Microsoft aims to tap 'Net generation'

Microsoft next week plans to begin testing a radically new instant messaging and communications product aimed at teenagers and young adults who grew up using the Internet.

The new software, called Threedegrees, creates a peer-to-peer social group in which people can chat, share photos, listen to music and meet friends. Concurrently with the test, or beta, program, Microsoft also plans to release the Windows Peer-to-Peer Update for Windows XP.

To use Threedegrees, prospective testers must be running Windows XP with Service Pack 1, the peer-to-peer update and MSN Messenger 5 installed on their computers. The software allows people to create groups, in which up to 10 people can participate in the same instant messaging session. Group members also can share animation and photos or listen to music.

The new software comes out of the Microsoft's 18-month-old NetGen division, which operates on a campus in downtown Seattle, separate from Microsoft's main operations in Redmond, Wash. A team of 12 recent college graduates, led by group manager Tammy Savage, has been trying to develop products aimed at the "Net generation," or young people between the ages of about 13 and 24.

"I think that's the thing people in this age group really gravitate to is the communications tool, really socializing through the instant messenger," Savage said Monday.

Jupiter Research analyst Michael Gartenberg described Threedegrees as a "powerful extension" of instant messaging as a concept.

"The ability to form personal, ad hoc communities and perform shared tasks means this product will have a lot of appeal in the 13- to-24-year-old market," he said. "This is a market that has grown up on the Internet to a certain extent and is looking to extend that functionality."

In developing the product, Microsoft started by looking at the computing habits of the age group, which Savage said is radically

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different from people who did not grow up with the Internet. Only when Microsoft understood their habits did it attempt to create a product to suit them, she said.

"We really wanted to have a different set of skills that would allow them to meet new people online in a way I, for instance, cannot," she said. "They have a way of vouching for each other as friends, figuring out who to trust and not trust."

For "Net-genners," Microsoft learned that using the Internet for socializing is a way of life. So the company focused on technologies that would help "get groups formed and have activities they can do," Savage said. "We wanted things that paralleled our customers' priorities, which was hanging out with your friends and having fun."

Core to Threedegrees is the group aspect of instant messaging. While each group is limited to 10 members, one person could participate in a dozen different groups or more, instant messaging or participating in activities in any or all of them.

"If you look at Threedegrees closely, there are broader implications for this product for Microsoft, (such as) driving IM use for corporate purposes," Gartenberg said on Tuesday. "Take the Threedegrees functionality and apply it to corporate work groups and you have the extension from communication to collaboration that goes beyond IM. If you look at the shared-picture feature and imagine that was a PowerPoint file, you get the idea of where Microsoft could go with this."

Wink wink, nudge nudge
Another feature, known as Winks, lets one customer send animation to everyone in the group. "Winks is an activity where they can basically 'wink' at someone across the room, but (you) do it virtually--flirt with them," Savage said.

Group members also can share photos and, more importantly, listen to music available in a common playlist. Savage sees this as one of Threedegrees' most important features. "Music a lot of times is the background for the fun that you have."

Microsoft used the dinner party as the model for developing the size of the social group and the way music is shared within it.

"It's not uncommon for someone to bring a new CD of a new band they've heard," she said. "That's a very common way for people to learn about new music is through their friends. In fact, word of mouth for music adoption is the most popular way for music to be adopted."

Group members can create playlists of 60 songs, or the equivalent of five or six CDs. The songs are played from the participant's hard drive, rather than being illegally swapped. Songs can be in Windows Media Audio, MP3 or WAV formats.

People interested in Threedegrees can visit the product Web site, which right now is merely collecting e-mail addresses for people looking for notification of the beta's availability.

As for the name, it is a takeoff on six degrees of separation, the theory that every individual on the planet can be linked to any other individual by six other people. "You're closer than you think," with three degrees, Savage said. "Our team is really small and really scrappy. We didn't go out and spend $1 million on branding. We basically sat around one day and said, 'Why is this meaningful to us?'...It's the team answer, and so that's what we're going out with."

How successful that approach may be will be seen in response to the beta, particularly among Net-genners, who Microsoft believes see the Internet and technology more as social tools than products for getting work done.

But success could have further implications, as the NetGen group's research about the Internet generation could affect many other products.

"One of our (key) priorities as a group is to take the learning about the (13- to 24-year-old) customer and infuse it across Microsoft," Savage said. "We do a lot of work with other product groups. So our impact is broader than the specific beta that people are going to see."