MSN Brings Paid Search In-House

Contrary to previously expressed plans, MSN will begin selling paid search listings through an auction-based keyword system, rather than relying primarily on licensed listings from Yahoo’s Overture division. MSN will sell search keywords through a new advertising platform that will provide features not offered by competitors, such as detailed demographic information about users and suggestions for more effective keyword targeting. The move could help MSN capture a bigger share of the lucrative and fast-growing paid search market, but it doesn’t guarantee success: MSN will still need to excel in delivering accurate search results to attract users from Google and Yahoo.

The Other Shoe Drops

When MSN first announced plans to invest in Internet search in spring 2003, it said it was focusing exclusively on algorithmic search-that is, a search engine that returns results to users based on machine-calculated relevance-and said that it would replace Inktomi (now owned by Yahoo) as its algorithmic search provider. However, the division denied plans to enter the paid search market, in which advertisers pay for placement in a separately designated area of a search results page. Instead, MSN said it would continue to rely on partners, particularly Overture, to provide paid search listings.