Microsoft Corp. yesterday announced what amounts to a not-so-subtle challenge to America Online Inc.'s "AOL Anywhere" marketing campaign: a partnership with RadioShack stores that Microsoft says will allow customers to sign on to its MSN Internet service "anywhere, any time and on any device."
Starting next fall, up to 7,000 RadioShack locations nationwide will unveil interactive Microsoft boutiques featuring high-tech gadgets such as hand-held computers, cellular phones and Web TVs, all linked to MSN. And salespeople will be trained to pitch the benefits of Microsoft's low- and high-speed Web connections.
Microsoft Chairman Bill Gates said the companies want to "make this 'Everyday Web' a reality for a broad set of consumers."
Under the five-year agreement, Microsoft will invest $100 million in the fledgling RadioShack.com site to upgrade its e-commerce capabilities. Tandy Corp., the Fort Worth-based parent of RadioShack, will earn a commission on accounts sold through its stores. The Microsoft store-within-a-store deal follows similar RadioShack alliances with Compaq Computer Corp. and Sprint Corp.
Merrill Lynch analyst Douglas Neviera called the deal a "home run" for Tandy and predicted that the strategy would bring RadioShack "more customers that will spend more money."
In the past year, Microsoft has been investing billions of dollars in telecommunications to try to expand into the hot areas of Internet access and commerce. MSN is the nation's third-largest Internet service provider, with 2.5 million members--behind Dulles-based AOL, which has 19 million, and MindSpring/EarthLink, which has 3 million.
AOL and others had been bidding for the RadioShack partnership, company officials said. Microsoft won because it offered sophisticated technology beyond that of simple Internet service providers, said Leonard Roberts, Tandy's chairman, president and chief executive. Some analysts suggested that AOL would turn to another retailer, such as Circuit City or Best Buy.
Shares of Microsoft--whose stock has slumped since last Friday, when a judge ruled that the company had used its money and power to stifle competition--jumped $2.50, to $89.62 1/2, yesterday.
CAPTION: Tandy Corp. president and chief executive Leonard Roberts, left, appears with Microsoft Corp. Chairman Bill Gates yesterday.