Microsoft Adds Contextual Ads Alongside Desktop E-mail

Microsoft has begun showing contextually targeted text ads alongside users’ email messages in the beta test for its new Windows Live Mail Desktop application.

Live Mail Desktop, currently in a limited beta test, is a new application in the Windows Live family that lets users view email accounts from multiple providers. The successor to Microsoft’s Outlook Express application, it lets users compose, delete, and organize mail offline, while also providing Web-based access and 2 GB of storage for messages online.

The text ads in Live Mail Desktop are contextually targeted against the content of a user’s email messages, similar to the way Google targets ads in Gmail. Targeting is done via Active Search, a feature unveiled on Friday that analyzes the content of an email message and then suggests related Web searches, and displays ads, based on that content.

“Active Search bridges the gap between your inbox and the broader Web using the power of search,” Oji Udezue, program manager for Live Mail Desktop, wrote on the development team’s blog. “Using Active Search is essentially the same as conducting a ton of related searches the old-fashioned way — by cutting and pasting terms from your email into a separate Web browser — only without all the effort.”

Contextually targeted sponsored links, provided by Kanoodle during the beta period, are targeted to the relevant keywords that Active Search finds. Paid search sponsored links, delivered with Microsoft’s adCenter, are shown whenever users select alternative keywords or enter in their own search terms.

Active Search displays key search terms found in a message along with a search box at the bottom of the screen. Search results and sponsored links are displayed alongside, without having to open a new browser window. If the content of a message does not trigger any relevant results, no ads or search results are shown.

The Active Search feature is designed to make it easier for users to act on things that pique their interest while reading email, Udezue wrote. Since many projects are already described in a message in a user’s inbox, and those projects usually require a Web search to complete, Active Search removes a few steps in the process, he said.

Users can turn off Active Search with a single click, which then returns the space on the right-hand side of the screen to the display ads that resided there previously.

Microsoft began showing ads on parts of the Windows Live services in limited markets in March. The tests began with contextually targeted graphical ads in 10 markets. For Live Mail, ad units include super banners, skyscrapers, and a few other units in the login area, inbox, and on screens where users read or send mail.

Last month, the company began serving all ads on its U.S. search properties with its AdCenter targeting platform. The company has said it expects to begin using AdCenter to serve all search, contextual and display ads on Windows Live Mail, Windows Live Spaces, Windows Live Safety Center, Windows Live for Mobile, Office Live and Office Online, and Xbox.com later this year.

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