Welcome to Chapter IV. The next series of sections detail one of the most interesting, exciting, and to many, troubling eras in the history of Microsoft. While Microsoft was busy developing Chicago (Windows 95) and rallying the entire company around that massive project and opportunity, an unprecedented and unstoppable force was taking root, the modern internet (back then it was called the Internet). Today we would refer to this as a disruptive technology change—a less capable, cheaper, alternative to all the things we were building, but the notion of a disruptive technology change was still years away from becoming business canon. This is the story of how the Internet happened to Microsoft—a story that has many participants and at least as many perspectives.

As Technical Assistant at the time I found myself in the middle as a facilitator but also an activist and champion. The personal growth that I experienced during this time would prove to be an incredible blessing that led to enduring friendships and amazing memories. At the same time, this was a period of remarkable turmoil and angst, mixed in with an unrelenting corporate urgency.

Let’s start with the online landscape of 1994?

Back to 023. ThinkWeek

The pending storm was all anyone was talking about as I completed the last few interviews at the end of my annual (or more) recruiting trip to Cornell in February 1994. As snow, and more snow, piled up, I knew I was not getting out that day as planned. This happened every other year or so.

What I did not know was that getting stuck would turn into a lesson on what it takes for a large and successful organization to change course and rally around something new.

Microsoft, and BillG in particular, were thinking about the opportunities online, as it was called. Russ Siegelman (RussS) focused on the opportunity. As a recently-hired fellow TA, he was exclusively looking at the existing world of online information services and connectivity.

The biggest online service by far was America Online (AOL); the dial-up service had membership of over two million households, and notably was equally accessible from both Windows and Macintosh. AOL along with CompuServe and Prodigy were collectively a sort of big three of online services and gave a bit of a feel that they were like TV networks and in some sense they operated that way with various forms of channels. In 1992, AOL released a Windows version of the software, which previously ran on MS-DOS, putting it at parity with Macintosh (I used it in graduate school with the screen name SHNOWZ, it’s still mine but that’s another story). Apple even had a deal with AOL that offered online services for Macintosh users on the AOL platform, and that in turn gave them leverage to develop exclusive online content deals with major media brands. That’s the kind of thing that would concern Microsoft.

Millions of people sent email to each other on the service, participated in communities, and explored deep information services on finance, business, and more. All of this was done from within the AOL application.

Few, if any, at the time thought this approach, a so-called walled garden, was bad. In fact, most people thought it was the only way to “package up” a variety services and information sources. AOL uniquely combined services with an application that handled the complexities of connecting a computer modem to the service over a landline. It was slick. To attract customers, AOL was spreading floppy disks everywhere, through magazine inserts, cash register checkouts, and direct mail. It was growing fast, approaching $100 million in revenue.

AOL was so exciting that Microsoft cofounder PaulA became a major investor, much to the chagrin of the Microsoft competitive spirit. He even tried unsuccessfully to acquire controlling interest of the entire company. Paul correctly recused himself for several Board meetings during this time because of the ownership stake.

BillG was spending a great deal of time on the earliest stages of working with the “carriers,” or the phone companies, trying to navigate the right partnership model. Dial-up made these companies essential to the online world. Household high-speed connectivity was still years away with many predictions of timelines and technologies, but no approach seemed like it would take hold any time soon. In Europe, somewhat faster ISDN was useful to business customers, but globally connectivity was rooted in the traditional phone companies over dedicated connection-based lines, and slow.

The phone companies, and later the cable companies, were motivated to achieve more than their pipeline or carrier status. Both wanted to play in the world of content and services and own more of customer experience, especially for consumers. This led to a long series of discussion and eventually pilot projects between various players including Microsoft. The spectacle of giant companies navigating a new space while simultaneously partnering and competing (frenemies, or coopetition, terms that became popular in the increasingly intertwined PC industry) was a sight to be seen.

AT&T created a series of television commercials known as the “[Someday] You Will. . .” ads. These were slick visions of the future directed by David Fincher (Fight Club) and starring Jenna Elfman (Dharma & Greg), and narrated by Tom Selleck (Magnum, P.I.). They pitched a world in which one might borrow a book from thousands of miles away, watch the movie on demand, or even send a fax from the beach (that’s AT&T for you!).

Bill loved to talk about these exact concepts when meeting with various digital highway partners, so when I showed him the commercials I had taped at home, he seemed irked at the feeling of having his concepts “stolen.” The truth is everyone was talking about these broad ideas. AT&T happened to do a great job visualizing them. As we would learn, the part of the company that created these videos had nothing at all to do with the part of the company delivering products and services. It was pure vision marketing. There was a lot of that going on.

Microsoft was investing heavily in creating CD-ROM content and was in the early stages of a robust line of multimedia titles including Encarta encyclopedia and a whole series of interactive versions of beautiful books by Dorling Kindersley, from Dinosaurs to Dogs and Musical Instruments. We talked a bunch deal during ThinkWeek about how this experience could translate into a programmed online experience, though the limitations of bandwidth were obvious, especially after the compromises faced to get these to work on PCs.

Broadly, Bill’s Information at Your Fingertips (IAYF) vision loomed large. Unveiled at COMDEX, the massive computer industry tradeshow (COMDEX is a portmanteau of Computer Dealer Exchange), in November of 1990, IAYF presented a vision for computing years in the future that put important information in an integrated and seamless fashion a click away. To articulate IAYF, Microsoft made its first visionary video based on the fictional coffee company Twin Hills with an oddly familiar green logo (Twin Peaks filmed east of Seattle was as big a Northwest hit as coffee). Many of us, myself included, made it over to the library to watch it or secured one of the video tapes that were widely distributed.

There was also a very fancy brochure which I kept at the time as a reminder of our vision. I was definitely giddy about the future. It was a future where we moved seamlessly between applications, just pointing and clicking, editing rich documents filled with charts and graphs, connecting to rich information, and more. It was graphical. It was easy. It was what we loved to call a North Star.

The company would also update to IAYF to be shown at the November 1994 (more than a year away). Recall those demonstrations from ThinkWeek about devices like General Magic, that would become the focus of the updated vision.

The roots of IAYF brought together two famous visions from the history of computing. In the July 1945 issue of The Atlantic, Director of the Office of Scientific Research and Development Dr. Vannevar Bush authored “As We May Think,” in which he described a futuristic information tool for the workplace:

Consider a future device for individual use, which is a sort of mechanized private file and library. It needs a name, and, to coin one at random, "memex" will do. A memex is a device in which an individual stores all his books, records, and communications, and which is mechanized so that it may be consulted with exceeding speed and flexibility. It is an enlarged intimate supplement to his memory.1

The idea of having access to the world’s information was a key part of IAYF. Bush took it a step further and connected aspects of the information together:

All this is conventional, except for the projection forward of present-day mechanisms and gadgetry. It affords an immediate step, however, to associative indexing, the basic idea of which is a provision whereby any item may be caused at will to select immediately and automatically another. This is the essential feature of the memex. The process of tying two items together is the important thing.

This notion of tying two items together was widely present in the multimedia titles. This action became known as hypertext as originally described two decades after Bush’s essay in a seminal work by information theory pioneer Ted Nelson published in 1965 as Project Xanadu. On the subsequent project Hypertext Editing System, Nelson worked closely with legendary computer science professor and founder of the computer science department at Brown University, Andries “Andy” van Dam, who later became among the first advisers to Microsoft Research.2

Hypertext formed the foundation of multimedia titles and the training and help materials in Windows and Office, known as WinHelp, similar to the most mainstream use of hypertext, which was about to become incredibly interesting to Microsoft. It’s notable that Apple HyperCard for the Macintosh, released in 1987, made extensive use of hypertext and was a widely used modern commercial system that influenced a generation.

AOL was the reference point for online services and defined the experience we collectively believed was relevant. The idea of an online service that had the feel of a television network for the information superhighway while also working as a PC application seemed to check all the boxes.

The snow kept falling as I looked out the window of Cornell’s Statler Hotel. I was about to have my whole understanding of online services turned upside down.

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