The Microsoft Story Part Two

What was Microsoft's Office of the President? When did Bill Gates step away from Microsoft? What are the latest developments at Microsoft?

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Episode Transcript

Speaker 1 (00:04):
Get in Touch with Technology was text Stuff from how
Stuff Works dot Com. Here everyone, and welcome to Text Stuff.
I'm Jonathan Strickland, and we're going to bring to you
the second part of our episodes on Microsoft and just
kind of the Microsoft story and how it developed as

(00:26):
a company and the big things that shaped it and
the big things that did to shape the industry, right,
going from three to over ninety thousand employees in the
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,

(00:46):
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

(01:07):
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

(01:28):
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

(01:49):
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,

(02:10):
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,

(02:31):
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.

(02:53):
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

(03:14):
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,

(03:34):
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

(03:55):
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,

(04:15):
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

(04:38):
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

(05:00):
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

(05:26):
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

(05:48):
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

(06:11):
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.

(06:33):
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

(06:56):
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

(07:18):
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

(07:38):
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.

(07:59):
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

(08:21):
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

(08:44):
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

(09:05):
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

(09:28):
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,

(09:49):
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

(10:10):
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

(10:30):
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

(10:52):
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

(11:15):
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

(11:36):
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

(11:57):
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

(12:19):
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

(12:41):
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

(13:01):
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

(13:25):
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

(13:46):
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

(14:07):
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

(14:29):
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,

(14:50):
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

(15:14):
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

(15:35):
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

(15:58):
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

(16:19):
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

(16:41):
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

(17:01):
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

(17:23):
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

(17:47):
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

(18:07):
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.

(18:30):
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

(18:51):
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.

(19:16):
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

(19:38):
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

(19:59):
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

(20:24):
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

(20:46):
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

(21:07):
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

(21:29):
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

(21:49):
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

(22:10):
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

(22:32):
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

(22:55):
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,

(23:18):
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

(23:39):
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

(24:00):
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

(24:22):
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

(24:42):
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

(25:04):
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

(25:26):
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

(25:48):
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,

(26:13):
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

(26:36):
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

(26:56):
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

(27:19):
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.

(27:40):
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

(28:03):
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

(28:26):
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,

(28:51):
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

(29:11):
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

(29:33):
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

(29:53):
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

(30:16):
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,

(30:39):
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.

(30:59):
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

(31:21):
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

(31:41):
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

(32:02):
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

(32:24):
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

(32:50):
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

(33:10):
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,

(33:34):
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,

(33:56):
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

(34:18):
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

(34:40):
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

(35:00):
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

(35:21):
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

(35:43):
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

(36:04):
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

(36:25):
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

(36:46):
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,

(37:07):
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

(37:30):
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

(37:52):
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

(38:14):
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

(38:36):
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

(38:59):
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

(39:20):
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,

(39:40):
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

(40:01):
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.

(40:22):
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

(40:43):
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

(41:04):
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

(41:24):
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,

(41:48):
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

(42:09):
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

(42:30):
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

(42:53):
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,

(43:14):
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

(43:37):
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.

(43:58):
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

(44:20):
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

(44:43):
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

(45:05):
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

(45:30):
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

(45:51):
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.

(46:11):
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.

(46:35):
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,

(46:56):
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

(47:20):
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

(47:40):
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.

(48:04):
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,

(48:26):
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

(48:47):
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

(49:09):
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

(49:30):
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

(49:54):
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

(50:17):
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

(50:41):
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

(51:03):
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

(51:25):
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

(51:46):
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

(52:09):
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

(52:30):
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

(52:51):
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

(53:13):
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

(53:34):
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

(53:58):
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

(54:20):
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

(54:41):
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

(55:02):
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

(55:22):
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

(55:42):
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

(56:03):
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

(56:26):
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

(56:46):
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

(57:07):
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

(57:28):
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.

(57:50):
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

(58:11):
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.

(58:34):
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,

(58:55):
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

(59:16):
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.

(59:38):
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