New MSN Updates Bring More Ads

While today marks the day that both MSN Spaces and Messenger version 7 are released to the public, it also marks the start of a risky strategy by Redmond to better monetize the two services.

Users will find ads in places they wouldn't have seen them before, including in their personal Spaces and at the beginning of video chats initiated through the Messenger client.

Microsoft says that the new advertising opportunities "will allow marketers to deeply integrate their brands into consumer’s overall communications experience and connect with their target audiences in more creative, spontaneous and unobtrusive ways."

Announced with the Spaces update was the first advertiser for the service: Volvo. The car manufacturer will have its own Space, and will use it to advertise its automobiles in a blog format. Volvo will also begin to advertise itself through what Microsoft calls "unobtrusive" text links and graphics at the top of users personal Spaces.

Redmond officials hope to entice other companies to the service by offering them a similar deal.

Changes to advertising have been made within the Messenger client as well. Aside from the normal half-banner on the buddy list, users will now see advertisements within the conversation window, in the form of text ads. MSN will also open up its Tabs architecture to allow sponsored tabs within the client.

Additionally, Microsoft plans to serve commercials between each session of a new feature called MSN Video Conversation, a full-screen video and audio conferencing service. According to sources, MSN originally planned Video Conversation as a premium service, however internal tests and research found that consumers would not be likely to pay.

To MSN's defense, the same amount of time was spent on researching advertising across the two services, sources told BetaNews, and the company believes that additional advertising will not adversely affect the perception of Spaces and Messenger 7.

A the products are only launching today, it is too soon to know if users will react negatively to the increased presence of advertising. If the past is any guide, however, there is a very fine line between acceptable and unacceptable amounts of advertising in the eyes of the consumer.