Microsoft to Test E-mail Text Ads

NEW YORK Microsoft said next week it would begin testing the targeting of text ads to e-mail messages, the first step of what the company believes could be a rollout across several properties, including its blogs and instant messenger.

The initial test will be confined to some users of its Windows Live Mail desktop e-mail program. Like Google’s Gmail, Microsoft will scan e-mail messages for keywords that it matches to search ads. “Active Search” will provide a search box with a list of suggested search terms and results for the message’s keyword, including search ads. Unlike Google, Microsoft will give users the opportunity to turn off the scanning, and instead see graphical ad units.

“It’s important whenever you’re doing something that uses their communications data, you should give them a choice,” said Aly Valli, a senior product manager at Microsoft adCenter.

The test, if successful, could lead to the rollout of Active Search to the 250 million users of its various e-mail products, the MSN Spaces blog platform and MSN Messenger IM client.

“For an advertiser, this is a pretty elegant way of reaching people with a targeted message,” Valli said.

Google’s release of Gmail in April 2004 ignited a mini-firestorm for scanning e-mail messages for keywords to target ads. Valli said the option to turn off such a feature is key for areas some users will not feel comfortable with targeting, particularly their personal correspondence.