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After years of exploring the matter, Microsoft has finally started offering an ad-funded version of Microsoft Works in some countries.
Users who run the software see a small ad as they are writing their document or editing their spreadsheet. Although the program has the ability to update its set of ads online, today it runs mostly ads for Microsoft and a few partners, all of which ship with the product itself.
Works SE (which stands for Sponsored Edition) is free to PC makers, though they don't get a cut of the ad revenue. Large computer makers typically only pay a buck or two for the low-end version of Works, though.
Microsoft Offers Advertising Funded Works SE [news.com]
If Works was actually good enough for most people then nobody would upgrade to the full blown version of Word.
Of course, the system builders could always give Open Office away for free but I doubt that would make them money (they must get a financial reward for including adware).