Microsoft Gets A Clue From Its Kiddie Corps

Bill Gates didn't get it. Neither did Steve Ballmer. In July 2000, when Tammy Savage, a 30-year-old manager in business development, went before Microsoft's heavy hitters and presented a case that they were clue-challenged in understanding an entire generation, the reception was chillier than a campsite on Mount Rainier.

She'd told them all about her perception that for young people, the Internet is like oxygen, and the 13-24 set "are on instant messenger before their morning coffee." To serve that crowd--the "NetGen" --Microsoft had to discard its methodology of starting with a technology and then creating products. Instead, Savage reasoned, the needs and attitudes of the customers should determine what software Microsoft should produce, and the technology should come later. If Microsoft wanted to be relevant in the future, she told them, it had to adjust to NetGen, even if it meant producing software that the middle-aged guys in the room didn't care for.

Fortunately for Savage, Microsoft group VP Jim Allchin was curious enough to follow up, and now--after a wild ride in production development that took a page out of MTV's "The Real World"--her NetGen project has finally produced real software. Next week the company will release a public beta version of threedegrees, a persistent (maybe too persistent) online application that will allow young people to express their social graces, and sometimes disgraces, among friends and lovers.

Here's how the software works. You invite friends to form a posse of up to 10 participants. Representing the group on your desktop will be a colorful image, either one from a set provided by the software or something one of the group has produced. (It could even be a digital photo.) If you're online--and since threedegrees assumes you have broadband, you're probably online all the time--you give your friends a holler simply by sending the equivalent of an instant message. Everyone in the group will see it. If you want to send them a digital photo, you simply drag it over the icon and it shows up on everyone's computer. Then there are "winks": small animations that you trigger to run on everyone's screen. Some of the standards include big lips smacking a kiss or a heavyset cartoon character who drops trou and cuts the cheese. (Sending these to oldsters might cause a NetGen gap.)

The most ambitious feature is called musicmix, an online equivalent of a pajama party where people take turns playing deejay. Each group member contributes favorite tunes into a shared playlist, displayed on a dashboard with a customized "skin," and everyone listens together. A click from any participant can choose a new song. Then everyone chats about the tunes. Interestingly, men and women use this feature differently: guys will see it as a contest--who's brought the coolest tunes?--and do virtual chest-thumps introducing the hottest bands. Meanwhile, the girls use the music as background for their chats.

Threedegrees is a surprising departure for Microsoft. The company that's relentlessly focused on productivity has now produced an anti-productivity tool, constantly interrupting you and urging you to waste time with your friends. Who would want something like that? According to Tammy Savage, an entire generation.

In fact the departure is the very point of the whole NetGen effort. Savage joined Microsoft's New York City sales office straight out of Cal State, Fresno, in 1993. Her smarts eventually got her to the Redmond, Wash., headquarters, where she began her crusade. Early in 2000 she got a chance to test her perceptions by getting 12 Oberlin undergrads to live for three weeks in a big house in Seattle (a la "Big Brother"). She told them their job was to think up a business plan for a new company, but all she cared about was the way they used technology to communicate with each other as they cooked up dot-com schemes. The lesson: to NetGen, technology isn't a tool, it's the environment. Microsoft envisioned its customers using the Net to communicate and get things done. But this crowd, she realized, saw the Net as a means to socialize.

Then came that fateful meeting under Allchin's guidance, and later, with the mentorship of Windows manager Will Poole, she built a team to make software. In early 2001, she set up in the hip waterfront area of Seattle--miles away from the orthodoxy at Redmond--recruiting kids barely out of college, promising them the opportunity to make an immediate impact. To those lured from Harvard, Princeton and other schools, it was like a combination of a job and a '90s sitcom. Some Microsoft execs questioned the idea of recruiting a staff composed almost totally of kids. "But when Willy Wonka met Charlie," Savage says, "he didn't say, 'You can be an intern and in a few years can suggest one feature in a product'--he gave him the keys!"

After a three-day mountain retreat, the team decided that the essence of their product should be relationships. Thus the product name: half the amount of the alleged Six Degrees of Separation allotted to any two randomly chosen people. Then, in one big room with a great view of Elliott Bay, the group began concocting their software. Only months later did Microsoft send over a relative codger--33-year-old John Vert--to figure out how to make the system actually run on Windows XP and Microsoft Instant Messenger. The most enthusiastic users, of course, were the team members themselves. There were groups bound by fandom of Kelly Osbourne, and two-person groups who were romantically entangled. Contests began to see who could create the most artistic winks. A crucial milestone came earlier this month when, with little fanfare, Savage's group put threedegrees on Microsoft's internal Web site. In certain quarters of Redmond, productivity took a nose dive. Days later, visitors to the Redmond campus were puzzled to see beer-chugging animations and grinding skateboard tunes erupting on the desktops of their hosts. (Fortunately, you can switch off the intrusions.)

Threedegrees will be available free (three, and currently "there's no business plan," says Savage. But if large numbers take to it, they will represent defections from AOL's Instant Messenger user base, long a target for Microsoft poachers. Also, because threedegrees relies on the cutting-edge peer-to-peer technology--which lets people send information to each other directly, without accessing sometimes overburdened servers--the project will be a great test bed for future Microsoft P2P products. Threedegrees is also a fascinating experiment in how music can be legally shared over the Internet. After much negotiation, the labels OK'd musicmix, once Microsoft agreed to somewhat hobble its features. (Playlists have a maximum of 60 tunes, and the songs won't play unless the original owner is participating.)

Savage's dream is that threedegrees will profoundly change the way Microsoft thinks. That's a tall order. The company's last attempt at a product that filled the desktop with whimsy was Bob, a file-management system with a cartoony "social interface." It was a legendary flop. Unlike Bob, however, threedegrees has been created and tweaked by the same kinds of people who will use it. "This is something we did for ourselves," says engineer Eugene Zarakhovsky, 24. Undoubtedly, the generation who grew up with the Rolling Stones will greet threedegrees with all the warmth they'd give the Klez virus. But the Kelly Osbourne set just may adore it. In any case, Tammy Savage's project has won at least one crucial, though overaged, convert. "Bill Gates," she says, "totally gets this now."