Why the collapse of Kangaroo is an 'opportunity’ for Microsoft

Ashley Highfield is a motoring obsessive, and when he was the BBC’s new media supremo, he furnished his office with a seat made specially for the Formula One racing driver Jenson Button, though he has it no longer. “I suspect it has ended up on some tip at the BBC,” he suggests. “If only I’d got a Lewis Hamilton chair, it would be worth a fortune – I basically backed the wrong rider, didn’t I?”

Well, yes, you did, but then, no, you probably haven’t, Ashley, not now that you’re a big shot at the mighty Microsoft. In the past year, Highfield has switched chairs with a rapidity rarely seen beyond the world of children’s birthday parties. It’s no wonder he lost Jenson’s.

Having secured the position of bbc.co.uk as Britain’s favourite website, he left his post as the corporation’s head of future media and technology last April, taking up a role in charge of Project Kangaroo, the grand plan by the BBC, ITV and Channel 4 to establish an online portal for all their shows. Less resilient than its boxing marsupial namesake, the project was rudely terminated by the Competition Commission earlier this month. But by then Highfield was gone.

For the past six weeks, he has had a new job as UK managing director, consumer and online, of Microsoft, the computer technology empire founded by Bill Gates. Highfield’s new office in London’s Victoria gives a spectacular view of Westminster Cathedral, and as he looks down on the building’s Neo-Byzantine splendour, he comments: “Microsoft, the new religion! The new Catholicism!”

He’s joking, but Highfield is evangelical about what Microsoft can do for the British public. It’s a company that it’s all around us, as Hotmail, as MSN, as Xbox. Three-quarters of British email accounts are Hotmail, and MSN instant messenger in December sent out four times more missives than the Royal Mail. Yet somehow Microsoft itself does not have the same level of instant recognition as Google or the BBC.

For Highfield, 43, who has been brought in to increase consumer awareness of Microsoft, it is an irresistible challenge. “I love the fact that it’s already number one in a number of areas but not many people know about that, and that Microsoft itself is refocusing the organisation on the consumer. I think anyone would love this job.”

How does he think Microsoft is regarded in Britain? “I have a gut feeling that it is trusted, respected, but perhaps not particularly loved,” he says. “I don’t think I want the Microsoft brand to be ‘cool’ but I want it to stand for quality, reliability and ease of use. In hard times maybe the new cool is having bought something that you know is going to work, and you’re never going to lose your photos. Maybe the uncool thing is to go and spend £1,500 on a very nice white thing when you could have spent £300 on a Netbook that would have done the job.”

He has been thrilled by MSN’s already strong position in some specialist areas such as entertainment, travel and, of course, cars (last month it became Britain’s number one motoring website). “They’ve got something like 186 per cent year-on-year growth. They’ve got a user base of 2 million, and it’s good stuff, there’s some good editorial from a passionate team.”

Asked about the size of the MSN Cars editorial team, Highfield holds up three fingers. “This is the eye opener, this is a very commercial business and the way they work – the way we work – is to have good relationships with third party providers, and really focus on what the customer is interested in.”

This is where Highfield really comes into his own. Few can rival his understanding and network of contacts in the all-important field of online video, which is now a major focus of Microsoft’s attention. Kangaroo’s demise is potentially Microsoft’s gain. “I think it’s a huge opportunity. I think the fundamental idea of Kangaroo – of a one-stop shop for quality video – doesn’t go away just because Kangaroo has gone away. MSN Video already has some of those elements: it’s a portal; it doesn’t do user generated content; it focuses on partnerships with broadcasters and content providers to get good quality content in.”

Highfield, who would like MSN to carry more content from the BBC than it already does, says “I’m having conversations with broadcasters to see how we might work together”, and says that, in spite of his wish to raise awareness of Microsoft, the MSN portal would put the names of broadcasters and their shows to the fore. “We must respect and promote the broadcasters’ brands and the programming brands and not try and subsume them under a master brand like [internet TV service] Joost.”

He says MSN Video could take the online role of the electronic programme guide on television. These are not idle boasts for, as he points out, “MSN Video, after YouTube and iPlayer, is the biggest video portal in the UK, and I want to grow that”. That process will be helped by technological advantages such as the Silverlight software that ensures that “whatever broadband speed you’ve got it adjusts so that you never get frozen screens or annoying buffering”.

He may have come from the BBC but Highfield is also tasked with maximising Microsoft’s advertising revenues, in the face of the recent buffering in the online ad market. He stresses his commercial roots as a management consultant who spent five years in the commercial television sector and says that though Microsoft’s budgets “have had to be revised downwards” it is still a “growth business”.

He sees big opportunities in display advertising, and says quality video content will attract business that has no wish to sit alongside footage of “cats on skateboards”.

YouTube might not be, then, a direct competitor but Google’s search engine certainly is. Microsoft currently has a meagre 3.6 per cent share of search in the UK, but Highfield is convinced he can change that. “We need to differentiate our product so that people try us out and make the switch,” he says. “Some of the exciting features that I’ve seen that are coming down the line, but are a bit hush-hush at the moment, I think are compelling enough to make people want to try us out.”

Two years ago Highfield spoke patriotically of how British broadcasters could fight off the American multinationals and lead the world in online video. Isn’t he now on the other side?

“No, I think you can square the circle by saying Microsoft should be able to work with those UK broadcasters to create a partnership. I never thought the UK broadcasters should go off into the sunset on their own. Now I’m on the other side, I would hope that whether it’s brands that want to advertise with us or content partners that want to work with us, we should be able to make their programmes and content sing,” he says.

He jokes that he might write in his memoirs that he anticipated the collapse of Kangaroo but claims that the truth is that he was seduced by Microsoft’s offer. But the concept behind Kanagroo, he says, can live on. “It’s important to not lose the spirit of the idea of creating a framework where great British content – new, catch-up and archive – can be made available to the British audience,” he says. “We are world leaders in Britain in video over the internet and the worst thing would be to let the decision create a hiatus or gap. What I’m passionate about is keeping the momentum going.”

‘I don’t think I want the Microsoft brand to be “cool”, but I want it to stand for quality’