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Microsoft on Wednesday released an update to its MSN 8 Internet access software, adding new spam-filtering features and enhanced parental controls.

The software uses an improved spam-filtering algorithm to block unsolicited e-mail, and the company said that MSN 8 can protect innocent eyes from offensive material by preventing images from being loaded unless the sender is on the user's contact list. Users can manually view these images at their discretion, and the incoming messages are blocked until the program has scanned the e-mail for viruses, according to Microsoft's release announcement.

Users will also be to manage the size of their in-boxes more easily because MSN 8 includes a storage meter that indicates the size of each message and how much space remains in the account, Microsoft said.

Since kids today tend to be more computer literate than their parents, Microsoft MSN 8's parental controls are easier to set up and customize, and come with a fly-out menu that's accessible from the Help button, the company said. Parents can approve or disapprove any name their children add to their contact list, and the program stores e-mail messages to children until the sender is authorized.

Tough Competition

One analyst says that the changes to MSN 8 won't help Microsoft gain market share against the current king of the ISP market: America Online.

"It's definitely not going to help them get any new Internet subscribers," said Steve Harris, research manager for ISP markets at market research company IDC. "They're so far behind AOL, there's no way they can catch up."

MSN closed 2002 with 8.73 million subscribers in the United States compared to AOL with 26.42 million subscribers, according to IDC's statistics from the fourth quarter of that year.

Change of Plans?

Given that Microsoft's new strategy is to deemphasize Internet access, Harris said, the company won't come near to reaching AOL's subscriber levels. In fact, he expects Microsoft to back out of the access business entirely within the next couple of years. Competing in the ISP market was very expensive for Microsoft, Harris said.

The company's new strategy is to offer its Internet service and software to all buyers, regardless of how they get access to the Internet, he said. "They're kind of exiting in a proactive way."

Complicating Microsoft's efforts in the Internet services business is last week's announcement that the company and AOL Time Warner settled a private antitrust suit filed on behalf of Netscape Communications by AOL in January 2002.

As part of the deal, Microsoft must pay $750 million and give AOLTW's America Online Internet division a royalty-free, seven-year license to use Internet Explorer with AOL's client software. The industry giants also announced that they would work together on long-term initiatives for digital media and new business models for content owners.

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