Microsoft tries to woo AOL users

Associated Press

REDMOND, Wash. — A week after America Online said it was raising rates for unlimited monthly Internet access, Microsoft Corp.'s MSN Internet division has launched a $50 million campaign aimed at getting AOL users to switch to Microsoft's service.

Microsoft said Tuesday it will offer three months of free Internet access to people who switch by June 30. The company also will guarantee that monthly fees remain at $21.95 for unlimited access through January 2003.

AOL, the market leader with about 29 million subscribers, recently said it was raising rates for unlimited Internet access by $1.95, to $23.90, beginning in July.

Analysts have said that AOL's decision to increase prices would likely cause few defections, but could mean hundreds of millions of dollars in revenue for parent company AOL Time Warner Inc.

MSN is the nation's second-largest Internet access provider, with about 5 million customers. Atlanta-based EarthLink Inc. is third, with about 4.8 million customers, and charges $19.95 a month for unlimited access.

Shares of AOL Time Warner lost $2.53 to close at $51 on the New York Stock Exchange. Shares of Microsoft were down 57 cents at $70.34 in trading on the Nasdaq Stock Market, where shares of EarthLink were off 54 cents to close at $12.91.