Wednesday, March 29, 2006

Microsoft Targets AOL Dial-Up Customers With Price Cut

Attention AOL dial-up customers Microsoft Corp.'s MSN has a deal for you. The deal is in the form of a price cut for dial-up, bringing the total monthly fee for MSN to $17.95 a month versus AOL's $25.90. AOL dial-up customers were recently hit with a $2 price increase.

Dial-up is the high tech industry's buggy whip business, but there's obviously some gold left, even as most Internet service providers work to move their dial-up customers to broadband. Curiously, higher speed broadband is often priced lower than dial-up. Verizon and AT&T, for instance, have been offering DSL broadband for around $15 a month recently. Cable broadband providers, too, offer low-priced broadband.

Microsoft said it believes it can pick up some AOL dial-up customers, even though the broad dial-up market is shrinking, as users move to broadband. Microsoft can also give a little nudge to archrival Google, which beat Microsoft out in December in a competition to invest in AOL.
Google won, invested $1 billion in AOL, and took over a chunk of the latter firm. Microsoft was left out in the cold in the deal.

"We definitely think there's some opportunity for AOL dialup subscribers to explore alternatives when they see a price increase," Kevin Mizuhara, MSN Access director of marketing, told the Washington Post.

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