The patent application, "Profitable free computing resources leveraging the advertising model," describes several possible applications for a targeted advertising system under development. It details the possibility of free or cut-rate computers for Microsoft's online customers, provided through a phone company, Internet service provider, or leasing company, with Microsoft presumably working with those partners to subsidize the cost and share online advertising revenue.
Most tantalizing is the idea of an entirely ad-supported operating system. "An operating system may be provided by an operating system developer for free," the patent application says. "Users may then receive advertisements for use of the free operating system." It goes on to detail how someone who doesn't want ads would purchase a full license, and someone who tolerates some ads may buy a "limited license or subscription." A Microsoft spokesman declined to comment further on the patent application.
Microsoft is serious about online advertising. This year, it bought Massive, a developer of technology for delivering ads inside video games, and last week it projected its online services revenue would grow between 7% and 11% in the coming fiscal year, to between $2.5 billion and $2.6 billion.