Microsoft can now register top-level internet domains, having been added to the Icann (Internet Corporation for Assigned Names and Numbers) list of accredited domain name registrars.
This means that Microsoft can now add new top-level domains such as .com, .net, .org and .pro to the databases used by computers on the internet.
Microsoft said the Icann accreditation "will be helpful and educational for us as policies evolve and we introduce new and improved internet-based services to our customers".
"Becoming an Icann-accredited registrar is just one of many ways we can improve our customers' online and search experience," the company said.
The move is probably related to its Office Live product, which is expected to emerge from its beta testing period on 15 November, according to Rich Miller, an analyst with internet research firm Netcraft.
Microsoft offers free domain name registration to Office Live users, and to date the company has been using Melbourne IT for this service. By becoming a registrar in its own right, Microsoft could cut costs, Miller said.
Though its status as a registrar makes it possible, Miller does not expect Microsoft to get into a new business selling £4-per-year domain name registrations. "The most sensible approach for Microsoft is to do what it's doing with Office Live: use the domain name to establish the relationship and then offer additional services," he said.
Being a registrar also gives Microsoft better access to the top-level domain databases and could help the company improve its Live Search product, Miller said.
Google has also become a domain name registrar so it can quickly determine when domains have changed hands and then adjust their search ranking accordingly, he said.