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Could there be a free, ad-supported Windows in Microsoft's future?

Would Microsoft ever go so far as to offer a low-end SKU of Windows client that would be free, but ad-supported? Back in 2005, a Microsoft researcher authored a ThinkWeek paper detailing how and why Microsoft could make Windows an ad-supported product. But I never thought anything came of that paper... until now.

When Microsoft Chief Software Architect Ray Ozzie outlined his suggestions for Microsoft's gameplan back in 2005 (via his "Internet Services Disruption" memo), he was a big advocate of Microsoft introducing ad-supported, free software and services. Since that time, Microsoft has been dabbling with ad-supported products on a variety of fronts, including the forthcoming consumer version of Office Web Apps and Office Starter products.

But what about Windows? Would Microsoft ever go so far as to offer a low-end SKU of Windows client that would be free, but ad-supported? Back in 2005, a Microsoft researcher authored a ThinkWeek paper detailing how and why Microsoft could make Windows an ad-supported product. But I never thought anything came of that paper... until now.

Stephen Chapman, the blogger behind the Microsoft Kitchen blog, unearthed an interesting screen shot of a Microsoft employee's LinkedIn profile that mentions a "prototype for advertising in Windows" project, codenamed "Madison."

(Update: Yes, there is more than one Microsoft codename "Madison," as a couple of folks have noted. There is also a "Madison" data warehouse appliance, now known as the Parallel Data Warehouse Edition of SQL Server 2008 R2.)

Based on that profile, it seems Lead Program Manager Krista Johnson spearheaded two Microsoft incubation projects between 2005 and 2008. One was Madison and the other was a prototype Windows CE-based PC that would sell for under $100. (The latter sounds like some kind of ultra-low-cost PC/"Origami" device.)

There's no word whether these prototypes went anywhere. But now I'm wondering whether Microsoft might release some time in the coming months/years a free, ad-supported Windows SKU. Maybe it will be more like Office Starter, in that it will be a stripped-down subset of Windows, preloaded on new PCs, that includes the ability to move up to a paid, more fully-featured version (using the current Anytime Upgrade model).

Or maybe something like Madison will be the new alternative to Windows Starter Edition? If it is, I wonder how Microsoft will make up for lost revenues, as it currently charges OEMs $30-plus per copy for Starter preloaded on netbooks, according to various estimates....

I've got a question in to Microsoft about whether the company has ruled out the idea of an ad-supported Windows release. I'm not expecting much of an answer, but I'll post what I get here.

Update (April 1): Just got an official "no comment" from a company spokesperson.