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MSN upgrade seen as incremental

Compared to its prime competitor, America Online, Microsoft is being rather low-key about its software upgrade for the Microsoft Network.

    Microsoft Network announced an software upgrade in its service today.

    Compared to its prime competitor, America Online (AOL), which has been rolling out the digital equivalent of a virtual marching band for its next service upgrade (AOL 4.0, code-named Casablanca), Microsoft (MSFT) is being rather low-key about this upgrade.

    In fact, the company doesn't really have a name for the upgrade, which simply is being referred to as MSN 2.5.

    While the upgrade won't necessarily bring any new members to MSN, it can help prevent current members from jumping ship, according to Peter Krasilovsky, an online analyst who covers MSN for Arlen Communications.

    "What we're seeing is incremental improvement from the Microsoft Network, which will make it more functional and ultimately more attractive," he said. "It's a reason to stay on MSN, but it's not a reason to join MSN."

    With 2.5, MSN will be upgrading its troubled email system by adding new back-end servers and an enhanced email client. The new system provides MIME support, which allows members of MSN to exchange file attachments with other online services and email systems.

    MSN has been plagued by email problems ever since it launched and the upgrade is badly needed. "Email's been a thorn in Microsoft's side," Krasilovsky added.

    The new version also is touted as easy to install with features that are standard on other services, such as the ability to send instant messages and locate members online. "I think this puts Microsoft on more of a level playing field with AOL," Krasilovsky said.

    The upgrade also offers another feature that marks Microsoft's shift in strategy away from pure entertainment and toward practical content: Quick View gives members an instant site map of MSN, allowing them to go right to designated areas.

    The menu can remain on the desktop while the member is offline and then can instantly jump to the area, rather than having to navigate through MSN's sometimes cumbersome and clunky system. This will allow people instant access to "free" areas where they can make purchases, such as CarPoint.

    "Microsoft is intent on building a band that will be extremely credible several years out for the coming era of online commerce," Krasilovsky said. "That's why they're spending so much on MSN now. They just want to make sure it works well. They're anxious to put a lot of the content on the free area and build a loyal base of eyeballs."