Microsoft MSN Search Advertising To Launch in March?
Despite being a signed Overture paid search ad distribution partner until 2006 and rumors escalating earlier in the year that the current MSN paid search frmula would be intact until June of 2005, Bloomberg News reported today that MSN Search will be announcing their “Moonshot” paid search interface by March 16th (yes, the day after tomorrow). MSN Search’s Moonshot (apparently the code name) will give MSN Search the leverage to give advertisers an offering similar to Google AdWords and Yahoo Search Marketing Services’ Overture advertising platform.
From Bloomberg News:
“The goal for Microsoft is to capture more revenue and more control over the entire product,” said Alan Davis, an analyst at Seattle-based McAdams Wright Ragen, which manages $2 billion including Microsoft shares.
Trying to catch market leader Google, Microsoft last month released its first search engine built from scratch and still uses Yahoo’s Overture unit for paid search. Microsoft spokeswoman Karen Redetzki declined to comment. Microsoft is holding briefings with reporters tomorrow, she said. MSN is holding a conference for its advertisers this week and plans to make the announcement there, the people [who leaked the information] said.
Bloomberg News also commented on how paid search brings a price war mentality to bidding on top ranked search engine advertisements.
MSN’s entry into the market may start a price war for advertisers, said Martin Pyykkonen, an analyst at Janco Partners Inc. in Greenwood Village, Colorado.
“If you’re MSN, you could go to the group of top 500 advertisers and say, ‘We’ll give you X percent off the price you’re getting from Yahoo and Google’,” Pyykkonen said. He rates Yahoo shares “buy” and Google “market perform.” He doesn’t own either stock.
Microsoft has almost 10 times as much in cash and short-term investments as Yahoo and more than 16 times as much as Google, and winning customers with price cuts may be considered a “pretty good use of cash,” Pyykkonen said.