Microsoft announced last week that it had developed its own system of text ads in search results on MSN Search. According to Microsoft, this system will be much better than that of its rivals Google and Yahoo because it will allow ads to be served based on the user's gender, age and location.
There are three clear reasons why Microsoft is making this move:
- For Microsoft, Google is becoming a real threatThanks to the income that Google is obtaining from its AdWords, multiple initiatives are being financed in the field of programming with free software and in applications that have little to do with Windows and that compete directly with Microsoft products, such as Gmail vs Hotmail.
- It is obvious that The market for text ads included in search results is a huge source of revenueGoogle is a living example of this, having just announced a net profit of 342.8 million dollars during the second quarter of 2005.
- In a way, for a few years, MSN has been forced to share its revenue with Yahoo, one of its main competitors. Until now, the ads that MSN offers on its portal are offered by Overture, a company that since March 2003 belongs to Yahoo, so Yahoo receives a commission for each sale on MSN.
According to Microsoft, the service they will offer will be much more attractive to advertisers than that of Google and Yahoo, since it will offer segmentation by sex, age, user location, time when ads are viewed, and other parameters that Microsoft knows about its users.
Microsoft has entered the search engine world late, but it seems to be doing so in a complete way, albeit step by step and without taking any risks.
MSN Bot
The first move was in the summer of 2003, when it launched its newly programmed MSN Bot spider to scan the entire web, when its portals were still using the Inktomi search engine (owned by Yahoo since that year and for which Yahoo paid 235 million dollars). During 2003, Yahoo earned 5.3 million dollars thanks to MSN for the use of its search engine.
In mid-2004, Microsoft launched the beta version of its own search engine and at the end of 2004 it stopped using Inktomi completely, and started offering its own search results. Since then, it has been fighting to position itself among the best search portals. However, MSN Search's best asset is not its search results ranking algorithm (as is the case with Google) but the fact that many Windows users do not know how to change the home page of their Internet browsers, nor how to change the search engine that MS Explorer has installed by default. So it is not surprising that MSN is the number two website in the world in terms of traffic (number one is Yahoo, number two is MSN and number three is Google).
Having created its own search engine, the next logical step for Microsoft is to exploit the economic potential offered by search engines, which Microsoft failed to see until Google and Yahoo began to post positive financial results year after year.
It seems that the first Microsoft sites to test this new advertising system will be MSN Singapore and MSN France. It will then be extended to other countries.
We will be keeping an eye on this when it happens, so we can conduct analyses on the segmentation and acceptance and subsequent expansion of the MSN advertiser network.
Interesting links:
Alexa Ranks (http://www.alexa.com/site/ds/top_sites?ts_mode=global&lang=none )
World ranking of websites according to their number of visits and page views.
