Has MSN's time come?

...channel to get stuff out from a Windows organisation that otherwise was kind of blocked by their rather difficult delivery process" that can be slowed by traditional sales channels, he said.

Of course, Microsoft isn't in danger of falling apart anytime soon. The Windows monopoly, the Office desktop suite and the Exchange email system give Microsoft plenty of money to fix the problem. And it's not as though tech giants disappear into the night: IBM, after several years of scuffling, reinvented itself as the tech services king.

But it's fair to say that the hammerlock Microsoft has had on tech for better than a decade may finally be loosening. Increasingly, Web surfers are finding alternatives to the PC for their Net access. And no competitor, not even Netscape, has captured the public's imagination the way Google has.

The memo now circulating shows that Microsoft execs are well aware of the search giant's impact. "Google threatens Microsoft's position on the Internet, and could potentially lock Microsoft out of its existing distribution channels and reduce the value of Windows," the memo said, according to The Wall Street Journal. The Journal  first reported on the memo on Thursday. Microsoft, the memo said, was playing "an expensive game of catch-up".

Now the battle is intensifying, and MSN is an ideal launch pad for Redmond's counter-offensive. Last week, rumours swirled that Microsoft would acquire AOL or enter into a partnership that could have AOL using MSN's search engine and effectively swiping Google's single biggest source of revenue. Neither company has confirmed the rumours.

"MSN will be higher profile, and it will also be better leveraged," said David Smith, an analyst at Gartner. "There is a lot of good technology and a lot of assets over there that can be leveraged."

Up to now, MSN has struggled to find its niche within Microsoft. It started out in the Windows group when Windows 95 launched. Later, it was positioned as a competitor to AOL's proprietary service and bundled dial-up Internet access. It even once featured MSN TV.

"Few products at Microsoft have gone through so many strategic identity shifts over the years as MSN has," said Jupiter's Gartenberg.

MSN finally reached operating profitability two years ago because of an increase in online advertising, particularly keyword search sales. That brings it to where it is today: a well-travelled property whose time may have finally come.

While analysts praised Microsoft's new MSN vision, they said the devil will be in the details that Microsoft hasn't offered many of yet. Gartenberg predicted that MSN's instant-messaging service, for one, will become part of the Windows environment.

"There is no doubt that whatever Microsoft will be offering vis-à-vis MSN, and how MSN goes forward, it is going to be strongly integrated back into the whole Windows platform," he said.

Added Gartner's Smith, "I think you are seeing the beginning of Microsoft kind of getting themselves set for the redefinition of platform — the era we are calling the second Web revolution."

What remains to be seen is whether Microsoft is able to do battle with Google as successfully as it did with Netscape.