Report: Microsoft readying new online pay TV service

Even as the word spreads that Google TV could be a stillborn disaster, long-time TV wannabe Microsoft (Nasdaq: MSFT) is reportedly headed back into the fray with what's being described as an "online pay-television subscription service through devices such as its Xbox video game console."

Throughout its history Microsoft has never been able to resist television's siren call, although the software giant's success has never come close to matching its computer-centric businesses. Still, word this time is that Microsoft thinks it has the platform (Xbox) and connections (starting with ESPN and extending to other programmers) to make a go of it as a "virtual cable operator" delivered over the Internet

If the first notion doesn't work, Microsoft has a reported backup: Create content silos and sell individual channels like HBO or Showtime as it does with ESPN on the Xbox. Microsoft, of course, said it doesn't comment on rumor or speculation, so there was no affirmation or denial for the reports.

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