The service is due to launch officially in six months

Microsoft is aiming to capitalise on the user-generated video phenomenon by launching an online service to compete with YouTube, Google and Yahoo.

Soapbox starts testing on Tuesday and will launch within six months as part of current service, MSN Video.

"It's really early days in online video; this is still act one," said MSN's Rob Bennett.

YouTube had 34 million visitors last month, according to Nielsen/NetRatings, while MSN Video attracts about 12m.

"We're definitely not blind to the fact that YouTube has a big lead right now," said Mr Bennett, general manager of MSN's entertainment and video services.

The video-sharing market has proved increasingly popular with users in the last 12 months with services such as YouTube crossing over into mainstream success.