Microsoft's Ad Plan? It's Classified

Is Microsoft's revelation that it is testing a classified ads service conclusive evidence that The House That Bill Built is truly trying to hitch its wagon to advertising revenues?

On the one hand, we've got to remember that Microsoft will try anything. I wouldn't be surprised to hear that Microsoft is testing a personal solar-powered microwave coffee warmer. But on the other hand, this feels serious. It feels as serious as Microsoft's all-out war on Netscape. It feels like any day now we can expect Microsoft CEO Steve Ballmer to announce, "Advertising belongs in the operating system."Why? Because it's where the money is. by 2007, online advertising will reach $13.8 billion by 2007 -- a number that will surpass magazine ad revenues, according to a JupiterResearch estimate quoted in the Microsoft article.

Historically, Microsoft hasn't been a very successful advertising salesman. MSN is a distant third behind Yahoo and Google or maybe even fourth if you figure in AOL. The software giant hasn't been able to break through in search technology. It's thrown money at maps and online journo-boy Michael Kinsley but hasn't been able to buy a hit. But that doesn't mean it's going to stop trying.

And you've got to admit, the new classified-ad thing, code-named "Fremont," sounds like it's better thought out than some of the recent PR-fests (notably "Windows Live").

The service, which should go into a public beta in a few weeks, lets users control the audience they aim their classifieds at. They can go small -- send their ad only to their MSN Messenger IM contacts or to groups within the MSN Spaces blogospheroid, or to selected e-mail domains, which lets them target their coworkers at widgetworks.com.

Or they can go large, and list their ad on MSN local search, or the MSN search engine. There's even a rudimentary notion of advertising presence, with people who are advertising stuff for sale getting a little yellow star on their Messenger window and Spaces homepage.

The drawback? Notice how many times "MSN" appears in the preceding paragraphs. Microsoft wants lock-in. You've got to have an MSN account, a Messenger contact list, a Spaces page. The competition, notably Craigslist and Google's Google Base, in contrast, is more wide open. Fewer features, maybe, but greater freedom. You can post at will to either one, though you won't get as much clever marketing support.

The key to Microsoft's interest is undoubtedly another statistic that surfaced in the results of a Pew Research Center poll that says 17 percent of adults who use the Internet have sold something (or tried to) online. That's the eBay market. It's very real and very big. And I'd say Microsoft, a company that's finding it increasingly hard to sell an upgrade to Office or deliver a new Version of Windows, is very serious about wanting a Microsoft-sized piece of it.