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November 11th, 1999

[3:00 PM] Microsoft Continues To Show Just How Innovative They Are
by Staff

In another stunning example of Microsoft's innovative business efforts, the company has announced a "strategic alliance" with Tandy Corporation. The alliance centers around a, now get this, a "store-within-a-store: that will be featured in many, if not all, of the 7,000 Radio Shacks around the country. Microsoft will be peddling internet access in these "stores." Other parts of the deal include a huge wad of cash going to RadioShack for their online e-commerce site as well as a sweetheart advertising deal for RadioShack on MSN.com. According to Microsoft: [Editor's Note: This is Microsoft's press release. It is long-winded, but we are presenting it in its entirety dave for the fluff quotes from company execs. For more commentary, read The Mac Observer Spin at the end of the article.]

Microsoft Corp. and RadioShack, the retail operating format of Tandy Corp., today announced a strategic alliance that should accelerate the adoption of Web technologies and consumer connections to the Internet as Microsoft and RadioShack team together to acquire new customers. Under the five-year agreement, the companies will establish a Microsoft "store within a store" in as many as 7,000 RadioShack locations across the nation. Customers will be able to see demonstrations of and sign up for MSN dial-up or broadband Internet access.

In addition, as part of the alliance, Microsoft will make a $100 million equity investment in the newly launched RadioShack.com, to help build it into a leading e-commerce site. The online store will have premier placement across all of MSN and its properties, including the newly launched MSN eShop online shopping service. The agreement will extend RadioShack's goal of becoming America's Home Connectivity Store and will deliver a key pillar of Microsoft's vision for the Everyday Web, enabling millions of Americans who shop at RadioShack to be connected any time, any place and on any device.

Microsoft Presence at RadioShack -- A "Store Within a Store"

The purpose of the alliance is to accelerate the adoption rate of narrowband and broadband Internet access using Microsoft® products and services, as well as those from Microsoft partners, available at RadioShack stores nationwide. Accordingly, Microsoft will join RadioShack's other strategic partners who have also set up a "store" inside RadioShack. This retail presence, as well as the presence of Microsoft products and services in other sections of the RadioShack store, will showcase a broad range of solutions and services based on Microsoft technologies, including MSN Internet Access, Microsoft WebTV Network services, Windows® CE-based handheld devices, MSN mobile solutions and Microsoft home networking. Customers can sign up for narrowband or broadband MSN Internet service and will have access to a version of MSN co-branded with RadioShack.

The design of the Microsoft retail store at RadioShack will begin immediately. An aggressive rollout of the new "store within a store" concept is scheduled to begin during the third quarter of 2000 in RadioShack's network of 5,000 company-owned stores and up to 2,000 more RadioShack dealers. Microsoft's store is the latest in a series of similar joint alliances by RadioShack, including the RCA Digital Entertainment Center at RadioShack, the Compaq Creative Learning Center and the Sprint Store at RadioShack.

Microsoft and RadioShack Plan Joint Efforts in Marketing, Infrastructure Enhancement

Both companies will make substantial contributions to joint marketing efforts over the life of the agreement, beginning with a jointly funded consumer marketing launch late next year. Microsoft will also fund the initial store fixturing, in addition to planned updates to the Microsoft "store within a store" at up to 7,000 RadioShack locations.

Microsoft, in conjunction with NorthPoint Communications Inc., which has relationships with both companies, has also agreed to provide broadband access to all RadioShack company-owned stores at no cost. About half of the stores are expected to use digital subscriber line (DSL) services from NorthPoint, with Microsoft arranging for the remaining high-speed connections.

Alliance to Further RadioShack's Home Connectivity Strategy

The Microsoft alliance further enhances RadioShack's plan to become America's Home Connectivity Store. RadioShack expects to take a leadership position in connecting America's homes and small offices to state-of-the-art digital audio and video products and services, the latest computer advances, and high-bandwidth technology. The strategy is designed to enable RadioShack to deliver new and emerging technologies, including instant Internet access, video teleconferencing, multiple fax/phone connections and on-demand services, to those who want a single-source solution and personal, knowledgeable help.

RadioShack is rapidly developing the capabilities, through its acquisition of AmeriLink Corp., to install and set up -- right in a customer's home or small office -- any of the consumer electronics and connectivity solutions customers purchase in the store or online. AmeriLink is one of America's leading installers of cable, telephony and high-bandwidth products.

Investment in RadioShack.com to Help Create E-Commerce Powerhouse

Microsoft's investment in RadioShack.com represents a major commitment to establishing RadioShack as the premier merchant of electronic goods and services on the Internet. The investment will involve building a more powerful infrastructure for the site based on Microsoft e-commerce technologies - the same technologies that power such leading consumer sites as Monster.com, 1800Flowers.com and SmarterKids.com. Microsoft and RadioShack will work together to implement further enhancements, creating a full-featured online store where RadioShack's loyal customers can go for a wide range of consumer electronics products, parts and services.

RadioShack will be a major advertiser on the MSN network of Internet services and will occupy one of the premier positions on the MSN eShop online shopping service site (http://eshop.msn.com/). Through its presence on eShop, RadioShack.com will be able to take advantage of the portal leadership of MSN to reach a broad audience of customers on the Internet. In addition, RadioShack.com will adopt the Microsoft Passport electronic "wallet" service, adding to the growing number of e-commerce businesses that recognize the customer and business value of automated authentication and wallet technology.

Deal Makes Everyday Web a Reality to help build it into a leading electronic commerce site.

Tandy will be a major MSN Internet advertiser and will be featured on the new MSN eShop online shopping service.

For more reading, Microsoft has set up an "interview" in their "presspass" section of their web site.

The Mac Observer Spin: All right, does this sound like one of the most ridiculous concepts to anyone else? A "store-within-a-store" that sells Internet access? That calls for a set of brochures and a lovely cardboard standup, not a "store-within-a-store." Certainly this move will dupe more people into signing up with MSN, and is a powerful tool in the ongoing, and seemingly newly heated, race between AOL and Microsoft for eyeballs. However, our take on this is that Microsoft has pushed forward this initiative, including a hefty chunk of change from the petty-cash box stuffed into Tandy's corporate pockets, in order to give Wall Street something pretty to think about instead of Judge Jackson's nasty ruling. This is supported by the fact that the design of the "store-within-a-store will begin immediately." If this had not been rushed, the two companies would have waited the extra half-hour it will take to design this new "addition" to RadioShack. This seems to have been a successful tactic too as MSFT closed at 89 5/8, a gain of 2 1/2.

Is this the Freedom-To-Innovate Microsoft talks so loudly about? This entire announcement is nothing more than a big pile of fluff.

Microsoft - RadioShack



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