Microsoft Corp. said Tuesday it has reached a deal to use Predictive Networks' technology to track the viewing habits of people who use its set-top boxes for interactive television. Predictive Networks, based in Cambridge, Mass., makes ``personalization software'' that monitors what programs and advertising each user watches, and creates a profile. That profile is then used to tailor advertising pitches and content offering to the individual user.

Predictive says the system should not raise privacy concerns because it does not store viewers' habits by name or record other personal information. Andy Beers, a senior product manager for Microsoft TV, said the deal would provide more potential moneymaking opportunities for the company's network partners. Microsoft's 6-year-old interactive television venture, iTV, has struggled. Portugal's TV Cabo, which in June became the world's first cable company to roll out advanced set-top boxes running Microsoft's new TV software, has more than 1 million cable subscribers but only 2,500 have signed on for interactive TV. The system lets viewers shop, play games and do e-mail and other activities, and also makes it easier to record programs and otherwise choose viewing preferences.