But the move announced on Wednesday evoked mixed responses. While children's chairities welcomed the move, major net service providers slammed it as a publicity stunt that would lead children to use less safe sites elsewhere.
Microsoft's online subsidiary, MSN, said it would completely axe chatrooms in most countries from 14 October.
A few countries, including the United States, would retain the services, but these will either be monitored or subscription-based only.
"Most people treat this type of service with respect but we have found that chatrooms – and not only ours - are increasingly being used for inappropriate communications," Matt Whittingham, head of the customer satisfaction at MSN UK said.
"May of those using chatrooms are young and interested in sex and going out. Unfortunately we know paedophiles have exploited this and the freedom they get from chatrooms to target children," he added.
Microsoft's decision came amid increasing global concern that chatrooms had become the favourite haunt for paedophiles seeking to gain access to vulnerable children.
But significantly, Microsoft founder and chairman Bill Gates pleaded ignorance about the closure move.
"I do not know about that, once I see the report I will respond to that," Gates said while on a trip to southern Africa.
"Most people treat this type of service with respect but we have found that chatrooms are increasingly being used for inappropriate communications"
Childrens's charities rejoiced at the planned closure.
"This announcement is a very positive step forward and will help close a major supply line for sex abusers who go to great lengths to gain access to innocent children by grooming them on the internet," Chris Atkinson of a children's charity said.
But Freeserve, an internet service provider, criticised MSN decision as nothing short of reckless.
"Chat is an intrinsic part of the internet and its not going to go away," a Freeserve spokeswoman said.
"We know about the problems of chatrooms but the answer is not shutting them down, its about constantly looking at ways to make them safer for users," she said.
MSN says it has local internet content in 33 countries and in 17 languages. It claims a total of 201 million users worldwide and says some 1.2 million of them use its chat services.