/ 2 September 2004

Microsoft launches online music store

On the face of things, Microsoft’s online music service looks a lot like the market leader, Apple Computer’s iTunes.

When the service launches on Thursday, songs will cost 99 cents — the same as Apple. The catalogue will initially include about 500 000 songs, but the company plans to scale up to more than one million songs over the next few weeks — matching the volume available to Apple users.

But Microsoft insists it is different. Among other things, the company claims its service will have a different look and feel, and says a main selling point is that is that songs can be played on more than 70 handheld devices that support its Windows Media format.

Apple’s service only works with its iPod and a recently released Hewlett-Packard clone. But Apple may still have an advantage there: after all, the iPod has become an ultra-hip accessory.

Microsoft doesn’t ”look to make any money of note” from the service, said Yusuf Mehdi, Microsoft’s corporate vice-president in charge of its MSN online division.

Instead, Mehdi said on Wednesday, Microsoft is hoping the service will serve as a vehicle for drawing more users to its MSN website, helping garner more advertising dollars. The service also aims to be another way to keep Windows-based personal computers enticing, he said.

Analysts have said Microsoft also is eager to boost the popularity of its Windows Media technology, which it hopes will become a standard format distributing copyright-protected digital music and video. Apple uses different technology, posing a potential threat to Microsoft.

Microsoft is launching a new version of its Windows Media Player along with the music service.

The market for buying music over the internet is still nascent, but analysts say it stands to increase substantially in the coming years. Apple said this week that users had downloaded more than 125-million songs from its service since its debut in April 2003.

Other competitors include RealNetworks’ Rhapsody, Roxio’s Napster and offerings from companies like Wal-Mart Stores and Sony.

A final version of Microsoft’s service is expected to be completed in mid-October, Mehdi said. – Sapa-AP