MSN shifts to Web strategy

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Microsoft Corp. is radically redirecting Microsoft Network into an "Internet online service," forcing it to change its business model for advertisers, content providers and consumers.

As part of Microsoft's Internet blitz, MSN will be positioned as a gateway to the Internet. MSN mainly will repackage Internet content for subscribers while offering easy connections to the Internet.

Microsoft is steering away from its early plan to put exclusive content on the service and share revenues with content providers, who increasingly prefer to be directly on the World Wide Web.

"The Internet is exploding, and we want to participate in [that] larger market," said Bill Miller, MSN director of marketing.

Microsoft in the first quarter will begin an MSN direct-response and print campaign from Anderson & Lembke, San Francisco.

MSN has grown to 600,000 subscribers since its August launch. Critics fault the service for being slow and having limited content compared with rivals like America Online; MSN is working on speed, and the Internet focus greatly enhances the content.

Unlike Apple Computer's tiny eWorld, which is shifting to a free Web service, Microsoft thinks customers will pay for MSN because of the way it packages and bundles Web content.

Microsoft is still tinkering with advertising. But it will offer ads both on MSN and on www.msn.com, a free site Microsoft is positioning as the ultimate home page for the masses to start their Internet explorations.

Copyright December 1995 Crain Communications Inc.

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