This week, Microsoft executives began touting personalization--a new tactic in the company's bid to remain at the forefront of software design and development. In more and more of the company's high-profile projects, Microsoft is imbuing its software with the ability to react to users' needs. Two recent examples of this strategy are MSN Messenger 7, the upcoming Instant Messaging (IM) client, and Microsoft Search, the underlying technology that will power Web-based searching on MSN and hard disk-based searching in Longhorn, the next major Windows release.

The company revealed its plans for personalized IM last week at the annual Microsoft Financial Analyst Meeting. During his MSN-oriented presentation, Corporate Vice President Yusuf Mehdi noted that MSN Messenger, which has more than 135 million users, often peaks at 120 million simultaneous online chats. "Personalization [is one] thing that we have not yet brought to the Web; in fact, no one really has done a great job at any of the major portals in terms of personalization," Mehdi said. "As we start to get better return on investment for clients and delight customers by being able to give them targeted content, we think this will dramatically improve our business."

Mehdi demonstrated a prototype of MSN Messenger 7, which will be a major update. MSN Messenger 7 will support skins similar to those Windows Media Player (WMP) uses and Avatars, small characters that users can dress up and accessorize. MSN Messenger currently offers Avatars in Australia, South Korea, and the UK; Microsoft will extend that functionality to other markets with MSN Messenger 7.

Microsoft Chairman and Chief Software Architect Bill Gates said yesterday that his company's search products will differentiate Microsoft from market-leader Google by offering personalized search results that are based on user preferences and needs. "We're going to make search extremely personal," he said, noting that the technology will tailor search results based on the information that users find most valuable. The new technology will work with both local (hard disk-based) searches and Web-based searches, Gates said.