The article is a bit light on details regarding their ereader, and there could have been a lot more going into their business decision than what was being said. I would imagine a big thing would be: is there a market for it? In 1999, probably not. Even if people wanted such a device, Microsoft would have to get publishers on board since an ereader without a large selection of books would flail in the marketplace. After that, there is price. I decided to buy an ereader when the went below $300, but early ereaders were considerably more expensive. Yet ereaders didn't truly become popular until they approached $100.

The technology would have been another big factor. Much of the market would not exist if eink displays did not exist. An LCD based ereader for the office may be pretty cool after all, but a lot of people read outdoors and want the convenience of charging once a month. (Actually, I would argue that I charge less than once a month since the process of loading books usually tops off the charge.) Amazon also forged the way with a lot more than their marketing muscle: cellular connectivity allowed them to introduce a product that was more of a book than a computer peripheral.

Other factors enter the fray too. Library lending is a big thing for a lot of readers. Would people have bought ereaders without libraries promoting them, as well as offering free access to ebooks? Doubtful.

I don't blame Microsoft for their decision. It was a conservative one that was likely based upon the market at the time. It was likely based upon the points mentioned in the article, the ones I mentioned, as well as others (e.g. production, distribution, and marketing). Of course, they may have had success in 1999 if they tried. But hindsight is also 20/20.