"This iLoo release came out of the UK office and was not a Microsoft sanctioned communication and we apologise for any confusion or offence it may have caused," Microsoft spokeswoman Bridgitt Arnold said late Monday.
The fake release generated coverage by The Wall Street Journal, The Associated Press and Reuters.
The Associated Press received confirmation of the project from both Microsoft's Waggener Edstrom public relations firm and London-based Red Consultancy, which handles such work for the software giant in England.
In an e-mail sent last week to The Associated Press, Red Consultancy's Ben Philipson wrote "MSN is really working on building a prototype for the Summer festivals, perhaps Glastonbury... This is very much a 'toe in the water' experiment to gauge interest so we'll have to see how it goes, although judging from response so far it's really captured people's imagination!"
Malina Bragg, who helps with MSN's account for Waggener Edstrom, also verified last week that the project was true.