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A survey by investment and research firm ChangeWave Investment Research of its clients who are current and former subscribers of America Online showed that 40 percent of respondents were dissatisfied with the service. The report comes at a time when AOL Time Warner's management is struggling to get the online service back on track as it suffers from an anemic advertising climate and slower growth in its dial-up subscriber base. Of the 402 respondents in the survey, 73 percent were still subscribers and 27 percent had left AOL in the past year, ChangeWave said. About 40 percent said they were clearly dissatisfied with the brand, service and customer support. Some members resented the relatively high cost of $23.90 for the service, the report said.

At the E3 gaming conference in Los Angeles, Microsoft's David Hufford talks to correspondent Melissa Francis about the company's new Xbox Live online service.
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Doom III, Command & Conquer: Generals, and Star Wars Bounty Hunter will be demonstrated by a special E3 panel. GameSpot Live is your only source for the exclusive broadcast of this panel on Wednesday, May 22, from 4:00pm-5:30pm PT.

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The video game industry is setting its sights online after a flurry of console price cuts that will put the focus less on the hardware and more on giving consumers reason to get hooked. Microsoft Corp. outlined plans Monday to launch an Internet gaming service for its Xbox game console. Starting this fall -- the company didn't specify a date -- Xbox owners who also have a high-speed Internet connection will be able to play each other through an online service called Xbox Live. For $49.95, Xbox owners in North America, Europe and Japan will be able to purchase a year's worth of access to the service and a headset-style communicator device that connects with the Xbox.

The rising tide of web services is leading to a battle among Microsoft's .Net framework, Sun's ONE (Open Net Environment) platform, and Linux for the allegiance and revenue from Web-hosting service providers. As part of its strategy, Microsoft is expected to continue developing tools for a service provider industry it views as a "great test bed" so it can gauge the application management, integration, and packaged value-add delivery nuances of Web services and .Net, according to Ted Chamberlin, a network analyst at Stamford, Conn.-based Gartner.

Microsoft's drive to draw the attention of Web-hosting giants has momentum. This week, Ensim, a hosting automation company, will introduce WEBppliance for Windows 3.0. Redmond, Wash.-based Microsoft is endorsing the software appliance as a means to sell and support .Net-based Web hosting services to small and midsize businesses through telecommunication and service providers, said Andy Kim, vice president of marketing at Sunnyvale, Calif.-based Ensim.

Microsoft Corp., the world's largest software company, is an unaccustomed underdog in one of the few tech sectors still booming: video games. Half a year after the high-profile debut of its Xbox game console, Microsoft is under pressure to show it can gain ground on market leader Sony Corp. 6758.T by tapping its deep pockets to fund price cuts, hit software and an aggressive push into online gaming, analysts said. "We want to broaden the reach of Xbox and get it into the hands of more gamers," John O'Rourke, director of Xbox sales, told Reuters last week after Microsoft cut the U.S. price of the Xbox to $199 from $299.

Microsoft will spend $2 billion in its effort to make Xbox the leading video game console, a company executive said Monday. John O'Rourke, marketing director for Microsoft's games division, said the company will spend that much to build out the network for online Xbox gaming and to fund research and development for the next version of the console and support for game developers. Microsoft representatives had already said the company would be spending $40 to $50 per game machine--which Microsoft already sells at a loss--to get the Xbox online service running.

Microsoft will sell a $49.95 Xbox Live package, O'Rourke said, which includes a 12-month subscription to the service and a headset microphone that connects to the Xbox for voice chat. The fee does not include a broadband connection, which is required to subscribe.

Intel Corp., the world's largest semiconductor maker, on Monday rolled out new chipsets with graphics capability built in, to support its Pentium 4 and Celeron processors, which will save personal computer makers about $25 for each computer they make. The trio of chipsets, which connect processors to the system memory and other parts of PCs, will boost the performance of PCs for both corporate and home users, Intel said. One of the chipsets, the 845G, is aimed at higher-end corporate and home PCs, which will likely cut into the sales of some lower-end graphics chips sold by Nvidia Corp. and others, analysts said.

The 845G, 845GL and the 845E all have the next-generation version of a data transport technology, called USB 2.0, which speeds the transfer of data, say from a digital camera to a PC for editing and manipulation. The first version of USB can move data at about 12 megabits per second, while USB 2.0 shunts data among devices at about 480 megabits per second, McCarron said.

Microsoft is launching a new campaign to pluck away the disaffected from America Online's 34 million-strong subscriber base. The Redmond, Wash.-based software giant will use an application called TrueSwitch, developed by New York-based Esaya, as the main weapon in what it considers its most aggressive attempt to date to close ground between AOL and its own MSN service. TrueSwitch automatically transfers all the information from someone's AOL mailbox, address book and calendar services into MSN Internet Access, Microsoft's ISP.

Defectors can also choose to have their AOL e-mail forwarded from their account to MSN for 30 days and can create a mass e-mail listing to inform all address-book contacts of the switch. Microsoft will also give a $50 rebate after defectors pay for three months of its service.

Web site hosting software maker Ensim has announced a new version of its software for managing hosted Web sites that run on Windows, a potential lift for Microsoft as the company looks to expand its .Net strategy to key markets. Ensim's Webppliance software is used by Web site hosting companies to manage multiple Web sites, the company said. The new Windows version of Webppliance lets a Web site hosting operator run its operation on Microsoft's Windows 2000 operating system and .Net Web services technologies.

Ensim executives said Windows technology is "growing in popularity" among Web site hosting providers. Support from third-party software companies such as Ensim may help Microsoft crack the Internet infrastructure market it clearly lusts after. Much of its .Net Web services strategy is based on providing the underpinnings for future Internet-based software. A key to this drive will be how quickly network operators and Internet infrastructure companies adopt software from the Redmond, Wash.-based software giant.