updated 7/12/2004 7:46:49 PM ET 2004-07-12T23:46:49

Microsoft Corp. is planning an online store to sell Windows-compatible products -- and promoting it in prime real estate right on the Windows XP start menu.

The Redmond, Wash.-based software giant said Monday that it plans a fall launch for Windows Marketplace, a shopping and downloading site that will allow users to buy hardware and software for use with Microsoft's dominant Windows operating system.

Microsoft and its partner, CNET Networks, Inc., won't actually sell the products directly, said Susanne Peterson, a director in Microsoft's Windows group. (MSNBC is a Microsoft - NBC joint venture.)

Instead, the site will provide customer reviews and other information about computers, software and other gadgets, and links to online merchants such as Circuit City or Best Buy, where the consumer can make purchases, she said.

Previously, Microsoft offered Windows Catalog in its start menu, which described some products but didn't offer any links to merchants.

Windows Marketplace will immediately get a boost from high-profile promotion on the company's Windows XP start menu and its dominant Internet Explorer browser. Microsoft said millions of customers will be exposed to the promotion.

Safa Rashtchy, an analyst with Piper Jaffray who follows e-commerce, said he didn't expect leading online retailers like Amazon.com to lose sleep worrying that the new offering could encroach on their business.

"So far in the e-commerce space we have not seen a competitive product from Microsoft," he said, and he doesn't expect this one to be any more of a threat.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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