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Microsoft Considering Ad-Supported Windows

Posted by iNext - 2005-11-17

Microsoft is considering the possibility of free, advertising supported versions of its applications, including Windows.

An internal research paper prepared for an executive brainstorming session recommends looking into delivering software such as Works, Money, and Windows free of charge, supported by advertising revenues.

However, Michael Gartenberg, research vice president at analyst firm Jupiter Research, said that the paper should not be seen as confirmation that Microsoft is actually planning such a move.

"This is just an exploratory thing that is far more for discussion than a plan," he said. " Microsoft is not shifting its business plan this week."

The research paper, which was dated "winter 2005," was dug up by technology news Web site CNET . Microsoft confirmed the authenticity of the document, but declined any further comment.

"As Web advertising grows and consumer revenues shrink, we need to consider creating ad-supported versions of our software," the site quoted from the paper.

The idea seems to be mostly a thought experiment on how far Microsoft can take its Live software strategy unveiled last month.

Microsoft is to offer several software products through the Web free of charge. Advertising is intended to make up for the revenues that the vendor would otherwise have made from license fees.

Making software available with advertising allows Microsoft to respond to the rise of Google , which has built a multibillion dollar business in the online advertising market.

The initiative also offers Microsoft a tool to counter the rise of free open source  software products, including Linux  and OpenOffice, that increasingly compete with Microsoft's main products, Office and Windows.

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