Microsoft weighs fees for U.K. portal
By CNET News.com Staff
February 26, 2001, 9:20 a.m. PT
http://news.cnet.com/news/0-1005-200-4948964.html?tag=prntfr

LONDON--Microsoft confirmed Monday that it is considering charging people
for "premium services" provided through its MSN
UK Internet portal, the most-visited site in the United Kingdom.

The company issued a statement saying that existing services, including the
company's popular free e-mail service Hotmail,
will not be subject to charges. But it said it is actively considering
charging customers for enhanced versions of existing
services or for new offerings.

These include broadcasting live music through the MSN Web site and providing
enhanced games through MSN Gaming. MSN
said these services are likely to launch next year.

"MSN is at an early stage of looking at charging for premium services on MSN
UK," a company representative said. The
representative could not confirm reports suggesting that it might charge
people up to $87 (60 pounds) a year for access.

The decision underscores concerns over the viability of Internet advertising
as a means of generating revenue for Web portals.
Microsoft said it has doubts about the long-term viability of free Internet
portals but added that it does not intend to abandon
Web advertising altogether.

"We remain committed to generating revenue from our existing advertising
model. In the U.K., (this is) revenue from advertising,
from sponsorship and content distribution," said the Microsoft
representative.

However, a survey carried out recently by consulting firm Booz Allen &
Hamilton indicates that banner ads on Internet portals
have little affect on surfers.

MSN is the most popular Web portal in the United Kingdom, with 14 million
visits per month, according to its own data. It
receives 200 million visits every month worldwide but is thought to be
unable to transform those clicks into dollars through
mere advertising and sponsorship deals.

Subscription-only sites have achieved few successes. Yahoo said recently
that its auctions listings have suffered since
January, when the service ceased to be free-of-charge.

ZDNet U.K.'s Will Knight reported from London

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