Microsoft Plots Ambitious Growth for MSN

CobraBoy (
Sat, 12 Oct 1996 17:14:51 -0700

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October 11, 1996 [Image]

Microsoft Plots Ambitious Growth for MSN


[R] EDMOND, Wash., -- The Microsoft Corporation, citing
a "fundamental and profound shift" in its on-line
strategy, is planning an aggressive push to develop new
information and entertainment programming for its
growing on-line information service, Microsoft Network.

The company said that its content-development strategy
for MSN was designed not so much to seduce customers
away from competing online services, like America Online
and CompuServe, but to attract consumers who have not
yet joined the rush to cyberspace.
yet joined the rush to cyberspace.

-----------------------------Likening its strategy to
Forty new multimedia the Hollywood movie
features and services to studios of the 1930's and
launch a Golden Age for the 1940's, and the early
online service. years of television in the
-----------------------------1950's, Microsoft, the
world's largest personal
computer software company, disclosed Thursday that it
now has some 40 new multimedia features and services in
development for MSN.

While Microsoft has extensive experience in creating
entertainment and technical software for personal
computers, the new Internet business ventures signal the
company's broad forays into the local, national and
global media business -- with a goal of eventually
reaping the sort of advertising revenues associated with
radio, broadcast and cable television, and magazines and

With its new emphasis on entertainment and
communications, Microsoft also hopes to attract millions
of consumers who, unlike early users of on-line
services, do not necessarily care about the Internet or

The new products, which will begin appearing on MSN in
November, are the computer-based equivalents of
television shows and specialty magazines, including
news, weather and sports programs, interactive games,
the Internet equivalents of television comedies and
dramas, and a variety of special-interest programs
ranging from adventure travel to personal fitness to

Laura Jennings, vice president of MSN, said that
Microsoft had just hired its first Internet advertising
sales force, with offices here and in New York City. She
said, however, that she did not expect MSN to be
profitable for at least three years.
profitable for at least three years.

-----------------------------Inaugurated in August
Microsoft will spend $100 1995, MSN now has nearly 2
million on advertising and million subscribers and
promotion for MSN. has become the world's
-----------------------------third-largest online
information service,
trailing only America Online and CompuServe.

Microsoft officials said the company would spend $100
million in the next year to promote MSN, including, for
the first time, television advertising and direct mail
marketing. The service's rapid growth so far has come
almost entirely in the slipstream of the success of
Windows 95, Microsoft's flagship operating system used
in an estimated 85 percent of all new personal

While America Online has relied heavily on direct mail
to bombard consumers with computer diskettes containing
the service's software, Microsoft has begun sending out
what will eventually be millions of shiny, high-capacity
CD-ROM disks containing MSN multimedia software.

Some 100,000 current MSN customers have already received
the new CD-ROM disks, and Microsoft said it planned to
try to convert all other customers to the new software
in the next year.

Microsoft said the goal of the aggressive marketing
campaign was not to steal customers away from America
Online, the current market leader, but rather to attract
new users from among the 21 million households in the
United States with personal computers and modems. Only
about half of those households currently subscribe to
one or more online services.

To woo new users, Microsoft said today that it would
offer a variety of options for connecting to the
Internet and to MSN. All new users will be offered free,
unlimited access for the first month. After the initial
month, the entry-level pricing plan will be $6.95 a
month for five hours of access, with additional hours
costing $2.50 each. Another option is unlimited Internet
and MSN access for $19.95 a month. High-speed digital
access over ISDN phone lines, which will greatly improve
the performance of MSN's extensive use of video,
graphics and sound, will be offered for $49.95 a month.

People who gain access to the Internet through service
providers other than MSN can gain access to the new
programming on MSN for $6.95 a month.

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