09:30 PM

Microsoft says its building a YouTube

By Richard Koman for SiliconValleyWatcher

Continuing its strategy of copying fantastically successful online services (see Microsoft's iZunes strategy), Redmond is getting ready to launch Soapbox as a challenger to YouTube, Reuters reports.

"We're definitely not blind to the fact that YouTube has a big lead right now," said Rob Bennett, general manager of MSN's entertainment and video services. "It's really early days in online video. This is still act one."

Microsoft Video was a traditional online video site with news clips and featured product (movies and music) videos from partners. They were completely blindsided by the user-created revolution and Soapbox is an attempt to embrace and extend.

"Microsoft is jumping on this bandwagon with some uncertainty with where it's going, but the company believes it needs to be on board," said Joe Wilcox, an analyst at JupiterResearch.

But MS will control the site with a stern eye towards copyrighted material (they could do no less, given their outrage over software piracy), but the solution to copyright infringement is cut deals with labels that allow sampling and mashups of copyright material. Given how weakly MS seems to get the user-creation piece of this, Soapbox strikes as a beta project that is unlikely to steal YouTube's magic. Both Apple and Google should be better aligned on that score.