I mean, it’s not like whenever a project is cancelled at Microsoft they bring team members into a room and say, “We’re totally going to lie to the public (and therefore the shareholders) but here’s the real reason...”
Maybe all the nuances aren't fully communicated publicly when a project is cancelled, but I don’t recall having a sense that what was said publicly was any different than our understanding internally. But that was almost 20 years ago.
The majority of the teams I was on during my time there were ‘internal startups’: Mira, NetGen, WinFS, MatrixDB. Like startups anywhere, projects being unceremoniously cancelled was par for the course.
I don't remember Microsoft ever really giving the public a reason for canceling it. It just seemed to disappear with everyone just speculating what the reason was. Was there a press release that I missed?
I vaguely recall something being posted to the blog. I doubt the blog is still up. I could google around and check the Wayback Machine and so forth, but it would probably be faster if you did it yourself. I don’t have any inside info, I’m afraid.