Sony - a name derived from sonus, the Latin word for "sound" - was founded in 1946 by Akio Morita, an heir to a sake fortune. The company enjoyed its initial success by producing the first Japanese tape recorders and portable radios. Since then, Sony has enjoyed success in everything from the Trinitron color television to the Walkman. (Sony's one big miss: its Betamax lost the heated VCR wars to Matsushita's VHS technology). In the 1980s, Sony, faced with increasing competition in the consumer electronic marker, started to diversify its holdings. It began to move aggressively into the computer market - manufacturing chips and floppy disk drives - and to devote more funds to research, facilitating the development of the compact disc. Sony's line of Vaio PCs has been very successful, and the company is now looking into other means of home networking, such as digital netwroks that will link TVs, set-top boxes, and other devices.

In the late 80s, Sony became a major player in the entertainment industry virtually overnight with its purchase of CBS Records for $2 billion in 1988 and Columbia Pictures for $4.9 billion in 1989. In the early 90s, Sony manufactured the extremely popular Apple PowerBook, but failed with its portable CD-player in the U.S. market. It also partnered with Microsoft to produce electronic textbooks and with Sega to make CD video games. Sony has since turned against Microsoft, deciding to use Palm's operating system when looking for a program to run its hand-held devices. Sony now has plans for further ventures with chip-maker Intel and big hopes for WebTV, the recently introduced mass-market Internet provider.

In 1995, relative-unknown Nobuyuki Idei took over as CEO of Sony and radically restructured the company, which startled many since Japanese businesses are known for their cautious, consensus-based style of management. In addition, he tapped John Calley to head weak-performing Sony Pictures Entertainment, which had produced a series of box office disappointments in the mid-1990s. (Sony was forced to take a massive $3.2 billion restructuring charge on Columbia in 1995 to cover the studio's losses). After such hits as Jerry Maguire, Men in Black, and Air Force One, Sony Picture's much-anticipated 1998 remake of Godzilla proved disappointing (relative to the $200 million shunted into its production). Undaunted, Sony Pictures announced plans to produce its own James Bond series - prompting MGM to retaliate with a $100 million copyright lawsuit in August 1998. The year also saw the consolidation of Columbia and TriStar studios into the Columbia TriStar Motion Picture Group, which expects to produce 20 to 24 pictures annually, and the merging of Sony theater chains Loews Theaters and Cineplex Odeon to form Loews Cineplex Entertainment.

Sony has found other ways to entertain us. Its platform software has already found uses in the digital set-top market, as companies including Tele-Communications Inc. have agreed to include Sony technology in their digital set-top devices. But the successful integration of PCs and AV appliances is yet uncertain. The 64-bit Sony PlayStation, produced by Sony Computer Entertainment, is giving Nintendo's N64 a run for its money. The PlayStation plays games from CDs, a cheaper and more appealing alternative to the N64's cartridges. The division has sold more than 33 million units (12 million in North America) and 236 million game CDs since the console's release in 1995. Though a relative newcomer, the PlayStation has amassed a game library five times that of the N64. A new portable version of the PlayStation, the PS One, is about a third of the original's size, and will feature new games, as well as support the old ones. The PS One will be available in the U.S. starting in September 2000. Sony announced that it would license technology from its PlayStation2 to other manufacturers, in the hope of making the PS2 the dominant home entertainment device.

In response to Japan's worst recession since WWII, Sony announced a restructuring plan in March 1999. The company plans to cut 17,000 jobs over the next four years, most of which will be through attrition. By the year 2003, the company plans to shut down 15 manufacturing facilities. In addition, Sony wants to move away from traditional products like TVs and stereos and concentrate more on high-tech products like video games, laptops and digital cameras. After withdrawing from the American cell phone market in 1999, Sony will return in 2001 with phones and mobile gadgets that provide easy access to music, film, and other online content. The new cell phones will be equipped with Sony's Memory Sticks, and all the functionality of a Walkman. Just because the phones will operate as Walkmen does not mean that Sony is leaving the portable music player behind. Sony is working with InterTrust Technologies Corporation to enable PCs and the Memory Stick Walkman and VAIO Music Clip to handle music electronically distributed over the internet. Believing that online music is a market about to explode, Sony became the first major record company to launch a music distribution service on the web. Hoping to fight the illegal distribution that has run rampant on the 'net, a Sony spokesman said, "We want to establish a rule based on copyrights." The company's site makes songs available for only one copy from a PC. So far songs must be paid for via a Japanese credit card, though eventually the service will be extended to the United States. In other online news, Sony began selling consumer electronics over the internet in February 2000, leaving open the possibility of the same for the U.S. Sony's acquisition of Verant Interactive, Inc. in June 2000 will strengthen the company's position as the leading online destination for interactive gamers. Sony is also opening an internet bank, which will offer electronic banking, bill payment, and loans. The accounts can be accessed at ATMs throughout Japan.

Sony's Metreon shopping and entertainment complex has emerged from its first year as a huge success, welcoming 6 million people to its 15-screen theatre and inviting them to play interactive games, try out Sony products, and hopefully leave with a shopping bag in hand. Given the entertainment center's popularity in San Fransisco, Sony is opening new complexes in Germany and Japan. Germany is the site of Sony's new European headquarters, where the company built a $1 billion center featuring offices, apartments, condominiums, and entertainment attractions on the location vacated by the Berlin Wall.