If you’re not familiar with how Google makes the bulk of its gazillions of dollars, it’s advertising. Do a search on Google and in the sponsors area of the results page, you’ll see links. Google makes money from an advertiser every time a user clicks on those sponsored results.
Yahoo! has a similar solution (formerly Overture), that probably kept them out of bankruptcy in the years immediately following Y2K.
Well, get ready for Microsoft to enter the game next year (shocker). (MSN currently uses Yahoo!’s product to serve such ads on its site.) This came through today:
- Microsoft previewed its keyword search advertising system, called MSN adCenter, and announced that it would test the service to advertisers in France and Singapore before its U.S. debut, which is anticipated sometime after Microsoft’s deal with Yahoo’s Overture ad network expires in 2006. The MSN adCenter will offer advertisers key demographic data from searches made by MSN members; company CEO Steven A. Ballmer said, "Advertising is going to be a very important long-term source of revenue to Microsoft."
Aside from the extra work this may take to manage, this is a good thing. Competition usually is.
Prices for pay-per-click advertising have been skyrocketing since its inception, so maybe MSN (at least in the near-term) can drive down some of the prices by 1) creating another major player in the space and 2) giving advertisers a way to opt for just one service and get good results without breaking the bank.
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