News.com's Ina Fried has the scoop some internal documents from Microsoft ruminating on ad-supported software that leverages its new adCenter platform, beyond Office Live and Windows Live. The document Microsoft Money lists factors that would favor the ad-supported model, such as online usage, data exposed for targeting ads, ad-supported competitors. Microsoft Works, Money and OneNote fit the bill. Here's the really interesting part:
The company's exploration of ad-supported software extends even to Windows, its most important product. An ad-supported version of Windows could make some sense, the Microsoft researchers argue in their Thinkweek piece, noting that the operating system reportedly earns $9 per year per user.
"It seems possible that we could match that revenue via ads, but there are difficult UI (user interface) issues to solve, since the OS does not have a natural way to display ads that does not annoy users," the Microsoft workers say in the paper. One suggested possibility is a low-end version of the OS that comes bundled with other ad-supported programs such as Works, Outlook Express and Windows Media Player. However, the writers point out that "it's not clear how to prevent these elements from being replaced."
In his post from Nov. 3, Phil Wainewright explains why he thinks the idea of ad-supported applications is complete bull, on two counts.