MSN Splits Into Two Divisions

REDMOND, Wash. -- Microsoft Corp. announced plans this week to split its MSN division into a software unit and a communications unit.

The decision reportedly comes on the heels of a growing MSN deficit, $92 million to be exact, as reported in Microsoft's latest quarter, and the increasing belief that MSN is an effective online portal, but that its failure as an Internet Service Provider (ISP) has been too costly.

MSN was originally created in 1995 to eclipse AOL's control of the dial-up Internet market, although it was never able to compete with the Time Warner division and instead fell into a long line of similar, second-rate ISPs.

MSN also managed to transform itself into an online portal that attracted volumes of subscribers, but it was never able to even skim the surface of AOL's monopoly.

As the popularity of high-speed Internet access took hold, MSN began to slip even farther behind its competitor and failed to maintain necessary profit margins.

According to reports, even a $300 million marketing campaign last year couldn't save the division, and it soon lost an estimated 400,000 subscribers to other services.

Research firm IDC predicted earlier this year that Microsoft would eventually sell off its meager portion of the Internet market to another service provider, and in many ways, reports out of Redmond suggest a similar move.

While MSN will still keep one foot in the dial-up business, Microsoft intends to more directly target the riches of the broadband telecommunications industry.

According to Microsoft, it will divide MSN's communications services, which includes its dial-up and DSL services, Hotmail, Passport, and MSN Messenger, and MSN's information services, which includes the MSN portal, search functions, and ecommerce.

Microsoft has appointed Yusuf Mehdi to helm operations on the software side and Blake Irving as head of the communications side. Mehdi will also head up Microsoft's attempts to create an online music store and further its web search technology.

In September of this year, Microsoft shut down all of its unmoderated MSN chat rooms in 28 countries worldwide, including Europe, the Middle East, Africa, Asia, and parts of Latin America.

At the time, Microsoft said it was trying to curb the amount of illegal activity and adult content that circulated through those chat rooms. The company also stated that its decision was based on legal issues and a persistent drain on company resources.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

2025 XBIZ Amsterdam Website Launches With Call for Speakers

XBIZ is pleased to announce that the website for its annual European conference, XBIZ Amsterdam, is now live.

NC Governor Vetoes Bill Targeting Adult Industry, Override Possible

North Carolina Governor Josh Stein today vetoed a bill imposing new regulations that adult industry observers have warned could push adult websites and platforms to ban most adult creators and content.

25,000 Sign Petition to Legalize Pornography in Ukraine

An OnlyFans model’s petition to decriminalize pornography in Ukraine has amassed the 25,000 signatures required for official consideration by President Volodymyr Zelensky.

WannaCollab Joins Pineapple Support as Supporter-Level Sponsor

WannaCollab has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

FSC Unpacks SCOTUS Age Verification Ruling in Webinar

The Free Speech Coalition conducted a public webinar Tuesday to help adult industry stakeholders understand the Supreme Court’s recent decision in FSC v. Paxton, and its potential implications.

UK Lawmaker Calls for Appointment of 'Porn Minister'

Baroness Gabrielle Bertin, the Conservative member of Parliament who recently convened a new anti-pornography task force, is calling for the appointment of a “minister for porn,” according to British news outlet The Guardian.

FSC Toasts Jeffrey Douglas for 30 Years of Service

n the very same evening when the adult industry was hit hard by the Supreme Court ruling supporting Texas’ controversial age verification law, HB 1181, members of the Free Speech Coalition board, staff and supporters gathered to celebrate Jeffrey Douglas’ 30 years as board chair — a fitting reflection of his reputation as an eternal optimist.

TTS Opens UK Testing Location

Talent Testing Service (TTS) has opened a new U.K. location in Ware, Hertfordshire.

FSC: Age-Verification Laws Go Into Effect in South Dakota, Georgia, Wyoming on July 1

The Free Speech Coalition (FSC) has published a statement regarding new age verification laws set to go into effect tomorrow in South Dakota, Georgia, and Wyoming.

FSC Responds to Supreme Court Decision on Texas AV Law

The Free Speech Coalition (FSC) has released a statement responding to last week's Supreme Court decision on FSC v. Paxton, the Texas age verification law.

Show More