May 12 (Bloomberg) -- Microsoft Corp., seeking more revenue from Internet advertising, introduced software that allows users to exchange messages while watching online videos.

Messenger TV combines the Windows Live instant-messaging program with video software, Microsoft said today in an e-mailed statement. Users will be able to watch and share clips from companies such as Viacom Inc.'s MTV Networks, U.K. broadcaster Channel Four and music companies Sony BMG and EMI Group Plc.

Microsoft, the world's largest software maker, is expanding its Internet business to spur online advertising sales and catch up with Google Inc., owner of the YouTube video site. YouTube already shows ads on its home page and alongside some clips. PepsiCo Inc. and News Corp.'s Twentieth Century Fox plan to run ad campaigns on Messenger TV, Microsoft said.

The service will initially be available in Europe, where there are 95 million users of Windows Live Messenger. There are 240 million Messenger users worldwide, Microsoft said.

Microsoft, based in Redmond, Washington, rose 60 cents to $29.99 in Nasdaq Stock Market trading at 4 p.m. New York time. The shares have fallen 16 percent this year.

To contact the reporter on this story: Vivek Shankar in San Francisco at vshankar3@bloomberg.net

Last Updated: May 12, 2008 16:21 EDT