Microsoft Corp. has announced plans to offer Microsoft Works, its diluted version of the Office product, to customers for free next year. Works version 9 SE will be loaded on a limited number of new computers. The catch? The program will come with advertising already installed.

Display ads will appear in the lower corners of the screen when users turn on the program. The ads will update and change automatically in the background, while the user is online. If the user does not sign on to the Internet, the there are ads that come with the program and that will remain static until such time as the computer goes online.

Users will have the opportunity to click an upgrade option within the free Works program. For a $40 fee, they can upgrade to an ad-free version of Works 9, and they will also have an option of downloading a trial version of Microsoft Office 2007.

Only users in selected countries and markets will receive the free, ad-supported version of Works. The locations have not yet been announced, nor has Microsoft indicated whether it will launch a free web-based version of the package.

The Microsoft Works package contains a word processor, a spreadsheet, a calendar, a dictionary, a project organizer, and a personal database. The program also has the ability to open and save documents in Office 2007 formats.