Under the deal, Microsoft will provide Charter subscribers with access to streaming media, games and other services through a customized version of MSN Explorer. The cable-TV operator is controlled by Microsoft co-founder Paul Allen, who quit running the software giant's day-to-day operations in the early 1980s.
The joint service, expected to begin in October, will initially feature a co-branded home page. Early next year the companies plan to expand to include other services, such as Windows Media Player, MSN music, Hotmail and MSN Messenger.
The announcement signals Microsoft's latest move to expand its reach by delivering content to people with broadband access. In April, the software giant agreed to a five-year pact with Qwest Communications to offer MSN content and services to customers of the telecommunications provider. The companies expect to generate about $1.5 billion in revenue from the deal.
Analysts say they expect broadband to become increasingly popular. But to spur mainstream adoption, they say companies must show consumers benefits that cannot be obtained through an ordinary dial-up connection.
"What's MSN really doing to beef up its offering to add broadband bells and whistles and features that really differentiate it from the dial-up MSN experience that anybody can get over the Web today?" asked Joe Laszlo, an analyst for research company Jupiter Media Metrix. "Speed alone isn't enough--there does need to be some added value on top of just high-speed Internet access."
Microsoft said it is betting broadband access will change people's Web experience. With its customized version of MSN Explorer, the company hopes to provide people with easy and convenient access to streamed content.
"Like any new technology, there are barriers to entry," said Lisa Gurry, product manager for MSN. "But we think broadband still holds great promise for consumers in that by providing exciting content that's optimized for broadband, customers will see how much more exciting their Internet experience can be if they have broadband service."
The new design leaves screen space for St. Louis-based Charter's content and for links to its programming partners and other products, such as interactive TV services.
In June, Charter inked a deal to let subscribers in Forth Worth, Texas, and St. Louis use video on demand services from Diva. Subscribers can watch, pause and rewind hundreds of programs--including children's shows and ESPN events--whenever they want to through a special set-top box.