Microsoft said this week that MSN users should switch over to its free MSN Messenger instant messaging service as a replacement for the chat rooms, which are scheduled to close down in 28 countries on Oct. 14. The decision excludes the United States and Canada.
Microsoft stands to benefit in several ways from the move, for example, by reducing expenses related to maintaining and policing free Web chat rooms and by raising the prominence of MSN Messenger in the affected regions: Europe, Asia, Africa and parts of Latin America. That in turn could help boost revenue when Microsoft begins to charge for IM, something analysts say is just a matter of time.
"Even though MSN Messenger is not a paid service, it's the leading edge of where Microsoft wants to go with paid services," said Rob Helm, an analyst at Directions on Microsoft, an independent market researcher.
Like rival IM services from America Online and Yahoo, MSN Messenger has attracted millions of people around the world who communicate with other buddies on its network. Although these services are free, they give providers another vehicle for advertising and, more important, keep people using other services in their networks.
But the importance of IM for Microsoft goes beyond that. Later this year, Microsoft is expected to launch Live Communications Server (LCS), which it plans to sell to companies that want IM packaged with security and archiving features. Much in the way that e-mail is managed by corporate IT departments, companies will want IM that they can control, Microsoft and other tech giants believe.
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