The move into music would help Microsoft tap into a $40 billion-a-year industry, but the world's leading software company also may raise fears it would use its clout to dominate another Internet business.

With typical Microsoft flash, the Redmond, Washington-based company has invited rock stars and movie luminaries to a Tuesday night bash at a Los Angeles music club where it will showcase the new product, Ms Audio 4.0.

Ms Audio will allow Internet users to download music files for replay later while guarding against piracy by making songs impossible to copy without authorisation.

It is Microsoft's copy-proof alternative to the popular MP3 format that has taken the online music world by storm but greatly alarmed the recording industry because it offers no copy protection.

The launch will come one dayafter International Business Machines Corp and online multi-media company RealNetworks Inc turned up the heat on Microsoft by announcing they were teaming up to provide their own downloading format.

That deal combines IBM's technology and support from several major record labels with RealNetworks estimated 55 million users of its RealPlayer software that allows Web surfers to receive ``streaming'' audio and video clips.

But analysts said Microsoft's presence through its Windows operating system that runs most personal computers would make it a formidable competitor.

Microsoft will make Ms Audio available as a ``plug in,'' or addition, to its Windows Media Player. Songs formatted using Ms Audio are also said to be faster to download and sound better than MP3.

While it was unclear how the format winner would translate victory into profits, analysts agreed the marriage of the booming Internet to the music industry was potentially lucrative.

``It's exciting times here. It's like mega, mega buckshere,'' said an Internet analyst with Booz-Allen & Hamilton Sajai Krishnan ``It could make the music industry much, much bigger.''

Apparently not wanting to be left out of the blitz of online music announcements, AT&T Corp on Monday unveiled the second version of its a2B music player, promising faster downloads and crisper sound than MP3.

``We've been able to cut the time to download music without compromising sound quality or security in response to consumer demand for a better experience when they download music,'' a2B Chief Operating Officer Larry Miller said in a statement.

Analysts said the chief hurdle for online audio companies would be to convince artists and record labels to adopt their format to post songs on the Internet.

``It's less of a technical battle at this point and more a question of who industry players are going to line up with,'' Krishnan said.

BMG, EMI, Sony Music, Universal Music and Warner Music are backing a test run of IBM's format this June, but analysts said Microsoftmay alienate some labels by going ahead with Ms Audio while seeming to ignore an industry-backed plan to draft specifications for a universal standard.

``There's some sensitivity, it seems, as far as timing is concerned,'' said senior marketing director Rick Fleischman for Liquid Audio,a closely held company in California that has helped pioneer Internet music.

``Microsoft is not a guaranteed winner but they're worth watching,'' Fleischman said, adding that Liquid Audio planned on supporting Microsoft's format, as it has done with others, including MP3.

Microsoft also must reassure potential partners it will not strong-arm its way into the music distribution business.

That fear has been heightened by the company's court battle with the justice department over allegations it abused its dominance in desktop operating systems. ``Microsoft especially has, unfortunately, a special hill that they have to climb,'' Krishnan said.