Here's a lead graf that sounds a bit like "I saw Grandma dancing with a hula hoop": Microsoft is planning to launch a music streaming service.

The service, based on Microsoft's experience with its Zune player, is being readied for launch at the end of this month. It will be modeled on Spotify, which offers free streaming with ads or ad-free streaming for a monthly fee. Microsoft is in talks with a download partner.

One potentially intriguing angle would be a tie-in with Microsoft's massively successful gaming console. You may laugh at Zune, but who laughs at Xbox?

The news broke in The Telegraph, a British newspaper.

Microsoft is also planning to open retail stores to compete with Apple's.