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Outage brings a Net giant to its knees

The embarrassing outage that prohibited access to Microsoft's major Web properties comes at a high point in the company's checkered history on the Net.

The embarrassing outage that prohibited access to Microsoft's major Web properties Tuesday and Wednesday comes at a high point in the company's checkered history on the Net.

According to recent reports, traffic is up, advertising dollars are flowing despite a souring market, its instant messaging service is rapidly adding users, and the number of subscribers to its Internet access service has exceeded expectations.

Microsoft's Internet strategy has been marked by a series of hits and misses. But persistence and deep pockets are finally paying off.

"There was a time when MSN was seen as a tech-enthusiast, early-adopter portal, and that's changed," said Patrick Keane, an analyst at Jupiter Research, a division of Jupiter Media Metrix. "They're becoming more of a mass market property."

The numbers back it up. AdRelevance, the online ad measurement division of Jupiter Media Metrix, released a study this week showing MSN as the online advertising leader in December. The study said MSN booked $180 million in ad sales, topping Yahoo's $118 million and's $56 million.

The outage is likely to have "minimal" impact as long as Microsoft is able to deliver the number of impressions it promised to advertisers when the sites are back online, said Rudy Grahn, an online advertising analyst for Jupiter Media.

But he did note that some seasonal retailers could be disproportionately affected, such as those selling jewelry or flowers for Valentine's Day. "They need this time of year and they need impressions in this (time) window," Grahn said.

Meanwhile, cumulative traffic onto its Web sites, including MSN, Hotmail, Expedia, and, has also attracted the most unique visitors around the world, according to Jupiter Media Metrix figures from October, 2000. Microsoft sites collectively attracted 91 million unique visitors worldwide. Yahoo came in second with 88 million, while America Online attracted 85 million.

Within the United States, Microsoft's network of Web properties rank as the third most-visited destination on the Internet. According to Jupiter Media Metrix, Microsoft Web sites drew 54 million unique visitors in December, trailing America Online's 61 million and Yahoo's 55 million.

Microsoft's long beleaguered ISP also has begun to gain traction after a rough start. MSN online initially made its proprietary content and services such as Expedia and CarPoint accessible only to customers of its ISP, similar to AOL's model. Microsoft later made the content freely available to all Web surfers.

Last quarter, Microsoft added 500,000 new subscribers to its ISP, according to Jupiter Research's Keane. MSN Internet access, as the ISP is called, had lingered at around 2 million subscribers for years. Now the company says that it has more than 4 million subscribers.