Joint research by Microsoft Research (MSR) and MSN will focus on grabbing a larger share of the burgeoning online advertising market, improving MSN Search, and ideas for new online services. Unlike the rest of MSR, which is devoted primarily to pure computer science research, the joint research projects will concentrate on advances that can be quickly incorporated into Microsoft online services.

Research Focuses on Ads, Search

After several years of lagging behind competitors such as Google in both functionality and revenue growth from online services, Microsoft announced major changes to its online services in Oct. 2005. The company is redesigning established MSN services (such as Hotmail and Messenger) and rebranding them Windows Live, introducing a new suite of online services for businesses called Office Live, attempting to establish consistent design principles across these services, and creating platforms on which third-party developers can build additional online services.

Microsoft not only wants to capitalize on current online trends, such as the spectacular growth in paid search advertising, but also hopes to spot or create future trends and turn them into profitable businesses. To this end, MSR has joined with MSN to form the following research teams:

AdCenter Incubation Lab (adLab). Established in Dec. 2005 and colocated in Beijing and Redmond, WA, this team of more than 50 researchers will develop and improve adCenter, Microsoft's online advertising platform, which launches worldwide in mid-2006. The adLab group is focusing on paid search (in which advertisers bid to appear in close proximity to search results for a particular keyword), contextual advertising (in which advertisements are displayed on third-party sites based on the content of those sites, or to particular users based on their behavior), mining of social networks (e.g., targeting advertisements to a user based on her friends' interests), new advertising formats (e.g., video and full-screen displays), and advertising bar-code readers (e.g., for scanning offline content to get more information from an online source).

AdCenter was originally positioned as MSN Search's answer to paid search platforms from competitors Google and Overture (Yahoo). But it now appears that Microsoft wants to apply adCenter much more broadly—the service will almost certainly be used to track user activity and deliver advertisements on Windows Live and Office Live, and could find its way into Windows Media—based online TV shows and movies, the Xbox Live online gaming service, and the Microsoft Internet Protocol television (IPTV) platform (which lets telephone companies deliver TV programming over dedicated IP networks). If successful, adCenter will help Microsoft capture a greater share of the online advertising market, which the company estimates will grow to US$29 billion in 2008.

Search Technology Center and Search Labs. A Search Technology Center (STC) in Beijing and a separate Search Labs organization colocated in Redmond and Silicon Valley will focus on improving MSN's search technology. Created in Oct. 2005, the STC will attempt to improve the quality of search results through techniques such as data mining and machine learning (computer algorithms that alter themselves automatically based on past results or user behavior).. Search Labs, established in Jan. 2006 and headed by former IBM researcher Ashok Chandra, will focus on the user experience, such as personalizing search results and developing interfaces beyond the typical search pane.

Live Labs. Established in Jan. 2006 in Silicon Valley under the leadership of former Overture and Yahoo research director Gary Flake, Live Labs is responsible for identifying new online opportunities and quickly developing or improving Windows Live services to capitalize on those opportunities. Although its charter is vague compared with the adLab and search initiatives, Live Labs includes MSR staffers with expertise in areas such as text mining, search and navigation, document processing, and server scalability.

Resources

MSR is covered in "The Role of Microsoft Research" on page 25 of the June 2002 Update, and has a home page at research.microsoft.com.

Microsoft's latest online push and the role of adCenter in that initiative is detailed in "Services Emerge Under 'Live' Brand" on page 25 of the Dec. 2005 Update.

AdCenter is covered in "MSN Brings Paid Search In-House" on page 23 of the Apr. 2005 Update.