Post updated with new information.
Rumors are flying that Microsoft will soon unveil a big revamp of MSN Spaces, and the changes include letting bloggers run contextual ads courtesy of Kanoodle and perhaps Amazon.
One can't help but wonder why Microsoft wouldn't broker those ads itself, via adCenter, since the company has admitted to having a contextual bun, a la AdSense, in the oven. Maybe that's coming later.
UPDATE: Microsoft shared some official details via its Spaces blog. The Amazon tie-in involves making it easy for bloggers to join its affiliate program and get paid for referrals. The Amazon deal is available to users in the U.S., U.K., Canada, Germany, France and Japan. The Kanoodle ad links are limited to U.S. and U.K. bloggers.
Feature adds include juicing up photo uploads, new themes and an Xbox "recent games played" module. The post also mentions the platform will soon launch in Latin America, South Africa, New Zealand, Malaysia, and Singapore.
Comments on the post reflect a mixture of elation with the enhancements and frustration with post-upgrade bugs.
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