YouTube Forces Microsoft to Rethink Soapbox

Less than three years since it first debuted, Microsoft has all but confirmed it is weighing what to do with Soapbox, its faltering YouTube competitor.

Microsoft’s (NASDAQ: MSFT) site for user-generated video content appears to be one of several projects that the company is mulling whether to cut down or cut loose in the wake of current marketplace realities.

“We are currently evaluating what the Soapbox brand means to MSN and how it relates to our content strategy,” a company spokesperson said in an e-mail to InternetNews.com.

However, officials have stopped short of saying they’re killing off Soapbox — at least for now — and the spokesperson repeated earlier company statements that user-generated video is an important area for Microsoft. In fact, the tone of the e-mail overall was positive, even saccharinely so.

“We remain committed to delivering amazing experiences for consumers while at the same time keeping a keen eye on our business objectives during this tough economic climate,” the spokesperson added. “Online video is a key part of the MSN experience.”

Soapbox debuted in beta form in September 2006. Eight months later, in April 2007, Microsoft released a beta version of its MSN Video site that sported Soapbox’s look and feel.

As it has multiple in the past, Microsoft was late entering a market that was already dominated by YouTube, which started in 2005. In fact, just weeks after Soapbox debuted, Google spent $1.65 billion to snap up YouTube.

Today, YouTube still dominates the entire category. In April, YouTube served up 5.5 billion video streams, while the combination of MSN Video (including Soapbox) and Windows Live served up 164.4 million streams, according to data from ratings firm Nielsen Online.

Additionally, while YouTube showed a year-over-year growth rate of more than 35 percent, Microsoft only grew ten percent in that same period. In April, Nielsen had Microsoft in sixth place behind Nickelodeon Kids and Family Network, which itself grew 16 percent year-over-year.