June 3, 2003 6:00 PM PDT

Microsoft recharges MSN 8

Microsoft said it will release an updated version of its MSN Internet service on Wednesday, the latest salvo in its ongoing campaign to unseat America Online.

The latest update to MSN 8 focuses on beefing up software to block unsolicited bulk e-mail and adds new parental controls. A sneak peek of the software made its rounds on the Net in April under the guise "MSN 8.5."

The new MSN 8 comes a week after Microsoft said it would pay $750 million to AOL's corporate parent AOL Time Warner to settle an antitrust lawsuit filed on behalf of Netscape Communications. Netscape, a subsidiary of AOL Time Warner, alleged that Microsoft unfairly used its monopoly power in operating systems to stifle Netscape's own Web browser.

Along with the $750 million payout, the companies agreed to a number of partnership concessions. AOL will receive a license to use Microsoft's Internet Explorer browser in its proprietary service for seven years. AOL also agreed to consider using Microsoft's Windows Media technology on a nonexclusive basis throughout its service.

Meanwhile, AOL is planning to release the next version of its service in the fall and will test new features throughout the summer. Earlier this week, AOL unveiled the second beta version of its new client, dubbed AOL 9.0 and internally code-named Blue Hawaii.

New additions to the service include a caching system that speeds Web page downloads and a revamped e-mail box with a spam-filtering system. Prior enhancements included adding Apple Computer's QuickTime technology to AOL's media player, joining RealNetworks and Microsoft's Windows Media.

For the latest version of MSN 8, Microsoft is touting a new antispam algorithm that the company says will improve spam blocking. MSN 8 will also forbid embedded HTML images from being presented unless the sender is included in the recipient's address book.

These spam alterations are part of an overall revamp of MSN 8's e-mail service, including mandatory virus scanning for all e-mails with attachments, a meter that shows remaining memory for storing messages, new navigation tools, and sync features for online and offline contact lists.

Changes in MSN 8's parental controls are mainly navigational in the form of new tabs and buttons to help customize settings.

Both AOL and Microsoft are scrambling to refine their respective online services in the face of subscriber declines from their core narrowband user base. Last quarter AOL said it lost 289,000 U.S. subscribers from the previous quarter, while Microsoft said its subscribers declined by 300,000.

AOL and Microsoft have acknowledged that their narrowband subscriber ranks are thinning. The Net giants are turning their attention to persuading broadband users to pay for high-speed versions of their service for a lower price than their monthly dial-up rates.

 

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