patrickdeuel.com

Firing yet another salvo in its long-running war to win over AOL subscribers, Microsoft announced a buffed version of its MSN service would go into beta this week, with enhanced features designed to put a dent in AOL's dominance of the Internet service provider (ISP) market.

Microsoft said it would roll out MSN 8 in North America in the fall, followed by other countries in the next few months. MSN 8 includes advanced browsing software that would include a "dashboard" users could customize to suit their tastes. The new service also bundles formerly paid Microsoft services, including bill-paying services, digital photo tools, and access to the Encarta encyclopedia. Microsoft also boasts MSN 8 will include enhanced e-mail, better parental controls, and more personalization options.

"MSN 8 will be the most significant version of MSN we have ever released due to the thousands of hours of feedback we are gathering from people about their everyday problems using the Internet," said Yusuf Mehdi, vice president of MSN, in a statement. "Our goal is to deliver a service that consumers will want to graduate to, and with the first beta of MSN 8, we're on track to surpass this goal by delivering excellent services that leapfrog other competitive offerings."

In a change, Microsoft said MSN 8 would be available to customers of other ISPs for a fee. The company did not disclose the pricing for MSN ISP customer or for MSN 8 as a standalone service. MSN unlimited dial-up service currently costs $21.95 per month.

MSN 8 is the first upgrade to the MSN service since October 2001, when Microsoft rolled out MSN 7 to capture market share from ISP leader AOL. Despite its many attempts to lure AOL subscribers through rebate plans and multi-million dollar ad campaigns, MSN remains a distant second to AOL. AOL has 34 million members, while MSN has 8 million.

However, with the ISP market growing increasingly cutthroat, AOL has pulled out all the stops to retain subscribers, including offering free months of service to users threatening to jump ship. Analysts have questioned how many AOL subscribers actually pay its full monthly subscription fee. A report by Morgan Stanley estimated that 15 percent of AOL's subscribers are on free trials.

MSN 8 will include a tool for those wishing to defect from AOL. Rolled out in May, MSN's TrueSwitch service helps users migrate their address book, calendar, and old e-mail over to MSN. Microsoft said the service was "tapping into consumers' growing discontent with America Online and their desire for a better Internet service."

Separately, Microsoft announced at the MacWorld Conference in New York City that it would roll out new products for Apple users. The new offerings include a Palm synchronization tool that allows Office v. X users with Entourage X as their e-mail program to easily transfer information from their Mac to their handheld. Also, Microsoft debuted a new remote desktop connection client, which Mac users to remotely access Windows data and applications.