Retail Deals Promote MSN Internet Access

Pressing forward in its quest to promote MSN as an ISP as well as a portal, Microsoft has signed new agreements with leading bricks-and-mortar retailers. A comprehensive strategic alliance with Best Buy—the largest volume retailer of consumer electronics in the United States—provides for in-store promotion of the MSN Internet Access (MSNIA) service as well as other connectivity products; Microsoft will invest US$200 million in Best Buy. Separately, office supply chain stores Office Depot and OfficeMax will join Best Buy and other retailers in offering a US$400 rebate on the price of a new PC or other merchandise in exchange for a three-year subscription to MSNIA. And in a two-month promotion through the end of February, shoppers visiting any of 120 real-world shopping malls may sign up for MSNIA at the mall information desk.

Going Offline to Get Online

These deals follow an innovative store-within-a-store product promotion venture in a November agreement with RadioShack. (See “RadioShack, Microsoft Team Up” in the Dec. 1999 Update.) Microsoft sees bricks-and-mortar promotion of its access service as a significant channel to customers who are buying a computer or an Internet connection for the first time. Other portal companies have also seized upon the strategy, creating a rush to make deals with the choicest retail partners. Microsoft beat out AOL to sign RadioShack. On the day of the Best Buy announcement, AOL signed a deal with Wal-Mart to deliver a co-branded access service; Yahoo has signed a similar deal with Kmart.