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The war between Microsoft (Nasdaq: MSFT) 
and AOL for Internet users is extending to a new battleground today: New York's Central Park.
That is where Microsoft is scheduled to hold a star-studded launch event for MSN 8, the latest version of its Internet browser and online services. Beginning at noon Eastern time, the celebration is expected to feature celebrity guests, such as rock star Lenny Kravitz. It is all part of a US$300 million promotional campaign -- the most Microsoft has ever spent to market MSN.
"That's almost a perfect match to what Star Wars took in in U.S. ticket sales," IDC analyst Jonathan Gaw told the E-Commerce Times.
AOL Not Resting Easy
Meanwhile, AOL is continuing its marketing blitz for AOL 8.0, which launched two weeks ago at its own celebrity-drenched event. On Wednesday, AOL issued a press release touting the popularity of its service since its debut, saying AOL 8.0 has been downloaded 5 million times, surpassing last year's AOL 7.0 record. "The record adoption rate highlights the depth of AOL members' engagement in the service as a central part of their everyday lives," said AOL CEO Jon Miller.
AOL said its 8.0 upgrade is its biggest to date, with more than 100 new and enhanced features, including better e-mail filters, improved parental controls and more convenient online shopping.
MSN 8 also has new features, such as blocks for junk mail and enhanced parental controls. Microsoft is trying to portray its service as the most user-friendly. On Wednesday, Usability Sciences Corporation announced the results of a study showing that MSN 8 was preferred 3 to 1 over AOL 8.0. You guessed it: The study was commissioned by Microsoft.
"We are delivering a service that will help people solve the problems they have had to deal with on the Web, as well as give them new features to do more than ever before online in the areas of browsing, online safety, e-mail and communications," Bob Visse, director of MSN, told the E-Commerce Times.
Broadband Battle
Analysts say broadband is the next battlefield for online services. Microsoft and AOL are aiming to recruit new customers now, so that when broadband becomes commonplace, they will be able to sell video-on-demand and other high-end features to those customers.
Microsoft has long run a distant second to AOL in terms of subscriber base. But that gap may narrow if the MSN 8 launch goes as planned. "They're trying to hit AOL when they're low. The timing is pretty good, and their marketing is pretty good," said analyst Gaw. "There is still a large population that is not online yet. AOL has stumbled in terms of growing its subscriber base."
In the Spotlight
AOL Time Warner also has stumbled in the eyes of investors; the company's stock has fallen 60 percent this year. On Wednesday, it posted a quarterly profit but said it would restate two years of results, cutting $190 million in revenue, because of accounting problems at its AOL division. The U.S. Department of Justice and the U.S. Securities & Exchange Commission are currently investigating AOL's accounting practices.
Today, it will be Microsoft under the spotlight. Microsoft chairman Bill Gates is expected to demonstrate the features of MSN 8 in front of 700 invited guests. Champagne is scheduled to be served, and considering Microsoft's mammoth promotional budget, do not be surprised if they uncork Dom Perignon.
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