Microsoft is testing a new social network which is designed to be used on company intranets.

Computerworld.com reports that the TownSquare application was launched by the company in January and is currently used by over 8,000 Microsoft employees.

TownSquare has a layout similar to that of Facebook and allows companies and employees to display information in a news feed.

Chris Pratley, general manager of Microsoft's Office Labs, told the website that TownSquare grew within the company "by word of mouth" and now around 700 employees "use the social network daily".

"We share that with the client teams we work with. They take the knowledge about usage so they don't make so many mistakes in product design," he added.

In October 2007 Microsoft paid $240 million for a 1.6 per cent stake in the leading social networking site, Facebook. The site was valued at $15 billion at the time.