Another omen that waning computer sales and declining profits could create a personal computer price war.

In another omen that waning computer sales and declining profits could create a personal computer price war, Microsoft Corp. announced Friday that rebates on PC purchases in return for Internet subscriptions, which were beginning to look like an industry standard, will no longer be given. In its quest for increased margins, Microsoft is cancelling its MSN rebate offer, whereby PC buyers willing to subscribe to three years of MSN Internet service received a US$400 rebate on the price of the computer. Microsoft says its efforts to improve profitability account for the rebate cancellation. Chief financial officer John Conners told interviewers this week that more conservative marketing offers, such as one year of free Internet service with the purchase of a computer, will be implemented instead. The practice of providing rebates, used widely to attract and keep new customers, is seeing less use by Internet service providers (ISPs). Companies such as Prodigy Communications and EarthLink have also offered computer-purchase rebates in the past, but found them a costly means of boosting their subscriber bases in the wake of slowing sales.