9/26/2003

SEATTLE (Reuters) - Microsoft Corp. (MSFT) said on Friday that it will scrap its two-year deal with BellSouth Corp. (BLS) to provide high-speed Internet access to customers under the name of its MSN Internet division.

The world's largest software company said the move was part of its broader strategy for MSN to provide subscription services to broadband users, rather than selling Internet access directly to customers.

MSN shifted its strategy after competing for years against America Online (AOL) for dial-up customers.

Current customers of MSN's digital subscriber line service will have 60 days to move their accounts to BellSouth's managed DSL service or choose a new provider.

They will receive a free modem, month of service and activation from BellSouth if they sign up with the No. 3 U.S. local telephone company, as well as a free subscription to MSN for a year.

"Broadband continues to be a key part of MSN's overall strategy, but rather than providing the broadband network and system infrastructure, telecommunications provisioning, and support that we do today, we will be focusing our efforts on creating and delivering the most useful Internet software for online customers," Gurry said.

Continued @ CBS MarketWatch