Microsoft weighs fees for U.K. portal

LONDON--Microsoft confirmed Monday that it is considering charging people for "premium services" provided through its MSN UK Internet portal, the most-visited site in the United Kingdom.

The company issued a statement saying that existing services, including the company's popular free e-mail service Hotmail, will not be subject to charges. But it said it is actively considering charging customers for enhanced versions of existing services or for new offerings.

These include broadcasting live music through the MSN Web site and providing enhanced games through MSN Gaming. MSN said these services are likely to launch next year.

"MSN is at an early stage of looking at charging for premium services on MSN UK," a company representative said. The representative could not confirm reports suggesting that it might charge people up to $87 (60 pounds) a year for access.

The decision underscores concerns over the viability of Internet advertising as a means of generating revenue for Web portals. Microsoft said it has doubts about the long-term viability of free Internet portals but added that it does not intend to abandon Web advertising altogether.

"We remain committed to generating revenue from our existing advertising model. In the U.K., (this is) revenue from advertising, from sponsorship and content distribution," said the Microsoft representative.

However, a survey carried out recently by consulting firm Booz Allen & Hamilton indicates that banner ads on Internet portals have little affect on surfers.

MSN is the most popular Web portal in the United Kingdom, with 14 million visits per month, according to its own data. It receives 200 million visits every month worldwide but is thought to be unable to transform those clicks into dollars through mere advertising and sponsorship deals.

Subscription-only sites have achieved few successes. Yahoo said recently that its auctions listings have suffered since January, when the service ceased to be free-of-charge.

ZDNet U.K.'s Will Knight reported from London.