CNET takes an interesting look at Microsoft's history in the Web era and suggests that MSN may now be a key part of Microsoft's Web 2.0 strategy. They write that MSN is already being used as a platform for Windows software releases:

"The search service in Windows Vista, for example, shipped earlier as MSN Desktop Search. In addition, Internet Explorer features, like tabbed browsing, and protection against phishing techniques [...] shipped first through MSN."

What's more interesting is an old Microsoft memo from May 1995 that CNET dug up again, called "The Web is the Next Platform", and what that tells us about MSN's future. The memo was written by Microsoft engineer Ben Slivka (where is he now, I wonder?). Here's TheRegister's coverage of it from December 1998, around the time of the Microsoft anti-trust trial:

By 27th May 1995 Slivka is on version 5 of the document, so we can presume that if Bill Gates read an earlier version, he didn't understand it. Nor indeed does Slivka seem to understand the implications of what he's saying completely. He leads in with "The Web is an application platform (complete with APIs, data formats, and protocols) that threatens Windows."

Later in TheRegister piece...

Says Slivka: "My nightmare scenario is that the Web grows into a rich application platform in an operating system-neutral way, and the a company like Siemens or Matsushita comes out with a $500 "WebMachine" that attaches to a TV… When faced with the choice between a $500 box (Risc CPU, 4-8 megabyte RAM, no hard disk,…) and a $2k Pentium/P6 Windows machine, the two thirds of [US] homes that don't have a PC may find the $500 machine pretty attractive!"

Wow - that was an incredibly prescient thing to say in 1995! Swap "Siemens or Matsushita" with Google, and "WebMachine" with WebOS - and that's precisely the competitive threat Microsoft faces today.

But let's return to the topic of MSN. Ten years ago, the memo made it apparent that MSN was heading in the direction of an AOL - a closed proprietary system 'competing' with the Web:

"There was a time when we thought that we could just 'build it and they will come' with MSN, hence all the non-Internet technologies we developed (Marvel RPC, incompatible Mail & News protocols, MOSView etc.) for MSN. These technology choices were unfortunate, for (in hindsight) I think it is clear that MSN would have been much further along now if we had started from the existing Web and enhanced it. [...] It is possible that if Microsoft forges ahead with its current MSN plan (Blackbird, OLE everywhere, COM/DCOM etc.) and only pays the Internet lip service, we may 'pull a Windows' and end up dominating the online world. All of these other players will spend all of their time bickering about IETF standards and shipping incompatible extensions, and the Internet will end up a mish-mash of incompatible solutions." 

On that last point - although the Web still has issues with "incompatible solutions", the core web solutions have in fact solidified. As Lucas Gonze recently pointed out in a post about how systems rigidify over time: "I'm wondering how long the current round of [Web] standards will stick around, and fooling with the idea that it might be for a lot longer than we would expect." I agree, web standards and formats (especially the 'simple' ones such as HTTP, REST, XML, RSS, etc) have proven to be remarkably resilient and I expect them to be around for a lot longer. Maybe even Web 10.0, as Lucas has been pondering. 

So yes, over the past 10 years the Web system has certainly rigidified. To the point that in 2005 Microsoft sees Google, the bigco most likely to roll out a WebMachine, as the major threat it's feared all along. 

In response Microsoft is integrating MSN into its platform product development group, where Windows is developed. It's too early to know how this will play out, but one thing's for sure - the Web is on an equal footing with Windows for Microsoft now. It took them 10 years to fulfill the destiny that one of their smart engineers, Ben Slivka, mapped out for them in May 1995. But will it be enough to stop the WebMachine?