Can a tiger change its stripes? Can you turn water into wine? Can Ray Ozzie and Steve Berkowitz transform Microsoft into an Internet company from its Windows/Office roots? This is a question highlighted by the New York Times, which looks at Microsoft efforts to beef up is online operations through initiatives such as Live. At the risk of under-playing the dominance of Internet Explorer and the popularity of MSN.com, Microsoft isn't an Internet company and, frankly, it will never be seen as anything else other than a giant software company with some interesting side projects (e.g. Xbox).

This isn't necessarily a bad thing but it is what it is even though Microsoft has been struggling to convince people otherwise for the past decade. If you take a step back, Microsoft's track record beyond Windows and Office has been, at best, mediocre. A good example is television where it has toiled for years and spent billions of dollars to establish a foothold in the living room. Microsoft has acquired stakes in cable companies, purchased start-ups (anyone remember WebTV?) and, most recently, tried to developed an IP-TV platform for carriers. But after all this time, money and effort, Microsoft only has a modest presence in the TV or video markets.

Microsoft's problem - and challenge - is the Internet isn't part of the corporate DNA so it's hard to really be a vibrant and innovative Internet player when it's not really who you are. A part of this reality is Microsoft continues to make billions of dollars from selling Windows and Office. It's the business so Microsoft's lack of success in diversifying into other businesses is no different than what many other companies have faced over the years. Microsoft, however, is fortunate its core business continues to rumble along as opposed to being forced to diversify because the core business is eroding.

What Microsoft and investors need to accept is Microsoft will continue to be a software company with a Web presence as long as its continue to operate in its present form. If, however, the company decided to break itself into independent operations (Windows/Office, Xbox, MSN/Internet) then it might be a different story because each entity would have its own core mission and raison d'etre. In the meantime, Microsoft will attempt to fight the good Internet fight while chasing after dyed-in-the-wool Internet rivals such as Google and Yahoo.

For more on Berkowitz, News.com recently did a Q&A with him. By the way, read what you will into this quote Berkowitz gave the NYT about life at Microsoft compared with his previous employer, Ask.com: "I’m used to being in companies where I am in a rowboat and I stick an oar in the water to change direction. Now I’m in a cruise ship and I have to call down, Hello, engine room!. Sometimes the connections to the engine room aren’t there."

Technorati Tags: Google, Microsoft

So how keen are you about Microsoft Vista? Keen enough to be among the first people to embrace the new, much-anticipated and much-delayed operating system? During this week's Talking Tech podcast, Kevin Restivo and I both advise smart computers users to wait on Vista until Microsoft fixes any of the inevitable bugs that will emerge despite years of development and billions of dollars of R&D. After all, we're talking about an operating system with 40 million lines of code.

That said, when I think of Vista, I think of those old Fram oil filter commercial in which a mechanic tells a customer, "you can pay me now or you can pay me later". For computer users, it means you can migrate to Vista now (not recommended) or do it later but at some point, you'll probably have to do it to take advantage of new software and Web services designed specifically for Vista. While everyone is focused on Vista, people and investors shouldn't overlook the launch of Office 2007 given Office accounts for 30% of Microsoft's sales and 50% of profits.

Earlier this week, the Toronto Sun laid off 16 more employees - reflecting the newspaper industry's continued struggles. The question is if you owned a newspaper, what would you do to fix it? USAToday's Kevin Maney had an interesting column exploring the idea earlier this week, while I was inspired to write a blog post with my take.

Finally, Kevin (Restivo) and I looked at BitTorrent's $20-million venture capital deal. We're not sure how BitTorrent is going to spend $20-million given it doesn't have a P2P network to operate. Perhaps it's a sign investors believe the music and movie industries will start to capitalize on P2P rather than fight it like the music industry has insisted on doing. It could also suggests BitTorrent's investors believe consumers may be willing to pay for an online service that provide high-quality downloads at reasonable prices (much like iTunes). Then again, the problem with the P2P world is even if you have a legitimate player emerge, there will always be new ones offering free content...such as DailyMotion.com, which has a library of commercial-free TV shows.

Technorati Tags: Microsoft, Newspapers, P2P, Video

After months of anxious anticipation, Internet Explorer 7 is finally available. Now, we can abandon those pesky open-source browsers that have kept IE from cementing its domination of the market. I can't wait to uninstall Firefox, Flock and Opera. No more worrying about cool extensions and plug-ins from an army of developers, no more worry about Web sites that just don't look quite right, and finally no more guilt about trying to be one of those people who seeks out Microsoft alternatives. If I were you, I'd rumble over to IE7's download site immediately. Can it only be a matter of time before Firefox's 10% to 12% share of the browser market returns to a more reasonable level - say 2% to 3%? Then, we'd be back to normal again with a true king and lots of little wannabes wandering around to make it seem like competition is alive and well.

   Then again...what if IE7 isn't the be all and end of browsers? What if it's a simply much-needed improvment from IE6, which was still using Spyglass technology from late-1990s? What if Firefox 2.0 is just as good and user-friendly? (and less of a memory hog would help as well!) Surely, this would force Microsoft to deal with competitors (Firefox, Opera, Flock, Maxthon, etc.) that encourage innovation. What if all those Firefox users and all those Firefox developers just keep on doing what they're doing? Now, this could be interesting, very interesting.

   So what do you do as a browser user? Well, if you're curious and brave, download IE7. If you're happy with Firefox, Flock and Opera, just keep on doing what you're doing. For more view check out FactoryCity, Inside Microsoft and Matt Cutts.

If you want some insight into why the iPod is such a smash success - and why Microsoft's Zune will have a tough time getting a solid market foothold - check out National Post Robert Fulford's recent column. At 74, Fulford likely falls outside the iPod's "target market" but the fact he finds his Nano  "the finest private luxury object of this century so far" reflects how the iPod has resonated with so many consumers (more than 60 million and counting to be precise). If Fulford starts publicly pining for an iTV device, you know Apple has scored another home run.

Microsoft has introduced a new and improved search engine called Live Search. So like any good blogger and ego-centric Web user, naturally the first thing I did was conduct a search for "Mark Evans". Wait, what's this? Live.com barely has me on the front page -whereas Google and Yahoo both rank me #1. So who does Microsoft love more than me? Well, the top-ranked Mark Evans is some guy in England who's a veterinary surgeon, TV personality, author, amateur engineeer and e-commerce retailer. Now, that's a Mark Evans who's living up to his name but I'm not going to take this sitting down, Mark Evans. Until Live.com makes me the #1 Mark Evans, this is war...well, sorta, kinda, maybe given all of us Mark Evans should probably stick together. Microsoft's press release can be found here, while everything else you'd want to hear from folks in the blogosphere is here.