The free, animated application, called Time for a Story, lets parents read stories to their children via a webcam from another location.
Children can interact with the pictures on screen, whilst hearing their parent's voice and seeing their face on the PC.
The new tool provides three classic Noddy stories and other classic characters are expected to follow in the coming months.
Alex Marks, head of marketing for Microsoft Advertising said: 'By bringing relevant and interactive content to consumers, brands are able to connect and engage in far deeper and more meaningful ways. Digital is now mainstream, with 66% of the UK population online and 58% of kids going online when they get home from school. Time for a Story is fantastic way of allowing families to come together and share children's learning experiences'
This article was first published on Marketing