Microsoft Joins Paid Search Ad Market

Joining the ranks of Google and Yahoo in their efforts to monetize Web searches, Microsoft has announced a new platform for advertisers dubbed MSN adCenter. The first component of the program will be paid listings on the company's MSN Search, which will replace those currently powered by Yahoo in some markets.

Eventually, Microsoft plans to roll out MSN adCenter to most of its Web properties and provide a one-stop shop for advertisers to manage their campaigns. MSN is taking a slightly more targeted approach than its rivals, allowing advertisers to tailor their keyword buys to specific user information, including age, gender and location.

Such capability has sparked concern from some privacy advocates who feel advertising is becoming too invasive. Microsoft said will track members of its services such as Hotmail and connect that data to public demographics.

However, the company notes the information will only provide overall audience intelligence. In turn, advertisers will achieve better results and Web users will see advertisements that are more likely to appeal to them, Microsoft says.

A pilot program for MSN adCenter will begin within the next six months in Singapore and France.

Microsoft has not specified whether it will entirely replace Yahoo's search ads with its own, but such a move is expected. "MSN remains committed to working with Yahoo! Search Marketing (formerly Overture) and will continue to collaborate with it," the company said. Microsoft's contract with Yahoo expires in 2006.