Microsoft announces upgrade to MSN 8

Microsoft on Wednesday officially released the long-anticipated MSN 8, a version of the Internet service that boasts new spam -filtering features and enhanced parental controls.

An improved spam-filtering algorithm is used to block unsolicited e-mail, and the company said MSN 8 can also protect innocent eyes from offensive material by preventing images from being loaded unless the sender is on the user's contact list. Users can manually view these images at their discretion, and until incoming e-mail are scanned for viruses these messages are blocked, Microsoft explained in its release announcement.

Users will also be to more easily manage the sizes of their inboxes because MSN 8 includes a storage meter that indicates the size of each message and how much space is left in the account, Microsoft said.

Since kids today tend to be more computer literate than the parents, Microsoft MSN 8’s parental controls come with an easier setup and customization, plus a fly-out menu accessible from the Help button, the company said. Parents can approve whom their children add to their contact list, and e-mail to children are stored until the sender is authorized.

Despite these changes to MSN 8, one analyst says this won’t help Microsoft gain market share against the current king of the U.S. ISP (Internet Service Provider) market: America Online Inc. (AOL).

"It's definitely not going to help them get any new Internet subscribers," said Steve Harris, research manager for ISP markets at market research company IDC. "They're so far behind AOL there’s no way they can catch up."

MSN closed 2002 with 8.73 million subscribers in the U.S. compared to AOL with 26.42 million subscribers, according to IDC's statistics from the fourth quarter of that year.

Harris said that given that Microsoft's new strategy is to de-emphasize Internet access they won't come near to reaching AOL's subscriber levels. In fact he expects Microsoft to back out of the access business entirely within the next couple of years. Competing in the ISP market was very expensive for Microsoft, Harris said.

The company's new strategy is to offer its Internet service and software to any buyer regardless of how they get access to the Internet, he said. "They're kind of exiting in a pro-active way."

Complicating Microsoft's efforts in the Internet services business is last week's announcement that the company and AOL Time Warner Inc. (AOLTW) settled a private antitrust suit filed on behalf of Netscape Communications Corp. by AOL in January 2002.

As part of the deal, Microsoft is to pay US$750 million and give AOLTW's America Online Internet division a royalty-free, seven-year license to use Internet Explorer with AOL's client software. The industry giants also announced they would work together on long-term initiatives for digital media and new business models for content owners.

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