Gates, set, go — AOL faces its biggest challenge on the Net

To try to sign up more people for its access service, which at 3.5 million subscribers still lags far behind AOL’s 25 million, Microsoft will pitch MSN in 10,000 retail stores and handing out free copies of the new MSN Explorer browser, which people can use apart from the access service. The new browser, which has been available in a test version for months, includes a colourful interface with cartoon-like icons and a built-in media player for watching video or listening to music on a computer. The announcement was made on the same day that AOL was expected to unveil its new browser, Netscape 6.0, which will try to win back ground Netscape lost to Microsoft’s Internet Explorer software in the 1990s. Along with changes aimed at making MSN’s finance, shopping and search features simpler, Microsoft’s new browser takes square aim at the area AOL has built its reputation on ease of use, Sanford said. "What AOL has done, I think, is a good job of making it easy. What we are doing is providing a whole newexperience on MSN, taking all these individual best-of-breed services and integrating them," Sanford said.

Microsoft, which analysts have said dropped the ball in its first attempts at building an online service, has seen users of the MSN portal grow to 210 million users a month. That makes it one of the top three online services, along with AOL and portal Yahoo! Inc. Sanford said MSN would be supported with a new $150 million global marketing campaign, and total funds spent on the service would hit about $1 billion over the next year, making it one of the biggest launches ever for deep-pocketed Microsoft.

That $1 billion included marketing, retail partnerships, cross promotions and rebates, Sanford said.