AOL and MSN go head-to-head for post-PC internet access

MSN is spending $1bn on worldwide marketing to take on AOL in the first battle of the war to dominate internet appliances in the 'life after PCs' era.

The first phase of the battle is likely to fill UK screens over the holiday period as MSN spends $20m of its $150m advertising budget here. The rest of the $1bn will be absorbed by marketing, promotions and rebates. AOL yesterday released the latest version of its software, which includes a feature to allow users to access online information by phone. Microsoft will be relying on new and revamped features to take on AOL, which will be the content king when its merger with Time-Warner goes through. However, in the UK, MSN has been the most popular site for the last three to four months, although AOL tops the list for time spent online according to figures from media monitor MMXI Europe. Matt Hanrahan, analyst at Bloor Research, said: "My first reaction is, 'where's the content?' Anyone taking on AOL will be struggling against a lot of momentum. "But, in the next phase, with consoles - AOL's digital dashboard, Xbox, etc - the move to appliances will show a battle between services and content that will determine how the net and market will swing." MSN has revamped its applications, which bundle in with IE, and strengthened its search engine to make it easier to use. According to Dominick Addison of MMXI, MSN has the stronger brand recognition throughout Europe. Much of MSN's success was achieved when it managed to get its software loaded on almost all new personal PCs. The company boasts that this provides 210 million unique customers hitting its site.