Losing Xtra partnership? Whatever, says Microsoft

Microsoft MSN appears unconcerned that it may lose its long-standing contract as partner to Telecom's internet business Xtra.

It has been speculated that MSN would be replaced by Yahoo in a deal connected with the sale of Telecom's Yellow Pages.

Telecom chief financial officer Marco Bogoievski has said it was reviewing its MSN partnership, which is due to expire at the end of the year.

Microsoft's director of innovation, Brett Roberts, said it expected that existing partnerships would be "reviewed, renewed or whatever".

The company viewed Telecom as an important customer, but had faith that MSN's huge global presence would guarantee success.

"The Xtra brand may be big in New Zealand but the MSN brand is massive worldwide. We are not wanting for options.

"It's a safe bet that you are always going to see evolution in this very busy challenging dynamic marketplace with existing partnerships. It's always changing."

Microsoft was well placed to deliver good content and experiences for Kiwi audiences, he said.

"We have done a very good job around Hotmail, which is the largest service in New Zealand. MSN Instant Messenger is the most popular messaging service."

Microsoft was also reviewing its delivery of the MSN and Windows Live services to the New Zealand market via Telecom.

Telecom and Microsoft's New Zealand consumer portal MSN have been partners since 2001.

Bogoievski has said the online media and local search marketplace had changed significantly.

Brands such as Google, MSN and Yahoo were using their global strength to compete.

"The breadth and depth of such brands are proving attractive to consumers interested in a rich online experience that brings together search, entertainment, messaging and communications in a simple and attractive manner," he said.

Telecom said last month it was examining options for its Yellow Pages directory service, including a partial or full sale.

Analysts say the business is worth between $1 billion and $2 billion.

A large internet company such as Yahoo or Google could make use of the directory service by linking searches to advertising, generating more revenue from the information.