As part of the deal the software giant's search and display ads will appear on more than 30 local Advance US newspaper sites.
These include the websites for The Star-Ledger in Newark, The Plain Dealer in Cleveland and The Birmingham News in Birmingham.
The deal sees Microsoft's taking another stab at the local newspaper and search advertising markets, and a strike against Google's dominance in the online ad market.
had previously attempted to lure local advertisers with its Sidewalk platform, which it unloaded in 1999 to Citysearch, an online city guide.
Advance Internet will become a certified reseller of the Microsoft Media Network, which includes Bing, offering local advertisers greater access to users online, while allowing Advance Internet to significantly increase its reach in all of its local markets.
In practice, the deal mirrors the Yahoo! Newspaper Consortium which sells ads across over 700 US newspapers, but will allow Advance Internet to maintain its own ad platform, powered by 24/7 RealMedia, which it will integrate with Microsoft.
Brian Handly, general manager of PubCenter at Microsoft, said: "The local perspective that Advance Internet will be incredibly helpful as we develop our reseller efforts.
"We are excited to expand content and search ads into Advance Internet's portfolio of regional web sites."
As part of its Conde Nast business, Advance Publications owns such titles at The New Yorker, Wired, Vanity Fair as well as the Newhouse Newspaper Group.