Microsoft unwraps online AdCenter

Microsoft AdCenter allows the display of more relevant online ads

Microsoft has launched AdCenter in an effort to attract more pay-per-click advertisements. 

The service allows the display of more relevant online ads, which should lead to increased revenues for Microsoft and higher conversion rates for advertisers.

AdCenter lets advertisers bid on search keywords around which an ad appears, and offers additional targeting features that control the geographic location of the target audience, for instance, or the time of day when the ads are displayed.

The service goes beyond online search advertising. Microsoft unfolded its Live Software strategy last year in which it plans to introduce a series of free, ad-supported online applications such as email, blogging tools and security products.

"Ad-supported software services are an integral part of Microsoft's plans to give consumers access to a broader variety of digital media, whenever they want and on whatever device they prefer," said Microsoft chief executive Steve Ballmer.

"Our close partnership with the ad community is extremely important to us as we evolve Microsoft from a software company into the world's largest, most attractive provider of online media through MSN, Windows Live and AdCenter."

The service is a response to Google's AdSense programme and Yahoo's Search Marketing solutions, formerly known as Overture. 

These services have been instrumental in increasing revenue from online search for their respective owners.

Although the Microsoft AdCenter bidding process is similar to Google's Adsense, Microsoft offers finer targeting mechanisms.

The service was announced in March 2005 and Microsoft is already using AdCenter in Singapore and France.

Staring this week AdCenter will become the exclusive online advertising platform for Microsoft's English websites in the US. A test in the UK is scheduled for June.