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Tech nemeses America Online and Microsoft butt heads again this week by announcing dueling updates to their online services, AOL 8 and MSN 8.

Both companies have teased customers by dropping hints and giving previews of the new versions. AOL 8, featuring more personalization, including parental controls and extras specific to both dial-up and broadband customers, is available for download by AOL members this week. MSN 8, offering new mail tools and parental controls, is scheduled to be available for download on October 24.

A first look at both programs indicates AOL still has the edge on MSN in a features race. But MSN 8 has vastly improved its online service over the past year, beefing up parental controls, enhancing access to premium content like Encarta online, and developing its e-mail client.

Money Matters

Monthly Internet access through MSN is still cheaper than AOL. MSN charges $22 for unlimited dial-up access, compared with AOL's $24 monthly fee. Both offer broadband options that vary in price by market.

But MSN is making a pricing change, dropping the free download of its MSN Explorer software. This is an MSN client browser, different from the Internet Explorer browser bundled with Windows. This browser lets users access a free MSN e-mail account, MSN Calendar, or online photo-editing tools, and use their MSN screen names to get e-mail or send instant messages. Microsoft is charging $10 monthly for a bring-your-own ISP plan that gives you access to its MSN software and proprietary services. AOL's bring-your-own-access fee is $15.

A Look at AOL 8

Blocking spam and smut, and finding good chats, gets easier with AOL 8. The service also features a much improved junk e-mail filter and beefed up parental controls designed to keep kids from viewing objectionable Web sites and chatting with strangers.

Personalization takes center stage with AOL 8, starting with options that let you customize your AOL desktop, emoticons, and the sounds your buddy list makes. An interesting feature called "Match Chat" can be configured to alert you via pop-up messages if, for example, an astronomy buff would like to know if discussion about Neptune launches in an AOL chat room.

While AOL courts the high-speed crowd with enhanced broadband content like its music program Sessions@AOL, it doesn't neglect its largest customer base: dial-up modem users.

An auto-reconnect feature will be popular with AOL dial-up users who sometimes get bounced offline. It saves chat prattle you might have missed while you were reconnecting.

Also aimed at dial-up users is a $4 monthly premium service called Call Alert. It notifies users who have a single phone line when a telephone call comes through while they're logged into AOL. Callers hear one of a number of canned greetings, like "We're online right now, please leave a message." A pop-up message will let the computer user know who is calling based on Caller ID information, and voice mail can be retrieved through your AOL in-box.

You've Got More Work

AOL 8 still has lots of room for improvement, especially with its e-mail client. Despite antispam advances, it still needs work when it comes to viewing and sorting messages. I didn't much care for a new tiny AOL 8 Companion that sits idly on your desktop offering copious shortcuts to AOL services.

But an ongoing AOL disappointment is its restriction on use of AOL screen names. AOL supports up to seven screen names per account, but only one of those seven can be logged on at a time. That's no help for multi-PC families with kids who want to access their AOL accounts simultaneously on separate computers.

AOL is partially addressing this concern with the pending announcement this week of an AOL Broadband service option that company representatives call "home networking friendly." Through it, all screen names associated with a single account can connect to AOL simultaneously over a home network. But the service is limited to AOL Broadband customers paying upwards of $55 monthly.

The situation is similar with MSN's service, which allows nine screen names per account. Access is limited to one at a time on dial-up, but Microsoft says all can access MSN 8 services simultaneously over various high-speed connections.

MSN Nips at AOL

The revamped MSN serves up a selection of snappy new communication tools. Among the best features is MSN Mail, sporting advanced antispam controls and functions that mimic Microsoft's adroit Outlook Express. In MSN 8, MSN Mail offers offline access to your e-mail account, plus preview panes so you can flip through messages with ease.

Other MSN 8 highlights include its first parental control tools, which apply even to MSN Messenger. The service adds photo-editing software from Microsoft Picture It, and has a souped-up IE browser with ample links to MSN premium content such as MSN Money and Encarta Online.

Microsoft has dumbed-down the MSN browser client by fusing big MSN icons into the browser interface and making it tough or impossible to change some aspects of the interface, like your home page and icons. Microsoft has also bundled a download manager and a co-browsing service for sharing browsing sessions with other MSN 8 users at the same time. These features by themselves are cool, but have been available on the Web as third-party applications for some time.

With 8.7 million MSN users to AOL's 35 million user base, according to figures from Jupiter Research, Microsoft is in the unaccustomed position of playing David to AOL's Goliath. But MSN 8 is Microsoft's most competitive threat to AOL yet. And Microsoft also claims it recently hit the 9 million subscriber mark.

Microsoft's advantage, as always, is its marketing muscle. The company is unleashing it on AOL with this release, launching a $300 million marketing campaign beginning with MSN 8's introduction this month.

Race Continues

America Online is the more mature online service, and AOL 8 bolsters that role. The service knows its customer base better than does MSN, and its latest version demonstrates that. For example, AOL 8's Match Chat and continued focus on advanced features for dial-up customers help keep AOL several steps ahead of MSN in the race to bring innovative and relevant content and services to customers.

Microsoft's challenge is still that too many MSN features are free at MSN.com to make for compelling reasons to switch. However, MSN 8 will undoubtedly appeal to AOL defectors who hunger for less AOL and more of a pure Internet experience with limited hand-holding.

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