Microsoft: “Who Needs a PC for E-Commerce?”

With $30 million (US$) to back it up, Microsoft (Nasdaq: MSFT) is talking TV as its latest target for e-commerce. The Redmond, Washington software giant is investing that money in Wink Communications, Inc. to encourage cable, broadcast and satellite TV viewers to shop while they channel surf.

Wink, the only interactive TV data service available in the United States, hopes to use Microsoft’s software engineering muscle to reassure prominent TV channels and major advertisers that its service presents the future of TV.

Wink provides technology to TV channels and advertisers to send interactive graphics and data to a stand-alone Wink set-top box or a Wink-enabled cable or satellite receiver, which is connected to a TV to display the information. Wink delivers additional data for the programs being shown, such as additional statistics for a sporting event, that viewers can choose to view or hide on the screen during the program.

Taking TV Viewing Further

The money-making side of the service is the availability of additional information for products shown during commercials. While watching a commercial, the viewer can use their remote controls to click an icon on the screen to access additional information about that product, buy it, order a sample or be put on a mailing list for additional printed literature about that or other products the advertiser offers.

In addition to collecting orders, Wink’s service compiles information on the viewer’s buying habits, which it delivers to the advertiser to help the advertiser develop future ad campaigns and promotions. Wink operates a data collection and order fulfillment center to pass the TV orders on to the advertisers.

For Microsoft, the agreement provides access to Wink’s technology for the Microsoft WebTV Network. WebTV is a more complex TV data service in which Internet access to e-mail services and the top Web sites is integrated with TV programming on one screen. The display shows a WebTV interface, or browser, with a smaller screen within it showing TV shows.

Adding Wink technology to that service will give viewers a simpler shopping option with direct access to products on the browser, in addition to traditional Internet shopping that is done by first accessing specific shopping sites on the Web.

Seeking More Growth

WebTV, on the market for two years, it has garnered about 700,000 subscribers. The product is designed to make Web surfing easier for consumers who are not comfortable with computers. Wink, a private company based in Alameda, California, has garnered a growing number of endorsements from the TV and advertising worlds since it launched last year. The company provides its services to three major broadcast networks — ABC, NBC and CBS — plus top subscription channels CNN, ESPN, TBS and the Weather Channel.

On the advertising side, top 10 advertiser Procter & Gamble plus Charles Schwab, AT&T and General Electric have signed on. Five cable operators, including four of the top five in the nation, and DirecTV, the largest satellite TV provider, have agreed to make Wink available through their services.