Update: Microsoft Unveils MSN Online Advertising PlatformUpdate: Microsoft Unveils MSN Online Advertising Platform

Microsoft Corp. chief executive Steve Ballmer on Wednesday unveiled the next-generation online advertising platform for MSN, launching the company into the keyword-advertising market dominated by rivals Google Inc. and Yahoo Inc.

Ballmer unveiled the MSN AdCenter at the company's MSN Strategic Account Summit, an annual advertising-industry forum held at Microsoft's Redmond, Wash., headquarters. The online advertising platform will be tested first in Singapore and France before its made generally available. A timetable was not disclosed.

"(AdCenter) will be a way to buy (advertising space), one stop, across everything in MSN," Ballmer said in his keynote speech that was webcast from the summit.

MSN search currently lets advertisers buy top placement on a search results page that's marked as sponsored links in a box at the top and bottom of the page. Sponsored links on the right-hand side of the page are provided through Yahoo Search Marketing Solutions, formerly Overture Services Inc.

Ballmer did not announce any changes in Microsoft's partnership with Yahoo, but was clear that the relationship could be modified as the software giant added its own innovations to its online advertising services.

"We still see opportunities to partner there. We're having discussions. But we think it's also important that even while we maintain what has been a very good partnership for both companies, there are places where we have ideas to innovate," Ballmer said. "So, we want to bring you our innovations and then to try to weave that in context with whatever we do with our partners."

Yusuf Mehdi, corporate vice president of MSN, joined Ballmer on stage to demonstrate AdCenter, which he called the company's "next-generation online ad platform."

"It is a complete end-to-end system across order entry, billing, reporting, targeting, campaign optimization for running your online advertising," Mehdi said.

AdCenter will eventually cover all forms of advertising offered on MSN, including branded displays, paid search, email marketing and other services. Microsoft plans to extend its advertising services beyond a browser and PC to mobile devices and Internet-based television, called IPTV.

The first AdCenter service, keyword advertising, will be tested in Singapore and France in the next six months, Mehdi said.

In demonstrating the platform, Mehdi showed a number of software tools keyword buyers can use to build their advertising strategy on MSN based on information about the network's audience, including geographic location, gender, age group and other factors. The tools can be used to determine which keywords best fit the campaign, to decide on a target audience and chose the best way to reach it, and to perform post-campaign analysis.

In keyword advertising, advertisers pay search engines to target their ads and only display the banners when a user searches on the keyword that advertisers choose. Advertisers often bid on keywords.

Keyword advertising has been the engine behind the double-digit revenue growth of search-engine giant Google. Yahoo, as well as other entertainment portals, are aggressively moving into the market.

The online advertising market in general is growing rapidly, driven primarily by paid search over the last several years. According to market researcher JupiterResearch, a division of Jupitermedia Corp., advertisers are expected to spend $13.8 billion online in 2007, with paid search forecast to grow 30 percent compounded annually from now until then.