The MSN Mobile service, started in August 2006 as part of Microsoft’s MSN and Windows Live services, will be granted a new feature. Microsoft announced the launch of a mobile advertising service in U.S. starting this week.

Following Yahoo Inc’s initiative in late 2006, Microsoft expands from serving mobile ads in Japan and some European countries to placing advertisements on the US MSN Mobile page.

Among the first brands to advertise on MSN Mobile will be Paramount Pictures, Jaguar and Bank of America, but a company spokesman said that more advertisers will be added over time.

The Microsoft Corp.’s initiative was backed up by the online advertising company aQuantive Inc. and the mobile group Screen Tonic SA, recently acquired this year.

Microsoft acquired aQuantive in May this year for $6 billion. The purchase consolidates Microsoft's position in display ads that use sound and video, an area where the company still ranks ahead of Google, which dominates the market for ads linked to search terms.

The MSN Mobile users will be able to receive small graphic or text ads, depending on the quality of the cell phones.

Besides the usual information services, such as news, entertainment, online chat or local weather forecast, MSN Mobile users will also be provided with a new service from MovieTickets.com Inc. and Thumbplay Inc. that will allow them to buy movie tickets, ring tones or other cell phone related products with their credit cards and a new astrology channel.

Microsoft isn't yet letting advertisers target ads based on mobile phone users' location or Web surfing behavior — but the software maker is definitely thinking about it, according to Phil Holden, a director in the company's Online Services division

In the near future, Microsoft also plans to offer its customers the possibility to advertise on a wider range of platforms, from the internet to mobile phones and Xbox Live.

Up until now, according to statistics, cell phone advertising has had a slow growth rate due to the fact that most subscribers in the U.S. still use their phones primarily for talking.  Lately though, the statistics are beginning to change, and users tend to become more oriented towards the multiple services on their phone.

The three major internet based providers – Microsoft, Google and Yahoo – consider the mobile advertising service as a lucrative investment that could possibly increase their revenue even more than the online advertising does.

In September, Google announced AdSense For Mobile, a service which works in a similar way as it does on PCs: the publishers are allowed to place AdSense contextual advertising on the web sites design for the mobile phones, so that the traffic could be monetized. The ads would contain only two lines of text, with 12 or 18 characters per line, depending on each language’s characteristics.

Microsoft’s interest in the mobile market has increased lately and last month the Redmond company announced the acquisition of the French company Musiwave, a provider of mobile music entertainment services to operators and media companies.

The acquisition will be just another brick for the foundation of the “Connected Entertainment” concept. Under this concept Microsoft is promoting various hardware and software assets such as Windows Mobile, Zune, MSN and Windows Live.