Whatever Happened to MSN's “AdSense” Anyway?

Back when Yahoo! first announced their plans for a pay-per-click advertising program to compete with Google’s highly-successful AdSense program, Microsoft also expressed interest in the field, and had decided to do likewise following the successful re-launch of its MSN Ads program. MSN Ads is basically AdWords – context-based pay-per-click ad campaigns directed at advertisers, not publishers. However, the adCenter re-launch was months ago (way back in May), and we were originally promised pay-per-click ads for publishers would debut some time in the Summer of ’06.

It does seem that the idea was scrapped, as a matter of fact, MSN adCenter was “looking for guinea pigs” since over a year ago. While some sporadic blog posts on the subject, the only contextual-advertising solution coming out of Microsoft’s camp any time soon is for advertisers who want in on the MSN Live Search ads. It seems that Microsoft has finally decided to stop re-inventing the wheel, and learn from the mistakes of others. Yahoo!’s own Yahoo! Publisher Network (YPN) isn’t doing too hot, so perhaps that’s a wise decision in the end.

But has Microsoft completely dropped plans for its publisher-side context-driven ad program? That is highly unlikely. While at the moment MSN’s adCenter can support the demand for ads on its Live Search pages, the fact remains that as demand goes up (and the market saturates), Microsoft is going to need more room to place advertiser’s ads. In the ad-campaign business, it’s quantity that matters. Charging more for limited real-estate space on Live Search (simple rules of supply and demand) is only a temporary solution, since what matters most is exposure – lot’s of it, and the cheaper the better.

While Superbowl ads rake in hundreds of millions every year, if the Superbowl were on TV everyday, no one would pay that much – at least, not for too long. It’s the same thing with MSN’s current adCenter model. Sooner or later, they’ll need to expand it to include content publisher’s websites and visitors into the equation. The only question is, when will this happen? Microsoft certainly has had its hands full this year, especially with the constant delays of its operating system, and the sudden barage of new software needing immediate attention for release. Now that Vista, Office, and Exchange are out of the picture, maybe Microsoft will take this time to focus on context-based ads and re-analyze what they have.

The contextual-advertising market is huge. It’s nowhere near tapped for all it’s worth, and no matter how hard Google tries, it doesn’t have the entire market covered. Yahoo! may have bungled things up with their poor “context-analysis” and absoloutely dismal customer support/response times, but that doesn’t mean that only Google can play this game.