Report: Microsoft to drop out of the race against YouTube

Microsoft's scaling back of its social media initiatives continues, with the news today first reported by paidContent.org, learned during an interview with Corporate Vice President Erik Jorgensen, that MSN Video's Soapbox service will be shutting down completely. Soapbox has been its portal for user-submitted videos, but Jorgensen indicated to Fried that sponsorship for those videos -- which constituted about 5% of MSN Video's content portfolio -- was too low for the service to be sustained in the present economy.

In an interview with CNET's Ina Fried last month, Jorgensen stated then his team's intentions to scale back Soapbox, though he was careful at that time not to reveal the extent. The paidContent.org interview indicates that user-generated content may still be feasible on a revised MSN Video service, or whatever it should be called, although Microsoft is unlikely to give that content its own portal.

Soapbox began its journey to nowhere in September 2006 with a closed beta test, that was opened up to public testers the following February. At no time in its history did it ever actually have a unique angle, no particular reason why someone wishing to share a video would upload to Soapbox rather than to another YouTube competitor, such as Europe's DailyMotion. Reliable metrics estimate that DailyMotion received just under 4.9 million unique visitors last month, and HD video sharing service Vimeo serviced just over 3.2 million unique visitors. Soapbox barely escaped 48,000.

It's widely known that MSN has been working on another makeover, with the objective being to concentrate on a handful of more popular services. Last month, Microsoft discontinued sales of its Money Plus software, which had been tied in with its MSN Money Web site. Both were more popular when they were linked with CNBC, which struck out on its own once again in December 2006.

Followers of Microsoft in the business world will recall that the company began constructing Soapbox after the bidding for then-independent YouTube grew too rich for Microsoft's tastes. Google ended up the winning bidder the month after Soapbox's first private beta tests began.

The fate of MSN should be among the subjects when the company holds its regular quarterly earnings call this Thursday. An extra analysts' meeting is scheduled for the end of the month, although most expect that particular meeting to focus on Windows 7, which by that time is expected to have released to manufacturing.