The Guardian (UK) has published a story looking at what the newspaper says is a brewing war between Apple, Sony, and Microsoft for music downloads. As part of the story, the Guardian points to unconfirmed and unsourced rumors that Microsoft is going to enter the market for music downloads after all, and is prepared to spend millions of dollars in marketing the effort. The article describes a format war between Apple and Microsoft (in particular) as potentially being a nightmare clash for consumers. From the article:

But the music industry is rife with speculation that Microsoft will announce before the end of the year that it is opening an online store to compete with Appleis iTunes Web site. It raises the prospect of an all-out battle between Gates, dubbed one of the worldis richest geeks, and Apple co-founder Steve Jobs, described as ithe first rock star of the technology businessi.

[...]

Simon Dyson, an analyst at Informa Media, which has just published a report on the market, warned: iAt the moment, compatibility doesnit matter because the majority of songs can be ripped from CDs or downloaded illegally. But as soon as digital downloading really takes off itis potentially problematic.

iIf Microsoft becomes the biggest download site, and it is incompatible with the biggest player, the iPod, thatis potentially ridiculous. It would be a nightmare.i

Thereis more information in the full story, which we found to be an interesting read.