Microsoft in $50m Drive to Poach AOL Subscribers

30 May 2001

Microsoft is staking fifty million bucks in adspend on its MSN Internet deck, gambling that its hand is strong enough to lure customers from America Online in droves.

Capitalizing on AOL’s price announcement last week [WAMN: 23-May-01], the Microsoft campaign targets AOL subscribers disaffected by the sudden increase – its first in three years – and invites them to switch to MSN.

The $50 million campaign is backed by an offer of three free months online and thereafter a rate guaranteed not to exceed $21.95 monthly before January 2003. This undercuts AOL which plans to hike its subscription as of July from $21.95 to $23.90.

The initiative was triggered, says MSN group product manager Bob Visse, by a 50% surge in inquiries at MSN call centers from AOL customers seeking an alternative ISP.

But the oracles of Wall Street were unimpressed. “I think this is just another marketing gimmick in an industry sector with a ton of different marketing angles being pursued,'' said one entrail-raker.

“There is a small segment of value buyers who will want this type of product, but that doesn't change the nature of the business,” agreed another as he thumbed his dog-eared Tarot.

News source: New York Times