Microsoft gets personal (.Net)

The company sheds more light on its plan to charge MSN and other services users.

Microsoft Corp. is forming a group to build a new paid-subscription service for consumers, and restructuring a long-running development effort that had been viewed as internal competition for the company's popular Office software.

The Redmond, Wash., company said it will build a new development team, dubbed Personal.NET, to develop a "premium" subscription service that includes elements of MSN, the company's online service. It also will offer some functions now found in consumer-software offerings such as its Encarta encylopedia program and Money, a personal-finance program, the company said.

Microsoft (msft) didn't disclose any timetable for the new effort, which will be headed by Bob Muglia, a group vice president who will head an organization with the new name of the Personal Services Group. He had been in charge of a group that was called .NET services, reflecting the company's umbrella term for its broad Internet strategy.

The company has long received the bulk of its revenue from selling software for personal computers. The .NET effort was formed last year, in part to create Internet-based services that could bring recurring revenue streams to the company.

Well before .NET, in 1997, Microsoft formed a group with the code name NetDocs, to create a Web-based subscription service that would offer some of the same functions of Office, such as word processing and a spreadsheet. The group expanded to more than 400 employees, and was widely cited as an example of the way Microsoft at times creates rival development groups.

Thursday, however, Microsoft said the NetDocs team would be shifted inside the larger Office organization, effectively ending those separate efforts. "We want to bring those things together to create a next-generation technology for our customers," a Microsoft spokesman said.

Brian MacDonald, a senior vice president who had been in charge of NetDocs, is taking a leave from the company for family reasons, the spokesman said.

In a separate move, Microsoft said Vice President Yusuf Mehdi was given responsibility for what is being called the MSN and Personal Services Businesses Group, responsible for network programming, business development and other functions associated with software services.

In an unrelated development, a Minnesota state judge ruled that a consumer antitrust suit accusing Microsoft of overcharging customers who bought the Windows operating system through middlemen can move forward as a class action.