MSN on the ropes? Not likely - Microsoft

According to Microsoft, MSN's loss of nearly 20 percent from its subscriber base was widely anticipated and the remaining 125,000 users are in fact the service's "core user group".

Gillian Kent, MSN's group marketing manager explained that with the advent of free services such as Freeserve, company executives had expected to lose customers. Asked whether those executives thought a loss of as much as 20 percent was expected, Kent replied: "We expected a big hit. We've had that big hit."

Microsoft believes, according to Kent, that users are experimenting with the free services and other paid for online services, "particularly AOL," have been "severely hit" but that the situation is settling down.

Kent dismissed claims that the service would be sold or be allowed to dissolve. She also disputed comments suggesting MSN had little to differentiate it from free Internet services advising users to look at the stability of the MSN service. Asked if Microsoft was looking to move MSN to a free model, Kent chose not to answer the question.

Adam Daum, senior analyst at Inteco reckons Kent's view is "slightly optimistic" and predicts another 10 percent loss. Daum, who is an MSN user, says Microsoft could do well with MSN, which he praised for its reliability, if it went free and was marketed aggressively.

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