Dean Hachamovitch, general manager for Internet Explorer, stated last week in a blog posting that the "future of the web is HTML5." He noted that the HTML5 specification does not specify a particular format, and that "H.264 is an excellent format." The bottom line? "In its HTML5 support, IE9 will support playback of H.264 video only." Hachamovitch followed up on his original post today with a much more complete explanation of Microsoft's reasoning for selecting the H.264 codec over competing emerging standards.
The comments from Hachamovitch also noted that most web video is currently Flash-based, and although Microsoft and Adobe are working together on Flash, there are issues with security, performance, and reliability with Adobe's player.
It appears that Microsoft is planning for a future that is less dominated by Adobe Flash, and one that is more in line with the standards-based approach that Jobs and Apple are embracing.