Microsoft (NSDQ: MSFT) is in the process of expanding an online service that will serve as the back end for a slew of new entertainment offerings, with a particular focus on video and mobile phone services, reports NYT’s Bits blog. Both the reasonably successful XBox Live online gaming and video service, and Zune,  the not-so-successful media player, share the same online back end system. Microsoft believes it now has the foundation to do a lot more, though details are still sketchy.

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Microsoft wants to stress the flexibility of the online services Microsoft will offer. Consumers will be able to choose whether they want a subscription service or pay-to-download. Further emphasizing the service’s open-ended ethos, the individual content will have customizable components. As an example, a user accessing ESPN via Microsoft on a mobile device, will be able to tailor the content settings depending on the sport they’re interested in, be it hockey news or baseball stats. (More details on Microsoft’s mobile phone plans - or non-plans - are available here on our sister site MocoNews.)

In a conversation with J Allard, Microsoft’s VP, Design and Development, Entertainment and Devices,  who has overseen the development of Zune and XBox Live, the Times’ Saul Hansell writes that he feels he’s heard this game plan from Microsoft before - Nov. 1994, in fact. At the time, he had interviewed Microsoft’s former CTO Nathan Myhrvold, who was touting the new MSN web portal as the primary threat to AOL. Needless to say, things didn’t go as planned there. While Hansell is somewhat dubious at Microsoft’s new plans to create another online content network, which will feature digital entertainment that users will presumably be able to get elsewhere.

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