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MSN and Windows Live Assessment is Mixed

According to the latest Current Analysis assessment, they are taking a slightly negative stance on MSN and Windows Live -- because while the ISP and Internet content provider benefits vastly from their being part of Microsoft, they are also beholden to it.

The Online Services Business division is tied to Microsoft Windows-based operating systems and applications. In the past, consumers left MSN's dial-up services in large numbers because of its high price, outages and periods of poor customer service.

While MSN has addressed these issues, its dial-up business is now dropping due to competitor broadband offerings, with telcos offering DSL in some cases below $20 a month. The Verizon/MSN relationship has been strained since Verizon made Yahoo! its primary broadband services option.

Yahoo! has now locked up the top two major U.S. domestic DSL service providers (AT&T and Verizon) to utilize its content and features. MSN showed up late to the search engine party in 2005, as Google and Yahoo! have captured a majority of market share and potential advertising revenues.

MSN initially grew its subscriber base by drawing on a blank check from Microsoft, outspending the competition to win over customers. MSN now has other tools it can use to generate revenue and increase advertising revenues. Microsoft is rolling out a new generation of online search and communications tools through its new line of services developed under its 'Windows Live' brand.

The MSN search engine is a way to drive advertising revenue and keep eyeballs on MSN Web pages instead of migrating to Yahoo! and Google for search tools. The Web portal itself is also a valuable advertising tool -- not just to generate revenue but also to promote the software giant's Microsoft Windows operating systems and applications.

Current Analysis lists a variety of 'weaknesses' that it believes Microsoft must address, but I won't revisit those points. Instead -- as a beta participant for Microsoft's Windows Live, Office Live and 'Soapbox' video sharing platform -- while I agree that their ISP offering is clearly in a tailspin, their web services have an excellent upside potential. However, that said, I also believe that the Windows Live portal could be improved by enabling better integration of all these online services.

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