January 7, 2004 9:40 PM PST

Gates unveils new MSN

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Microsoft on Wednesday unveiled updated versions of its MSN family of Web sites and services in the hope of attracting the growing number of consumers with broadband connections.

Company Chairman Bill Gates presented a new version of MSN.com's home page and demonstrated a new online video service during his keynote speech at the Consumer Electronics Show in Las Vegas on Wednesday evening. Gates also gave a tour of MSN Premium, Microsoft's Web software pack that it hopes will attract customers who access the Internet through a high-speed connection.

The launch comes at a critical time for MSN, which has long bundled dial-up Internet access with a modified Web browser that links to all of its other services. Like its dial-up competitors America Online and EarthLink, MSN has witnessed subscriber declines stemming from greater adoption of faster broadband services offered by cable and phone companies.

In response, Microsoft hopes MSN Premium will offer people enough bells and whistles to persuade them to pay an additional fee on top of their monthly broadband subscriptions.

The idea is gaining popularity among the Internet giants. Yahoo recently launched Yahoo Plus, which bundles a smattering of its paid services into a $5.95 a month subscription. Meanwhile, AOL is selling a version of its service called AOL for Broadband for $14.95 a month with the similar hope of appealing to broadband users.

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Bill Gates, chairman, Microsoft

The final version of MSN Premium is not far removed from the test version released in August. The software costs $9.95 a month, or $99.95 a year, for a product offering a souped-up e-mail client, a more sophisticated digital photo editor that emphasizes picture sharing, and the ability to access e-mail from a separate Outlook account, among other features.

The software also includes safety features such as parental controls, antivirus software, a firewall, a pop-up blocker, spyware detection and spam filters.

Microsoft will also launch a slimmer, cheaper version of the software called MSN Plus, which costs $5.95 a month or $49.95 a year.

"We are focused on providing a premier broadband experience," MSN spokeswoman Lisa Gurry said.

Aside from its software bundle, Microsoft also unveiled MSN Video, a free, advertising-supported streaming video service that it began testing last fall. As previously announced, MSN Video will stream considerable amounts of content from its media partner NBC, including clips from "NBC Nightly News," "Today," CNBC, MSNBC and "The Tonight Show."

The service has added other video providers such as Discovery Channel, The Weather Channel, The Food Channel, clips from the National Hockey League and movie channel Showtime, among others.

Online video has been a fickle business that most major Internet companies have entered into with mixed results. Some services, such as RealNetworks' RealOne SuperPass, have reported strong subscriber numbers, while others, such as Yahoo Platinum, quickly flopped. AOL has pinned its turnaround hopes on becoming a destination for flashy online media and attracting broadband users.

Unlike RealNetworks, Yahoo and AOL, MSN isn't charging people to watch its videos. Instead it's selling 15-second advertising spots for every five to six minutes of video. Microsoft's Gurry declined to say which advertisers have bought segments. She also said the free, ad-supported model was not absolute.

"At this point in time, the audience of folks interested in paying for content on the Internet is very small," Gurry said.

 

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