Microsoft plans to test publicly an online classifieds service before the end of the year, a company representative said today.

Garry Wiseman, MSN product unit manager for Microsoft, says the company hopes to release a test version of Windows Live Classifieds to the public in the next month, with the full service going live in the first half of next year.

The service, previously code-named Fremont, is similar to the popular Craigslist.org classified service, he says. On Craigslist, anyone can post items for sale or available jobs, apartments, or houses, as well as other services and events they’d like to broadcast to the public. In turn, users can search these product listings and connect with the sellers, companies, or organizers directly through the service.

Some also have likened Windows Live Classifieds to Google Base, a service being tested by Google that hosts and makes searchable various types of online and offline content, such as events, job postings, products, and even recipes.

Van Baker, research vice president with the Gartner Group, calls Windows Live Classifieds a “no-lose” proposition for Microsoft, even though the company is entering an existing market with a host of competitors.

“Even if the market perceives this as a me-too product to Craigslist, so what?” he says. “Classified ads in the newspapers are shrinking on a daily basis, more and more people are going to the Web to buy things, and if Microsoft can go get a piece of that, it’s a revenue source for them.”

Microsoft will differentiate its service from classified sites such as Craigslist by letting users specify to whom they would like to post their own classifieds, or from whom they would like to receive the ads. This allows them to create a trusted social network for online classifieds transactions, Wiseman says.

Users can post their classified listings to only buddies in their MSN Messenger list, say, or to e-mail users who share a common domain, such as microsoft.com, Wiseman says. They can also list postings on their MySpaces blog for their friends to see, he says.

By signing into Microsoft Passport, users can get a customized classifieds page showing only the listings they want to see, he says. But while customized classified-ad browsing is possible, anyone who goes to the Windows Live Classifieds can search through public listings.

Microsoft also plans to “geo-tag” all of its Windows Live Classifieds listings by providing a direct link to its Live Local search service (formerly called Virtual Earth) so users can see the location of the item, job, apartment, etc., Wiseman says. Other online classifieds use this kind of location mapping mostly just for apartment or housing listings, he says.

Windows Live Classifieds, like other Live services, will be supported by online advertising. Contextual ads will appear alongside listings, but will not interfere with the user experience, Wiseman says. “They will not obstruct the usability of the site.”

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