Cybernaut 

Microsoft enters music market

Let’s see…

When you want to buy music online, you can go to Apple (www.apple.com) and download iTunes, to the new Napster (www.napster.com), to PressPlay.com, to BuyMusic.com, to MusicMatch, to RealNetworks, to MP3.com, to EMusic.com – the list is long.

It’s about to get longer in 2004 when Microsoft extends its reach a little further into the online music market.

The store is tentatively being called the Microsoft Music Download Service, and will offer files in the Windows Media Audio (WMA) format.

Whether it will function as a subscriber-based service like RealNetworks, or as a store like iTunes is unknown, but the belief is that it will combine the two like Napster.

Although it sells millions of songs, the iTunes formula is losing money with every download at this point. Apple is content to lose some money on the music, however, in order to keep selling its popular line of iPod portable music players. At the same time they may raise the price of music in the future, or achieve enough sales to get the music at a discounted rate, making the store as profitable as iPod sales.

With Microsoft branching into hardware recently with Xbox game consoles, table PCs and cell phones, it’s possible that a Microsoft music player similar to iPod may be on the way.

Linux richer than Microsoft?

Whenever the pundits debate the latest moves by Microsoft Corporation, someone inevitably points out that the company can afford to be patient and even to make a few mistakes now and then – with more than $50 billion in cash reserves behind them, they’re untouchable.

Of course investor groups are always quick to point out that some of that money is rightfully there’s and want Microsoft to pay a few more dividends, but the Redmond, Washington company isn’t budging. Right now that nest egg is one of the company’s greatest assets, enabling research and development, the aggressive marketing of products and market diversification, and for long-term sales strategies that make more sense than the get rich quick, race to the bottom schemes favoured by other software companies.

A recent article in Business Week (www.businesweek.com) challenges Microsoft’s position as one of the wealthiest software companies on the planet.

Linux, the upstart creation of Linus Torvalds that is free to own and upgrade, providing you share your code with other developers, is surprisingly wealthy.

According to Business Week, Linux’s wealth lies in its growing network of unpaid developers and the growing list of companies that have adopted Linux operating systems to power their computers, servers, and other software applications.

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