Windows Live Messenger now even more live, as Microsoft grows an audience

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Windows Live Messenger now even more live, as Microsoft grows an audience

Redmond (WA) – Though the company had plans to unveil its first in a series of so-called “Windows Live Services” last Tuesday at TechEd 2006, today, Microsoft proceeded with the rollout of Windows Live Messenger, the company’s new IM tool. Its value proposition will be a risky one, as we reported last week from Boston: In addition to connecting individuals with people, Live Messenger will make available “services,” to borrow an overly borrowed phrase, consisting of programs that converse with users over a chat session.

It was a difficult sell during TechEd – in fact, sessions devoted to Windows Live were, by any account, not among the most attended of the show – but Microsoft is pressing on with the idea that the users of this chat client represent a virtual collective, a huge audience of consumers who await the opportunity to be addressed with a variety of advertising messages. By Microsoft’s repeated estimate, there are 230 million Messenger users at present, as well as 240 million Hotmail users and 130 million users of Microsoft’s Spaces blog service. The fact that a great many of these “users” are actually replicate accounts and pseudonyms for users with multi-faceted personalities does not daunt the Microsoft team, as Windows Live General Manager George Moore told TechEd attendees on Tuesday. (Live Messenger users must have Hotmail or MSN e-mail accounts. Incidentally, there are only an estimated 6.5 billion people on the planet.)

An altruistic view at how individuals are all connected with one another on a cosmic scale, based on the common things we all like…brought to you by Microsoft.

The way Microsoft looks at the prospects for services now, as Moore explained, if you totaled the number of relationships in every Messenger user’s Contacts list, the total number of relationships you’d have is about 12 billion. Each of those relationships is an addressable element, representing a kind of living organism, the growth pattern of which could be plotted on this chart, which could perhaps be called the me chart. Here, there is a virtual network of social connections that link all living things…or, more importantly, all Microsoft services users. Each layer on the chart contains petals that reach out to relate “me” to the world around “me.” Eventually, and perhaps not coincidentally, the outermost petals represent discrete relationships which correlate conveniently to demographics.

The key to harvesting these relationships, said Moore, is enticing developers to create the applications that enable services providers to leverage the natural act of reaching out. “We have 400 million members of this audience that developers can choose to interact with, and write applications that leverage,” he explained. “And what fuels this virtuous cycle is the money coming in from advertisers, or from business models that are brought by developers that are used to address this audience. This causes us all to build out the platform, and as more applications are built, it draws in more consumers, which draws in more advertisers, which causes us all to build out the platform. So it starts to feed upon itself and form a virtuous cycle as it continues to evolve.”

One Messenger bot called “Movie Scout” looks for theatres and showtimes, and shares movie memorabilia with its user, such as this cool wallpaper. The download had to pass a strict, multi-step security procedure prior to being accepted.

One example of this leveraging comes from an interactive Yellow Pages, which is one of the test applications, or “bots,” built for the last beta of Live Messenger. In a conversational mode that resembles the first command-line-driven applications, users can enter directory information, and the Yellow Pages searches for a match, which can then be coped to the Clipboard.

In a more sophisticated example, Movie Scout peruses the Internet in search of showtimes and available films, and can fetch reviews and other interesting data. In an example demonstrated Tuesday morning by Ken Levy of the Windows Live team, Movie Scout has found a Superman “S” badge, which it offers to the user as a download. But acceptance is not an automated thing, for tucked away between the petals of the demographic mandala is the sense of skepticism that drives modern security. After a check of certificates for both sender and receiver, the wallpaper is finally applied to the background of Messenger, and humanity evolves.

How these services will distinguish themselves functionally from Web pages that accomplish many of the same goals, is unclear; but there’s a possibility that Microsoft is relying mainly upon the character of the whole operation to make it work, or rather, to make you believe it can work. It’s a reliance that goes two ways: If you, the Live Messenger user, can perceive a human-like character in the services you use (or, to use Microsoft’s term, “consume”), then the value of that association may be of as much value to you as association with a real person. Likewise, if Live Messenger can just get over the fact that you have a dozen or more accounts by different names, then services can perhaps see as much value in chatting with a dozen or more of you as with just one of you.

“Six years ago, if you went to one of the developers in our team and asked, ‘What are you building?’ they’d say, ‘We are building the largest and most profitable communications service on the planet.’ The reality is, we’re building an audience – an audience that is addressable by these businesses that…make use of Windows Live Services.”

In language clearly more targeted to the financial analyst, Microsoft’s corporate vice president for Windows Live, Martin Taylor, stated in a Q&A statement this afternoon, “We plan to dedicate roughly US$1.1 billion of the company’s overall $6.2 billion research and development budget toward Windows Live and MSN in the 2007 fiscal year that starts next month. However, this doesn’t mean that Microsoft is backing away from our other core businesses. Windows Live is a distinct growth opportunity.”

Launches are more figurative things in this rapidly changing world. Despite this afternoon’s official marketing launch, at the time of this writing, Windows Live Messenger remains available from Microsoft as a beta download, along with the other planned services for Windows Live.