posted on February 2, 2001 09:41:05 PM new
WWWWWWWOOOO HHHHHOOOOOO,
Finally we can all look through the ads and not have to add the $400.00 that it seems every seller discounts if you go for MS's 3 year MSN plan
Here's the full story:
Microsoft Corp. said Friday it
will stop offering a $400 rebate to new
subscribers of its MSN Internet access service,
an offer aimed at rapidly building its user base
but one that analysts say has hit the software
giant in the pocketbook. MICROSOFT INSTEAD WILL offer one free year
of MSN to buyers of new personal computers, and expects
the new deal will enable it to continue to add at least half a
million subscribers each quarter, Bob Visse, lead product
manager for MSN marketing, said in an interview.
(MSNBC is a Microsoft - NBC joint venture.)
The $400 rebate for subscribers who signed a
three-year contract would be halted in March, while the
new offer, which expands to other PC makers a deal initially
given only to buyers of machines from Dell Computer Corp.
was already in effect, Visse said.
“As we move into being really more a high-value ISP
(Internet service provider) offering, we feel like we don’t
really need that $400 rebate as much, and frankly we feel
this offer is more attractive to consumers,” Visse said.
“The offer was super successful, and there was an
investment we made to make sure we had a really
compelling offer,” Visse said. “It’s hard to draw an exact
sort of line in terms of is this going to change the bottom
line. It’s more that we are going to keep investing in this
business.”
Analysts had expected a rebate change since
Microsoft’s quarterly earnings report last month in which
Chief Financial Officer John Connors indicated that the offer
was in effect too popular and was eating into its bottom line.
“It’s obviously much more economical,” Brendan
Barnicle, an analyst with Pacific Crest Securities, said of the
new offer. ”A $400 customer acquisition cost is pretty high,
even for an ISP, which arguably has a longer return period.”
“They are trying to do something about what is
essentially flattish revenue growth at MSN,” Barnicle said.
Microsoft has been using such rebates to draw users to
its service over rivals like AOL Time Warner’s industry
leading America Online service, which boasts some 27
million subscribers to MSN’s 4 million.
The offers, combined with a massive marketing
campaign, have helped MSN finally stand on own after
years of missteps and blunders caused it to fall farther and
farther behind AOL.
MSN said it added 500,000 net subscribers in the last
three months of last year, and Visse said the service could
likely attract at least that many in each of the next few
quarters.
[ edited by dhamjpsnet on Feb 2, 2001 09:42 PM ]
I know if the 500,000 people got the $400 rebate, that is a lot of money. That is $200,000,000 worth of rebates. However, that was actually bad for the people that took that deal. That is like a $400 loan, and you have to pay back $790.20. I don't think it is a huge hit for MS. They will get a lot more money back in return.
posted on February 2, 2001 09:59:52 PM new
It wasn't a loan. What msn got in return was a promise to pay for internet access for 3 years. The rebate was an instant rebate and, in itself, only held the obligation to continue using msn for the agreed upon period of time and pay monthly for the service. No "upfront" payment was collected.
posted on February 2, 2001 10:03:59 PM new
Yes, you get $400 worth of merchandice. You have to end up paying over $700 in monthly internet fees for 3 years. This is not a loan? In my books, it is very close to it.
posted on February 2, 2001 11:45:19 PM new
If you were already going to pay somebody about $23 /month for Internet access and did not anticipate being able to find/afford anything better than a 56K modem , then yes, it was a good deal. Personally, the way the industry changes, I think one would be foolish to lock in to that for 3 years. What do you do if DSL becomes available in 12 months. Of if you're like me and you already have a Cable modem. Just a real pain in the *ss trying to adjust every price for $400 or $100 or whatever. I think that's great news!
posted on February 3, 2001 05:37:08 AM new
Actually, there's another way to look at it. A fair amount of people do have cable or DSL, but they also want a backup dialup connection, in case their main connection goes down for any reason. Others travel and would like a nationwide dialup for when they're not within their home territory.
So, they turn to rebates such as this.
Now, as far as the money goes. Yes, you pay out $756 over the course of 36 months. BUT, you basically receive a $400 discount off of that (that was the $400 that you received off the price of the merchandise you bought.. remember, this is just a different way of looking at it). Therefore, your actual ISP fees for the course of 36 months are $356. That breaks down to $9.89/month for unlimited, nationwide service.
In this senario, you didn't "save" $400 on your computer, you saved $400 on the price of your ISP which can be used as a backup or anyplace in the country.
With all that said.. I too will be glad to see those ads vanish.
posted on February 3, 2001 05:50:18 AM new
I always wondered what folks did here in Ohio where I live. MSN doesn't have a toll free number here (last time I checked), but the local Best Buy and stores like it were always offering this deal as well.
Do the math...it's not that great a deal anyway, plus being locked in for 3 years. Many ISP's around here offer unlimited service for $9-15 per month anyway.
posted on February 3, 2001 11:27:20 AM new
Several of the ISPs offered the $400 deal....&...I've had several friends use it to their benefit...They were first time computer buyers, used the $400 to offset the initial cost & remain very happy in their limited Internet world (they don't need super fast connections & basicly bought the pc to "get online" without much real use for it).....
I took advantage of one of the offers to use the $400 to purchase my son's video recorder (Christmas gift)....The kids needed their own Internet connection & I preferred that we had different ISPs, so that I could use their's in emergencies...The chances of us getting them a cable modem/connection are slime to none, so it worked for us....
posted on February 3, 2001 12:34:44 PM new
I think this was a terrific deal. I purchased one of the e-machine computers using the 400 instant discount offered if you signed up for 3 years of MSN and got a brand new 500mhz computer that I've been completely happy with for approximately 75 dollars. I'm not a "beginning computer user" at all, but I am financially not very well off and the offer and rebate meant that instead of using the 486 I had used for 5 years, i got a brand new computer for essentially just the $22.00 a month for the MSN connection. I use this computer for an average of 6 hours a day online and I have had no complaints with it so far (11 months). I don't particularly like MSN's Internet service but I can live with it for three years because it's made it possible for me to have this nice new computer. Cable would be nice, DSL would be nice....when the 3 years is up, I'll check it out, and hopefully be better off financially. When people say "computers are so inexpensive nowadays" they mean well, but "inexpensive" is a relative term. They are not inexpensive for someone earning less than 20,000 per year---so this deal was a very good boost for those people (and I am included in that group.)
posted on February 3, 2001 01:35:20 PM new
So is this a service that gives one an email extenstion of "msn.com"?
I have a rule set up that automatically moves ALL emails with that extension to the delete folder. 70% of the spam that pops into my mailbox originates there as it does from "usa.net". Or hotmail addresses.
Microsoft should rename anything they have with email as "Spam capital of the world".
posted on February 3, 2001 01:44:02 PM new
i guess you can delete whatever mail you want to, but tons of my buyers have msn.com addresses, as do i. stereotyping them as spammers isn't really fair, since for many people msn.com is their internet connection and sole email address. if you spam from it, you will get in trouble and they WILL know who did it, because you only get one email with msn. if you want more you have to go elsewhere (such as to a free email like hotmail or others.) i am sorry that you got so much msn.com spam, but if you report them they should be eliminated quickly, because, as I said, you get only one screen name.
when I was in business a lot of our clients had msn.com addresses as well.
