MSN search ads will compete with Google, Yahoo!
Internet search giants Google and Yahoo! no longer have the red-hot search advertising market
all to themselves.
Microsoft's MSN has introduced its answer to Google and Yahoo!'s pay-per-click text ad
programs, called MSN AdCenter. Advertisers love search ads because they pay only if users
click the ads, which show up next to search results.
MSN currently runs search ads provided by Yahoo!'s Overture unit, with a contract that runs through July 2006.
MSN AdCenter will begin testing in two markets -- France and Singapore. Microsoft is vague about when the test will begin, saying only that it will be within the next six months.
Still, search marketers who make their living placing ads on the Google and Yahoo! networks are delighted at the prospect of having a third vehicle to choose from.
"Competition is fantastic," says Chris Winfield, the president of New York-based search marketing firm 10e20 Web Design. "I'm hoping this will lower some of the costs per click. I can't see Microsoft charging as much as Google and Yahoo!, at least not in the beginning."
Winfield thinks clients will adjust their budgets to tout their wares on all three networks, which could hurt Yahoo!. Because advertisers now are buying Yahoo! to be on MSN, "Yahoo has to take a hit," Winfield says.
But Safa Rashtchy, an analyst at research firm Piper Jaffray, says Yahoo!'s loss will be minimal. He estimates that MSN revenues represent around 10 percent of Yahoo!'s annual search profits, worth roughly $120 million yearly.
"Yahoo! will make it up with growth in search advertising," he says. The search market will expand from a projected $8.3 billion this year to $23.7 billion in 2010, Rashtchy says.
MSN currently runs search ads provided by Yahoo!'s Overture unit, with a contract that runs through July 2006.
MSN AdCenter will begin testing in two markets -- France and Singapore. Microsoft is vague about when the test will begin, saying only that it will be within the next six months.
Still, search marketers who make their living placing ads on the Google and Yahoo! networks are delighted at the prospect of having a third vehicle to choose from.
"Competition is fantastic," says Chris Winfield, the president of New York-based search marketing firm 10e20 Web Design. "I'm hoping this will lower some of the costs per click. I can't see Microsoft charging as much as Google and Yahoo!, at least not in the beginning."
Winfield thinks clients will adjust their budgets to tout their wares on all three networks, which could hurt Yahoo!. Because advertisers now are buying Yahoo! to be on MSN, "Yahoo has to take a hit," Winfield says.
But Safa Rashtchy, an analyst at research firm Piper Jaffray, says Yahoo!'s loss will be minimal. He estimates that MSN revenues represent around 10 percent of Yahoo!'s annual search profits, worth roughly $120 million yearly.
"Yahoo! will make it up with growth in search advertising," he says. The search market will expand from a projected $8.3 billion this year to $23.7 billion in 2010, Rashtchy says.
