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March 18, 2005

New PPC Engine From MSN

I know this happened three days ago, which is about 20 years in blog time, but if you haven't heard...

MSN will soon be rolling out its own Pay Per Click (PPC) service, putting them in direct competition with Google's AdSense and Yahoo's Overture PPC services. As you may know, MSN currently derives much of its advertising revenue from showing Overture ads and splitting the profit with Yahoo. Once MSN's PPC service is in full gear, we can very likely expect them to drop the Overture ads.

However, MSN's contract with Yahoo/Overture doesn't expire until June 2006, so most Overture advertisers will probably continue to see their ads on MSN for some time. An official roll-out date has not been set, but MSN will be testing their their new PPC sevice in France and Singapore over the next few months.

The entrance of a new, well financed PPC player is going to make things a bit tougher for both Yahoo and Google. Yahoo, in particular, is going to take a bigger hit, since they will be losing a major platform to show their ads. Keep in mind that PPC is essentially the reason that Google and Yahoo haven't gone the way of Altavista, so being forced to share the market with a major new player is quite possibly going to be put a dent in their profits, at least in the short run. (Though it will more likely put a dent in your profits as a search marketer, as your ad spend gets spread around a bit more.)

In a possibly related story, Google's top management has sold off over $500 million dollars worth of stock in the past few months (not that much, really, when you consider what the stock is worth).

If you're still hungry for more, Charlene Yi has a great write-up, searchenginelowdown.com has some good screen-shots, and here's the official press release.

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