Speaking to The Daily Telegraph, MSN executive producer Peter Bale said: "Music is an important area for Microsoft. We are looking at launching a music streaming service imminently.
"It will be a similar principle to Spotify, but we are still examining how the business model will work."
Apparently the launch of the service is pencilled in for the end of July, and Microsoft is expected to have a download partner for its service, similar to 7Digital's partnership with Spotify.
"We are looking at how other similar businesses have structured their business model and are trying to figure out what will work best for both the consumer and Microsoft," added Bale.
More after the break
There's also a possibility that the service might be integrated with the Xbox 360. We'll keep you posted.