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MS throws hat into paid-search engine ring

adCenter squares up to Google and Yahoo!

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Microsoft is taking on the great Google Money Machine with an inhouse answer to Google Adwords.

Step forward Microsoft adCenter, launched yesterday to pump out all-paid search traffic on MSN and other Microsoft online properties in the US. Microsoft’s adCenter replaces Yahoo!'s Overture as the paid-for search engine on MSN. The only surprise is how long it took Microsoft to make the switcheroo – predicted ever since Yahoo! bought Overture in 2003 – and confirmed this time last year by Microsoft at its annual MSN Strategic Account Summit.

Microsoft adCenter is already running in Singapore and France and will trial in the UK with select advertisers in June.

Paid-for-search is what made Google founders Larry Page and Sergei Brin multi-billionaires, and it is what made Yahoo! pay $1.63bn for Overture. Microsoft is coming late to the feeding frenzy: there are few signs of paid-search revenues actually falling, but advertiser disenchantment is growing. Click-fraud and ballooning prices are to blame.

Yesterday, for instance, a Newark, NJ advertiser, Crafts by Veronica, and several other small firms slapped Yahoo! with a class action suit, alleging fraud in the way the company distributes ads through Overture. The suit follows research published last month by anti-spyware activist Ben Edelman. This details examples of alleged syndication and click fraud.

A class action suit could be considered a badge of success – surely it is better than indifference. And Microsoft has had plenty enough of those to take any such future actions in its stride. A more pressing challenge will be to find third party publishers for its technology. Google and Yahoo! after all have tens of thousands of partners already signed up.

The quickest short-cut for Microsoft would be to buy Miva.com, the new name for Findwhat.com and eSpotting, which is the only independent paid-for search firm of note in town. ®

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