Google is beating Microsoft at search, and Apple is pummeling Microsoft on the music front—but with the popularity of the Xbox 360 and Xbox Live, Microsoft has a major edge on all of its challengers when it comes to controlling the living room. And the company made it clear that it’s in this fight for the long haul at E3, with news that Xbox Live would be getting much more digital content soon, including music from Last.fm, connections from Twitter and Facebook, and more streaming movies from Netflix. 

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Microsoft (NSDQ: MSFT) is already far ahead of Sony in terms of console volume; the same goes for Apple’s AppleTV flop or startups like Boxee, Roku and ZillionTV. (And there isn’t even any premium third-party content available on the Wii yet.) Meanwhile, Microsoft said Xbox 360 owners had watched over 25 million hours worth of movies in the three months after it partnered with Netflix for streaming video—so there’s clearly a hunger for non-game content on the console. John Schappert, Microsoft’s corporate VP of LIVE laid out just how much more of that content people would get:

—Last.fm: Xbox Live will offer streaming radio from Last.fm; Gold (paying) members will get access for free, Silver members will likely have to pay a fee.
—Twitter and Facebook: The network will pull in status updates, photos and friend lists from both social nets; tweets will be displayed as part of a cloud, while Facebook Connect will allow players to post game footage, high scores and achievements directly to their profiles.
—BSkyB: On-demand and live TV shows from the U.K.-based broadcaster (our sister site pC:UK wrote about it here).
—“Instant-on”: Since the Xbox Live library will be rebranded under Zune, the whole system is getting an upgrade; that includes all content in 1080p HD quality and instant streaming.