Microsoft Zune Killing May Have Been Result of Corporate Shakeup - (It's wonderful)

Microsoft Zune Killing May Have Been Result of Corporate Shakeup

Microsoft may have killed its Zune portable media player, according to reports. However, the company seems reluctant to share details about its future plans for the Zune franchise, whose hardware includes the touch-screen Zune HD and first- and second-generation Zune.  

We have nothing to announce about another Zune device, a Microsoft spokesperson e-mailed to eWEEK late March 14. Our long-term strategy focuses on the strength of the entire Zune ecosystem across Microsoft platforms.

In a March 14 report, Bloomberg reporter Dina Bass suggested that Microsoft would stop introducing new versions of the Zune music and video player because of tepid demand. However, she added, Zune software would maintain a presence on Microsoft platforms such as Windows Phone 7.

Although the Zune HD earned strong reviews in the wake of its September 2009 release, the device failed to break the Apple iPods tight grip on the portable-media market. That market is also undergoing its own seismic shift at the moment, as smartphones and tablets increasingly become the center of peoples mobile digital lives: even Apple has seen sales of its traditional iPod fall over the past several quarters, a phenomenon the company partially attributes to the rise of the iPhone.

But the Zune hardware may also have found itself something of an orphan after Microsofts massive corporate upheaval in 2010, which saw the departure of the executives who had brought the project to life, and a reorientation of the companys approach to consumer products. 

In May 2010, a major shakeup gripped Microsofts now-extinct Entertainment and Devices Division, with rumors that underperforming products and killed projects had led to the departures of its two top executives: Robbie Bach, the divisions president, and J Allard, its senior vice president of design and development. Allard and Bach had each logged about two decades worth of service with Microsoft.

During the first quarter of 2010, the divisions revenues had contributed about 11 percent to Microsofts $14.5 billion bottom line. But the high-profile failure of Microsofts Kin social-networking phones, coupled with continuing problems in its smartphone line and the Zune HDs anemic reception, led analysts to question the divisions ultimate viability.

This has been a vampire division since its inception. A vampire division is one that lives off the value created by the rest of the company and, from a corporate perspective, does more damage than good, Rob Enderle, principal analyst of the Enderle Group, told eWEEK in May 2010. Its profit, which wasnt much, was massively offset by the economic cost it caused to the corporation and it needed to be rethought.

Ballmer later reorganized Microsofts divisions and presidents, breaking the Entertainment & Devices Division into a Mobile Communications Business overseen by Andy Lees and an Interactive Entertainment Business headed by Don Mattrick. By splitting responsibilities for mobile and entertainment to Lees and Mattrick, Ballmer seemed intent on giving those product lines new focus. Part of that focus may have involved killing the Zune hardware, while keeping the software componentand associated media storeas a part of the Windows Phone 7 ecosystem.

 

After everything lately about microsoft zune, microsoft zune, microsoft zune and now: Microsoft Developing New Music/Video Service

Microsoft Developing New Music/Video Service

Microsoft is making its third attempt to enter the music and video discovery arena with Ventura.

While Microsoft's Entertainment and Devices (E&D) unit is reportedly cranking up its development team to work on next Xbox console, the company is also hiring developers to work on a project called Ventura. According to sources close to the project, Ventura will focus on "music and video delivery and consumption," and will likely include recommendations, ratings and comments from users.

"The team is a tight group of music and video lovers that create services and experiences revolving around music\video discovery and consumption," reads a job description from a listing uncovered by ZDNet. "We are not afraid to try new things in the name of pushing the bleeding edge of technology."

"Think large scale. Think Azure," the job listing added.

As pointed out by Business Insider, Ventura will be Microsoft's third attempt to establish a successful service in this particular area. The company's first venture was through the acquisition of MongoMusic for $65 million back in 2000. At the time, the studio was building a music recommendation engine similar to the Music Genome Project used by Pandora. However the MSN group reportedly "squandered" the opportunity to compete with Pandora after the acquisition, and the technology "went nowhere."

Microsoft attempted to enter the sector again with the launch of the Zune service and the Zune player in 2006. The service pushed the idea of sharing music you liked with friends also using Zune, allowing them to check out your favorites and to make comments. A Zune Pass subscription added the ability for friends to listen to songs simultaneously. But Microsoft didn't sell enough Zune players for the service to be useful, thus Zune never really caught on.

As of this writing, consumers can download the Zune client and purchase movies, TV shows and music just as they would with Apple's iTunes. The Zune website also provides socialization features, allowing users to tweet on Twitter and "Like" on Facebook from everywhere on Zune.net. "Share the love for all your favorite music and movies beginning with Lady Gaga's latest single, Born This Way," the website reads.

Additionally, the monthly Zune Pass grants unlimited access to music that can be streamed or downloaded on a PC, Xbox 360, Windows Phone 7 smartphone, or Zune HD device. The service also includes ten extra songs that consumers can keep "forever." The actual downloadable Zune client features a social section, but seemingly remains locked to those with a Windows Live and/or Zune account.

Currently it's unknown how or when Microsoft's Ventura service will launch. It's speculated that it may open its doors as a standalone Web site or as downloadable application. It may also become part of another Microsoft product like the current Zune platform, Xbox Live, Games for Windows – LIVE, or the Windows Media Player.

Will Ventura be the next step in Zune's evolution, or a rival to Pandora?