Here Today, Gone Tomorrow at MSN

The fast-track executive who conceived the idea for Microsoft Network three years ago and has headed the online service since its launch last summer has abruptly stepped down in the midst of a difficult transition.

Russell Siegelman, who has yet to be appointed to a new job at Microsoft Corp., said he decided to seek a new challenge after pushing MSN to a subscription base of 1 million.

But analysts speculate that his departure may be related to widespread dissatisfaction over Microsoft’s handling of MSN’s shift from a proprietary online service, similar to that of America Online and CompuServe, to a service based on open Internet standards.

Content providers and software companies that have spent large sums developing for the old proprietary system have been treated “shoddily,” said Jesse Berst, editor of Windows Watcher, a newsletter that reports on Microsoft. “With billions of dollars in the bank,” said Berst, Microsoft “could do a lot more to help these people.”

Laura Jennings, just back from six weeks’ maternity leave and MSN’s new boss, said Microsoft will honor its contractual obligations to its partners. But she offered little other comfort than to point out that Microsoft is feeling the same pain.

“The Internet caused us to change our strategy,” Jennings said. “It was an expensive thing to do.”

* Times staff writers Leslie Helm in Seattle ([email protected]), Greg Miller in Orange County ([email protected]) and correspondent Paul Karon ([email protected]) contributed to this report.