MSN 'to charge user fee'

Microsoft says that its hotmail service will still be free

Microsoft is reportedly planning to start charging surfers for the improved services of its MSN internet portal.

The site receives 200 million visits a month worldwide, and is the UK's most viewed website.

We will build extra services into MSN and start monetising this within a year

Neil Holloway
Microsoft UK

Microsoft's UK managing director told the Independent on Sunday that fees could be introduced within 12 months.

Any move by MSN to start fee-charging would pave the way for its competitors yahoo.com and aol.com to follow suit.

Consumer mindset

But it has yet to be proved whether the public likes the internet enough to actually spend hard-earned cash on it.

"The consumer mindset is that the internet is free," Rebecca Ulph at Forrester Research told the paper, while other analysts also express doubts that consumers will decide to make the transition to become paying subscribers.

It is clear that the online advertising won't generate enough revenue

Neil Holloway

But Mr Holloway told the paper that he thinks people will be prepared to pay about £60 a year for extra services.

Microsoft stresses that the site's core facilities including Hotmail will remain free.

Fees will be demanded for extra services that are now under development, such as an advanced filter system to protect email accounts from junk mail.

Advertising blues

The need to start charging is becoming pressing because of an expected downturn in advertising revenue this year.

"It is clear that the online advertising and the click-through model alone won't generate enough revenues. We will build extra services into MSN and start monetising this within a year." said Mr Holloway.

MSN is already thought to be running at a loss at the moment, and an advertising squeeze this year would deepen losses.

Microsoft launched a $1bn programme to upgrade the portal in October, saying that it wanted MSN to become as well known as its Windows software.