Microsoft updated its MSN Messenger application, offering improved video and voice calls as it duels with Yahoo and AOL in fierce competition to attract the eyes and ears of more Internet users. In addition, Microsoft launched a finished version of an online scrapbook service it has been testing, MSN Spaces, and rolled out new advertising opportunities.“Microsoft, AOL, and Yahoo are in a race to see who can provide the most stuff to their IM customers,” said Rob Enderle, founder and president of the Enderle Group.” The MSN updates are also aimed at making the company’s services more interactive, as it takes on challengers such as Internet telephony startup Skype Technologies, IDG News Service reported. Skype has seen steady growth for its free PC-to-PC voice service, leading it to roll out PC-to-mobile phone calls and messaging capabilities. Microsoft wants to get one step ahead with the release of its new MSN Messenger 7.0 instant messaging (IM) application which offers free PC-to-PC video calls for users with a webcam, in addition to free voice calls. The video call feature uses technology from webcam maker Logitech to synchronize audio and video streams, the news service said. Users can watch a video in the Messenger window or get up close and personal in full-screen mode. Additionally, the com-pany plans to incorporate a feature in coming months that will allow Messenger users to send messages to friends’ mobile phones.Messenger 7.0, which has been in beta since December, also includes the ability to perform a search during a chat session and share photos. The company also officially launched its MSN Spaces service, an online scrapbook that lets users post blogs, photo albums, music lists and other personalized information. Introduced in beta form in December, MSN Spaces now offers more storage space — allowing users to post around 750 photos –and a variety of backgrounds and personalization options. Over 4.5 million people have already signed up for the free service, Microsoft said. Both MSN Spaces and Messenger 7.0 have also been optimized for advertising, allowing marketers to tout brands in brief video commercials, text ads, links to Web sites, and banner spaces, among other sponsorship options.“We’re trying to build an advertising experience into the product, but we don’t want it to be obnoxious,” said Phil Holden, director for communications services for MSN. Enderle said MSN Messenger has become an important brand for Microsoft. “It’s pervasive,” he said. “It’s an application that once you use it you can’t live without it. And it connects you back to the vendor supplying the services, which can then offer you more services.” Technology Industry