Andy Beal had a blog post yesterday on MSN's preparations for launching their own PPC product. I've long speculated that it will be an MSN PPC program, and not an MSN powered search engine that would end up having the power to dislodge Google and Yahoo!'s grip on the search engine market.

While Microsoft may have the finances and knowledge base to build an excellent organic search engine, the reality is that searchers will require far more than simply a good search experience to entice them to switch their engine of choice. Internet users are creatures of habit. Once Google, or Yahoo!, or another engine earns that coveted spot of "home page" in a user's browser, it takes a powerful force to get them used to using another engine.

For instance, I was always quite impressed with the AlltheWeb search engine, but I never did manage to get in the habit of making it my first destination for search. I was so used to using Google that I rarely remembered to head to AlltheWeb unless I ran into trouble finding what I was looking for on Google. That same mentality holds true for many Internet users.

So how will a PPC product help Microsoft challenge Google and Yahoo! in the search wars? After all, no one selects a search engine based on their PPC offerings. That said, search engines rely on earnings from the PPC programs to help fund improvements to their organic search products. Part of Google's ability to develop new offerings like Local Search, Froogle and Google Alerts is due to the success of their AdWords and AdSense programs. Each new search offering provides additional places to display PPC ads, which increases revenue. It's a circular growth process that relies on the success of an engine's PPC program.

Many advertisers are unhappy with their Overture and AdWords experiences, but are reluctant to drop their accounts because of the loss of coverage they'd experience if they stopped advertising in those venues. The introduction of a Microsoft PPC product would provide new ad inventory and a new PPC management experience. If Microsoft has taken the time to pay attention to the complaints that are common to the Overture and AdWords experiences, they could introduce a new product that would be well received by PPC managers.

Perhaps even more obvious is Microsoft's ability to play "the money game." Microsoft's virtually unlimited pocketbook has, in the past, allowed them to topple competitors without introducing a superior product. Microsoft could easily introduce a syndicated PPC program similar to AdSense, but offer a high enough revenue share to convince nearly all AdSense partners to switch to a Microsoft based program. The loss of AdSense revenue could be devastating to Google's ability to develop innovative new products. Yahoo! will also experience a loss in revenue with the introduction of an MSN PPC product. Yahoo!'s Overture currently provides the PPC results on the MSN search site. With MSN currently ranked as the third most popular search engine, Yahoo! stands to lose quite a bit of PPC traffic when their relationship with MSN comes to an end.

The launch date of MSN's PPC product is still unknown, but the fact that it will launch can pretty much be taken for granted. Online marketers can certainly look forward to a new PPC program to explore and Google and Yahoo! fans can cross their fingers and hope that their favorite search engines will fare better than Netscape did.

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January 5, 2005

Jennifer Laycock is the Editor of Search Engine Guide, the Social Media Faculty Chair for MarketMotive and offers small business social media strategy & consulting. Jennifer enjoys the challenge of finding unique and creative ways to connect with consumers without spending a fortune in marketing dollars. Though she now prefers to work with small businesses, Jennifer’s clients have included companies like Verizon, American Greetings and Highlights for Children.

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