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Windows 98 release on track

A Microsoft executive tells an analyst conference that the release of Windows 98 is on schedule.

SAN FRANCISCO--Like a train conductor trying to keep to a tight schedule, Microsoft (MSFT) insists that it is on track for shipping its Windows 98, but a top executive acknowledged today that questions remain about scheduling of Windows NT's latest version.

Robert Herbold, Microsoft's chief operating officer, said at the BancAmerica Robertson Stephens Technology '98 conference here that the launch of the Windows 98 operating system is still on schedule. Microsoft previously had said that it planned to release the OS between April and June, despite speculation that the launch could be held up due to the company's ongoing antitrust battle with the Justice Department over requiring computer vendors to bundle its Internet Explorer browser with its operating system.

Although the launch of Windows 98 is on track, it is important to keep in mind that the product initially was supposed to be Windows 97--before it fell behind schedule. Herbold noted that while another much-anticipated launch from the software giant, Windows NT 5.0, is still on track with its beta testing, its shipping date remains in question.

He reiterated the company's standard line on the corporate operating system, saying that its shipping date will depend on the results of the product's beta test. The same holds true, he added, for the company's pending SQL Server 7.

Herbold also addressed the status of Microsoft's four core business areas.

Microsoft is expecting strong growth in sales of its desktop systems and applications, he said. The software giant has shipped over 20 million copies of its Office 97 product and now is working on new versions of the software suite.

As for sales of Back Office Server, Herbold said: "We are the new kid on the block, so growth prospects are high, but market share is not."

Sales of Windows NT were up 45 percent from year-ago figures during the last quarter. Sales of Microsoft Exchange are up 160 percent, while sales of the company's SQL server are up 90 percent.

Microsoft's Web interactive media has seen positive growth as well, but in other respects, the company has racked up some "battle scars," Herbold acknowledged.

"People have asked do we have a financial model that will work," he said. "The answer is no. It's too early to tell."

Herbold said Microsoft's consumer platform, WebTV, has more than 250,000 subscribers and noted that Windows CE software has shipped more than 500,000 units so far this year.

Microsoft's ad spending for fiscal 1996, he said, was 5 percent, or $4 million, of total ad spending on the Net. Last year, that figure rose to 7 percent, or $24.2 million of total ad spending.

Herbold said another growth area that Microsoft would be paying attention to going forward is news delivered via the Net.

"Big events cause Net use to skyrocket, and it doesn't go back to normal afterwards," Herbold said. "[Net users] get converted and continue to use the service."

Herbold cited viewership statistics from the Web site of MSNBC, Microsoft's joint venture with NBC, showing that Net usage jumped 140 percent in January after Michael Kennedy was killed while skiing. Viewership fell during the two days that followed, but still was up 30 percent from levels tallied before the fatal accident.

Herbold ticked off a list of other major news events that followed a similar ebb and flow, pointing out that MSNBC's viewership base was up 330 percent after the Texas execution of Karla Faye Tucker.