Speaking to The Telegraph, executive producer of MSN 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".
Even more interesting is that the service has apparently been pencilled in for a launch at the end of the month, so there's not much longer to wait.
As for how Microsoft's offering will work, expect it to take its lead from successful services already out there.
"We are looking at how other similar businesses have structured their business models and trying to figure out what will work best for both consumer and Microsoft," added Bale.
Similarly to 7Digital's partnership with Spotify, it is thought Microsoft will have a download partner for its service, and is reportedly in discussions with a number of companies about teaming up.
Finally for the gamers among you, it seems the service could be somehow integrated with the Xbox360, although Bale was pretty tight lipped on how this would all work. Adding a streaming service to the 360's offering really would make it the entertainment hub it is aiming for.
We'll be keeping you updated on any news on this, but in the meantime be sure to read Stuff.tv Mic's thoughts on whether services like Spotify can even survive. Let us know what you think below.