Microsoft today announced that its launching the Web’s Largest Advertising Network. They are running ads on all of their new Windows Live services including Windows Live Office. Advertisers include JC Penny, Coca Cola, and Monster Worldwide.

Excuse me, but when is the last time you were working on your contacts or email and suddenly felt like shopping online at JC Penny?

As I’ve said many times before but the real innovation at Overture/Google was to make ads useful. Well placed ads next to search results help you find what you are looking for. Why do you think Google makes so much money on ads placed directly next to search results while most people who run those same ads on their blogs make almost nothing?

The customer is in charge. Simply showing an ad does not a business model make.

I’m sure you folks at Microsoft are really smart. Maybe one of you could explain to me why you think this will work. This looks like 90’s Internet bubble thinking to me.