Microsoft has at last confirmed plans that it will launch its own music-download store next year, putting it on the path to direct competition with Apple Computer"s iTunes and a growing list of rival digital song stores.
With unequaled software reach, Microsoft"s entry into the market will almost necessarily create a splash larger than that of virtually any other company, despite being as much as a year behind Apple and others. But the company"s service is also certain to be closely scrutinized by antitrust regulators who are already examining its music policies with a microscope. The plans also represent a change in direction that has left some of Microsoft"s own customers feeling betrayed. When Apple"s store launched last year, Microsoft publicly stated it had no plans to compete directly, preferring instead to let other stores use Microsoft technology for their own efforts.
But those assurances changed over the course of the last few months, rivals said. "They called up and said they were going to do it themselves, but the person on the phone said, "You know us, it"s going to take us more than a year to get it up,"" said one executive at a rival music service, asking not to be named. "It was a bad news, good news kind of thing." The official confirmation of Microsoft"s music-retail plans come after months of speculation and hints from as high as Microsoft Chairman Bill Gates himself. Gates said in July that he was considering building a song store, even if he didn"t see it as a direct profit center for the company.