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Microsoft increases number of subscribers

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SEATTLE — Microsoft Corp. added 980,000 MSN Internet access subscribers in the last three months of 2001, bringing its total to 7.7 million subscribers, the company said Tuesday.

The new figure also reflects a reduction of about 200,000 "bad" accounts, MSN marketing director Bob Visse said, including subscribers who stopped paying, moved or were using bad credit cards.

The Redmond software giant's robust subscriber base growth still leaves it far behind rival America Online, which boasts 33.2 million subscribers. The unit of New York-based media giant AOL Time Warner said it added 1.9 million new subscribers in the last quarter of 2001, including 1.1 million in the United States.

Microsoft currently only offers its MSN access in the United States; AOL has users in Europe and Latin America as well.

CompuServe, also owned by AOL, has about 3 million subscribers.

Including other paid Internet subscription services, such as extra storage for free Hotmail accounts or paid greeting card services, Microsoft said it now has more than 8 million total Internet services subscribers and added 1.2 million new subscribers in the fourth quarter of 2001.

AOL spokesman Andrew Weinstein said AOL does not include subscribers who buy extra storage for its free Netscape accounts or subscribe to other paid subscription services, such as its premium Mapquest accounts, when counting its total subscription base.

But Visse said those accounts are a good barometer of Microsoft's progress in making its MSN division profitable. Microsoft will not say when the MSN division hopes to turn a profit. He said MSN's paid Internet access service alone is profitable, but other services such as the Web site haven't yet made money.

Microsoft is in a fierce battle to lure AOL subscribers to its service, going so far as to launch a $50 million campaign aimed solely at getting rival AOL users to switch to MSN. Visse said more than 50 percent of new MSN Internet access subscribers are former AOL users, based on a sampling of thousands of new users.

Weinstein said AOL does not track whether former users seek new Internet access service.