Linfoot will be based in Microsoft's London office and will lead new opportunities for brands to create premium partnerships with MSN across Windows 8, Xbox, Skype, Windows Phone and Bing.
She will work with brands to develop immersive content experiences on MSN, which has 23 million unique users every month.
Although she will not head up a team directly, Linfoot will work closely with the wider commercial and editorial teams.
She will report to James Hayr, head of advertising solutions at Microsoft Advertising, who in turn reports to Andy Hart, general manager of Microsoft Advertising & Online, UK.
Linfoot has 12 years' digital experience in publishing and sales, most recently working with clients such as Channel 4, The Fairtrade Foundation and Northcliffe Media, as part of her own consultancy.
At Guardian News and Media (GNM) from 2002 until 2010, Linfoot held roles including head of digital brand solutions and digital innovation manager, within the commercial department.
Linfoot brokered the first commercial use of The Guardian's 'Open Platform' API and the launch of The Guardian's music editorial channel with a commercial partner.
Hayr said: "Sara's CV speaks for itself. Microsoft is reinventing the web and, with Sara, we will be co-creating with brands from the beginning, ensuring we develop the best possible campaigns together."
Linfoot said: "I'm looking forward to breaking new creative boundaries with a business that offers a unique combination of scale, content and technology.
"The continued investment in MSN's editorial offering, combined with Microsoft technology, will allow us to maximise effectiveness for our clients and re-imagine advertising for our audiences."