IS MSN ON THE BLOCK?

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Such numbers aren't exactly good for morale. Indeed, one source close to Microsoft describes MSN today as filled with employees who are feeling whipped, uncertain of their project's mission and perplexed by hearing it referred to in some quarters as already a failure.

What to do? Despite its riches, Microsoft, like everyone else, is still groping for ways to make money online; the likeliest strategy will be to move MSN's acres of premium content from behind the pay service's forbidding walls to the free side, where their way would be paid not by subscriber fees but by advertising and online sales. A wholesale shift could come next January, when MSN plans to unveil its latest revamp.

In fact, the migration is already under way. Early next month, say MSN sources, four new content areas will land on the free site, including two established MSN channels, the women's community Underwire and the search site One Click Away, and two new ones: a job-search program called Get Working and Mauny's Kitchen, a cooking area with Seattle-based NPR correspondent Mauny Kaseburg as host.

There had better be more where that came from. Chairman Gates, a fearsome poker player, finds himself in the rare position of fighting for a very big pot with a rather mediocre hand. But he didn't become the richest man in America by folding after the first round. MSN is more likely to spend a few quiet months regrouping. Then look for the big guy to double down.

--With reporting by David S. Jackson/San Francisco