The Redmond, Washington-based company has included Smart Tags in the most recent test versions of Windows XP, an upgrade to the Windows operating system that will be released in October. But a company spokesman said Wednesday that the technology will not be included in the final version that will be released October 25.
With Smart Tags, Microsoft can link any word on a Web page to another site chosen by the company. For example, if a person was reading a story about traveling, the word "airline" could include a link that would divert the reader to an airline or travel service chosen by Microsoft.
Although the Smart Tags feature was included in Internet Explorer 6, the Web browser that is bundled with current beta versions Windows XP, it will be dropped from the final product.
"At this time we just don't believe it's going to be ready when (Windows XP) ships in October," Microsoft spokesman Jim Cullinan said late Wednesday. "External feedback" was one of the factors that led the company to remove the feature, although he indicated it could be resurrected in later versions.
Cullinan also emphasized that Smart Tags remain a feature of Office XP, the upgrade to Microsoft¹s suite of applications that launched on May 31.
Smart Tags, which are created using Extensible Markup Language (XML), could have strengthened Microsoft's ability to tie its newest applications and operating systems to its own Web sites or others that it favors, including those that charge fees.
The feature makes disparate bits of data available within Office programs or from Web pages. A Smart Tag pull-down menu attached to a stock ticker, say, in Excel 2002 or Internet Explorer 6, might lead to the MSN MoneyCentral Web site for the latest share price.
Critics accused the company of reverting to old tactics by loading Windows XP with features such as Smart Tags, which gives Microsoft some greater control over consumers' Internet use. Windows is the operating system on roughly 92 percent of all personal computers around the world.
What was most worrisome for analysts and others is that Smart Tags tie Web content exclusively to Microsoft software, in this case Office XP and Windows XP, according to Chris LeTocq, an analyst with Guernsey Research.
The feature gave Microsoft "some powerful leverage", LeTocq said, particularly since the company can use its products to redirect users to MSN Web properties and eventually sites "with premium paid services". The test version included Smart Tags for sports, stock and university information.
However, Microsoft insisted earlier that Smart Tags were safe.
"It's not like people are downloading executables here," said Shawn Sanford, Microsoft's group product manager for Windows. "This is fairly benign stuff."
But one shortcoming of Smart Tags is that the content is not dynamic. Accessing Smart Tags for stock information, for example, downloads static code to the desktop. "You want to refresh the list of stock tickers, you've got to go do a refresh someplace. So the usefulness is limited," LeTocq said.
Joe Wilcox contributed to this report.