In April, Microsoft sites were trailing in sixth place for online video, behind Viacom Digital, Yahoo, Hulu, Fox Interactive Media, and Google.
Microsoft's YouTube competitor will bow out on August 31, in another nod by Microsoft to the tough economy.
Microsoft said in June that it was re-evaluating Soapbox, although Microsoft vice president Erik Jorgensen said in a published report that Soapbox might become a site where bloggers and citizen journalists could post videos, possibly for a fee.
Now that's not going to happen. Microsoft notified customers on Tuesday that Soapbox would stop accepting videos on July 29 and that users who want to retrieve their videos should do so by August 31.
MSN will not stop offering online video, even though the user-generated content will be gone. "MSN Video has 88M unique users around the world, who watch 480M video streams each month," a spokesman said. "We remain committed to delivering amazing experiences for consumers while keeping a keen eye on our business objectives during this tough economic climate."
Soapbox has never made much of a dent against Google's YouTube, even though more Americans are watching online videos than ever before. Americans viewed 16.8 Billion videos online in April, according to comScore.
Microsoft announced Soapbox nearly three years ago, a month before Google bought YouTube. In April, however, Microsoft sites were trailing in sixth place for online video, according to comScore, behind Viacom Digital, Yahoo, Hulu, Fox Interactive Media, and Google, which dominated the market with 40.7 percent share.
Microsoft's 1.7 percent marketshare still put it ahead of Turner Network, CBS Interactive, Disney Online and AOL, but apparently that wasn't good enough.
On Google's earnings call last week, Google CEO Eric Schmidt told analysts he was pleased with YouTube's trajectory, although the company is offering few details on when or how it plans to make money on the site.
Microsoft, meanwhile, which reports fourth quarter earnings on Thursday, is focusing its resources elsewhere.
The company is challenged by declining PC sales due to the worldwide economic downturn and has recently shut down other non-performing businesses, including the online encyclopedia Encarta.
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