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BusinessWeek is reporting that technology powerhouse, Microsoft, is working on plans to develop some type of portable media player to rival the iPod. There is no confirmation whether this device will actually happen, but some little birdies within the corporation said that Microsoft has assembled a team that is analyzing the business aspect of such a venture. Also no confirmed word yet if this device will carry some Xbox branding and play video games, but Peter Moore—head Xboxer—said that the media device would need to take advantage of Microsoft's leverage in the video gaming industry and using the Xbox brand and including video games would be an opportunity. It must be time for a Thunderdome round 2 between Gates and Jobs.

The Bug in Microsoft's Ear [BusinessWeek]