In IT, it helps to have a long memory. That’s not just because occasionally someone needs to remember how to code Cobol. It’s because companies not only want you to remember their triumphs, they also want you to forget their mistakes as quickly as possible.
Thanks to the Internet, one need not keep filing cabinets filled with the dog-eared faxes of yesteryear. A few keywords typed into Google and there you are.
When Microsoft announced its investment in Chinese TV maker Sichuan Changhong Electric earlier this week, I laughed. A lot. Because I remember the first time that Microsoft announced it was making a move in China to attempt to link broadcast content and consumer electronics devices via the Internet.
In March 1999, then-Chairman and CEO Bill Gates crossed the border from Hong Kong into the boomtown of Shenzhen to tell the world of his company’s plan to bring China and the Internet together. “Venus Brings the Power of the Internet to Millions of Chinese Households,” the press release reads.
Microsoft intended to create a set-top-box-based system that would overcome what was then seen as a significant barrier to mass Internet use in China — the lack of PCs. Televisions were plentiful, PCs were not, so we’ll deliver the Internet experience via the TV, the thinking went. In theory, it wasn’t a terrible concept. Microsoft’s acquisition of WebTV (now MSN TV) in 1997 had proven the company could connect a few million American Internet users via dial-up, so why not China?
There were two major problems with that idea: Microsoft was not and is not a broadcaster, and Microsoft was not and is not a telecom operator. That meant that the likelihood of them overcoming the necessary regulatory and distribution hurdles to make Venus happen, especially in 1999, was almost zero.
And that’s exactly what happened. The announcement was essentially the beginning and end of the project. Venus never launched. Despite efforts by Microsoft and several others who took up the set-top banner, TV-based Internet use in China didn’t happen, and regardless, eight years later, China is the world’s second-largest Internet market.
Microsoft taking a $12 million, less than 1 percent, stake in a Chinese TV maker leads me to ask one simple question: So what? For Mr. Softy, the money is nothing. To Changhong, the money isn’t much and the stake is insignificant.
More than anything, the move makes me wonder, did Microsoft need to take a stake in a Chinese TV maker just to get somebody to make TVs that will connect to the Internet? Although Microsoft has been hurt by piracy in China, Windows is without question the default operating system, so it’s not like there’s a great danger of Linux software creeping onto televisions. Aren’t the other TV makers working on something like this anyway?
Local traders started buying Changhong shares following the investment, but given Microsoft’s lack of success in this area, that’s about all the enthusiasm it should be inspiring.
