to the PS two really, umny had sure, Sony had so many, so many terrific titles out at that point that the PS two is one of the strongest video game consoles ever. If you look at the library of games, it's pretty phenomenal. But yeah, that that was where Microsoft said this is we're going to get into the console gaming market. And so that's

that was the first version of that. UM Skipping two thousand two because I don't have any real information about Microsoft that year. Three, that's when they launched Windows Mobile two thousand three. So this is the first operating system they had officially called Windows Mobile. Is still mainly used for the Pocket PC at this time. They weren't really interested in developing smartphone operating systems at this point, although you could find the Windows Mobile operating system on a

couple of early smartphones. Also in two thousand three, UM, a new version of Office launched Office two thousand three. Shockingly enough, UM and again that really clever naming systems here, um and uh and yeah. The company at this point had over ut four thousand employees and their net revenues were above thirty two billion, lots of money, all the money. Yeah, two thousand four, that's when we have another another knock against Microsoft. That's when the European Commission because the old

anti trust hearings against Microsoft. So UM, like we said before, you know, the United States government's not the only entity that has gone after Microsoft or anti competitive or antitrust reasons. Certainly not, no. Uh. In two thousand five, actually South Korea UM started to open anti trust hearings. They they find them like thirty two million, but ultimately found them guilty and dropped the fine. So I'm not really sure the purpose of that one slept on the wrist. There's

more that happens in two thousand five. But before we jump into that, all right, back to two thousand five, here's where another launch comes in. So two thousand one they launched the Xbox two. Five, we get the Xbox three sixty. Now, this is, of course, the as of the recording of this podcast, the current generation of Microsoft console with the Xbox one on the horizon. It's coming very soon. We'll we'll talk a little bit about that,

of course, towards the end of this episode. Two five was also the year that Gates Bill Gates received an honorary knighthood from the United Kingdom that's interesting. It's very rare when someone outside of the UK is awarded with an honorary knighthood. There's a particular order, as I recall, that's for non U cases, and but I honestly can't remember what it is because I don't expect to receive one anytime soon. The Queen will not return my phone calls.

How rude you said it? Not I above such things. We are not amused. Two thousand six, Gates at that point shocks the world by saying that he will step back from Microsoft by two thousand eight. So this was a big news. I mean, Gates was very much Yeah he was, even though he had only been the chief Software Software Architect for a while. Yeah, yeah, he had not been in the the official leader of Microsoft. But people still thought of him as the leader of Microsoft.

I mean he was, like I said, at any big event like c E S, he was still the guy who would deliver the keynote. So this was this was kind of big news. And he still was, you know, saying that there was gonna be a transition plan and he was still gonna be working for Microsoft. He was going to scale back gradually. It wasn't like he was just gonna quit one day. So but it was it was you know, this was when he announced that. That was also when when Vista was released, which did not

as well as they were that. This is one of those operating systems that suffered for um for XP having been as solid of a system was right now XP. You know, like people will even point out that the early days of XP, XP was kind of a rough system. But they had released patches to XP over time of them. Yeah, because you had to keep you know, vulnerabilities would be discovered. Microsoft would fix the vulnerabilities, release a patch. More vulnerabilities

would be discovered in the line. But the Internet was so widespread at this point it was really easy for people to get ahold of those. Yeah, and Microsoft XP. I mean it became the foundation for a lot of software. And that one of the things we see time and again with big businesses is that they'll develop their own proprietary software to do business their own way, whatever their industry is, and these these programs will be built with

a particular operating system in mind. And Windows Windows XP had been around for a while, so, uh, anything that was not going to be compatible with that Windows XP platform was not very useful to businesses. So Windows Vista when it first came out, there were some compatibility issues.

There were a lot of driver issues too, Like if you had developed hardware four PCs and you had special drivers to make it work on a computer, Vista did not work with a lot of drivers, which meant that people were reluctant to upgrade because they didn't they weren't sure that their stuff was going to work with their computer.

And it was also being sold as a much more home PC system, and and at this point, I think a lot of people had phased into using, um, you know, having multi use computers, not separating their home life from their work life, and and and you know, it's just there were a lot of problems with Vista, and it got it personally, I did. I actually used it early

when there were still a lot of problems with it. Uh. And part of it was that people who were reviewing it gave it pretty critical reviews and it never recovered from that. Even though they Microsoft would address many of the problems that people had with Vista and subsequent updates, the damage had been done. Vista was known as being a bad operating system because of the criticisms that it

received and it never recovered. Um there was. That was the year that they launched something else that also had a very rough life. It wasn't just Windows Vista that they launched that did not really ever gained serious traction. They so launched another example of hardware. So they had had some success with the video game console market. That's when they launched the Zoon Player. So the zoon Player was a competitor to the iPod and later on a

competitor competitor to the iPod Touch. UH. It was an MP three player media player UH. And it was a project that was headed by Jay Allard, who was actually the guy who was in charge of the Xbox three sixty project before it's launched, so he had already demonstrated success in developing hardware for Microsoft. The code name by this project was Argo, and it was it was It was innovative in many ways. One of the things that you could do with the U the Zoom was you

could share music with someone else who owned a Zoo. So, Lauren, if you had a Zoom, uh, I apologize ahead of time for actually saying you would own a Zoom. A little brown MP three player. They originally just came in Brown. I think, I think I had I had Best Buys for priet Terry MP three player at the time, so I wasn't really had a compact branded MP three player

for the longest day, it was a brick. Uh. So uh, if you had a Zoom and I had a Zoom and I had a song that you wanted to listen to, you just really needed to hear Jet Boy, Jet Girl. I happened to have that and I want to lend it to you. I could do that for first that period of time. It was like alone. Yeah. Essentially, the file would remain viable on your Zoom device for a certain number of plays or a certain amount of time, and then it would essentially delete itself, so you wouldn't

be able to copy mufitely. But originally do you remember what? You probably don't, But do you remember what this sharing service was eventually called Microsoft Prepare Yourself Squirting? No, it was not. It was if I wanted to share my song, I would just squirt it right on over to you. My Zoom would squirt at your Zoom and then your Zoom could play that. I think I need an adult Yeah. Um, not my fault, not my fault. I didn't come up with it, it's just what it's called. So anyway, I

wish I were making that up. So let's move on to two thousand seven before any more damages that. That was the year that Office two thousand seven launched. Yes, strangely enough, Gates also collected an honorary degree from his alma mater or what would have been his alma mater. Also for reference, that's the year that the that the iPhone launched from Apple. Yes, yes, and uh. Later on, Steve Balmer would admit that Microsoft did not get completely

dropped the ball. They didn't move on smartphones when they should have because they had been working on their Windows Mobile operating system for a few years, and if they had positioned themselves properly, there is a chance that they could have been the company that brought the smartphone to your Yeah, because that's what Apple did. You know? Smartphones existed, people were using smartphones, especially executives, and using black but they brought it to to two people. Yeah, Apples, what

not that executives are people? I'm sorry that sounded terrible. Well, I don't know have you ever eaten with one? So that's a producer's joke. Uh so the but yeah, Apple was able to succeed where no other company had as far as the consumer interest in smartphones is concerned. And later Balmber would admit that Microsoft really dropped the ball. They could have been the company to do that, or

they at least had the potential. Uh. That's the same year that Bill Gates showed off the Milan surface computer, which was later just called the surface table and eventually renamed the Pixel Sense to differentiate it from the surface tablets that would come out down the line. So this was a table that could detect multiple touches up to

I think ten or twenty touches. It used cameras to detect where you were making contact with the screen, So cameras were actually mounted below the screen you could not see them, and they were measuring light in the infrared spectrum, as I recall, So that way it would detect where

your fingers were and you can manipulate stuff. You can even do things like have a digital camera that you had taken pictures with, put the digital camera on the surface, and then through wireless transfer, it could pull the pictures from the camera onto the surface. So it's kind of a cool effect. You. It's like setting your camera down on a table and something the pictures you have taken

are on the table. It was a neat idea and it was really meant as something that would be used in entertainment establishments and retail establishments, not so much the average consumer. I mean, we're talking about tables that cost like twenty grand. So it's not something that I'm going to go out and buy anytime soon unless someone out there wants to be really altruistic. Uh. And it's also a year that's something that is only it's a story that's just now unraveling to a level where we can

really get a grip on it. Uh. It's something that Lauren and I are going to cover in the future. Two thousand seven is when my Microsoft becomes the first company to be involved in the n s A s PRISM program. So PRISM, of course, is part of the n s A program to gather data about non US citizens related to any form of terrorism activity or or any other dangerous activity directed towards the United States and UH.

To do this, the n SSA gathers a lot of information and Microsoft was the first company to become part of this now saying that I don't want to give the uh the I don't want to imply that Microsoft was completely in favor of this. They were required by law to participate in this program. It's uh not like

it's you know, it's not like Microsoft volunteered necessarily. We don't know all the details of how each company became part of this, but we do know that, you know, these were all legal proceedings as defined by US laws. So I just wanted to say that because you know, we're still learning the details about this entire program. But yeah,

two thousand seven, that's when they started. It would be six years before we would all learn about this program, al right, two thousand eight, so that's the year when Microsoft gets hit with a little slap on the wrist from the European Commission hundred ninety nine million euros. You can call that a slap on the road. Don't slap me on the wrist with that, because I can't afford it. Yeah, Microsoft of course appealed that, yep, and they had hit

a corporate wide head count at this point. Is a global company, I mean, they've been a global company for a few several years. At this point, their global head count is at ninety thousand and uh. And it was at that point that Gates, as as promised us, stepped down from his daily responsibilities at the company. Yeah. It was also the last year that Bill Gates would do the keynote for C E S. UH And I remember

seeing that keynote. I was at that C E S. And it was interesting because they also presented a video of what Bill Gates is to Cold day was like a Microsoft leading up to his retirement because he had scaled back so far and h it was totally done

for laughs. I'm sure it was. It was very amusing and involved things like him putting his coffee cup on his car and driving off without remembering it, and then getting out of this car when he gets to Microsoft and picking up his coffee cup from the top of the car. Its stayed there the whole time. And lots of goofy stuff. In fact, there was a weird year for Microsoft. There's a lot of goofy stuff that came

out in two thousand and eight. For instance, there were a series of Impenetrable ads that came out featuring Bill Gates and Jerry Seinfeld, Right, I remember those. I showed you one of them, the one where the Jerry Seinfeld's walking through a mall and he sees that Bill Gates is being fitted for shoes and he says, great, googly moogly. He comes into the sneaker store and there's Bill Gates trying on a pair of conquistadors. They run tight. Uh. If you guys are longtime fans of tech stuff, you've

heard Chris and I have quoted this ad nauseum. I mean it's really esoteric. I mean it's such a bizarre very data and they and they have there's one point where the shoe store asks the ask Bill Gates if he has like the customer loyalty card, and Bill Gates flashes the card and it has on it his mug shot from when he was so he was a teenager and he kept getting pulled over and at least on

one occasion arrested for violation chilling around in his Porsche. Yeah, so he um, he had his mug shot on there as just a little sly gag. The whole commercial is a commercial. It's it's like a Seinfeld episode. It's a commercial belt nothing. It's a Microsoft commercial, but they're not promoting any particular product. Or service. It was really just odd. Yeah, and I loved it. But sure a lot along these lines. Um, you know, Gates maintained his position as the chairman of

the board. Um yeah, of of Microsoft, but no longer they're on a day DA basis. But but was still very much a figurehead. But but at that point he was really trying to concentrate on the Bill and Melinda Gates Foundation, Right, and that's a year. Uh. The last day of two thousand eight, December thirty first, two thousand eight,

several of the Zoo thirty models all froze. There was an error inside the internal clock driver that was running on the Zoo models, So anyone who had a Zoom thirty there was a chance that their device would just freeze and it wouldn't work for another twenty four hours. Within twenty four hours pretty much fixed itself. But if you wanted to fix it before that, Microsoft did release a patch. But that was just one of those things that kind of indicated where, you know, a little software

error could lead to a full hardware failure. I guess alternate of glitches. We're not We're not good. I mean, it wasn't an infrequent Yeah, I think it's fair to say that it didn't hurt Microsoft too badly just because the Zoom wasn't that popular. Sure, but it did hurt the Zoo. Yeah, well it didn't help. I mean, iPod was already so far in the lead that it has been really hard to catch up to it. Two thousand nine, that's when Microsoft launched. When does seven? A lot of

us thought that this was a pretty quick launch. I mean it went from two thousand and six of Vista coming out to two thousand nine with the successor to Vista coming out, and a lot of people felt that that was a really short window. I think it was more. I think it was partially a marketing emloy just because Vista had done so poorly. They were like, let's get this name out of here and and and you know,

we can do firmware updates basically. Yeah. It also it also confused people There were like, how did Microsoft get to seven? And you started counting? And Microsoft has an official response to that, which I cannot remember, but I do. When I read it, I thought, that's one way to count. Uh it was. It definitely confused me because people were people were dedicating a good amount of time figuring out

like where then the last number had been three point one. Yeah, and then you had all the different variations like Windows Windows you had, you know, but people were adding it up and then thinking I can't get to seven. Depending on which way I go, I can either get six or eight. But but eventually Microsoft did actually release a response saying this is why it's Window seven. That's also when they launched a fourth generation Zoom, which was meant

to UH to compete against the iPod Touch. This was the one that had the oh led display and had HD video out. It also had HD radio features UH and UM. At the All Things Digital conference, Steve Bomber announced the BING rebranding of Microsoft Live Search being launched an in an official way. UM. Other things that launched

that year were Russia's investigation into Antitrist proceedings. Yeah. That's also the year that that Microsoft would UH enter into a deal with Yahoo to provide search results for Yahoo, so Yahoo search engine would be powered by the BING search engine at that point. This is interesting because the year one year earlier, two thousand and eight, something I should have mentioned but I forgot to, was that Microsoft made a move to acquire Yahoo and actually they wound up,

They wound up not following through with that. Yeah, because yeah, who said that Microsoft had undervalued the what Yahoo was worth? And then Microsoft said, well, we don't want to play

with you anyway. And then a year later they said, you want to use our stuff for your surge engine, and you know who said yes, y'all who itself was going through some pretty serious trouble at this point, and uh, you know, if you've heard our Yahoo episode, you've probably understand more about that and about how you know, the company was really struggling for a while. And some would argue still is sure um to two nine wasn't necessarily a terrific year for Microsoft. It was the company had

some nine of the UH global operating system market share. However, this stock stipped to under seventeen bucks of share that year, which which was the lowest basically in their history since uh since nine. Now, to be fair, this is also right around the time that there was a global depression. It was a global economic sessions, but it was it was the only year of their negative growth um since

I love that phrase negative negative growth. Yeah yeah, And this was also the first year that Bomber headed the CS keynote on his own and Microsoft as the Microsoft keynote. The delivery guy. I actually saw that one too. I saw the last gates one in the first Bomber one.

Three interns were eaten that day. Then in the Connect was released, and and and the Connect would be what would help the Xbox three sixty overtake the PlayStation two and the WE consoles, PlayStation three, PlayStation three at that point, Yes, it's okay, yeah, and the Connect, I think I think what was happening was that Microsoft saw that the Wei when they released the We Move, I mean, that thing sold like crazy. It was almost impossible to find one

of those things for months after its release. And it was such a such a terrific um kind of non traditional market that they were aiming for, you know, a k a. Ladies um, which which always fends me a tiny wee bit, but yeah, right, um. You know, it was just around that time that the consoles that the major console players were starting to go like, hey, there are people in the world who might want to play

games who are not year old males. Yeah. Well, and and they were also just seeing that the We console was out selling the Xbox three sixty three. Yeah, and it wasn't necessarily that Nintendo was really making groundbreaking games. It was that the hardware itself was creating a totally different way to play. And so the connect and the move we're both kind I would I would argue those would have to be kind of responses to Nintendo's approach.

I'm sure both companies would argue saying that it was you know, that this was always part of their strategy, but that it was the hardware capacity at the time when you see when you see a company just run away with it like Nintendo was at the time. Now, of course Nintendo is in its own serious amount of trouble right now, but at the time it was doing really well. It just didn't have a lot of staying power, Like people got tired of their wee consoles in general.

I mean, that's that's a generalization. There's a game deficiency. Game deficiency as well. UM also was the year of the Windows Phone seven UM, Microsoft Link and the Office Suite. So now we're getting into this this era where Windows Phone has taken over for Windows Mobile operating system. Uh. In fact, that that had really started back in two

thousand eight. The Windows Mobile Operating System was showing its age, and rather than continually trying to upgrade it, Microsoft made the decision to start with a brand new operating system designed specifically for smartphones and for tablets that they were

calling Windows Phone rather than Windows Mobile. So that's you know, now we're seeing Windows Windows Phone seven, which I guess is to mirror the Windows seven operating system as opposed to show that this is the seventh version of Windows Phone. I don't even know. I can't tell. Counting is fun? Yeah, sure is. That's when Microsoft announced that it would discontinue the Zoo hardware development. So the Great Zooon experiment ended in failure. They could not replicate the success they had

in the console market. I know a lot of people who listened to this show listen to it on Zoom. In fact, we had people, uh, whenever there was an issue with RSS feed or something that was not properly going to the Zoom marketplace, people would write in Uh. Not a lot of people, but the people who did were very much, very vocal about it. Yeah. I mean, you know, it was a it was a decent MP three player. There was nothing wrong with it. It just

never got the traction that other hardware had sure. Well also also for you know, yeah kids that were PC versus Mac. Yeah, yeah, wait, that's the thing. Next, you're gonna tell me that pirates and Ninja can't get along. Steve Bomber delivers Microsoft's final keynote address at C e S. I did not see this one. I missed. I was

at CS that year, but I didn't go. But um, the company also said it would no longer maintain a space at CS, it would no longer have a booth there, and um, which which you know was it was a

came off like a like a big step. But was wasn't, I think overall surprising in the industry because you know, all of these large companies had for a while started kind of going like, well, why am I going to let all of these other places steal my limelight when I can just hold my own press conference and talk about anything that I want to, kind of following the same route that Apple and Google were doing, which is hold hold your own event and that way you can

why not, Yeah, you can announce things on your terms, on your schedule. Because the big issue with CS is, yeah, there's a huge spotlight that's on you because the whole world is there. It feels like at times, but one you're sharing the stage with everybody else, and two you have to have your stuff ready to announce at that particular time of year. If it's a product that you aren't ready to launch for another five six months, announcing it early can sometimes be harmful. We saw that with

the Palm Pre. The Palm Pre came out at CS one year, and everyone thought, this is the most amazing smartphone I've ever seen. I can't wait to get my hands on it. By the time it came out June of that following year, no one cared anymore. So this way Microsoft could terms in better strategy exactly, so they left c E S and uh. They also launched a new product in a brand new version of their operating system, Windows eight. Yeah. Windows eight. This was the the tablet friendly,

the multi platform friendly operating system. Yeah, to the point some people would argue that it wasn't so friendly if you had a desktop or laptop, especially if you had one that did not have a touch screen. But yeah, I was designed so that it could work on both touch screens and on traditional computers, and um uh, it definitely is very easy to use if you have a touch screen interface. If you don't have a touch screen interface, it takes a little bit more. Yeah, it takes a

little more effort to navigate through. It also had a desktop version where or a desktop setting where you could switch from the tiled view of Windows eight to the more desktop look to it, although the start button was missing at the time. But more on that in just a little while. Um but it got mixed reviews, I would say mixed to negative. There were a lot of people who found it, um difficult to to navigate it first. There were people who were missing a lot of the

features that they had become used to. Again, this happens every time you updated. But it's still pretty fresh and recent. So yeah, and and and again. Like not everyone. You know, people are starting to get touch screens for their home PC or laptop. But um, but that's not widespread enough to really be I think the Microsoft might have jumped to the gun on that one might have. I mean they were in a way, they were really trying to push this forward. In fact, they've been doing that more recently.

I think they're trying to become a leader in various areas, like a thought leader, not just not just an industry leader, but a thought leader in these spaces. But that that means you get pushed back, because it means that you are are abandoning certain things that people have, you know, come to rely upon, or at least be used to. And it takes a while to convince folks that no, no, no, go with us, because this is going to be great.

You just have to let this other stuff go. And I think it's really hard to do when you're when you're this big, when you've got this much of a of an os market share UM and telling you know, perhaps over half of the world that that they need to catch up to the times and get a whole bunch of new hardware is a difficult sell. There are different ways of doing it. Like Steve Jobs was very good at doing this Elvert Apple stee Jobs. I mean, he could tell you essentially what it was you wanted.

That was his job, and and the thing was, he was good at it. By the end of the by the end of a speech, you were convinced you did want the thing he told you you wanted. Um and uh. Whereas Elver a Microsoft that doesn't necessarily always work out that way two thousand twelve is also when Microsoft launched the surface tablet, So this was interesting because again they were getting into the hardware area. So they had they had the consoles, they had the failed Zoon. Now they're

getting into creating tablets. And it also was a little controversial because Microsoft is providing the operating system for other surface tap will not surface tablets, but other tablets running Windows eight. So then the question was are you actually entering into competition with your own partners and that was

that was a tough question. Um. Microsoft I think was mainly saying that the reason they were developing surface tablets was to inspire other but needs to also build Windows eight tablets and to just uh start that start the market, to establish a market that other companies could sweep in

and take advantage of. Um. I don't know, it's still early days, but I surface adoption has not been huge compared to things like Android tablets, and I think I think partially because of a little bit of that bad, bad press about Windows eight. Yeah, I'm sure that has something to do with it. Uh. Then we get into this year, we're not We're not finished at the end of June, but as of yet, Microsoft has announced the Xbox One for release at the end of the year.

They announced it and then they showed it off at first a couple of weeks before E three, and then at E three they went into more detail. It initially got a lot of people raising criticisms for some of the decisions that the Microsoft made. They wanted to go with a version of the Xbox One where you could buy games over over digital lines, so you would just download the game, or if you buy it on disk, you would just use it to copy the game onto your drive. Then you would never need the disc again.

So it was a way to try and move away from physical media. But it meant that there had to be a from the game developer perspective. There needed to be a way of verifying that the game itself was a legitimate registered copy, which meant that your console had to check in with servers on some regular basis, which they said was going to be every twenty four hours certain games. If you were playing a game, you would have to check once an hour, but the system itself

would be once every twenty four hours. UH. There was a lot of a lot of resistance on the gam or movement for that, and eventually UH they clarified and or rent contact. Well, the Xbox president essentially said, we heard what you had to say, and we now are going to change these policies so that now you can play a game on a disk just like you you could ever before you could you could sell that disc when you're done with it, you can trade it. If it's a digital copy, then you cannot do that because

that's just the way digital works. But if it's a physical copy and you're done playing, you can totally sell that back, or you can buy a used copy and there will be no restriction. Um. There were some other changes that they made that were really to mollify gamers who were complaining about the changes that were being made.

So um So that was a big story in with Microsoft. Also, just recently, Microsoft launched Windows eight point one, which is the newest update to the Windows eight op bring system, and it brings back the much beloved start button. It doesn't behave exactly the way it did in Windows seven and earlier versions, but you know what, it's the behavior of the start button has changed from version to version anyway,

but it is back. It had been removed and now it's back, and you can customize things like start and lock screens. Uh. It also Windows eight point one adds support for three D printers, which is kind of cool. It also deeper sky Drive support. Sky Drive is Microsoft's cloud storage solution. UM and this they also sold off their I P TV divisions. That's that's internet TV. Remember when they bought web TV way way way back. Now

they're getting rid of all that. They sold it to Rickson right, and and this is really a move I think to UM to focus on their Xbox Internet TV related departments. I would imagine so. And they also have entered into a lot of partnerships with cable companies and broadcast. Sure, it's it's not that they're trying to get out of Internet TV. It's just that they are focusing their efforts on on the hardware. I'm selling a lot of Xbox, Yeah,

that's the plan. I think they're gonna sell a lot more now that they've reversed their position on several of the issues that gamers found particularly troubling. That brings us up to date what Microsoft's been doing and what the company is up to. And you know, it's funny because I think every year since Balmer has essentially become the

the head of Microsoft. There have been rumblings that the company would look for someone else to replace him because people seem to feel that Bomber is not the right guy to be in charge, that he's not leading the company in an innovative way. I'm not the one to say that, but I've certainly heard it. And every time any discussion about Microsoft's corporate structure comes into play, I always hear somebody say, when is the board of directors

going to demand a different CEO? Um. You know, Bomber has been there a long time and he knows the business really well. And it may be that his public persona, the idea, you know, the way that he comes off in these presentations, like I said, like a super intense dude, may not be uh indicative of his actual leadership style. I don't know. Never worked with a man, I'm terrified of him and I hide uh. But it'll be interesting

to see what happens with Microsoft in the future. I I am curious to see how the Xbox one shakes out, as well as the fact that they plan on continuing to support the Xbox three sixty. I'm also curious to see how Windows eight shapes up now that we have eight point one out there, and whether or not they were they were again kind of prescient and their decision to make this, say a touch heavy. Yeah, we'll have to see. And of course Windows Phone is one of

those things that there there. I've seen some projections that it could have as much as seventeen percent of the market in like seventeen, but that's a very small slice of the market. They're still really battling Android and iOS. I mean, those are the two juggernauts there. So but when those phones is a a good mobile operating system. I've used it a little bit. I mean I don't own a device that runs Windows Phone, but the times I've used it, I thought it was pretty sleek and

everything seemed to be working really well. I thought was very pretty Um, I just I'm already really well invested, already entrenched Android. Yeah, yeah, that one. It's the one I'm entrenched in sometimes up to my neck. All right, Well, that wraps up our discussion about the company Microsoft. It's a big, big discussion, and obviously we could do episodes about lots of the different things that we talked about here,

and maybe we will in another few weeks. After this is crested when we can talk about something else in the meantime, something fun, silly, like in the n s A. So, guys, if you have any suggestions for future topics for tech Stuff, let us know. Send this an email. Our addresses tech stuff at Discovery dot com, or drop us a note. On social networking, you can find us on Facebook. You can find us on Twitter, you just have to look.

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