The speed with which Google was able to earn revenue from pay-per-click ads was "a wake-up call within Microsoft", according to the company's CTO, Ray Ozzie.
Microsoft trails Google and Yahoo! in the web advertising market, with the Redmond-based desktop software maker seen as playing catch-up in web innovations.
"Google's success very clearly caused an inflection point within the industry and within Microsoft," Ozzie said.
Ozzie said Microsoft would begin to extend its software out on to the web, but not to the extent the likes of Google has done - and not for business customers.
The company will use a "software plus service" model to include web-based features for desktop software, some of which will be ad-supported.
"Enterprises have a lot of complex requirements," he added."And although some of the advertising might be able to be tactically used in certain products within that market, I think that's probably going to stay predominantly in the model that it is within."