MSN mixes advertisers with blogs

New versions of Microsoft's IM and blogging services offer beefed-up community, video, search and advertising features.

Microsoft on Wednesday unveiled new versions of its instant messaging and blogging services with beefed-up community, video, search and advertising features.

In partnership with Logitech, MSN Messenger now offers full-screen videoconferencing capabilities with new technology that promises to establish connections between two people more easily, including across firewalls. MSN Messenger users can now share in the IM window search results from Microsoft's proprietary search technology. And subscribers can send wireless SMS (short message service) messages to any cell phone user, even those who don't use MSN Messenger.

Microsoft also announced improved quality for MSN Messenger's existing PC-to-PC voice feature. The software lets people make calls from their computer to standard phones as well, but it uses third-party technology that costs a few cents a minute.

On top of features for consumers, the Redmond, Wash., software titan has added advertising tools for both MSN Messenger and MSN Spaces. Here, Microsoft hopes to tap into the blogging community, to create marketing vehicles for customers such as Volvo, its first guinea pig.

"This is the beginning of the inevitable monetization of social networking tools," Forrester analyst Charlene Li said. "Microsoft is putting more interactivity in its ads. They are saying to users, 'Come and tell us about your Volvo and how much you like it.'"

Social networking and blogging share many characteristics of earlier self-publishing tools, which failed to evolve much past the vanity-publishing stage. Still, online media executives have concluded they are sufficiently different from past community publishing experiments to warrant their current status as the new, new thing.

Turning unruly mobs into well-behaved marketing tools could be a hard trick to pull off, given the Internet's notoriously flame-prone culture. Microsoft has already faced a mini rebellion among the ranks over its language-monitoring tools.

Still, the numbers seem to provide at least some evidence that Microsoft may be onto something. Since it launched MSN Spaces in December, it has signed up some 4.5 million members, according to Blake Irving, vice president in MSN's Communication Services and Member Platform group, mostly from its popular MSN Messenger service. A key draw to date, he said, has been photo sharing.

Microsoft isn't alone. Rival Yahoo last week launched a test version of Yahoo 360, a service billed as a way to stay in touch with people who matter and to easily share artifacts from photos to music to schedules. In a similar vein, Yahoo acquired photo-sharing site Flickr last week.

"Similar things have been around for a while, but it's often the little nuances that make the difference" between success and failure in technology, Irving said. "We've added some things that may seem like a nuance, but may be what it takes to reach a tipping point."