MSN Germany Offloads Net Access Business

Microsoft Corp. announced it will no longer provide Internet access via its MSN online service in Germany, and instead will focus exclusively on developing online content.

The move raises further questions about the future of the service that some analysts say continues to be a cash drain for Microsoft which has gone through several incarnations of the online service.

Rumors have surfaced on several occasions in the past suggesting that Microsoft would sell off the division which trails other online services despite its default status on every Windows 95 desktop.

Microsoft said it is encouraging its German members to switch to Deutsche Telekom AG’s T-Online, the country’s largest Internet service provider with a 2.2 million customer base.

According to Janet Angell, product manager for MSN, Microsoft and T-Online have had an ongoing relationship for several years, and called the latest move a “reshaping” of that partnership. She said that T-Online will take over MSN Germany’s billing and customer support functions.

The companies have established a co-branded start page to advise members of forthcoming changes. MSN e-mail addresses will remain in effect until the end of January, 1999, and MSN users who sign-up for T-Online before an August 31 cut-off date are
entitled to free software and two hours of free access per month through
December.

Previously, Microsoft provided Net access through its branded-lease partners UUNET, a subsidiary of WorldComm, and T-Online.

“The situation in Germany since we launched MSN has changed fundamentally,”
said Michael Konitzer, managing director of commercial online activities, in a statement. “Today there are a multitude of Internet service providers who provide good service at low prices.”

Microsoft, which said it does not release online usage statistics, declined to give the number of MSN Germany subscribers.