Will Kids Find Microsoft Cool?

Can William H. Gates III, the 38-year-old billionaire chief executive of Microsoft Corp., learn to think like a kid?

Gates has run circles around executives twice his age, leading his $3.8 billion company to the top of the business software industry. But he has barely cracked the growing home market. On Dec. 7, Gates begins his assault with two software packages specifically designed for kids: a writing program called Creative Writer and a drawing package called Fine Artist.

Microsoft is one in a crowd of developers looking to tap into the fast-growing, $2.8 billion market. In November, WordPerfect Corp. announced it will target home PCs with its Main Street software. Others are right behind. "The number of new products coming out in the next 12 months is staggering," says Peter J. Rogers, an analyst with Robertson, Stephens & Co.

Microsoft itself expects to unveil more than 100 home products within two years. But Gates concedes that success will require new thinking at Microsoft. "Only a small percentage of the people who work at Microsoft are kids," he says, only half-joking. "We're going to have to change."

Certainly, Microsoft's penetration of the home-software market so far has been far from stellar. Mediocre products and lackluster marketing have kept it from beating much smaller rivals. Microsoft Money, for example, a home banking and financial package first released in 1991, has captured less than 15% of the market from Intuit Inc.'s Quicken, the market leader.

BIG SELL. But Creative Writer and Fine Artist, the culmination of 18 months of development that included focus-group research with children, aren't the usual Microsoft fare. Creative Writer allows kids to write a story by generating random sentence fragments, replete with animation and sound effects, that can be linked together. Fine Artist can create animated comics. Tools to produce school reports or giant banners are located on different floors of a cartoon house, which kids navigate by sliding down a fireman's pole or riding an elevator. Instead of the thick instruction book that comes with most programs, an animated character named McZee givesadvice.

Gates says he will spend "tens of millions" of dollars in marketing and advertising in the next year. Microsoft will air 700 TV commercials and is adding discount vendors such as Price/Costco to its usual software outlets. That's a dramatic shift for the old boy. Perhaps, with his own marriage pending, Gates is starting to take home and kids more seriously.

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