Microsoft, Verizon team on MSN services

Under their multimillion-dollar deal, the companies said the service, dubbed "VZW with MSN," will offer people who have Web-enabled digital phones through Verizon Wireless use of services including MSN Messenger, an instant chat program that the companies say will be available for the first time in the United States as a mobile service. Subscribers to the co-branded service also will have access to Hotmail, Microsoft .Net alerts, a calendar and information such as news, stocks, sports and weather.

The announcement is one of several recent deals made by Web portals to move their services beyond the PC. Microsoft, America Online and Yahoo have all struck partnerships to put their e-mail, messaging services and content on wireless and handheld devices.

Microsoft's Verizon Wireless deal comes as the software giant unveils a $10 million marketing campaign for MSN.

Despite carrier efforts to sell services such as e-mail or Net access, U.S. wireless customers are reluctant to do more than make calls on their cell phones. Last year, there were about 350 million wireless e-mails exchanged between cell phones in the United States. In Europe, there are 30 billion wireless messages exchanged a month.

"I don't think it's at all proven that MSN knows what wireless subscribers want any more than Verizon Wireless executives know what their customers want," said Joe Laszlo, a wireless analyst with research firm Jupiter Media Metrix. "There's no evidence that just having a brand like MSN is enough to make it successful."

Verizon Wireless spokesman Jim Gerace said the deal is a sign of a "deepening relationship" between the two companies. Verizon Wireless was the first in the United States to sell the Thera, a Windows-powered Pocket PC device that costs $800.

An MSN representative says that the Verizon partnership is yet another attempt to expand the Web service's paying audience. This week, Microsoft launched a new campaign to capture AOL subscribers, offering to automatically transfer all information from a subscriber's AOL mailbox, address book and calendar services into MSN Internet Access.

The Verizon Wireless agreement "is another subscription service that we'll be offering--but in the mobile environment," said Lisa Gurry, product manager for MSN. "This relationship provides a great opportunity for consumers, and it also provides a new business revenue opportunity for MSN."

MSN said the wireless service, which is expected to launch Friday, would start at $6.95 per month. The company said it would be the default service for new Verizon Wireless customers who subscribe to Web access. Verizon and Microsoft added that they plan to collaborate on future next-generation services and devices.

Still, Alan Reiter, president of research firm Wireless Internet and Mobile Computing, says the deal isn't earth-shattering.

"They are turning over ground that others have plowed before," he said.

For example, he said, Verizon Wireless and Sprint PCS subscribers already can use MSN Messenger services, although those versions don't let people know if their buddies are online. The MSN Messenger offered through "VZW With MSN" will have that feature, Gerace said.

Ben Charny contributed to this report.