You have to admire the guile (stupidity?) of a company has already faced so much anti-trust heat and still do crazy things like this. Essentially, Microsoft is saying that the contacts that users put into MSN messenger belong to MS, not the user. And if that user wants to import those contacts to a social networking site, the site should pay them. Bizarre and stupid.
More on the attempt to squelch the growth of the internet via the full post on Fortune's Techland Blog
The problem typically arises when a social network, say, offers its users the ability to import the list of contacts they've accumulated on Microsoft Hotmail.
Since the summer, my friends tell me, Mister Softie has been sending cease-and-desist letters to startups that try to do this. These nastygrams are typically followed up by a meeting with Microsoft reps, who then try a couple different approaches to get the startup to integrate Messenger into their service.
If the company wants to offer other IM services (from Yahoo, Google or AOL, say), Messenger must get top billing. And if the startup wants to offer any other IM service, it must pay Microsoft 25 cents a user per year for a site license.