Redmond Waltzes Into Online Music

Microsoft showed up at the music download party on Wednesday with a music store wrapped around a new version of the Windows Media Player (WMP).

The company's preview release of MSN Music has 500,000 tracks, with plans to reach the industry standard 1 million tracks in coming weeks. Songs will cost users 99 cents each, and most full-length albums will cost $9.99.

Digital rights management technology embedded on the music files allow listeners to hear downloaded songs on up to five computers. They can burn a playlist of songs to a CD up to seven times, with unlimited rights for transferring songs to portable audio devices.

The Microsoft store, which goes head-to-head with similar offerings from Apple Computer , RealNetworks , Napster (formerly Roxio) and Wal-mart, will allow songs to be transferred to some 70 portable gadgets, including flash-memory devices, hard-drive devices and the new Portable Media Center (PMC). The new service will also support Media Center Edition PCs, which allows music playback in a living room setting.

The song files are encoded with Microsoft's Windows Media variable bitrate encoding, with an average bitrate of 160kbps and a peak bitrate of 256kbps.

Redmond also plans to secure international partnerships to roll out the service in the United Kingdom, France, Germany, Italy, Belgium, Brazil, Korea and Australia.

The launch of the service comes at a crucial time for Microsoft's MSN division, which has just turned profitable. With the clout of the Hotmail, MSN Messenger and WMP network to market the service, industry watchers expect Microsoft to grab a significant share of the billion dollar music download market.

The MSN Network alone, which includes the ISP service and the Hotmail e-mail service, attracts 350 million users per month, providing a major base to market the service.

Apple's iTunes remains top dog with its iPod advantage, but Microsoft is hoping the simplicity of the MSN Music offering will become a hit with Windows users. The company is promising an easy sign-up and navigation experience "without requiring a complicated setup before you start browsing the service."

The embedded search interface will allow shoppers to browse by song title, album information, artist name or music genre. The search engine will attempt to correct spelling errors to simplify the experience, Microsoft said.

"People can choose to download songs or albums to their music library in as little as one step -- without lengthy checkout procedures or re-entering credit card numbers," Microsoft said in a statement ahead of the official store opening.

E-commerce tie-ins with Amazon.com and Barnes & Noble will shuttle users to purchase albums that are unavailable online.

To lure shoppers, MSN Music plans to offer exclusive tracks and live performances. Free streaming radio feeds are also on offer with one-click shopping tied to the radio streams.