March 15, 2005 7:41 PM PST
MSN vs. Google and Yahoo, Round 3
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happening is that the larger slice Yahoo had is now smaller, because some has to go to MSN."
A Yahoo spokeswoman said that though the company's Overture Services relationship with MSN is set to expire at the end of June 2006, Yahoo had financially accounted for potential account shifts, and MSN's licensing deal was "gravy."
Other analysts say the search pie could, in fact, get bigger. They say MSN, Yahoo and others are working hard to expand the universe of online searches by integrating advanced search everywhere they can--desktops, toolbars and wireless phones, for example.
"The way people are expanding inventory is basically by integrating search wherever possible," said ComScore analyst James Lamberti.
For the last two years, Microsoft has been bullish on plans to build a search network to best Google's. Already this year, the company replaced Yahoo's Inktomi search technology with its own homegrown software. But Microsoft's designs for an ad system based on bids for particular keywords had been played down in the last year while the company perfected its search technology.
The development of such a system also suffered a setback in early 2004, when Paul Ryan left. Ryan, a key hire from Overture, was in charge of building the monetary engine of MSN's emerging search engine.
Key to MSN's strategy is to lure Web searchers away from rivals, and then draw in advertisers. MSN's AdCenter, for example, will offer advertisers detailed information on Web surfers' responses to certain keywords, as well as demographic and psychographic profile data (in aggregate) on potential customers.
The company will also build in tools to give advertisers greater access to reporting data.
Finally, MSN envisions adding functionality that will let advertisers buy banners and other branding-styled ads, alongside keyword paid search. Sohn said MSN is interested in building in contextual advertising opportunities and ad syndication services, too.
Ballmer and MSN Chief Yusef Mehdi will outline new advertising opportunities at the company's annual advertising summit near its headquarters in Redmond, Wash.
The two executives will also talk about a new entertainment advertising division that will focus on developing a range of fresh brand advertising opportunities.
"We're investing deeply in brand advertising and direct marketing," said Sohn, who declined to disclose the amount of the investment.
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