Microsoft Network relaunched

Microsoft was forced to announce price cuts and a change in strategy for its fledgling online service, The Microsoft Network, at the Windows Show 96 last week. The new direction is aimed at bringing MSN into line with the unprecedented growth of the World Wide Web.

At its launch, MSN was hailed as a "super" online service that would provide customers with the "richest content" available on a proprietary network.

Its focus was to provide a "compelling arena" for its customers with limited Internet access thrown in for good measure. Less than six months later, the world's leading software manufacturer has admitted that it "cannot compete with the World Wide Web" and is now offering full Internet access with MSN thrown in as a bonus.

Judy Gibbons, director of MSN in the UK, said the Microsoft Network was in its second iteration and had become "a kind of online club" for users. She said: "MSN will get you to the Internet via our high-speed network, but as well as getting you there, it will also give you access to an extremely rich and unique library of information only available to users of the MSN club."

The move comes at a critical time for Microsoft in the UK - America On Line launched its British offering, AOL, in January and already provides instant Internet access at the click of a button. Compuserve, the UK's largest online service with more than 250,000 members, has offered access to the Internet since last year.

Jonathan Bulkely, managing director of AOL, believes Microsoft needed to alter its strategy to compete. He said: "Microsoft figured running an online service was really difficult and they had to add full Internet access to survive. The playing field has changed and they got caught up in an extremely competitive market."

Full Internet access will be available with MSN along with three new pricing strategies from April. Unlimited monthly access is available for pounds 14.95 per month, or users can pay an annual fee of pounds 149.95, which works out at pounds 12.50 per month. Users can also opt for an hourly plan, which costs pounds 4.95 per month with three free hours. Additional hours cost pounds 1.95 each.