July 25, 2003 10:45 AM PDT

Microsoft considering music store


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REDMOND, Wash.--Microsoft Chairman Bill Gates said his company is exploring ways to develop a music download service similar to Apple Computer's iTunes that would tie into the software giant's multimedia applications.

A Windows Media Player-based digital music store, whether provided by Microsoft itself or by partners, would be a steep hurdle for Apple as it pursues plans to push its own popular iTunes music service into the PC market.

Responding to questions at an analyst meeting here Thursday, Gates indicated that any music store project would be more a matter of providing computer users with added convenience--and presumably, keeping people using Microsoft software--rather than a direct moneymaker.

"It's maybe a feature your platform should offer, but it's not like you're going to make some (big) markup," Gates said.

The online and music communities have been watching closely for a Microsoft response since Apple launched its iTunes music store to widespread approbation in April, promising a Windows version close to the end of the year.

The likely form of that response has been unclear, however. Microsoft has historically focused on producing the underlying multimedia software, rather than producing e-commerce services that would compete directly with the customers for its technology.

Already it has integrated several partners' music subscription services, including FullAudio's MusicNow and Pressplay, into the Windows Media Player. Analysts have said those services, among others, are likely to move toward an Apple-style pay-per-download service in the near future. They or other partners could be the vehicle for Microsoft's plans.

As others rush to match the success of Apple, which sold 5 million songs online in the first two months of store operation, it appears the Windows market will soon be quickly crowded with downloadable music stores.

On Tuesday, Buy.com CEO Scott Blum launched his BuyMusic venture, promising to spend $40 million on advertising the new online music store. Listen.com and RealNetworks are expected to add song sales to their Rhapsody subscription service. Amazon.com also is expected to launch its own service.

Gates indicated that America Online, Yahoo and RealNetworks will likely be competitors to any Media Player-based service.

 

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