Maffei, however, does have his detractors. Reportedly, Microsoft initially expected to have somewhere between 2 million and 3 million WebTV subscribers by now, but so far the company has managed to sign up less than 1 million. They note in particular that Microsoft's contract to supply software for the set-top boxes is nonexclusive. Also, it might have been unwise for Microsoft to demand exclusionary terms when such arrangements rank high among the business practices being challenged by the Justice Department. To Be Remodeled More broadly, Maffei says the focus of Microsoft's dealmaking isn't on short-term financial returns but on strategic benefits down the road.
Software is a very important element of what they do.
So I think you'll see us continue to be looking for all sorts of partnerships. These deals will help produce a fee-based business model in both direct and indirect ways. In either type of arrangement, the company expects to get a cut of whatever advertising or transaction revenue the services generate. But Maffei isn't prepared to overpay for them. But when the company asked Microsoft founder, chairman and CEO Bill Gates for permission to hire Maffei as its chief executive, it was turned down.