Microsoft Corp. today announced the availability of its new Zune HD portable media device that is aimed at competing against the very successful iPod touch from Apple.

The Zune HD is available with 16GB priced at $219.99 (black color), or with 32GB priced at $289.99 (color platinum).

Microsoft went on to say today that the company plans to add new games and applications to the Zune Marketplace in the near future.

The company said “Later this year, Zune plans to release free applications such as Twitter for Zune and Facebook for Zune, in addition to fun 3-D games such as “Project Gotham Racing: Ferrari Edition,”

According to a WSJ report, Microsoft is developing a new Microsoft branded phone dubbed “Pink”, that will likely be powered by Windows Mobile 7, coupled with Zune, Marketplace, and My Phone services, among other services developed by the MS Danger team.

The device will exclusively support the features above; the features will not be available for licensing for other vendors who power their devices with Windows Mobile.

The report also indicates Microsoft is in talks with Verizon to launch the device exclusively in the U.S.

There is currently no other information relating to a possible release, pricing, features, or even what the device will look like.

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Microsoft has just announced today the company will merge its Office Live and Windows Live products under one brand and product. Essentially, Office Live products are productivity extensions that include programs such as Office Live Workspace, Office Live Groove, and Office Live Small Business. Windows Live products are more geared towards consumers and include services such as Windows Live Messenger. The merged software packages will be available by the end of the year and should coincide with the release of Windows 7. Microsoft says the move comes to simplify the user experience.

In other news, Microsoft has just announced the closure of its ACES Studios division, which is the same team that develops one of Microsoft’s oldest offerings, Microsoft Flight Simulator X, which firstly debuted in 1982. Microsoft declined to provide details regarding the future of the product, but affirmed Microsoft is committed to the Flight Simulator franchise despite the closing of ACES Studios. The closure comes as a broader plan by Microsoft to cut costs, including the announced layoffs of up to 5,000 Microsoft employees.

In other news, Microsoft also reported revenue for its Zune portable media player is significantly down. Microsoft said Zune revenue was down $100 million (54% down) from Read the full story