Microsoft could announce its MS Audio 4.0 technology as soon as its Windows Hardware Engineering conference in early April, according to sources. MS Audio 4.0 could potentially create music files that are about half the size of MP3 files and with more built-in protection against illegal downloads, say published reports. MS Audio 4.0 is not expected to be incorporated into the version of the Windows Media Player which will be integrated with Internet Explorer 5.0, a product which Microsoft will unveil officially today in Redmond, say recipients of early copies of IE5. Instead, MS Audio 4.0 will be part of a future Windows Media Player release. Word of Microsoft's intent to create a rival to MP3 first broke on the digital music hub, MP3.com . MP3.com Senior editor Doug Reece said he talked to a number of Big Five music industry sources who claimed to have been briefed on Microsoft's plans. "This is clearly a play for Microsoft to steamroll what's going on with SDMI," Reece said. Microsoft currently supports the playback of MP3 files via Internet Explorer 4.0 and its current version of Windows Media Player. Microsoft also is a member of the Secure Digital Music Initiative, a standards group formed last December to work on digital-music security challenges, including the current lack of security inherent in MP3. Microsoft refused to comment on any aspect of MS Audio 4.0, including the name, timing or intent. A Microsoft spokeswoman declined to confirm or deny the MP3.com report. "Microsoft does not comment on any unannounced products," said Gary Schare, lead product manager for Windows Media Technologies. "That said, Windows Media Technologies support playback of MP3 today. And we are very interested in improving on the platform. "MP3 is a major phenomenon," Schare continued. "Microsoft is very excited about more and more people using Windows PCs to play back, record and store MP3. But as a company making its living on digital intellectual property, we would not condone the illegal copying or use of digital audio....We need for the whole industry, from vendors to record companies, to be happy about this." But other vendors in the digital music space say an attempt by Microsoft to build a new end-to-end solution wouldn't be far-fetched, especially given the spate of recent announcements by Microsoft in the digital copyright and Internet media spaces. That was the take of one source at an MP3-centric developer, who said that Microsoft's control of the operating system platform would give the company a leg up in creating any kind of end-to-end streaming media system going forward. "But why Microsoft is walking into the black tie party a little late wearing a mini dress is kind of baffling," the source added, wondering aloud what Microsoft would be able to contribute to the MP3 security problem that the SDMI isn't already tackling. The source added, however, that Microsoft is attempting to distance itself from perceptions that it is competing with MP3 application and content developers. "Microsoft is saying it's trying to turn Windows into the best platform for delivery. They want ISVs to proliferate around Windows as a media platform." Got something to say? Tell the Mailroom Take me to the MP3 Special