MSN Plans Entry into Search Ad Market

In the next six months, the company will begin testing its own sponsored link program that is expected to replace ads served from Yahoo.

Microsoft Corp. CEO Steve Ballmer on Wednesday will introduce the companys strategy for entering the paid search arena with rivals Google Inc. and Yahoo Inc.

The companys MSN division plans to launch the first test of its search-based advertising program in the next six months in the France and Singapore markets, said MSN Product Manager Karen Redetzki. Ballmer is expected to announce the effort during the two-day MSN Strategic Account Summit for advertisers, which is being held at Microsofts Redmond, Wash., headquarters.

MSN already sells "featured sites" that appear above Web search results, but it largely relies on a partnership with Yahoo and its recently renamed Overture Services division to deliver sponsored links alongside its search results.

MSN officials provided few details about the companys plan for replacing Overture, though MSNs entry into paid search is largely expected to be a step in its direction to eventually drop Yahoo for sponsored links. In February, MSN replaced Yahoos Web search results with its own search-engine technology.

"Our relationship with Yahoo has not changed whatsoever for using Overture paid search," Redetzki said.

MSN last year signed a deal through June 2006 with Yahoo for using Overtures sponsored listings, but Yahoo executives have recently acknowledged that they expect MSN to eventually stop distributing its search-based ads.

MSN will be selling sponsored links similar to Googles AdWords programs and Yahoos Overture offering, where advertisers bid on keywords in an auction model and pay based on the number of clicks on their links.

/zimages/6/28571.gifClick here to read about how sponsored links are extending their reach.

But MSN also wants to differentiate itself by focusing on adding a larger array of metrics for advertisers in its paid-search program. Search ads are the first of a series of advertising offerings MSN is launching on a platform called MSN adCenter, Redetzki said.

For paid search, MSN plans to provide advertisers with information beyond data about the number of clicks. It will offer advertisers information about the consumers clicking on links, such as geographic location, gender, age group, lifestyle segment and the time of day of the clicks, Redetzki said.

"Advertisers will be able to start spending their money more wisely and manage their campaigns more wisely by having this information," she said.

The data will be gleaned from MSNs 280 million monthly unique visitors who opt to provide additional information, and all of it will be provided without identifying individuals, she said.

MSN developed adCenter in-house, and it eventually will provide a "one-stop shop" for advertisers wanting to market using search advertising, banner ads and even e-mail ads through MSN Hotmail, Redetzki said.

While MSN adCenter was created in conjunction with MSN Search, it had it own development team building it on top of Microsoft software over the past 18 months, Redetzki said.

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