Microsoft looks to paid messaging in Asia

With the number of instant messaging users exploding in Asia, Microsoft will focus on making the now free-of-charge MSN Messenger service profitable by launching a battery of fee-based services for subscribers.

Already, Microsoft is testing consumer tolerance for pay services. "We have launched focus groups to see what types of services our subscribers want and how much they are willing to pay," said Celina Chan, director of MSN Hong Kong.

Potential chargeable services include additional storage and alert services that allow users to get alerts from airlines, or stock quotes by e-mail, MSN Messenger, or SMS (short message system).

Microsoft plans to leverage its broad customer base to build its premier services. "Our active users will find that our extra services are worth paying for," said Chan. With 110 million Hotmail users worldwide - and one-third of those also signed up for the MSN Messenger service - Microsoft feels it is well-positioned against competitors. "We still have a lot of room to grow," she said.

Chan expects the launch of Windows XP, slated for October this year, will help extend the Messenger service's reach. "Windows XP will have Windows Messenger, which has increased messaging features and will be interoperable with MSN messenger, so the user base will increase," she said. "Windows Messenger will also include a video messaging feature - based on NetMeeting technology - and people will be able to share files and edit each other's documents in real time, and even see each other's faces if they choose to."

According to poll results released by NetValue SA, an Internet audience measurement firm, MSN Messenger is neck and neck with ICQ for the top spot in instant messaging subscriptions. Users between ages 15 and 24 make up about half of the audience, the results showed.

However, youth dominance in instant messaging use may be no longer be as pervasive in the future. "Messaging is no longer the exclusive domain of kids and teens," said Clayton Fitts, NetValue vice president of sales and marketing. "We're seeing continuous growth among older users who are becoming more comfortable using the Internet for activities other than surfing."

MSN's Chan agreed, adding that as instant messaging technology matures, so will its users. "Our more mature market is growing very fast and they are using Messenger not to kill time or to chat, but to communicate with friends and colleagues," she said, adding that the adult customer segment, which has a greater disposable income, will provide a good base for chargeable services.

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