Tuscaloosa
Can Microsoft Stomp iTunes With a Store of Its Own?
When Microsoft unveils its online music store later this week, the first song offered should be Dave Brubeck's "It's Déjà Vu All Over Again." For Microsoft, taking a trail blazed by others - then trying to dominate the market - is a familiar tune.
With the opening on Thursday, Microsoft will land itself in a market that Apple Computer pioneered more than a year ago with its iTunes online music store, in much the same way that it took on Netscape in the Web browser business and Sony in the market for console game machines. As a storefront on the MSN online service, Microsoft's music service will offer song tracks for downloading to personal computers and portable music players.
Granted, the market for online music today is tiny, accounting for less than 2 percent of all music sales in the United States. Even five years from now, online sales are expected to account for 12 percent of a $1.7 billion domestic market.
"For Microsoft, it's like Slate, not Xbox," said David Card, research director of Jupiter Research, referring to Microsoft's foray into online magazine publishing, which is considered a tiny business within the company. "It's a pretty small opportunity right now."
But music is only part of Microsoft's strategy. The company has timed the store opening with the release of a new version of Windows Media, the software that allows consumers to play movies, songs and other content on a variety of devices running the Windows operating system. With Windows Media and the online music store, Microsoft hopes to further its efforts to make Windows a foundation for its reach beyond the desktop and into the living room.
The launch also comes as MSN is finally turning the corner. The service has begun making a profit for the first time, after losing money consistently since it was introduced as the Microsoft Network in 1995. For the fiscal year that ended in June, the unit posted an operating profit of roughly $200 million, compared with a loss of about $531 million last year.
posted by Utahsaint @ 7:40 AM
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