Microsoft is integrating behavioral targeting into its display advertising.

The company says that its advertisers now have the capability of showing display ads based on a web user's search and surfing behavior. Microsoft will study search behavior and categorize users among 18 audience segments. The category segments include groups like mobile users, gamers, parents and travel searchers.

Last week Microsoft Corp. announced plans to launch its adCenter Content Ads program early this fall and invited a number of advertisers to test out the program. The contextual ads will be initially placed on Microsoft properties such as MSN Money, MSN Real Estate and Windows Live sites. adCenter Content Ads will use demographic and geo-targeting technology.