MSN spreads its message

Microsoft's MSN division moved its newest instant-messaging and Web-logging software out of test mode yesterday, adding new communication features and advertising gimmicks aimed at turning the programs into revenue generators.

MSN Messenger will allow users with computer microphones to talk with each other over the Internet. Users with Web cameras can see full-screen video of each other during their conversations.

Blake Irving, a vice president in the MSN division, said he used the video service during a recent Microsoft executive retreat to introduce his mother to Chairman Bill Gates.

Video chatting "has just become this ready-for-prime-time thing," Irving said. "It's changing my life in a big way."

The Messenger program will also begin rolling out a way for users to send text messages to people with cellphones, even if the recipient doesn't have a Messenger account. That feature is expected to become available in Europe later this spring.

MSN also took MSN Spaces, its Web-logging program, out of test mode and is boosting photo storage to 750 from 250 photos. Spaces has been the fastest-growing service at MSN, executives said, with 4.5 million users registered since the test version launched Dec. 1.

That doesn't mean all of them are active users, however.

KEN LAMBERT / THE SEATTLE TIMES Parker Irving, 10, in California, reacts to the news from his father, Blake, a Microsoft executive in Seattle, that he must return to school yesterday after helping with Microsoft's Internet video demonstration.

Studies have shown that although a Web log, or blog, is created every 5.8 seconds, two-thirds languish for two months or more without being updated.

MSN said about 170,000 of its Spaces blogs are updated daily.

The division became profitable last year, mainly because of increased online advertising revenue.

Hoping to continue the momentum, MSN has packed ad opportunities into the Messenger and Spaces programs.

Companies can sponsor "theme packs" that essentially redecorate the Messenger program. Sprite, for example, offers a theme pack with animations, backgrounds and audio featuring its Miles Thirst character. American Greetings will begin selling users custom avatars, or icons that represent a user, for a few dollars each.

MSN has placed a search button directly into the Messenger window to try to direct more people to its search engine, which has become an important revenue source for the division.

Volvo has agreed to become the first advertising partner for MSN Spaces and will be prominently featured atop every Spaces page.

KEN LAMBERT / THE SEATTLE TIMES New instant-messaging characters known as "Muggins" are introduced during a Microsoft demonstration yesterday.

Advertisers are interested because communications tools are becoming a way to build audiences in an era when mass media — the traditional audience draw — is changing, Irving said.

"We're bigger than what people would think traditional media, like content, is about," he said.

For years, MSN's goal was to create fee-based services that customers would pay for, said Matt Rosoff, an analyst with the Kirkland-based Directions on Microsoft.

But advertising has really taken off in the past two to three years, leading MSN to focus less on subscriptions and more on retaining customers to boost advertising.

"What it reflects is MSN's changing business strategy," Rosoff said.

Kim Peterson: 206-464-2360 or kpeterson@seattletimes.com