Microsoft Corp. has confirmed recent reports that it’s planning to monetize Bing Chat with embedded ads.

Yusuf Mehdi, the corporate vice president of Microsoft’s modern life, search and devices group, wrote in a Wednesday blog post that the company is “exploring placing ads in the chat experience.” Revenue from those ads, the executive added, will be shared with publishers.

Reuters reported last month that Microsoft had held discussions with a “major ad agency” about including promoted content in Bing Chat. It’s believed that the promoted content could take multiple forms. Microsoft has reportedly tested paid links below Bing Chat answers, as well as a second ad format designed to target consumers when they search for a product or service.

Some Bing Chat users have reportedly already received ads in the service’s interface.

When a user types in a question, the service generates an answer that often comprises multiple sentences. After each sentence, Bing Chat displays a shortcut to the website it used as a source. Some users have reported that, in certain cases, those reference shortcuts are replaced with icons that display the word “Ad” and include a paid link.

In the blog post confirming the advertising feature, Mehdi also provided an update about Microsoft’s work with publishers. The executive detailed that the company is exploring multiple ways to promote content from publishers in Bing Chat.

Below its answer to a search query, Bing Chat displays a list of links to the websites from which it sourced the information. Mehdi detailed that Microsoft is exploring the possibility of updating that section of the interface with an “expanded hover experience.” Bing Chat would detect when a user hovers over a website link and automatically surface additional, related links from that particular site.

Another idea on the drawing board, according to Mehdi, is to add a new Microsoft Start panel to the Bing Chat interface. Microsoft Start is a news aggregation app that enables users to access content from multiple publishers. The panel the company could add to Bing Chat would display content from the app alongside search query answers.

“The early progress is encouraging,” Mehdi wrote. “Based on our data from the preview, we are driving more traffic from all types of users. We have brought more people to Bing/Edge for new scenarios like chat and we are seeing increased usage. Then, we have uniquely implemented ways to drive traffic to publishers including citations within the body of the chat answers.”

Bing Chat is powered by a customized version of the GPT-4 model that OpenAI LP debuted earlier this month. The service also uses a second, Microsoft-developed neural network called Prometheus. The latter system generates the citations that Bing Chat embeds into its answers.

Microsoft has made several improvements to Bing Chat since introducing it last month. The chatbot can generate answers in three formats: balanced, precise and creative. Two weeks ago, Microsoft released an update that increased the number of questions users can ask in a single chat session and sped up Bing Chat’s balanced answer mode.

Image: Microsoft