Microsoft Axing ListBot

Microsoft said this week that it is shutting down its ListBot service, dropping the free email newsletter distribution service in favor of its for-fee List Builder ASP service, which debuted earlier this year.

The decision is aimed at encouraging small email newsletter publishers to “trade up” to the five-month-old List Builder, pricing for which begins at $269.95 annually, and increases with the volume of mail sent. (Converts from ListBot receive approximately 40 percent off the base price for the first year.)

Microsoft originally acquired ListBot when it bought its parent, LinkExchange, in late 1998. That offering was eventually rolled into the company’s small-business Web portal, bCentral, when the service debuted in September, 1999.

But as a result of the shutdown, ListBot’s email functions will be disabled beginning in early Augist, although list managers will be able to salvage their subscriber lists and archived messages from ListBot until the 20th.

While the move will force hundreds of newsletters (the service manages upward of 90,000 subscribers) to either shell out for an upgrade or relocate to another provider, Microsoft says the change will allow it to concentrate on providing services to the small-business community.

“Microsoft chose to shut down ListBot because it is traditionally a consumer-based service used by hobbyists and personal site-owners to create email communities through their Web sites,” said the spokesperson. “ListBot diverges from bCentral’s goal to provide hosted services for small businesses whereas List Builder provides a business-level email marketing solution to better serve the needs of small businesses.”

Nevertheless, speculation abounds about the decision. Some list managers contend that the move came as Microsoft struggled to support the volume of daily emails it had to distribute, with the ListBot service often unreachable for hours.

Another potential reason for the shutdown might have been a failure by Microsoft to monetize the ListBot traffic. The company reserved the right to put ads into emails sent via ListBot, which it did regularly until about a year ago. Since then, it only occasionally adds a one-line pitch for the ListBot service itself to its emails.

“The shutdown of ListBot was not in response to low ad revenue,” a spokesperson said. “It was just a logical move for bCentral since our strategy is focused on offering business services via the Web on a subscription basis.”

But even though Microsoft charges that the service was used primarily by “hobbyists and personal site-owners,” dozens of ListBot list organizers used the service to keep in contact with customers.

“The newsletter I send out … is a part of the way I run my operation,” said a ListBot list owner, who uses the service to distribute semi-weekly deals on refurbished computer equipment. Upgrading to List Builder won’t break the bank, he said, but it will “cut a little bit into my profits, which aren’t huge to begin with.”

Another publisher, who runs an ad-supported sports newsletter, said the decision would likely make him close his publication if he can’t find a suitable free alternative, such as Topica.

“There are quite a few, just not as user-friendly as ListBot,” he said.

Aside from switching to List Builder, Microsoft said ListBot newsletter owners could create an email “community” in the company’s Web portal, MSN — by inviting list members into the group. Of course, that also means that the list manager is no longer running an email newsletter — just moderating a free-for-all email discussion.

More problematic is that shifting to MSN Communities effectively places the email recipients’ addresses into the hands of MSN. As a result, the original newsletter publisher no longer “owns” the list — and can no longer rent it to marketers.

Despite the worries, Microsoft said it believes List Builder would be a useful step-up for most of its publishers and list owners.

“For business users who use ListBot for email marketing purposes, we feel that List Builder will be a perfect replacement and they will be able to automatically migrate their information to this new service,” said the company’s spokesperson. “List Builder provides more value to business customers, including a greatly improved control center, better subscriber database management, and improved HTML email capabilities. Also, customers can target their email campaigns by interests and demographic information of subscribers.”

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