A year after Apple introduced iMovie, Bill Gates announced a year later that his company was going to be bringing in something new and innovative into Windows XP. That innovation was, of course, MovieMaker, a product that Microsoft later went on to directly compare to iMovie.

More recently (October 28th of this year), Mr. Gates noted that Longhorn will have in 2005 or 2006 what Apple introduced with Mac OS X and realized with Jaguar (purists will note that this was really started years ago with the NeXT OS). From a C|Net interview:

C|Net: Some of the concepts about how people manage their information are revived [from .Net], correct?
Bill Gates: Sure. I think the idea that your address book should be usable by other applications, that your calendar should be accessible by other applications--that is a big part of Longhorn, because we move those rich user schemas down into the platform so that applications can all get at presence and phone numbers and annotate the address book, instead of things like each application having its own address book.

Today, the Wall Street Journal reported that Microsoft will, in fact, be following Apple into the music download business. From the Dow Jones Business Wire:

A spokeswoman for the Redmond, Wash., software company confirmed that Microsoft's MSN Web site will offer such a service in 2004, but declined to provide further details. Microsoft executives previously have said the company was considering selling music online; the company's latest comments represent the most concrete statement yet of its intentions. A person familiar with the matter says Microsoft has been in regular contact with major music companies to discuss plans for a service.

Microsoft is in the process of hiring key personnel for its music site. A job listing posted on the Microsoft corporate Web site last week advertised an opening for a senior-level marketing position for the service.

Microsoft will enter a market that has exploded with competition this year as the recording industry has moved more aggressively to make songs available for delivery over the Internet. That has prompted an assortment of retailers, technology providers and media companies to scramble for a piece of the emerging online music business.

There's more information in the full article.

OK, so this was hardly a surprise. It's long been rumored that Microsoft will do this, and indeed the company has already launched a co-branded service in Europe. What remains to be seen, however, is whether or not the company can make a go of it.

Let's look at the issues: Apple says it is running the iTunes Music Store in order to sell iPods. There's no money in it, according to Steve Jobs. He recently questioned the business models of Roxio's Napster 2, MusicMatch and others, simply because those other companies don't have hardware to hawk along with the songs. That is a serious issue, as the only folks making money in the online music business are the labels.

So what does Microsoft have to gain? The company isn't selling its own MP3 player, after all.

In the first place, Microsoft has never needed more of a reason than "someone else is doing this, so we should try to own it." Secondly, the issue for Microsoft is Windows Media vs. QuickTime. Microsoft is desperate to own the market of content delivery, and if the iTMS continues to dominate the legal download market, more and more Windows users will be using QuickTime.

Big Redmond simply can't have that.

In addition to the market share issues, there are real revenue issues. While Apple isn't licensing FairPlay to other hardware vendors (AAC itself can be licensed by anyone wishing to do so, but it takes FairPlay to play songs from the iTMS), Microsoft is licensing Windows Media 9s to all of the other download services, as well as all of the hardware vendors competing with the iPod. That's real money for Microsoft. The twin demons of loss of market share and a threat to revenues have always been enough to get Microsoft to roll out the large-scale efforts.

That's why Big Redmond is doing this, but can the company make it work? Microsoft pretty much has a green light from the Bush administration to continue tying and bundling products into its monopoly powered Windows OS, so distribution won't be a problem. Look for Microsoft to build its store into its own Windows Media Player (like Apple did), and that alone should be enough to allow Microsoft to gain a significant foothold in this business.

Who will that hurt? Apple's iTMS? Probably not, actually. It's bad news for MusicMatch and whatever Dell's copycat service is called. It's devastating for BuyMusic.com, which might as well rename itself WhyStayInBusiness.com. It will also put pressure on Napster, and any other solution that is based on Microsoft's Windows Media technology. None of those platforms will have much opportunity to differentiate themselves.

That doesn't apply to Apple, however, and the fact is that the iTMS is the easiest to use service on the market. Apple will continue to be in the position to differentiate itself, just like it can with the Mac platform. Microsoft is not going to be able to touch Apple's ease-of-use with this service anymore than the company does with anything me-too product it brings to market.

That means that Microsoft will likely push out most of the other services except for the iTMS and Napster, or at least make those other services irrelevant.

The platform wars are here again, and it's once again Apple vs. Microsoft, with the latter boldly going where the former has already been.