Microsoft to launch video service to rival YouTube
Mon Sep 18, 2006 09:44 PM ET
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SEATTLE (Reuters) - Microsoft Corp. (MSFT.O: Quote, Profile, Research) will start testing on Tuesday an Internet video-sharing service called Soapbox, the software company's answer to Web sensation YouTube.
Soapbox (http://soapbox.msn.com) is one facet of Microsoft's strategy to create attractive Internet content to lure away billions of Web advertising dollars from market leaders Google Inc. (GOOG.O: Quote, Profile, Research) and Yahoo Inc. (YHOO.O: Quote, Profile, Research) .
Offering everything from funny home videos made by users to clips from old TV shows, YouTube sprung out of nowhere late last year as an entertainment break for millions of broadband Web surfers. In August, the site had 34 million visitors, according to Nielsen//NetRatings.
Soapbox will be offered to a limited number of users during an invitation-only test phase, but Microsoft said on Monday it will go fully live as a part of MSN Video within six months.
"We're definitely not blind to the fact that YouTube has a big lead right now," said Rob Bennett, general manager of MSN's entertainment and video services. "It's really early days in online video. This is still act one."
Microsoft is a late arrival into the crowded video-sharing market, following offerings from Google, Yahoo, Time Warner Inc.'s (TWX.N: Quote, Profile, Research) AOL unit and News Corp.'s (NWS.N: Quote, Profile, Research) social networking site MySpace. Last month, Sony Corp. (6758.T: Quote, Profile, Research) agreed to pay $65 million to buy video-sharing site Grouper.com.
Focused on original programming and clips from broadcast partners, MSN Video once was the most popular Internet video site until fans of user-generated content propelled YouTube, MySpace and Google past Microsoft in recent months.
Since March, the number of YouTube monthly visitors has nearly tripled while MSN Video remained mostly unchanged at less than 12 million users.
MySpace video quadrupled to 17.9 million visitors a month and monthly Google Video users rose 70 percent to 13.5 million over the last six months, according to Nielsen//NetRatings.
"Microsoft is jumping on this bandwagon with some uncertainty with where it's going, but the company believes it needs to be on board," said Joe Wilcox, an analyst at JupiterResearch.
Redmond, Washington-based Microsoft said it will take down any copyrighted material illegally uploaded by users once it is alerted by the rights holder, a similar policy to YouTube.
The runaway success of free-to-view online video sites has raised the question of whether rights holders such as music, TV and movie companies should be compensated, even if clips are uploaded by users.
Microsoft aims to win over users with a Soapbox player that allows people to categorize, share and comment on videos, all while the video continues to play uninterrupted.
It also provides simple and quick uploading of videos, Microsoft said.
In a departure from its past strategy of restricting MSN Video to its Internet Explorer browser and Windows Media Player, Microsoft will make Soapbox available for various browsers including Mozilla Firefox and Apple Computer Inc.'s (AAPL.O: Quote, Profile, Research) Safari.
Soapbox will also support a number of video file formats and delivery methods, according to Microsoft.
There will be no advertisements on Soapbox during the testing period, but Microsoft said it is studying how to best capitalize on the video content.
