November 18, 1998 6:05 PM PST

WebTV adds features

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Microsoft's WebTV Networks is adding features to its Internet TV service, including online commerce partners and a shopping guide, in a bid to attract subscribers this holiday season.

Many of the changes to the WebTV service are cosmetic, intended to make content easier to navigate. For instance, a section is being added that walks first-time online buyers through the purchase process.

WebTV is also introducing updated software for WebTV Plus models that lets users add sound and still images to messages sent to chat groups and the ability to send email greeting cards sent via the set-top devices. Older WebTV Classic models will not get this feature.

Customers wanting RealNetworks audio and video streaming technology for multimedia playback or Java support are not getting any presents for Christmas, though. WebTV has declined to offer both technologies.

WebTV is a part of Microsoft's strategy to expand sales of its software beyond the PC market. With some 500,000 subscribers, "WebTV is in a very good position in interactive TV," said Josh Bernoff, an analyst at Forrester Research.

"The challenge is for Microsoft to strike up more alliances with cable operators," Bernoff said.

Challenge indeed: WebTV's future is as an Internet service for cable TV, but it has yet to leverage Microsoft's $1 billion investment in Comcast Communications into a definitive contract to provide WebTV service to cable subscribers. The service is currently only available with dial-up modem access to the Internet that's available only from WebTV, and not a cable operator.

The company's lack of support for Java could limit its appeal to cable operators, some competitors are hoping.

WorldGate, which provides Internet access through cable set-top boxes, said that its system now supports Java. Where WebTV cited performance and cost as a reason to avoid Java, WorldGate executives say that their system runs Java applets on a central server to avoid the need for increased chip horsepower in the set-top box.

"Instead of providing a walled garden to a consumer, we can provide the entire Web to customers," said Gerard Kunkel, vice president of strategic programs at WorldGate.

In addition to letting users view Web sites that have Java-based content, the company wants to use Java to provide each user with a customized interface that displays information based on their demographics and preferences, said Kunkel.

In the meantime, WebTV will continue to pitch the device as an easier way to get on the Web than PCs. A Microsoft spokesperson declined to say how much Microsoft is spending on marketing this year.

Among the other features that are being added to the WebTV service:

  • WebTV Networks said it is working with online companies such as Amazon.com to feature their merchandise and sales items on an ongoing basis, with more merchants being added to the list. A new section of the service walks buyers through the entire purchase process, as well, in order to encourage online buying.
  • "Kids Home Page" that offers activities from PBS and other companies, and a search directory with Web sites providing education information or homework help.
  • "Quick Help" features that explains WebTV Network features.

    The new WebTV features will be rolled out to both WebTV classic and WebTV Ultra customers starting this week, with the rollout to be completed by Jan. 1, according to a Microsoft spokesperson.

    Bloomberg contributed to this report.

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