Microsoft will test a free, "ad-funded" version of its Works productivity suite with selected PC manufacturers this year, in another attempt to size up on-demand services.

The pilot program will rollout during the next few months and continue into the middle of next year, Microsoft told The Register.

"Microsoft is continually looking for ways to improve its products and bring more value to customers and partners and as a result, Microsoft is initiating a pilot program featuring an ad-funded version of Microsoft Works - Microsoft Works SE 9," a spokeswoman said.

It's not entirely clear what Microsoft means by "ad-funded", although senior management has talked since 2005 of putting clickable, internet ads in the UI of Windows applications. The non-ad-funded version, Works 9.0, is currently priced $39.95.

Microsoft was attempting to clarify earlier comments (http://blogs.zdnet.com/microsoft/?p=604) made by recently appointed corporate vice president of Microsoft's search and advertising platform group Satya Nadella, who'd caused confusion by saying Microsoft had already released the ad-funded version of Microsoft Works.

Despite scouring the internet in general, and Microsoft's own Works site in particular, however, the ad-funded version could not be found.

This "very small" pilot is Microsoft's latest attempt to find new revenue and delivery models for its software, particularly Office and collaboration, under the software plus services strategy. Microsoft recently expanded an Office subscription plan in South Africa and Romania to include the latest version, Office 2007.

Already billed as a Google Docs and Spreadsheets competitor, Works SE 9 could also pose a challenge to OpenOffice and StarOffice. We emphasize could given so little is known about the Works SE 9.0 architecture or it's ability to integrate online and because so much of Microsoft's Live online offerings - into which Works SE 9 could hook - are so very embryonic.

Certainly, StarOffice - once billed as an alternative to Office by Sun Microsystems for certain groups of users - has proved a let down both in terms of functionality and roadmap. Works SE 9.0, meanwhile, couldn't do much more harm to Microsoft's existing Office business, either, given so many consumers already use Works as a cheap alternative to Office.

Many OEMs shipped Works with their PCs for free, saving customers the need to shell out several hundred dollars for a full version of Office.®

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