MSN preparing fall broadband launch

REDMOND, Wash.--Microsoft is preparing to launch an enhanced version of its MSN service this fall as part of its efforts to tap broadband users for online subscriptions, according to the head of MSN.

Tentatively called MSN Premium, the service will be an add-on for existing phone or cable broadband users. Microsoft has not released any pricing details, but the company is exploring monthly and yearly rates, Microsoft Vice President Yusuf Mehdi, who runs MSN, said in an interview Thursday.

Microsoft currently offers a similar service for broadband users and charges $9.95 a month.

The software giant is playing up a few features in MSN Premium in hopes of differentiating it from other offerings from competitors such as AOL Time Warner's America Online. MSN Premium will come with new spam-filtering tools and pop-up advertisement filtering technology, Mehdi said.

The service also will connect MSN's e-mail and calendar with Microsoft's Outlook e-mail management system, essentially acting as a bridge between MSN and Office, using Exchange as its backend.

Mehdi's comments, made during Microsoft's presentation to investors and analysts here, came as rival AOL prepares to launch a refurbished version of its online service this summer. Called AOL 9.0 Optimized, the online service will attempt to appeal to broadband users by offering high-speed multimedia content and spam-filtering tools, among other additions.

Like MSN, AOL is attempting to sell a version of its software to broadband users. This strategy, called "bring your own access" (BYOA) in industry parlance, is aimed at people who plan to defect from AOL and MSN's existing narrowband service for a broadband service offered by phone or cable companies.

Launching BYOA plans is critical for MSN and AOL, because both companies are facing massive narrowband subscriber declines. AOL on Wednesday reported that it lost 846,000 subscribers since the previous quarter, some of whom defected to broadband services. AOL now has a total of 25.4 million subscribers.

AOL has priced its BYOA service at $14.95 a month, $9.95 a month on a limited promotional basis.

MSN is no stranger to subscriber losses. In April, Microsoft said MSN lost 300,000 subscribers despite launching a $300 million advertising campaign last October for its MSN 8 dial-up service.