Big news of the day: the preview of new Web services from Microsoft: Windows Live and Microsoft Office Live.

The coverage I've read has focused on Microsoft's competition with Google and Yahoo, but this is much more than a grab for online advertising revenue.

Way back in 1995, MSN and Internet Explorer represented two competing strategies for Microsoft. The MSN plan was a closed online service, a la AOL and CompuServe (the dominant players at the time). The other plan was to harness the wild Web using a browser: Internet Explorer.

Ten years on, neither strategy has achieved what Microsoft wanted: monthly revenue, millions of subscribers, and a database of credit card numbers. Surprisingly, the winning strategy came from an unexpected place: the Xbox.

While everyone was watching Windows and Office, Microsoft attracted two million subscribers to Xbox Live. That's not just two million gamers. It's two million user IDs, two million credit card numbers, and two million instant messenger users with buddy lists. It's two million consumers for product demos, promotions, and advertising.

The Windows Live strategy looks like the Xbox 360 strategy for Xbox Live: there will be a free level of service and a premium level of service. At the basic level, you get a user ID and basic services; at the premium level, you get more, and Microsoft gets you.

Go to ideas.live.com to see where this is headed in 2006. The instant message demo is more impressive than the personal page aspect of the site, but it's interesting to see RSS feeds built into the custom page (a la Google's custom page service).

What are the implications for Apple? I thought you'd never ask.