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Microsoft mulling fee-based services for MSN

The company is testing the waters with several new fee-based MSN services including virus protection, music subscriptions and even an e-mail-via-phone plan, sources say.

Microsoft, apparently serious about turning software into a service, is testing the waters with a number of new, fee-based MSN services including virus protection, music subscriptions and even an e-mail-via-phone plan, sources say.

But the company is still wrestling with exactly what its software services strategy will entail, both from a product and a business perspective.

The plans to enhance MSN offerings come as Microsoft is working overtime to add .Net "software as a service" hooks to its various operating system and applications software. .Net is Microsoft's initiative for turning software into a service business, helping the company expand revenue sources beyond its traditional application sales.

As the Redmond, Wash.-based company has done in the past when it starts planning for an operating system upgrade, Microsoft has been surveying consumers about the kinds of MSN services they would like and how much they would be willing to pay.

One consumer said he was surveyed by the Harris research organization recently on possible new MSN services including premium e-mail, virus protection, technical support and music subscriptions.

"They wanted to know what the services were worth to you, what your upper limit would be and what your lower limit would be, and how likely you were to use the services at those prices," said the consumer, who spoke on condition of anonymity.

The Windows enthusiast Web site ActiveWin on Monday published a list of possible new MSN services, provided from anonymous sources.

The lineup of services
According to ActiveWin, these potential services include the following:

• E-mail Plus, an e-mail consolidation, filtering and encryption service

• Buddies Plus, an instant messaging enhancement that would allow people to share music or files while online

• Phone Plus, a service similar to America Online's AOL By Phone that would allow people to have their e-mail read over the phone or have their voice mail read through their e-mail accounts over their computer speakers

• Music Plus, a service allowing people to create their own music channels and listen to four hours of online music per month

• Calendar Plus, an e-mail event notification and invitation service

• Download Manager, a software download service that would help people avoid interruptions in Internet service by scheduling downloads for off hours

Microsoft is contemplating making a number of these services free for those who subscribe to the company's MSN Internet service, said a source who asked not to be identified.

For those who do not use MSN as their Internet provider, Microsoft is considering making these services available for a monthly subscription service charge, the source said.

Microsoft executives declined to comment on the authenticity of the list of possible MSN services published by ActiveWin.

"It's no surprise that Microsoft is constantly evaluating different services and ways of delivering them," said MSN Lead Product Manager Bob Visse. "We're always in beta (with MSN) and always have new things we're working on."

Visse confirmed that Microsoft continuously surveys consumers on the types of products and services they would be interested in purchasing.

"We're doing what consumers want and expect," Visse said. "We are looking at things people do on a daily basis and are advancing them with technology."

New versions of Explorer, Messenger
Microsoft is expected to ship a new version of its MSN Explorer some time this year. Sources have said that Microsoft is working to deliver a new version of its MSN Messenger instant messaging client as early as this spring. On Tuesday, MSN competitor AOL announced plans to better cross-promote its Netscape subsidiary's technologies in the form of a new, Netscape-branded toolbar.

Microsoft also continues to update the various consumer services, such as financial, shopping, e-mail and the like, that are available via the MSN.com Web site.

Last month, Microsoft President Rick Belluzzo told financial analysts that the company is forging ahead with MSN services and will figure out the best business model in the process.

"We're not going to sit and analyze forever what the consumer is willing to pay," Belluzzo said. "We're going to put together some rich set of services, mostly built around communications, and we have a lot of innovative work going on in that area, and we're going to work to sell a package of that as a subscription. That package of capabilities can be available from a knowledge worker perspective, a consumer perspective, a small-business perspective, and we're just going to start testing that down that path.

"When we're all done, we believe there will be some ad-funded activities, there will be some subscription based, and we'll build a series of business models that will add up around that," Belluzzo added.