They already had a better one
Anyone remember MSN Spaces? That one kinda worked, though it was more of a LiveJournal-style blogging platform. But the thing is: it worked. Integrating that with their then-popular MSN Messenger IM service did wonders to the whole thing. At some point, people were constantly posting stuff in there and your friends could see those updates; a surefire thing as everyone had MSN Messenger.
It started dying off as people migrated to hi5 and/or Facebook and the old blogs stagnated. Sometime around 2010, Microsoft migrated all the blogs into some Wordpress crap and shut down the original network. Then they killed MSN Messenger. They basically killed off their only successful social network-ish stuff to promote Skype; instead, everyone just jumped ship to Facebook. Great job, Ballmer!