Microsoft Bulks Up MSN, But What About IE?

Today, Microsoft announced the beta of the next MSN version, which will come with some significant price changes and a new tier of service. The changes reflect Microsoft’s move out of the Internet Service Provider business, as the company focuses more on developing the online access software.

As part of the revamped ISP focus, Microsoft is relying more on existing services, such as Comcast, to provide customer connectivity. In the past, Microsoft put more emphasis on MSN-branded broadband or dial up access. For the time being, the $21.95 MSN dial-up service would continue to be available--at least for existing customers.

Microsoft plans to offer two MSN tiers: Premium and Plus. The Premium service would be comparable to the existing MSN 8 plan for consumers with an existing broadband account. Price would remain $9.95 a month, or $79.95 a year. The Plus service likely will cost less, as it would not include all the features available in MSN Premium. Microsoft has yet to announce pricing on the new tier.

The changes mean the Microsoft will have to work harder to enhance the value of the MSN client, giving consumers good reasons to cough up an extra 10 bucks a month on top of their existing broadband service. To that end, MSN Premium shows promise.

The MSN Premium beta is chock full of new features, many focusing on digital photography. Recognizing the burgeoning consumer interest in sharing digital photos, Microsoft has added the capability to share photos via instant messaging, creation online photo displays or share photo albums via e-mail.

These new features pull from technology originally developed for other products: Picture It!, Digital Image Pro and Plus! Digital Media Edition. The online albums are created using a lite version of Plus! DME’s Photo Story feature. Other enhancements, including the ability to edit and manage photos from within the MSN client, come from Microsoft’s consumer digital imaging products.

Rather than reinvent the wheel, so to speak, Microsoft is enhancing the MSN client by capitalizing on technologies developed for other products. Over time, I wouldn’t be surprised to see Microsoft execute an integration strategy that also would bring more MSN features into other stand-alone consumer products, like Picture It!, Money, PC gaming titles or Movie Maker.

Some changes are a departure from Microsoft’s longstanding practice of favoring MSN Websites or services. Following on a previous change that would allow consumers to choose their own home page (not necessarily MSN), the new product can retrieve e-mail from other POP3 accounts. The move makes sense, given that Microsoft wants more of a partnership with broadband providers and is repositioning MSN as a front-end to these existing services. Consumers with existing e-mail accounts for, say, Comcast or Verizon, might want to continue using those in addition to their MSN account.

Another enhancement: The Outlook Connector for MSN will come with the Premium service. Using this feature, XP and 2003 Outlook users can retrieve and synchronize MSN e-mail, calendars and contacts. With the Connector, Microsoft is trying to provide workers that use Outlook as their primary e-mail client a way to also access MSN mail.

I find the implications of other MSN changes disturbing. For example, Microsoft has added a new pop-up blocking feature to the MSN client. This is one of several browser enhancements available for paying MSN customers but not to the larger base of Internet Explorer users. This makes me wonder. Already, Microsoft has essentially abandoned IE development apart from delivery with new operating systems. So, unless Microsoft changes that position, a new IE version wouldn’t come until Windows XP-successor Longhorn ships in 2005 (Microsoft says 2005, but I believe 2006). During the heyday of browser competition, when Microsoft duked it out with Netscape, consumers were assured of frequent IE enhancements. But now that IE has huge market share and many Websites are developed specifically for the browser, Microsoft would appear to be abandoning IE development. Is there some reason why browsers shouldn’t continue to evolve? No good one that I can think of.

My conclusion: With the browser wars over and IE the winner, Microsoft is focusing more of its browser development on paying customers, i.e. (pardon the grammatical pun), MSN subscribers. Likewise, I would expect Outlook Express development to continue to remain stagnant. With support for multiple POP3 accounts, spam filtering, parental controls and other enhancements, the MSN client would appear to be emerging as the replacement for Outlook Express. Again, for customers willing to pay.

Certainly, Microsoft is a business about making money. But, I would suggest taking another look at Windows users and their need for improvements to IE. After all, they are paying customers, too. Microsoft doesn’t give out Windows for free.

Posted by Joe Wilcox at August 27, 2003 10:21 AM