MSN site could charge surfers

Charges could provide an alternative to advertising revenue for MSN

Microsoft confirmed today that it is considering charging users for "premium services" provided through its UK Internet portal MSN, the most visited site in the UK.

The company issued a statement saying that existing facilities, including the company's popular free email service Hotmail, will not be subject to charges, but said it is actively considering charging customers for enhanced versions of existing services or for new facilities.

These include broadcasting live music through the MSN Web site and providing enhanced games through MSN Gaming. MSN said these services are likely to launch next year.

"MSN is at an early stage of looking at charging for premium sevices on MSN UK," said a company sokeswoman. The spokeswoman could not confirm press reports suggesting that it might charge users up to £60 a year for access.

The decision underscores concerns over the viability of Internet advertising as a means of generating revenue for Web portals. Microsoft said it has doubts about the long-term viability of free Internet portals, but added that it does not intend to abandon Web advertising altogether.

"We remain committed to generating revenue from our existing advertising model, in the UK [this is] revenue from advertising, from sponsorship and content distribution," said the spokeswoman.

However, a survey carried out recently by consulting firm Booz Allen & Hamilton, indicates that banner ads on Internet portals have little impact on surfers.

MSN is the most popular Web portal in the UK, with 14 million visits per month, according to its own data. It receives 200 million visits every month worldwide, but is thought to be unable to transform those clicks into dollars through mere advertising and sponsorship deals.

Subscription-only sites have met with few successes. Yahoo! announced recently that its auctions listings have suffered since January, when the service ceased to be free-of-charge.

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