• by Shankar Gupta , October 11, 2005

MSN late last week started looking for advertisers to participate in a pilot of its paid search service adCenter, which is set to launch in the United States later this month. The pilot program, which competes with already established keyword markets from Yahoo! Search Marketing and Google's AdSense and Adwords, was launched in France and Singapore last month.

MSN put out a call for advertisers on its Searchblog, which quoted an e-mail from Yusuf Mehdi, MSN's senior vice president of MSN Information Services. In the e-mail, Mehdi stated that when the pilot begins, MSN will display its own search ads to 25 percent of the traffic to its search engine--while current partner, Yahoo! Search Marketing, will serve the remaining 75 percent.

Search engine marketing professionals said the diversification of the market will work to the benefit of advertisers looking to promote their products with keyword ads. Bryan Wiener, chief operations officer of 360i, said that MSN's unbundling of its search engine from the Yahoo! Search Marketing network will give advertisers more of an insight into what techniques are working best. "It's going to allow us more visibility into what keywords work on what engine," he said. "This will lead to more complexity--but it will provide more visibility into what's working."

Matt McMahon, executive vice president at Fathom Online, agreed that the increased competition that will come with an MSN paid search product will be a boon to marketers. "I think the competition is good for all parties involved because they're going to spur each other to further innovation," he said. "If the search results are good, and the advertising results are good, then the consumer is happy--and that's what spurs growth and revenue."

Also last week, rumors of negotiations between MSN and America Online resurfaced--this time indicating that the talks may focus on AOL partnering with MSN to power AOL's search feature--which would push Microsoft rival Google out of AOL.

360i's Wiener said a deal that left MSN powering search on AOL could make MSN a major player in the search marketing space. "Right now, AOL represents a large part of the Google network, and combining AOL with MSN would create more critical mass as a third viable search marketing competitor for Yahoo! and Google," he said. McMahon agreed, saying that an MSN-AOL deal would significantly expand MSN's search reach.

MSN declined to comment on the pilot program or the rumored talks with AOL.