Can MSN Steal AOL's Thunder?

Microsoft kicked off what will be a $300 million marketing blitz for its new MSN 8 Internet access software Monday, one day before rival America Online is set to launch the 8.0 version of its software in what has become an Internet service provider showdown.

Although Microsoft's media campaign won't officially begin until it launches MSN 8 on October 24, the software giant plans to rain marketing money on AOL's parade with an MSN 8 event in Superior, Wisconsin, Monday to show off its "superiority," while simultaneously unveiling a massive billboard in New York City's Times Square.

The media bonanza, which includes online, print, broadcast, and radio ads and runs until mid-2003, is a sign of just how serious Microsoft is about gaining traction as an ISP. In fact, the campaign doubles the amount of money Microsoft spent when it launched MSN 7 last October, according to MSN Product Manager Parul Shah.

Making Major Updates

The hefty investment is meant to show off what Microsoft believes is a major update to its service.

"We've made some significant headway with this product," said Shah, who mentioned that the company did extensive consumer research and even took anthropologists into consumers' homes.

The campaign also has another specific goal--to get users to switch ISPs.

The Redmond, Washington, company disclosed its latest membership figures for MSN Monday, claiming 9 million subscriptions, up from the 8.7 million it reported in July. While reflecting steady growth, the MSN numbers pale compared to AOL's more than 35 million subscribers.

Microsoft hopes to change all that, however, with the "It's Better With the Butterfly" campaign, which banks on the service's butterfly logo.

The campaign aims to demonstrate how MSN 8 solves common user complaints about their ISP, offering less spam, more effective parental controls, and better browsing, the company said.

"The primary difference between updates from AOL on their products is that the changes they make are fairly cosmetic and superficial, but with MSN they are significant advances that actually make the products more useful," Shah said.

Stand-Alone Service

Adding to the rivalry between the two ISPs, MSN is also launching a stand-alone version of its service with the rollout of MSN 8, Shah said, that is cheaper than AOL's offering.

MSN's stand-alone product, which offers MSN content services but no Internet access, will be priced at $9.95 a month, compared to AOL's stand-alone service, which is $14.95 a month.

The official unveiling of MSN 8 will take place in New York City's Central Park, which will feature a live performance by rocker Lenny Kravitz. AOL 8.0's official launch is set for Tuesday, meanwhile, when the company will stage its own ritzy New York City event Tuesday.