Analysts still see fuzzy future for MSN as new chief takes helm

Microsoft has appointed former MSNBC chief John Nicol to infuse the company’s MSN portal with more multimedia content and make it more appealing to online advertisers. But with MSN rapidly being overshadowed by the company’s Web-based services branded under the name “Live,” some analysts are scratching their heads as to what exactly lies ahead for the MSN portal.

Speaking to the IDG News Service on Thursday, Nicol said he has four key goals he expects to achieve this year. The first is to add more video to the site and to allow users to make and add their own video to its channels such as Travel, Lifestyle and Real Estate. Allowing users to create their own content for MSN is “something we’ve lagged behind in,” Nicol said.

Another goal for MSN is to beef up the entertainment content on the site, which he said draws an enormous amount of users to the site. To this end, Nicol plans to add more news and related content about celebrities, including a new gallery of high-quality photos of famous actors and musicians.

Additionally, the MSN team also plans to enrich the portal’s vertical channels, such as Money, Weather, News, Lifestyles and Sports, with more content that will make them appeal to a global audience.

Finally, Microsoft aims to connect all of the various content pages and channels of MSN more closely in a way that might appeal to a demographic that advertisers might target, Nicol said. For instance, if users look up popular music star Britney Spears, not only would they find information and news stories about her, but they also would find links to shopping sites that let them buy her latest record, he said.

Some of this functionality is available now, but Microsoft plans to add to it, Nicols added. Further, Microsoft plans to work with advertisers to use this kind of connected content to target specific demographics, such as teenagers who typically are Spears’ fans.

The end result of all this investment, according to Nicols? MSN will “gracefully blend user-created content with our own created content” to become an “outstanding platform” that complements Microsoft’s plan for its Live services. Microsoft also hopes to drive more advertisers to the site by working with them to leverage new MSN programming to develop campaigns specifically for the products and services they want to sell, he said.

Even with these plans in place for MSN it’s still rather unclear how the portal will fit into Microsoft’s overall Web strategy, said Matt Rosoff, analyst with Directions on Microsoft Inc. in Kirkland, Washington. It’s undeniable MSN is fading into the background as Microsoft builds out its set of services around its new “Live” brand, some of them a rebranding and revamping of former MSN services, he said.

For instance, MSN Hotmail is now Windows Live Mail, while a local search tool previously called MSN Virtual Earth has been rebranded Windows Live Local. The Live brand even has its own portal called Windows Live that allows users to aggregate and customize content in their a personalized homepage.

“What’s left under MSN — MSNBC?” Rosoff said. “Microsoft just divested itself of that, too.”

Richard MacManus, industry analyst and writer of the popular Read/WriteWeb blog, said it would be difficult for Microsoft to completely drop a well-known brand like MSN, even in light of the investment and momentum behind the Live strategy. He sees Microsoft trying to make the distinction that MSN is about content, whereas Live is about Web-based services. This is why e-mail, search and the former MSN Messenger product all have been rebranded under the Live moniker, MacManus said.

However, Microsoft may have painted itself into a corner, he added, because Web users are increasingly equating services and content, so they may see Windows Live and the MSN portal as redundant.

“It would be best to wrap content and services up into one brand,” MacManus said. “However, Microsoft has the dilemma of having a strong older brand (MSN) and a new brand which they’ve invested a lot in already (Live).”

In the meantime, Nicol has a job to do at MSN, one he took over in November after agreeing to the position during a sabbatical last summer. He said Microsoft has given him “hundreds of millions of dollars” and urged him to throw as many bodies as he needs at the MSN makeover to achieve his desired results of creating a media network out of the MSN Web portal.

“What you’ll see from the new MSN.com is a powerful media platform and network,” Nicol said. “We see money following if we can just build it.”

In fact, Nicol’s enthusiasm for turning MSN into an entertainment destination led him to refer to the portal as the “MSN Media Network” internally, though he said there are no formal plans to rebrand the site despite reports to the contrary.

Directions on Microsoft’s Rosoff said it sounds as if Microsoft’s plans for MSN, as well as Nicol’s appointment, are fairly typical for a company that likes to “try a bunch of different stuff and see what sticks.”

Still, despite the fact that MSN is a work in progress, he said that surely someone at Microsoft “at the high executive level” knows exactly what’s in store for the portal, but for now is content to keep the industry guessing.