MSN, AOL Rally, Rage as Second “8.0” Launches

The battle between AOL Time Warner’s America Online and
Microsoft’s MSN is shaping up to fit in perfectly with
the times — having all the earmarks of your typical election-year
mudslinging.

Expect to see plenty of punches thrown at AOL during Thursday’s unveiling
of MSN 8.0. Microsoft erected an 11,000 sq. ft. dome in Manhattan’s Central
Park, under which executives and well-wishers will expound on new features
available only with its service.

It will also be a rally of sorts for Redmond, Wash.-based MSN’s executives,
vendors and advertisers, hundreds of whom are expected to be in
attendance.

The spectacle, which culminates in a live performance by rocker Lenny
Kravitz, will continue the weeks of sparring between the two Internet
services that has reached a pitch — and a brazenness — typically reserved
for stumping politicos.

Last week, Microsoft unleashed packs of “butterfly bladers” — dressed like
its portal’s logo, and sporting Roller Blades, purple suits, butterfly wings
and placards touting pro-MSN slogans — who roamed nosily through the
streets of Manhattan to herald the coming of MSN 8.0.

A number of the bladers found their way to the plaza at New York’s
Lincoln Center. Inside, AOL execs happened to be unveiling version 8.0 of
their service — and trading barbs of their own at Microsoft and its
chiefs.

Within each of the companies, the posturing continues as well. America
Online has “AOL Running Man” to help keep its staffers’ spirits up as the
marketing battle between the two companies rages around their competing
releases of version 8.0.

“Running Man” (also known as “Did You Know” man) is an animation making the rounds of the company’s
headquarters in Dulles, Va. The clip shows a giant-sized Instant Messenger
icon gleefully squashing a little MSN butterfly.

Although an AOL spokesperson said the company is staying focused on
getting the word out about its recent launch, there’s a not-so-subtle
indication that management tacitly approves of such signs of partisanship.
Indeed, the AIM icon is sparking a number of similar displays circulating
the halls of America Online.

That’s in addition to dueling press releases, such as the one issued by
Microsoft on Wednesday morning which indicated a recent study found that
users preferred MSN to AOL by a margin of three to one. Most of the
participants in the study — which was funded by Microsoft — said MSN’s
ease of use proved the deciding factor.

The usability study is an old campaign tactic for Microsoft. As far
back as 1997, Redmond was commissioning Usability Sciences (the same firm
responsible for Wednesday’s findings) studies that found Internet Explorer
3.0 was preferred to Netscape’s (now AOL’s) Navigator.

On the same day meanwhile, another AOL press release about 8.0 came out since the launch, this time touting big download numbers.

“Only two weeks after it became available, AOL 8.0 has been downloaded more
than 5 million times, surpassing last year’s AOL 7.0 record, and has been
used by more than 8 million AOL Screen Names,” the company said.

“The record-breaking launch builds on AOL’s unmatched focus on consumers’
online experience, and the company’s legacy of using extensive consumer
research and member feedback to develop new features and services.”

America Online didn’t say whether that 5 million figure included versions of
8.0 that it quietly rolled out through “AOL Keyword: Upgrade,” in weeks
prior to the official launch.

Even the timing of MSN 8.0 debut Thursday appears anything but unintentional,
coinciding with AOL Time Warner’s release of third quarter
results — including the expected update on revenue woes at its America
Online division.

Because AOL Time Warner released its results late in the afternoon Wednesday, news outlets
are likely to carry the story of AOL’s advertising and commerce
headaches — including a restatement of prior earnings — on the same day
that MSN’s splashy launch is making headlines.

“It is an interesting coincidence,” chuckled MSN Product Manager Parul
Shah, when asked about the timing of the launch. “Maybe (AOL) will hope that
MSN will be in the news so much that day that they won’t have to worry as
much” about their earnings problems, she said. “We’re here to serve.”

Shah’s comments illustrate the spirit behind the thrusts and parries playing
out between the two companies, in jabs in the media, in advertisements and
dueling press releases.

It won’t stop anytime soon, either. America Online is getting ready to
unveil more product press releases around the arrival of AOL 8.0 as
well. It includes information about how subscribers can further personalize and customize their AOL interface using unique themes.

It also plans new e-commerce announcements in
the coming weeks, according to people familiar with the plans, and announcements about its “Did You Know” character (supposedly nothing like the Microsoft Office “Clippy” character mercifully retired last year). The animation tool is embedded within some of AOL’s Rainman Web pages, and pops up to help guide members through new features and services.

Microsoft, similarly, plans to use its present ad campaign, “Better with
the Butterfly,” as a longer-term promotional springboard, retaining the TV
spots’ live-action butterfly mascot beyond the present slate of ads, to
highlight upcoming features of its service.

The company also plans to take its message on the road with a two-month,
seven-city “Dome Tour,” during which it will show off MSN 8.0 features
under its massive, butterfly-branded portable shelter.

There, the company also is likely to reuse another tried-and-true marketing
ploy — its Pepsi-challenge-inspired “Dare to Compare” effort, which, like
the Usability Sciences studies, first appeared during the late 90’s Browser
Wars.

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