New MSN Messenger, Spaces, Mail Demoed

Big changes are in the pipeline for the MSN suite of properties according to presentations made Thursday by Yusuf Mehdi, senior vice president of MSN and Blake Irving, vice president of the MSN Communications Services. Some of the changes include enhancements to the company’s search product, as well as new social networking and e-mail products.

Microsoft’s suite of communications products has seen dramatic growth in the past four years. Hotmail has grown from 100 million users in 2001 to over 205 million in 2005. Likewise, MSN Messenger grew from 50 million to 175 million over the same period. MSN’s Spaces Web log, or blog, offering has grown to 50 million users in just six months, and has become the Web’s largest blogging site. Mehdi claims that 10 percent of today’s global RSS traffic is due to MSN Spaces.

On the search front, Mehdi said Microsoft was “going to attempt to move today’s search market from links to answers.” Pointing to the shrinking gap between Google and MSN’s search relevance, he said that the company fully expects to pull even and even surpass Google with future releases of the search client.

The service has seen minor success in grabbing some search share from Google, moving from 11.8 percent of the market in January to 14.8 percent in June. Making an analogy to cell phones and how service quality at the onset contributed to high customer churn, Mehdi promised analysts, “we are going to build a better search to drive the expectations of the customer.”

Microsoft’s Irving, meanwhile, demonstrated new social networking features that will be added into upcoming releases of MSN’s Spaces and Messenger products.

In Spaces, a “Friend of Friends” feature will be added that will show a page of the person’s friends and also could friends of those friends. The feature would operate similar to the Friendster or LinkedIn services.

Sources have previously told BetaNews that Microsoft has plans to take on the community site industry head on, and move Spaces beyond its current blog-like functions and to a community driven destination much like MySpace. Thursday’s demonstrations seemed to confirm those reports.

Also demonstrated was a new version of MSN Messenger that would allow users to see if their buddy is running Windows OneCare Live, or use shared folders similar to how Microsoft’s SharePoint currently works.

Finally, Irving demonstrated the next generation webmail client that he called “the future of WebMail for Microsoft.” However, it is not clear if the program is the rumored “Kahuna” upgrade to Hotmail as first reported by BetaNews.

According to Jupiter Research senior analyst Joe Wilcox, what was demonstrated is completely separate from Hotmail and will not carry the Hotmail name. Irving did say it would be compatible with Hotmail, but gave no timetable for release.


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