MSN may let ISP business die a natural death

THE ISP ARM OF MICROSOFT might be changing tack almost completely. Once set up to be a mirror image of AOL, MSN could be getting ready to leave the ISP business according to an article in the New York Times.

In what could be the first sign that Microsoft has given up on its plans to beat AOL, the article cites an interview between IDC analysts and the director of marketing at MSN. The analysts predict that MSN will eventually pull out of the ISP game entirely but that the company has a different strategy in mind.

The new plan is for MSN to become a software and services company, a model that Microsoft is definitely familiar with. Rather than running its own ISP company, MSN will work with telecomms companies to package a branded broadband service. MSN has already been doing this with companies like Qwest and Verizon. It's not alone in that market either, Yahoo! has been making inroads using that strategy in both the US and Europe.

The analysts further predicted that MSN's dial-up subscribers would be kept on but that the service would be left to die a natural death as more people shifted to broadband.

This strategy makes good sense for Microsoft, assuming that it's right. Leaving the telecomms companies to provide the infrastructure that they are used to doing and abandoning the modem racks wouldn't be a hard decision. µ

L'INQS
New York Times article. Registration required.