Microsoft Unveils Revamped Online Service
Comparing today’s Internet to radio, film and television in their early, unstructured days, Microsoft Corp. on Thursday unveiled an overhauled version of its commercial online service, Microsoft Network, as the vehicle for its ambitious plans to deliver a wide range of services and programming over the Net.
“Everything on the Web is disaggregated. There is a need to pull it all together,” said Patty Stonesifer, head of Microsoft’s Interactive Multimedia division. “We’ve done that with MSN.”
The new service is built around Internet Explorer, Microsoft’s increasingly popular Web browser, although MSN users will find a dramatically different interface greeting them when they sign on to the service.
Underscoring its emphasis on entertainment, a customer signing on goes straight to MSN’s “On Stage” section, which offers six “channels.” Each channel hosts “shows” aimed at particular consumer markets. Among the channels is one devoted to news, one for young adults and one for general information.
MSN will be launched with 16 original shows and the company says it is working on an additional 40.
“It’s a breath of fresh air,” said Allen Weiner, an analyst at San Jose-based Dataquest. “The Web has no programming rules. This adds an element of predictability.” He argued that by standardizing its offerings, MSN will give users a better sense of what to expect from each program.
MSN will also offer a range of what it calls “essential” services, including a travel service allowing users to make their own hotel and airline bookings. Another service, Microsoft Investor, allows users to follow their investments online, make trades and look up business news.
Microsoft will not say how much it is investing in the new service, but Rick Sherlund, an analyst at Goldman, Sachs & Co., estimates the software giant is already spending roughly $500 million a year on MSN and MSNBC, its joint news service venture with NBC.
The company said its new programming efforts will not reach profitability for at least three years. Company executives said they expect the entire online market to be worth $13 billion to $15 billion annually by 2000, including revenue from advertising, user access fees and retail transaction fees, and that they expected to garner at least 10% of that.
Microsoft launched Microsoft Network in the summer of 1995 as an online service similar to such proprietary networks as America Online and CompuServe. But the company decided to redesign it as an Internet service in December in response to the rising popularity of the Internet’s World Wide Web.
Because the service is packaged with Windows 95, the popular Microsoft operating system that is loaded by manufacturers onto most new computers, the company has built up a subscriber base of 1.6 million customers despite mounting virtually no marketing campaign.
However, the new service will be aggressively marketed with a $100-million budget in its first year for direct mailings, television advertising and other promotion.
The new service will be available in early November at a monthly cost of $6.95 for five free hours or $19.95 for unlimited usage.
