MSN: We passed on CompuServe

In a letter to MSN subscribers, vice president Laura Jennings said thatMicrosoft could have easily afforded to buy CompuServe, but passed on the chance.

"Regarding our own interest in purchasing CompuServe, Microsoft is always looking for smart business opportunities that are in line with our overall business strategies," she wrote. "We tend to focus on companies that can bring a combination of great development talent and great technologies at the right price. After investigating this opportunity in the early stages,we made a strategic business decision to invest our resources internally." Jennings also took a loosely veiled stab at AOL.

"Like CompuServe, Microsoft appreciates our members' desire for privacy, nonintrusive third-party offers, and reliable access."It's actually surprising that MSN didn't buy CompuServe. MSN and CompuServesubscribers have far more in common then AOL and CompuServe subscribes.

More importantly, adding the CompuServe customer base to MSN would haveput them in a better position against market leader AOL, which has onlyincreased its lead with the CSi deal. Apparently, Microsoft feared anothergovernment investigation, though AOL faces one now. Last week, federalregulators announced that they were looking into the CSi purchase