MSN overhaul takes many cues from rival AOL

The software giant is fine-tuning an overhaul of its MSN Internet service that imitates numerous features from archrival America Online.

As previously reported, the company tomorrow will make available the second preview version of the service--dubbed MSN Explorer--that not only integrates all of Microsoft's online offerings under a single interface but also gives the entire World Wide Web a proprietary Microsoft feel.

A release date for a commercial version of MSN Explorer has not been announced, although a company spokeswoman said tomorrow's preview likely will be the final beta version. An initial test version of the product was announced in May.

MSN product manager Sarah Lefko admitted the conceptual debt Microsoft owes to AOL but hastened to sharpen the differences.

"We believe this not only brings us even with AOL but takes us further," she said.

Lefko also said Microsoft will begin offering broadband service through MSN via satellite and digital subscriber lines (DSL) by the end of the year.

The MSN overhaul comes as the company embarks on a new, companywide Internet strategy, called Next Generation Windows Services, which is aimed at fending off Web-based rivals, applications, and upcoming operating systems like the Linux and Palm operating systems.

Microsoft has successfully pulled pages from rivals' playbooks before, modeling its Windows operating system on Apple Computer's popular graphical user interface, for example.

In the case of MSN Explorer--previously called "Next Generation MSN"--Microsoft has gone a long way toward imitating AOL's service. Once ridiculed in technology circles for pandering to Internet newbies, AOL has become the undisputed champion of the Internet. With 23 million customers, the company offers plenty of lessons for rivals such as Microsoft, which counts about 3 million customers for its MSN service.

Lefko said MSN added 450,000 new customers in the past six months.

Microsoft has re-evaluated its Web strategy several times following failed experiments such as TV-like Internet programming in the mid-'90s and a foray into creating content through its Sidewalk city guides, which eventually were sold to Ticketmaster Online-CitySearch.

Since then, Microsoft has distanced itself from Internet content, focusing instead on pushing its software offerings online. The company has stated its disinterest in owning content, given its strategic course in the aftermath of AOL's multibillion-dollar agreement to acquire Time Warner.

The new MSN Explorer capitalizes on Microsoft's software strengths, integrating its Internet Explorer browser with access to its free Hotmail email client, its MSN Messenger instant messaging client and its Windows Media Player. The service also features hot buttons to Microsoft's many Web sites, including its personal finance channel, its eShops shopping site, and its Windows Media music and video site.

In addition, the service allows people to create personalized folders, called "My Stuff," with stock portfolios, photos and other content.

The interface acts as a kind of graphical envelope that replaces the standard IE toolbar, anchoring people to the MSN brand regardless of where they travel on the Web.

Although the new Internet software is optimized for use with MSN, other Internet access services can install and use it.