According to reports from both the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) 2006 is proving to be a bumper year as far as online advertising spend is concerned. Showing a 37% increase over the same period last year, US Internet advertising revenues were up to $7.9 billion. In itself this is a new record, but the fact that the second quarter figure alone was $4.1 billion, a 5.5% increase over the first quarter and representing the seventh consecutive quarter of growth, is pleasing news for anyone in the advertising revenue driven web business. Moreover, that includes Microsoft.

Not only is the Seattle software giant planning to leverage its not inconsiderable user base by exposing it to advertisers through the new Digital Advertising Solutions program, but if the rumors are true then a totally free, advertising sponsored and web based edition of Microsoft Works could be on the cards as well. The latter is not particularly surprising, given the interest being shown in the spate of web-based productivity tools coming out of the Google camp of late (Writely, Spreadsheets, Calendar to name but three) but the DAS program pretty much came from leftfield.

The system will, I am informed, enable advertisers to target their audience across multiple devices. As long as Microsoft software is powering them, the user base will be exposed, be that on a desktop PC, PDA, Smartphone or even the Xbox.

This answers the problem that it is now pretty much impossible to reach an entire target market by advertising on a single medium, and Microsoft are in an almost unique position to leverage the opportunity. As Joanne Bradford, Corporate VP of Global Sales and Marketing, as well as Chief Media Revenue officer at Microsoft puts it, the opportunity to “connect advertisers with a million different audiences of one.” When you realize that the MSN networks alone can reach something like 465 million customers across 42 markets in 21 languages every month, and that is without talking about Windows Live, Office Online or Xbox Live, you start to realize she has a point.

Whether Microsoft has left it too late to play catch up with Google, and to a lesser degree Yahoo, both of which have pretty much pioneered the ad supported services online model, remains to be seen.