MSN 8 takes on AOL 8 in duel
for high-speed users

Copyright 2002 Gannett Company, Inc.
USA TODAY...10/24/2002
From LexisNexis

Byron Acohido

SEATTLE -- Microsoft Corp.'s biggest push yet to lure customers to its Internet subscription service kicks off today with Chairman Bill Gates and rocker Lenny Kravitz touting the coolness of MSN 8 in New York's Central Park.

In an attempt to trump rival America Online's $100 million campaign to promote its latest service, AOL 8, Microsoft will spend $300 million hyping MSN 8. But the real scramble is to boost broadband hookups, which cost more but speed the delivery of Internet services. About 90 percent of home Web surfers pay $20 to $25 a month for dial-up Web access.

Tech companies hope to popularize high-speed cable and DSL hookups that run $40 to $55 a month -- and introduce ways to charge fees for novel services.

"The growth isn't in dial-up. It's going to be in taking advantage of the transition to broadband," says David Card, analyst at Jupiter Media Metrix.

Broadband usage won't skyrocket overnight, experts say. One reason: Telecoms, which supply cable and DSL lines, continue to haggle with Internet service providers over how to split the take from rising broadband usage. Meanwhile, tech companies are laying the groundwork with:

• A software focus. MSN 8 is packed with software that makes it easier to manage e-mail, repel viruses and control how children use the Web. Gates said Microsoft hopes to "empower parents and children to work together to make responsible choices." But cutting-edge functions, such as plugging wireless home networks into the Web, work only with a broadband hookup.

• Multiple hookups. For the first time, AOL is providing a special home page designed specifically for broadband users, providing high-speed links to radio programs, music and movie trailers. AOL 8 also allows customers to simultaneously connect up to seven computing devices to a single broadband account.

"We absolutely believe broadband is where the opportunity will be in coming years," says Shawn Hardin, AOL's senior vice president for broadband and programming.

• New providers. Southwestern Bell and Yahoo last month launched SBC Yahoo, which makes DSL hookups available to 26 million phone customers in 13 states. Yahoo, the popular free Internet portal, is seeking other telecom partners to set up similar deals in other regions, Yahoo spokeswoman Nicki Dugan says.