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Last week Microsoft entered the Internet audio fray by announcing the release of their Windows Media Technologies 4 platform, which the company claims introduces a "new standard for CD-quality audio" on the Internet. Windows Media includes Windows Media Player, Windows Media Services, Windows Media Tools, and Windows Media Audio SDK.

Microsoft says that Windows Media Audio (WMA) files run at half the size of competing formats such as MP3, while maintaining "CD-quality sound"—a term largely criticized by audiophiles as misleading, since many feel the highly compressed files are not nearly good enough sonically to be equated with CDs. But Microsoft states that an independent study conducted by National Software Testing Labs has found that their platform is preferred over the sound of MP3.

Several Internet-oriented music companies—such as MusicMatch, AudioRequest, and Musicmaker.com—are quickly jumping on the MS bandwagon, but it will likely be the participation of the five largest record labels that makes or breaks the new format. As a result, Microsoft has been quick to score initial deals with Sony (Columbia Records Group), EMI (Capitol), and Warner Music Group (Atlantic). The format has a ways to go, however—its WMA releases number in the hundreds and feature few new releases, while competing formats such as MP3, Liquid Audio, and RealAudio number their titles in the tens of thousands.

In an effort to attract more business from the major labels, Microsoft has been working with SDMI member Reciprocal to develop copyright-protection and use-payment schemes for the new system. "We fully expect Windows Media rights management and CD-quality audio, combined with Reciprocal's transaction clearing services, to dramatically increase the volume of singles and albums released on the Internet, starting immediately," said Paul Bandrowski, CEO of Reciprocal. But as of last week, a hack to get around the WMA protection scheme was already hitting the Net.

Open hostilites between Microsoft and RealNetworks have also surfaced often in the last few months, and Microsoft took the launch of WMA as an opportunity to throw a few more jabs at its competitor. In a Microsoft press release, Dennis Mudd, CEO of MusicMatch, states that "Windows Media Audio offers superior audio technology for our users and, unlike its competitors, Microsoft is committed to maintaining WMA as an open standard. It was an easy choice for us to drop support for RealAudio in favor of Windows Media in our newest release, MusicMatch Jukebox 4.1."

But in the end, the public will vote with their dollars and mouse-clicks. The question remains: Who will come up with the magic formula for bringing the public together with their favorite music in a manner that keeps consumers and record labels happy? The race has just begun.