smooth wombat writes "Microsoft is combing personal data with your search habits to produce targeted ads. Users who use Microsoft's Hotmail email service, msn.com news service and other Microsoft-owned sites will see ads specific to their demographic and interests. From the article: 'Microsoft executives say the system works anonymously and they won't pass on people's names or addresses to advertisers. Executives say they want to foster confidence in users to build a long-term business, and one that gives an incentive to not misuse personal details.' "We're in the early days of behavioral targeting but it's an idea whose time has come,' says Simon Andrews, chief digital strategy officer for WPP Group's MindShare, a large buyer of ad time. 'There is a lot of potential to know if people have been looking at specific sites.'"