Not Ready When You Are, B.G.

It’s production day at Microsoft Network’s comedy show “15 Seconds of Fame,” and three comedians are valiantly--and vainly--trying to parlay humor from a few insipid personal stories e-mailed in by the show’s online audience.

The publicist for Weird Al Yankovic, the day’s special guest, worries that her client isn’t getting air time to plug his latest record. Talent scouts fret over how they will find celebrities to fill future shows.

A needless worry, it turns out. The show’s own 15 seconds of fame have run out: Unable to garner an audience of more than a few thousand, the show is one of 10 that will be pulled by the Microsoft Network (MSN) next month.

The failure of the first round of MSN programming illustrates some of the obstacles Microsoft faces in its ambitious, risky and, to many in the media industry, terrifying effort to build an entertainment and information empire in cyberspace.

Already, the software giant has launched MSNBC, a cable and online news joint venture with NBC; half a dozen online magazines; an investor site; a travel site; a local entertainment information site; and a range of music, game and other entertainment “shows.”

Thousands of new employees populate a new satellite campus called Redmond West, or “Red West” in company jargon, and media venture spending is running at $700 million to $800 million a year.

With its $9-billion cash hoard, powerful marketing machine, strong brand name and phalanxes of smart people, Microsoft certainly has the potential to make a major impact on an industry that’s being turned upside-down by technology.

It appears to have the commitment too. With its stock selling at lofty valuations that assume growth rates of 35% or more a year, and with pay based heavily on stock options, Microsoft needs to keep moving fast. It sees the media business as a key driver of the software business over the long haul.

“We’re a growth company,” says Laura Jennings, vice president in charge of the Microsoft Network. “This is a logical place for Microsoft to be. We’re plowing the money back in.”

Still, success is anything but assured. Historically, there are very few examples of a company moving into an entirely new industry and being successful.

Content is an area where Microsoft Chairman Bill Gates’ sharp business instincts, programming skills and heavy emphasis on “technical capabilities” have limited relevance. In multimedia CD-ROMs, the only other area in which Microsoft has made a substantial investment in content, the company has had few hits.

And the Internet remains an immature medium that will take many years to fully develop. The audience remains tiny compared with television, and consumers have proven very reluctant to pay for online information and entertainment.

Even though Microsoft’s online magazine Slate, for example, received mountains of free publicity and boasts a star editor in Michael Kinsley, it was recently forced to shelve plans to begin charging subscription fees, out of fear of losing readers. To reach the nation’s technophobic cultural and political elite, Kinsley has even decided he needs to offer a printed version of Slate.

“It’s depressing when you have to spoon-feed people,” says Kinsley.

Other projects have been similarly slow to take off. Sidewalk, a local entertainment and information venture, has finally launched its first site in Seattle after about two years of development. And then there’s the sorry fate of the first round of entertainment shows on MSN.

Microsoft executives claim to be unperturbed by the failures so far. By honing skills with of each successive Web program, says Jon Kimmich, producer of “15 Seconds of Fame,” “we want to develop the methodology for the studio of the 21st century.”

Success will depend in part on the extent to which Microsoft can turn Red West into a creative center. Physically, the new facility isn’t much different from Microsoft’s main campus. But instead of just programmers, Red West is packed with artists, audio technicians, editors, writers and film producers that Microsoft has lured away with attractive stock options.

Keeping that talent happy and motivated in a culture that celebrates the workaholic ways of Gates isn’t easy. Already, some of Microsoft’s new recruits from the print media world have left after finding the hours long and the work unfulfilling.

While Microsoft wants to keep its key talent in Redmond, where it can work closely with the technical staff, the Seattle area is not necessarily the best place for publishing and entertainment ventures.

Kinsley, for example, wonders whether he shouldn’t be running Slate out of Washington, D.C.

“It’s very helpful to be surrounded by people who are always surfing the Web,” he says. “But it would also be great to hear, ‘Hey, have you heard the latest on Newt?’ ”

Offering entertainment over the thin pipe of the telephone line could prove the toughest act of all.

Leading the effort is Bob Bejan, a trim, intense man who started his career as a dancer on “A Chorus Line” before directing a Broadway show and then moving into interactive media by founding Interfilm in 1992, a producer of interactive films.

The company flopped, Bejan says, because it was ahead of its time. Now, says Bejan, “I feel the time is right” for interactive entertainment.

Slipping neatly into the Microsoft culture of e-mail, meetings and long days, Bejan arrives at his cubicle by 6:30 a.m., early enough to play a few tunes on his electric guitar before the others arrive. He seldom leaves before 8 p.m.

Using metaphors drawn from show business, Bejan charms his new technology colleagues with his talk of creating a “choreographed” experience on the Web.

Whereas the goal of traditional film is to make you forget where you are, he says, “in the interactive world we make you believe you have all the choices.”

Borrowing from television, Bejan is aggressively soliciting ideas and talent from off-campus. He finances 13-week production runs of shows, and, like television, cancels the ones that don’t measure up.

A group of Bejan’s more successful young proteges has gathered at the cavernous cafeteria at the center of Red West to talk about their experiences.

Andrea Weatherhead was impressed when, as an audio technician, she proposed developing a show focused on leading composers and musicians. The idea was immediately accepted, and she was appointed producer. Her first guest was Herbie Hancock.

But Weatherhead says the corporate atmosphere, complete with e-mail bombardment, often makes it difficult for her creative people to get the privacy they need to work.

Sam Reich-Dagnen, producer of Mint, a magazine for online users in the 18-to-25 age group, is impressed by the intelligence of the people she meets on campus, but she thinks the company still lags Disney, her former employer, when it comes to creativity.

But the people who ultimately determine whether Microsoft succeeds in crossing the chasm from computers to content may be Microsoft veterans like Kimmich, who, with the exception of Bejan, continue to hold the key managerial positions at Red West.

Kimmich began as a programmer but joined Microsoft’s media efforts when he became part of the company’s doomed interactive TV effort.

He and colleague Ed Yip initially came up with the idea for “15 Seconds of Fame” as a way to highlight clever Web sites designed by Internet users. Instead, they decided to ask MSN subscribers to send in funny or strange personal experiences and have comedians do a “brain dump” on the stories.

Bejan was thrilled with the idea. “ ’15 Seconds of Fame’ is a great made-for-the-medium program,” he said. “It smudges the line of collaborator and spectator.”

Kimmich made an effort to establish a presence in Hollywood, flying down from Redmond virtually every week.

“We don’t have a good reputation for playing well with others,” he says. “We are going to change that.”

In Red West’s “back lot,” an office building where the walls have been torn out to allow for open spaces where animators, programmers and sound engineers can work together, Kimmich oversees a team of audio engineers and illustrators who are working to spice up a subscriber story.

It’s a piece about a travel agent who thinks the Hawaiian island of Molokai has leprechauns because it once housed a leper colony. The “brain dump” from show hosts Charles Fleischer and Stephanie Miller is converted to text and sharply edited. On a computer, a sound engineer adds some Irish-accented talk, the apparent jabbering of leprechauns, Hawaiian music and rain-forest birds.

When the show finally makes it online, it’s a strange hybrid. Personal stories are read by a narrator and echoed by one-liners from the comedians. Sometimes it can be funny, but with the technical problems and the lack of interactivity, it is still a poor cousin of radio.

Bejan thinks the problem is more a lack of promotion, but he cut the show along with nine others that didn’t measure up. Kimmich, the producer, will move on to new shows. But contract workers at many others will lose their jobs.

Can Microsoft continue to attract talent with such uncertain job conditions? And how long will it continue to back an effort that doesn’t produce profits?

Bejan likes to compare the relationship between Microsoft’s key software divisions and its new-media efforts to the relationship between Italy’s Renaissance merchant houses and its flourishing arts.

“It’s a patron relationship,” says Bejan. While MSN isn’t pulling its weight today, he adds, “now is the time you should be taking the risks.”

Microsoft’s best chances of early success are likely to be the online products that play to the Internet’s strengths in offering up-to-date information and quick service. Expedia, the travel site, could well become the place to go for information and reservations. Microsoft’s Investor site allows you to trade stocks as well as look up recent news on shares you own.

But all of Microsoft’s money, marketing and software power may be helpless against the online user’s reluctance to pay for content. Unless Microsoft can make the Internet a core part of the way people gather information and entertain themselves, says Jens Sanderson, general manager of marketing at MSN, “advertising and transactions don’t make sense.”