Microsoft plans to snap up music search company MongoMusic in a bid to expand its internet service for consumers.
MongoMusic will support Microsoft's MSN and WindowsMedia.com services which provide music and video encoded in the Windows Media format. Financial terms of the acquisition were not disclosed.
Proprietary technology is used to customise users' playlists and allow them to search for other songs based on their favourite sounds.
Jeff Camp, general manager at Microsoft's personal service and devices group, said MongoMusic's technology and relationships will help meet Microsoft's goal of offering compelling digital music content through existing sites such as MSN and WindowsMedia.com
Rob Enderle, an analyst at Giga Information Group, said the acquisition is part of Microsoft's bid to gain ground over AOL. "Microsoft is building a portfolio of services that can better challenge AOL. Though it is hard to catch a leader from behind, Microsoft has the money and it looks like it's spending it," he said.
Analysts predict that the need for music search and recommendation technology is becoming more valuable as the market for online music continues to prosper. According to researcher Jupiter Communications, the internet music market is expected to be worth $1.5bn by 2005.
MongoMusic was initially funded by Sony Music and Nokia Ventures.
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