MSN betting on personalization

MSN is "going to make a very big investment in personalization", says Yusuf Mehdi, head of Microsoft's MSN division:

The company hopes to soon have on its MSN web site a system similar to Amazon.com's technology that will recognize a user even if that person hasn't expressly signed on to the Web site, he said. It also is working on a system that will track a user's movements over the Internet and use that data to build a more personalized Web page based on the person's surfing habits.

Mehdi conceded that such efforts create thorny privacy issues. "We're going to make a very big investment in personalization, but it's very clear that privacy and consumer trust is really a key thing in getting your arms around personalization," he said.

Both Yahoo and Microsoft seem to see personalization as the key to attacking Google.

Update: 15MB of Fame has another interesting quote from Yusuf Mehdi and a link to the original speech at a Goldman Sachs conference.