"Microsoft has agreed to license its audio watermarking technology to Activated Content Corp. of Seattle. We all know watermarking's place as a part of the music industry's DRM toolbox, but Activated—already a DRM watermarking player—now wants to use Microsoft's watermarking technology to get into the advertising business. Watermarks... and ads? Yep. According to the announcement of the deal, "Microsoft's audio watermarking technology consists of digital audio software tools that will allow Activated Content to insert and extract non-secure data into audio files that they can use to offer additional services to the audio file end users." DRM provides few "additional services" to end users, so it's clear that the two companies are either taking the concept of "spin" to new levels or else they're talking about something else entirely."
Ars Technica has an interesting write up on audio watermarking technology and how it may be used to distribute free music that is embedded with a highly-targeted advertisement. I don't know about you, but I get the feeling that an implementation like this wouldn't be terribly successful. Every single "we'll give you free music in exchange for doing such and such" has gone nowhere. I don't expect this to be any different.