Microsoft plans to launch a music download service next year, going up against Apple's iTunes and many other services peddling music online.
Microsoft has been considering a music download service for some time. In July the company said that plans were in the very early stages, if they could be called plans at all. Microsoft Chairman and Chief Software Architect Bill Gates at the time said he did not see a music service as a money-making service, but it has decided to go ahead with it nonetheless.
"We cannot provide any further comment than to confirm that MSN will deliver a download music service next year," a Microsoft spokeswoman said in a statement.
Despite the "precious few details" Microsoft has given on its plan, it is clear that its entry will have an influence on the nascent online music market, said Mike McGuire, research director at GartnerG2, the business strategy research arm of Gartner. However, Microsoft's size does not guarantee it success, he said.
"This certainly is going to have an influence on the market. Whether or not this is going to be an extreme success for them remains to be seen. I would not say anybody has got a lock on this market at all; the market for online music distribution is very immature," he said.
Microsoft currently offers a music service in partnership with Pressplay. That could be replaced by the new service, for which it has started hiring staff. The company is looking for a lead product manager whose first duty will be to finalise the business plan for the music download service, including branding, positioning and budgeting, according to a job listing on its website.
RealNetworks, Microsoft's perennial cross-town rival in the music space, welcomed the news. RealNetworks offers Rhapsody, an online music subscription service that provides some downloads for burning to a CD as well.
"If you have the best product, you welcome competition because it brings attention to the place," said Dan Sheeran, senior vice president of marketing at RealNetworks in Seattle.