The software giant is inquiring about retail space in New York's Times Square, a much larger stage than its previous venue in San Francisco, according to real estate brokers.
One place it has been trolling is the 1 Times Square building, said Jeffrey Roseman, a broker with Newmark Retail, the agent for the building.
Roseman, who in the last three months has started to market the property, noted Microsoft approached his company about leasing the space.
"I had not reached out to them," Roseman said. "They were looking for something in the city, and we have spoken to them."
He noted, however, that it is not quite clear how much space the software giant is seeking, what its preferred location in New York might be and how the space will be used.
"My guess is they'll use it as a showroom," Roseman said. "A lot of companies that open a showroom in Times Square use it for branding...It's more like theater than retail."
A move back into retail could help Microsoft showcase its growing number of consumer products.
Its Windows Media Center is aimed at bringing the software maker, as is the upcoming .
Microsoft is trying to take on Apple Computer and Sony with its software for music players and. The company is also eager to edge with its Windows Mobile operating system.
Microsoft, however, is not commenting on its real estate pursuits in New York.
"At any given time, Microsoft evaluates and pursues real estate opportunities and needs. Out of respect for all parties, and a desire to not perpetuate rumors, we do not have a comment on this at this time," a Microsoft spokeswoman said.
Microsoft first opened a retail store in 1999 in San Francisco's trendy Metreon entertainment and shopping center. The store showcased Microsoft products, served as a training center and played host to community fund-raising events such as "Tail of the City," said Archana Chattha, vice president of brand marketing and business development for the Metreon.
"Tail of the City" events included an auction of computer mice decorated by celebrities, such as actress Sharon Stone and writer Amy Tan. But after three years,, saying it no longer fit into its core business priorities.
CNET News.com's Ina Fried contributed to this report.