Speaking exclusively to Revolution, Ashley Highfield, Microsoft's new UK managing director and architect of the BBC's hugely successful iPlayer, said the internet giant is working on plans for its own video-on-demand offering.
"I am in conversation with broadcasters and content providers to see what Microsoft could do by partnering in this area," he confirmed.
The planned initiative forms part of Highfield's strategy to reinvent MSN as the web's leading content portal by boosting the amount of audio-visual content across the site.
"We need to work with broadcasters as equal partners, to love their content, their programme brands, their channel brands and make sure they get full accreditation without trying to slap the MSN brand on top and take too much credit."
The Competition Commission's decision to block Project Kangaroo, the internet TV joint venture between BBC Worldwide, ITV and Channel 4, has left the nascent online video market wide open.
Highfield is convinced this spells a significant opportunity for Microsoft and he has already met with Project Kangaroo's stakeholders about picking up the pieces.
"It would be really bad news for the market if the decision to block Kangaroo were to cause a long-term hiatus and take away the impetus that the iPlayer generated in moving long-form video consumption to the web," he says.
Highfield stepped down from his role as chief executive of Project Kangaroo at the end of last year after just six months to join Microsoft as UK managing director and vice president of consumer and online.
In this newly created role, Highfield is now perfectly placed to resurrect Project Kangeroo under a different guise. By striking content partnerships with broadcasters rather than inviting them in as stakeholders, Microsoft's internet TV player would avoid regulatory scrutiny.
According to Highfield, Microsoft had been in negotiations with Project Kangaroo about selling advertising around the joint venture internet TV service. Consequently the internet giant already has the infrastructure in place to make its own on-demand initiative a commercial success.
MSN is already one of the internet's most popular content destinations, claiming to attract 16.8 million unique UK users each month.
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