Microsoft on Thursday will release Windows Live Local, a new online service that combines local search with the company's Virtual Earth aerial image service.

The Thursday launch will be a beta version; Microsoft hasn't yet disclosed a date for a general release.

With its new service, Microsoft is attempting go a step further than Google Local, which offers similar capabilities, by providing 45-degree aerial views of to-and-from locations. This so-called "bird's-eye view" is available for only a few major U.S. cities, including New York, Los Angeles, San Francisco, Boston, Seattle and Las Vegas.

More cities will be added over time.

The images are provided through a partnership with Pictometry International Corp., which uses low-flying planes to snap pictures. The images are then integrated with road and satellite maps to simulate a 360-degree panorama that users can zoom in or zoom out of in four compass directions.

"It's totally game changing from anything else out there in the industry," Stephen Lawler, general manager of Windows Live Local, said.

Charlene Li, analyst for Forrester Research, said Microsoft had one-upped Google and other competitors with the bird's-eye view, which none of the rivals have. "It's a really nice system," Li said.

Google, which Microsoft has identified as its top rival in search and online advertising, has also combined road maps, driving directions and aerial views to help people find and get to locations. However, its satellite images provide only one view looking straight down at a location.

Microsoft plans to make money on the new service, which is set to launch on Thursday, by selling contextual advertising. For example, if someone searches for hotels in a particular town, they will get a Yellow Page listing, as well as a clearly marked list of sponsored links. Google uses a similar business model. Microsoft, however, is looking to differentiate itself from its rival through what it believes are better capabilities.

Besides its bird's-eye views, Microsoft is offering step-by-step driving directions using either the angular views or straight-down satellite views, identification of construction areas along a specific route and several print options, such as the ability to only print directions or to include thumbnail pictures of each turn in the route. User also can print directions that include their personal notes.

For people using a laptop near a Wi-Fi connection, Microsoft's service can help the user position their current location as a starting point. Microsoft's algorithms for leveraging Wi-Fi locations in positioning are accurate within a few hundred feet of an actual location, the company said.

Users also can customize their maps by adding their own notes, such as which corner of an intersection to meet a friend or to add the itinerary of a set of activities. The note is displayed as a "pushpin" that shows the message when clicked. The customized maps can be shared via email, instant messages sent with MSN Messenger, a blog or Microsoft's MSN Spaces, a social-networking service.

The new service is part of Microsoft's Windows Live initiative to eventually make all of the company's software available as a Web service. A major driver behind the strategy is to take advantage of the annual double-digit rise in online advertising revenue.

Sales in the third quarter rose nearly 34 percent to $3.1 billion, according to the Interactive Advertising Bureau. Revenues this year are expected to top $12 billion, well above last's year's record of $9.6 billion.

Local search holds strong ad revenue potential for search engines, since many web surfers look for products and services near their home or in cities they're visiting. In general, however, local search draws the most complaints from consumers, who often find that the results don't match their needs, experts say.