October 24, 2002, 1:39 PM — Software sultan Bill Gates, rocker Lenny Kravitz, and a host of "surprise guests" are just part of the retinue set to be on hand when Microsoft Corp. officially launches MSN 8 at a raucous bash in New York City's Central Park Thursday afternoon.
With all the hubbub surrounding the release of the company's latest Internet access software, it's becoming apparent that this is no average product launch. Not only has Microsoft orchestrated a glitzy debut for MSN 8, the company has also set aside US$300 million to market the new software, with an upcoming tsunami of online, print, TV and direct mail marketing.
Microsoft's goal: Market domination.
"Microsoft looks like they want to be really aggressive, especially since they see a lot of opportunity in broadband," said Paul Kim, an analyst with Kaufman Bros. LP.
Indeed, MSN 8 appears to have a two-pronged approach -- to take a bite out of America Online Inc.'s (AOL) market leadership and to ramp up the service with an eye on new subscription opportunities.
In an effort to catch up to, and outpace rival AOL, MSN 8 boasts broad parental controls and new security features, such as antivirus protection. While AOL has long had parental controls, MSN claims its offerings are more comprehensive, putting the focus on security.
What's more, the latest version of MSN offers a 'bring your own access" subscription service, offering users of other Internet service providers (ISPs) the ability to access MSN content and services for $9.95 a month, five dollars less than AOL's stand-alone service.
The software giant is also hoping to use "bring your own access" to capture more of the international market, where vying with other established ISPs can be a daunting task.
The company is looking to justify the added cost of paying for both an ISP and MSN by offering enhanced security, and features such as photo-editing capabilities and sophisticated personal finance tools.
Microsoft is also betting on broadband, adding new features optimized for high-speed service and enhanced support for broadband home networking.
The ISP game is clearly one that Microsoft does not want to lose, and the launch of MSN 8 comes at an advantageous time, when AOL is off-balance. Not only is it suffering from revenue losses, facing financial probes, and being reorganized under new leadership, the Dulles, Virginia, ISP has also been put in the notice by its parent company AOL Time Warner Inc. to shape up, or be sidelined.
The release of MSN 8, then, is a clear shot at AOL, which released the 8.0 version of its software last week.
With the battle unfolding, Microsoft Chairman and Chief Software Architect Gates will likely reveal more of his strategy when he takes the stage this afternoon. With rock stars, special guests and potential business partners in the wings, one can only brace for the show.