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5/17/2007
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Can Microsoft Beat The Set-Top Box?

Microsoft is setting the groundwork to challenge cable companies with Home Server, Vista, and the Xbox video game console, which can play Internet content and high-definition DVDs on a TV.

Indeed, Microsoft for years has been trying to gets its TV software and program guide in digital cable boxes in the United States. The company managed to get its TV Foundation Edition software for cable operators in Comcast boxes. This week, however, Comcast said it would no longer carry Microsoft software, opting instead for GuideWorks, a joint venture of Comcast and Gemstar-TV Guide International, the Seattle Post-Intelligencer reported.

Comcast was using Microsoft software only in the latter company's home state of Washington, the newspaper said. GuideWorks was used everyplace else.

Clearly, the home network capable of distributing the most content -- from Web pages and HBO to digital photos -- would have an advantage. In Microsoft's view, any advantage a set-top box has today won't last.

Microsoft believes people will eventually be able to go directly to the Internet for the programming they want, rather than pay a subscription fee to a cable or telephone company that licenses programming from content providers, Steven VanRoekel, product manager for Windows Home Server, told InformationWeek at WinHEC. Some type of billing infrastructure would have to be developed to avoid paying each content provider separately. But his point is there won't be a need for anything more than an Internet connection.

While acknowledging such a scenario is years away, Microsoft is setting the groundwork with Home Server, Vista, and the Xbox video game console, which can play Internet content and high-definition DVDs on a TV.

"All those things are leading indicators of where the future is going and how we plan to foster that direction," VanRoekel said. "It's always crawl, walk, run. We're getting up to the walk stage" in home networking.

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