Microsoft plans retail stores, hires Dreamworks exec

IDG News Service - Microsoft Corp. plans to open its own retail stores to "transform the PC and Microsoft buying experience," the company said Wednesday as it hired an executive to run the retail operation.

The stores will help Microsoft engage more deeply with consumers and learn firsthand about what they want to buy and how, according to a Microsoft statement. Deciding where the stores will be located and what they'll look like will be the first order of business for David Porter, who will report to work on Monday as corporate vice president of retail stores.

Microsoft has long been perceived as lagging behind rival Apple Inc. in appealing directly to consumers, and Apple has a head start of several years in running a chain of stores. While Microsoft makes its own Xbox game terminals, Zune media players and some other devices, it doesn't have a branded PC product of its own like Apple's Macintosh.

In December, Apple neared 10% of PC sales while Windows lost a full percentage point of share for the second month in a row.

With the retail strategy, Microsoft said it hopes to articulate and demonstrate its innovation and value proposition. It will pass on lessons it learns from the stores to its retail and OEM partners.

The move comes as the company gears up for the release of the Windows 7 PC operating system as well as new releases of Windows Mobile and of the Windows Live online portal. It follows changes Microsoft has made to its marketing efforts as the Windows Vista operating system took on a negative image.

Porter has been head of worldwide product distribution for Dreamworks Animation SKG since 2007, and before that, he spent 25 years at Wal-Mart Stores Inc. His last position there was vice president and general merchandise manager of entertainment.

Microsoft has already had at least one retail store. In 1999, it opened a large store on the second floor of Sony's Metreon entertainment and shopping complex in downtown San Francisco. Among other things, visitors to the store could try out Windows CE-based handhelds and buy Microsoft apparel, souvenirs and shrink-wrapped software. The shop closed several years later, as did most of the other non-Sony-related businesses in the complex.