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MSN-UK Portal Likely to Charge Subscription Fee

Microsoft Corp. is getting ready to charge United Kingdom Web users for access to its popular portal, according to reports Monday in U.K. online publications.

If implemented, visitors to msn.co.uk would have to pay a yearly $86 (U.S.) subscription fee for access to MSN's U.K.-specific content offerings including news, sports and classified advertising.

In an interview with the Independent on Sunday, a U.K. publication, Neil Holloway, Microsoft UK managing director, said the decision could be made anytime within the next 12 months.

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

MSN's reasons for a move to the subscription-based model underscore the decrease in online advertising, a portal's bread-and-butter method for generating income. In the U.K., advertisers decreased spending in December 2000, from 17.7 million Euros to 17.3 Euros, according to a study by Forrest Research.

"In contrast to the lower overall online advertising spending, November and December 2000 showed increases in the number of companies advertising, but they were getting lower rates for each ad purchased," said Marc Cohen, Forrester's European AdWatch manager. He added that he predicts a second-half 2001 boom in advertising spending.

There's no doubt that MSN is king in the U.K., with more than 5.4 million visitors in November 2000, far ahead of second-place Yahoo!, which garnered 4.4 million visitors, according to MMXI Europe.

But it's unclear whether U.K. users are willing to shell out the shillings for a portal service, MSN's in particular.

According to a study by online research site CyberAtlas, MSN visitors are the thriftiest when compared to other portal offerings. While the portal leads in software and travel purchases, it lags behind Yahoo! and AOL in average dollars spent per visitor ($300).



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