I had always thought that Microsoft did not enter the social network market because it had one. Facebook. After all, it was an early investor and there are close relationships between the two companies.
According to T3, the secret project is called "Tulalip" is Microsoft's own social network - this news comes on the heel of the successful Google Plus launch with already 10 million users.
Personally, I'm kind of tapped out now. Plus works for me and Microsoft is going to have to do a lot of incredible stuff to make me want to even consider starting up a profile with it.
I wonder if Facebook had prior knowledge of this and how they feel about it.
From the looks of it, Microsoft could be trying to be an aggregator to other social networks (both Facebook and Twitter were featured prominently on the front page) and working with them instead of just competing with them outright. Yesterday, I wrote about an Apple patent that creates a mean for Apple's iOS devices to serve as an agnostic umbrella gateway to other social networks. I reckon this could be Microsoft's strategy.
Perhaps it's taking a page out of Sauron's playbook: One social network to rule them all. This is getting good.