Microsoft Spends Big on New Web Service

Microsoft Corp. on Wednesday took the wraps off its refurbished MSN Web service, backing the offering with a $1-billion war chest in its biggest effort yet to topple leading Internet access rival America Online Inc.

The new service, which includes a colorful new Internet browser as well as content updates, is also MSN’s first step toward carrying out Microsoft’s broad strategy of making it easy to swap data across its range of software and services.

MSN includes Microsoft’s Internet access business as well as a lineup of consumer sites such as the MoneyCentral personal finance page and the eShops online shopping service.

To try to sign up more people for its access service, which at 3.5 million subscribers still lags far behind AOL’s 25 million, Microsoft will pitch MSN in 10,000 retail stores and hand out free copies of the new MSN Explorer browser, which people can use apart from the access service.

The new browser, which has been available in a test version for months, includes a colorful interface with cartoon-like icons and a built-in media player for watching video or listening to music on a computer.

The announcement was made on the same day that AOL unveiled its new client software, AOL 6.0.

Along with changes aimed at making MSN’s finance, shopping and search features simpler, Microsoft’s new browser takes square aim at the area AOL has built its reputation on--ease of use, said Deanna Sanford, lead product manager for MSN marketing.

Sanford said MSN would be supported with a new $150-million global marketing campaign, and that the total spent on the service could hit about $1 billion over the next year, making it one of the biggest launches ever for the deep-pocketed Microsoft.

That $1 billion includes marketing, retail partnerships, cross promotions and rebates, Sanford said.