The company's services for the home haven't all met with success. WebTV, Microsoft's service for Internet-enabled television never attracted more than about a million subscribers and has now been merged with the company's larger MSN Internet service. Microsoft acquired WebTV in 1997.
WebTV's founder Steve Perlman has since left Microsoft and is now running none other than Microsoft's newest competitor, Moxi Digital. Moxi's products use Windows' competitor, the Linux operating system that is becoming popular for running devices.
The combination of Sony, the second-largest consumer electronics maker, and AOL Time Warner's America Online, the largest Internet service, could also prove a formidable one in the home devices market, analysts said. Microsoft will also compete with makers of set-top box software such as Liberate Technologies Inc, based in San Carlos, California.
Belluzzo acknowledged that the home devices market will be crowded.
"We think it will be very competitive and ultimately the person who delivers the most value, the most innovation, the right price, the best ease of use -- all of those factors will lead to success ... ."
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