Initially, the 3D content will be available for 15 US cities including San Francisco, Boston, Seattle and Los Angeles. Microsoft expects to have content for over 100 cities worldwide by September 2007.
One of the main highlights of Virtual Earth is the highly detailed landscapes. Buildings are presented in realistic colours and textures, a process that would normally require large amounts of time and millions of dollars.
Competing services such as Google Earth are based on satellite photos, whereas Microsoft uses aerial photography.
Stephen Lawler, general manager of Microsoft's Virtual Earth business unit, told vnunet.com that last spring's acquisition of mapping firm Vexcel provided access to new mapping and image-gathering technology.
The technology allowed the company to automate and streamline the 3D modelling process for the cities, allowing for faster and cheaper creation.
Unlike the standalone Google Earth, Microsoft has chosen to make Virtual Earth browser-based.
The company will allow users to incorporate their own mash-up content on top of Virtual Earth 3D. A similar service is also available for the current version of Windows Live Local.
The fact that Windows Live and Virtual Earth will be browser-based could give Microsoft an advantage over Google in bringing in new users, according to Greg Sterling, founder of Sterling Market Intelligence.
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The flight will take off from California's Mojave Air and Space Port and could happen as soon as 13th December