Microsoft is to team up with Verizon Communications to deliver its
MSN Internet service to Verizon's high-speed Internet customers in
the USA.
Chief executive of Microsoft Steve Ballmer and Verizon chief
executive Ivan Seidenberg announced the alliance between their
companies' respective Internet services divisions, MSN and Verizon
Online, yesterday (20 June).
The MSN Internet Service is Microsoft's answer to services
available through competitors such as AOL Time Warner. As with
AOL's Internet service, MSN subscribers sign on to the Internet
with portal software that gives users access to e-mail, streaming
media and entertainment programming as well as online
shopping.
Verizon Online DSL with MSN will be an enhanced version of
Verizon's current offering, with some of the new services requiring
additional fees, the companies said. It will be launched with the
release of version 8.0 of Microsoft's MSN software and will include
services in addition to those currently available to subscribers,
Ballmer said. The special Verizon services will include online
file-sharing, Internet-based voice services and unified messaging,
Microsoft said.
Ballmer characterised such fee-based services as something "that
people expect over a broadband link." The company has been
developing some Web-based services based on its emerging .net
initiative, although plans to deliver those to consumers have
stalled.
The company has committed to spending about $500m this year in
research and development of broadband services, Ballmer said.
Microsoft and Verizon last month teamed up to offer MSN services on
Verizon wireless devices. The two companies said they plan to allow
customers who purchase MSN broadband through Verizon to link that
to the previously announced wireless data services.
The deal calls for MSN and Verizon Online to market and sell the
service to the 34 million Verizon customers who can get access to
DSL. The service is expected to be available in early 2003.
MSN Broadband is currently available to customers through
partnerships with other high-speed Internet providers, at prices
ranging from $39.95 to $49.95 per month. Pricing of the service
through Verizon Online was not disclosed.
Top Microsoft officials have declared expanding the number of US
broadband users a top priority, in part so it can make available
new Web-based services to customers.
"There's at least 30 to 40% of US households that I think ought to
have broadband that don't have it today," Ballmer said.
Its partnership with Verizon marks the second major broadband deal
Microsoft has signed under which it will provide online services
for customers directly through a service provider. In April 2001,
MSN struck an alliance with Qwest Communications International to
deliver MSN-branded broadband and dial-up Internet access in
Qwest's 14-state local service area. The Qwest partnership will be
unaffected by the Verizon announcement, Ballmer said.
Microsoft also resells broadband and dial-up Internet access under
the MSN brand through various partner ISPs. The Verizon and Qwest
deals are different in that those two companies have agreed to
market MSN over competing services.
Additionally, Microsoft signalled that it would continue to
announce partnerships to bring high-speed Internet services to
customers that are not served by Qwest, Verizon, or the other MSN
partners that provide high-speed Internet services over phone and
cable lines.
Verizon Online offers dial-up and broadband Internet access to
consumers or businesses in its local service areas around the USA.
For example, Verizon had 1.35 million DSL connections in service at
the end of May in New York, according its Web site. Fifty-five
percent of Verizon's 61.2 million access lines are "DSL ready," and
it expects 62% of them to be operational by the end of the year,
Verizon said.
MSN has about 7.7 million Internet subscribers, which includes
dial-up and broadband users, the company said.