Journalists hanging out online were the first to hear of Microsoft’s latest online misadventures. The discussion started when John Callan, a Microsoft reporter, tried to join a journalism-oriented private mailing list. Word spread quickly that Microsoft was setting up a news service and debate raged on.

Within a few days, Microsoft had denied rumors of any plan to set up a full-fledged news service. “The extent [of the Microsoft News Service] will be in making decisions such as giving one story a bigger headline and another one a smaller,” said Bill Miller, director of marketing for the Microsoft Online Services group. “John was misinterpreted in what he was saying,” added George Meng, lead product manager for the Microsoft Network.

The service, which was announced at the same time as Microsoft Network, will offer customized news to the Network’s users. This means the news service will add graphics to stories pulled from different sources and create links to MSnet-relevant bulletin boards.

The service will include Microsoft Network Today, an online newsletter akin to the what’s new sections on other online services. “We will point people to interesting areas on our service and, when we connect to the Internet, to interesting areas there,” said Meng who told Web Week that the Microsoft Network would offer full Internet connectivity by the end of the year.

But larger outfits are looking at the furor over this annoucement as tempest in a teapot. “I think the Microsoft Network has a problem: If it’s going to compete with CompuServe, AOL, and Prodigy, it’s got to get some content. So I’m not surprised to hear about Microsoft scrambling to line up some stuff,” said Time Magazine’s science editor Philip Elmer-DeWitt, who supervises the magazine’s online presence. That view reverbated intemally as Microsoft officials say the 24-hour newsroom will be no different than those already ordine.

Others welcome Microsoft’s entry in the news delivery business, eyeing the creation of a real market. Brad Templeton, president of news packager Clarinet, sees Microsoft’s presence as beneficial to his business because, “If Microsoft convinces a lot of people to buy news, we will beat them on price.”

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