MSN sticks with online access

Expect Microsoft Network to continue making deals to bundle its content with access, but don't expect it to get out of the online access business any time soon.

That's the word from Jeff Sanderson, general manager of marketing for MSN, who spent his morning denying a Los Angeles Times report that it was pulling out of the access business.

The overwhelming majority Microsoft Network's 2.3 million worldwide customers buy MSN as part of a bundled package in which they get the online service plus access to the entire Internet for $19.95 a month, the going rate for Internet connections. Fewer than 50,000 of its customers buy MSN as a separate product, Sanderson said.

And MSN has no immediate plans to pull the plug on those customers. "You would never do that--never in a million years," Sanderson said.

In fact, taking away access at this point in the game, probably would be tantamount to business suicide.

UUNet Technologies provides the service, but MSN manages it, and not always very well. MSN has had difficulties with both billing and email, among other things.

According to Kate Delhagan, who follows MSN for market research firm Forrester, the network would do well to eventually dump that part of its service and focus wholly on its main goal: providing content.

And although Delhagan is predicting that access and content will increasingly become separate, she doesn't see a neat division in the next few years.

People at MSN "want to be a media company," she said. "This access thing is a necessary evil for them right now."

Sanderson said MSN's goal is to get its product out to people in whatever way it can. Right now, the market is demanding access-content packages: For the most part, people aren't willing to pay extra for content when there's so much free stuff already on the Web.

But MSN also is on the virtual street hawking its service, trying to get it bundled with other providers, such as the recently announced deal with cable-modem company @Home. And when Microsoft's purchase of WebTV goes through, expect the service to be bundled there as well, Sanderson said.

He also said Microsoft Network is launching a 2 million-person direct mailing of its CDs in comarketing MSN and Disney, which provides content on the site. MSN has also mounted a campaign to lure away CompuServe members.

The efforts are part of the online service's marketing push to expand its rolls and address membership complaints about email outage, slow access, and programs that are big on show but small on function.

"The only thing we want to do is provide more people with more options," Sanderson said. He also said to expect more deals, but he warned that they "should not be mistaken for anything resembling a radical shift in strategy other than giving more people more choices."