Microsoft will unveil on Monday its own system for selling Web advertising as it struggles to compete with Google and Yahoo in the expanding Web search business. The system, to be used by MSN, is meant to improve on those of Microsoft's rivals by allowing marketers to aim ads on Web search pages to users based on their sex, age or location

The move is part of Microsoft's broad response to the threat from Google, which is using its powerful advertising sales network to support an expanding range of free software products and Internet services. Last week, Microsoft announced a broad reorganization that placed MSN in the same group as its Windows operating system, indicating that it saw software delivered over the Internet - and possibly paid for through advertising - as central to its future.

But to offer such advertising-supported services, Microsoft needs to control its own system for selling targeted advertising. Until now, the ads on MSN's search service have been sold by Yahoo. Yusuf Mehdi, a Microsoft vice president, said the new service would have greater appeal to advertisers and ultimately would make more money for Microsoft. "We know we have to compete hard for our business," he said. "And we think we will offer advertisers better value because of the superior information we have about our audience." ...