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Summary:

Buried in yesterday’s onslaught of Bing announcements was news that Microsoft’s Zune service was launching a new MP3 store. Microsoft (NSDQ:…

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Buried in yesterday’s onslaught of Bing announcements was news that Microsoft’s Zune service was launching a new MP3 store. Microsoft (NSDQ: MSFT) said that anybody who looked up a track on Bing would now be able to stream the track for free via Zune and “purchase any of the millions of pure MP3s from the Zune catalogue.” The move fits with Microsoft’s strategy of pushing its Zune-related services, as opposed to the Zune device itself, and should give the Zune brand some new exposure. After all, while Bing may still lag badly behind Google (NSDQ: GOOG) in the search market, it is attracting millions of searchers a month.

Notably, Zune is now letting users buy tracks directly with their credit cards. Sounds obvious, but historically, people who had wanted to buy songs via Zune first had to buy “Microsoft points”, which could then be applied to purchase tracks. That has put the Zune at a competitive disadvantage to Amazon’s MP3 Store and Apple’s iTunes, neither of which require users to take an additional step like that. (Zune users will still have the option of using Microsoft Points).

Unlikely that any of this will do much to change Zune’s standing in the digital music market, however, considering iTunes’ complete dominance. As of last summer, the Zune’s market share of the digital music market was a tiny 2.6 percent to iTunes’ 69.1 percent and AmazonMP3’s 7.6 percent.

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  1. “That has put the Zune Marketplace at a competitive disadvantage to Amazon’s MP3 Store and Apple’s iTunes, neither of which require users to take an additional step like that.”

    I agree that Zune should had accepted credit card as an additional payment option early on and this was a poor implementation of the Microsoft Points program – wasn’t this points thing related to earning points for Bing searches?

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