Microsoft looks to boost advertising revenue

SEATTLE – Microsoft Corp. will test a free, advertising-supported version of Works, an already inexpensive package of word processing, spreadsheet and other programs, but would not say whether it is exploring a similar Web-based suite.

The company said Wednesday that a limited number of computer makers will pre-install Microsoft Works 9 SE on new PCs in certain markets, and that the test of the business model will last about a year.

Microsoft’s announcement comes a week after its top executives sketched out a strategy for supplementing traditional packaged software revenue with subscriptions and Web-based services, during a day of meetings with financial analysts at its Redmond, Wash., headquarters.

Industry watchers have been parsing those speeches for signs the company will develop an online version of the more expensive Office suite to compete with free offerings from Google Inc., but the company has so far been silent on the issue.

In an interview Thursday, Melissa Stern, a senior product manager at Microsoft, said the ad-supported programs address requests by customers for free productivity software and concerns from PC makers about rising costs.

The display ads will appear in the lower corners of the screen while users work on spreadsheets, calendar appointments and other documents. The suite will come pre-loaded with ads, and new ones will download when users’ computers connect to the Internet.

Advertisers can buy space inside of Works the same way they plan online advertising campaigns on Microsoft’s Web sites.

The ads, which Stern says are “not intrusive,” will be targeted based on what Microsoft knows about Works users’ demographics, and will relate to common tasks such as household budgeting and vacation planning.

Users of the free Works suite will be able to click from inside the program to upgrade to the $40, ad-free version of Works 9, or download a free trial version of Office 2007, which costs from $149 to $679.