Microsoft Corp. gave some legitimacy to the wireless Internet access arena last week with its $600 million investment in Nextel Communications Inc. and an agreement that gives Nextel customers access to customized Internet-based services via the Microsoft Network portal.
Analysts predict a number of wireless portal ventures in 1999, sparked by Microsoft’s interest in expanding its dominance in the personal computer software market into off-the-desktop markets. The non-exclusive Nextel agreement is only one piece of Microsoft’s plan for gaining access to all kinds of networks. In addition to its plans with Nextel, Microsoft announced overall plans to deliver a wireless portal designed to work with handheld devices, mobile phones and interactive pagers via the MSN network of services.
“Once you have content and access, you have a very formidable barrier to entry and a real competitive advantage,” said Timothy O’Neil, wireless analyst with SoundView Financial Group in Stamford, Conn. “Microsoft is seeing they need this access, and its access through Nextel is a small subsegment of the wireless market.”
The co-branded MSN network of services will give Nextel’s 3million customers access to e-mail, calendar functions, address book contacts and Web-based content services. Other offerings will include Web-based applications developed by third parties specifically for Nextel Business Networks users.
“We’re trying to extend the power of the Internet and intranet tools to wherever customers are,” said Mike Ozburn, vice president and general manager of Nextel Online. “In my mind, the killer application is the ability to make the Web personal.”
“Microsoft is right on target with what our 1999 U.S. Wireless Market Monitor has foreseen-that demand does exist today for highly personalized and interactive services,” said Cliff Raskind, senior analyst with Strategy Analytics’ Wireless Data & Computing Service division.
Nextel in February announced plans to roll out Internet access in six Eastern markets during the fourth quarter using Web services from AOL’s Netscape Communications. Microsoft will replace Netscape as the portal provider though Nextel says it will continue a relationship with the Internet service provider.
“There is a lot of technology that we think Netscape really does very well,” said Ozburn. “We’ll continue to implement enterprise, directory and commerce servers. Also we have had broader discussions with Netscape and AOL. The conversations have changed somewhat to offer more services and capabilities.”
Nextel will offer Internet-ready phones by July, with plans to roll out commercial Internet access by early 2000. The company said it will use Microsoft’s investment to advance the deployment of Internet services, develop additional digital services, expand the Nextel National Network and fund system development and expansion in other countries. Microsoft is paying $36 per share for an approximate 4-percent interest in Nextel.
Last week, U S West Wireless announced plans to roll out commercial mobile Internet access during the fourth quarter using its parent company’s ISP.
