We are taking what AOL has done in making it easy and taking it a huge leap forward

Deanna Sanford MSN

As numerous new internet-oriented devices begin to eat into Microsoft's core market, its Windows-based software, the firm is aiming to build MSN into a global brand to rival America Online.

At the moment, MSN says it has 3.5 million subscribers - far behind AOL's 25 million.

Microsoft says the $1bn package includes marketing, retail partnerships, cross-promotions and incentives.

Big push

The ad campaign, which will aim to impress consumers with MSN's internet services and content, will include TV commercials starting now in the US and early next month in Europe.

They are trying very hard to be a better AOL than AOL but, as they've discovered, those who have tried to be a better Microsoft than Microsoft haven't been very successful

Rob Enderle, technology analyst

The campaign will also run online, in print media, on the radio and in cinemas.

Microsoft wants to define its web portal as a "home environment" - what it describes as a place where "consumers feel in control in the unfamiliar environment of the web".

It has also done a partnership deal with Credit Suisse to offer the Swiss financial group's investment service on MSN.

Microsoft says the MSN portal has 210 million users a month, putting it with AOL and Yahoo in the top three online services.

'Horse race'

One technology analyst, Rob Enderle of consultants Giga Information Group, said: "It's a stunning site.

"If they'd done this back in 1995 when they first launched, it would have been a horse race [with AOL], but they are coming after this awful late."

David Smith of Gartner Group said both Microsoft and AOL considered the user experience, or how people interact with computers, to be very important.

"They are clearly investing a lot in the consumer space and they see AOL as a primary competitor," he said.