Microsoft Pumps $15 Million into DSL.net To Develop Business Portal

Microsoft Corp. announced yesterday that it’s pumping $15 Million (US$) into DSL.net Inc., a provider of high-speed Internet service, in order to deliver a MSN portal to small and medium businesses.

This comes just one week after New Haven, Connecticut-based DSL.net had postponed its initial public offering — due to market conditions. Microsoft’s investment is much less than the $96 million (US$) to $110 million DSL.net had hoped to raise. Nevertheless, by teaming with Microsoft, DSL.net can continue to deploy its network infrastructure in selected cities throughout the United States.

MSN Business Portal

The co-branded MSN portal to be created by the venture will feature DSL.net content and links, providing resources specifically tailored to meet the needs of smaller to medium-sized businesses. For instance, as part of the package, MSN will provide users with a Web-based e-mail account via MSN Hotmail, instant messaging and a contact management program.

“By providing its customers with high-speed access to MSN services, DSL.net is delivering the tools that businesses need to compete and prosper,” said Thomas Knoll, vice president Microsoft’s Network Solutions Group.

Internet Access Battle Heating Up

This latest investment in high-speed Internet access is just one of the avenues that the software giant is aggressively pursuing in its attempt to expand its broadband capacity. Last week, Microsoft announced plans for cable-modem service with Telewest Communications PLc, Britain’s second largest cable company — which is 30 percent owned by Microsoft.

Also last week, Microsoft hinted that it would consider lowering its price — or giving away Internet access all together in its attempt to checkmate its archrival America Online. Lately, the two companies have been sparring over AOL’s blocking Microsoft’s new instant messenger from reaching its 17 million subscribers. In addition, some analysts blame Microsoft’s broadband acquisitions and talk of lowering prices for AOL’s plummeting stock price. Its stock has lost about half of its market value since early April, when it reached a high of $167.50 per share.

Rumors Of Price Cuts

Meanwhile, one of the latest rumors permeating Wall Street is that Microsoft and Costco Cos., the biggest U.S. chain of warehouse-club stores, have made a deal to sell MSN’s service at a discount to its 13 million members.

But industry experts point out that even though Microsoft might appear to have the upper hand in its quest for grabbing broadband, it must soon face a verdict on its government antitrust trial. In final briefings filed yesterday by the Justice Department, Microsoft was accused of a “broad pattern” of misconduct in protecting its alleged Windows monopoly. But filings by Microsoft’s lawyers strongly denied any wrongdoing.