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French Version

MSN, AOL & Yahoo fight it out

The messenger software wars continue, coupled with other Internet tools, with Microsoft recently announcing plans for MSN version 8.

There's more to MSN than just the messenger, which is an integral part but not the only one. There's an email application, a browser and more.

Currently, according to the declared figures, MSN has 7 million users. Some reports claim that number even reaches 9 million. Both are impressive figures, but substantially less than AOL.

AOL is the leader in the messenger market with a whopping 35 million users. So, it's obvious whom Microsoft is targeting with its new version.

Additionally, Microsoft understands that its service is more popular in emerging markets, like our region, where AOL users are few compared to MSN and Yahoo. The extent of Microsoft commitment to challenge competitors both in the United States and in international markets is clear when you consider the amount of money Microsoft is putting behind it bid to grow MSN's user base.

Over the years, Microsoft has spent billions of dollars developing and marketing MSN. A report in a business magazine claims that Microsoft spent $500 million creating the new version and plans to spend $300 million on an advertising campaign for it.

The product itself is looking good. The new redesign of MSN will launch just nine days after America Online rolls out AOL 8.0- on Tuesday 23 October. Why is Microsoft doing all this? The company believes that the messenger market is going to be very big business in the years ahead.

A spokesman from Microsoft went as far as saying that it could be "a business the size of Windows or the size of Office in the future." According to Microsoft, "it's something that consumers will come to rely on in their everyday lifestyle."

The newest version of MSN focuses on improving filtering of spam and develops its e-mail program, one of Microsoft's advantages over AOL. However, it's important to note that MSN, now 7 years old, is yet to make a profit.

As for AOL, they seem optimistic that users will take to the redesigned AOL 8.0. They say that this version delivers the best value yet with features, functionality and experiences that "connect people with the other people in their lives." They believe the new version is AOL biggest step forward so far. AOL's new version lets users include more customization such as parental controls that allow adult supervision of children on the Internet. It also has greatly enhanced its e-mail program.

Customer retention is the name of the game, as studies show that users may try a couple of services before deciding to stick with one.

A June report by Forrester Research, found that MSN retained 43 percent of its subscribers from 2000 to 2001, while 79 percent of AOL's members were retained.

Although these two biggest competitors seem to be grabbing all the attention with their product announcements, Yahoo is working on a strategy in the US market to provide high-speed Internet access with EarthLink and in partnership with SBC Communications for Yahoo Messenger users.

The 'connectivity' aspect that is an added competitive benefit for users in the United States is also part of the war between MSN and AOL.

MSN subscribers will pay monthly fees of $9.95 for a "bring your own access" plan connecting through an ISP of their choice, $21.95 for a dial-up connection; and between $39.95 and $49.95 for broadband connections, depending on the users' location.

AOL will charge monthly fees of $14.95 for "bring your own access," $23.90 for the dial-up service and $54.95 for broadband.How this affects us in the Middle East, as we simply utilize the software regardless of the ISP, remains to be seen.

Amman 27-10-2002
Zeid Nasser
The Star

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