Microsoft Corp. announced Friday that it will step up its adCenter online ad platform to handle all the paid search results that appear on MSN search.
Currently about 25 percent of sponsored links come from adCenter, and the rest are outsourced to Yahoo! (Overture). The contract with Yahoo! expires in June though.
So its in-house ad placement is hoped to bring in higher paid search revenues and provide some competition for Google and Yahoo!.
It also represents a step toward developing a platform for placing ads across multiple platforms, as search is beginning to seep across various devices and platforms (i.e. Yahoo! Go). The development work for this platform will mostly take place at Microsoft's newly launched adLab, a marriage between its Redmond-based adCenter team and its Chinese research lab. adLab will work on ways to better target user demographics, behavior and device use.
It's a clear move to catch up to Google and Yahoo!, behind which it currently trails in paid search market share. As ad inventory will increase with more search happening across different platforms and devices, it's a good time for Microsoft to make such a move.
It will have some catching up to do, however, as Yahoo! has already signed partnerships with Motorola and Nokia to bundle Yahoo! Go in new phones, and Google is beginning to make some moves of its own in the portable device market. These partnerships will cement Google and Yahoo! into the interfaces of these devices. Look for Microsoft to do the same, as this is where much of the new growth in search market share will come from.