Microsoft announced yesterday that they would be replacing Yahoo!'s paid search advertisements with ads managed through MSN's new adCenter sometime in the next six months. adCenter is currently being beta tested by about 2,000 U.S. advertisers and is expected to go into wide launch early this summer.

According to an article in the Seattle Post-Intelligencer, Microsoft is also working on click technology that would tie ads to product placements within online video.

Microsoft is hoping to expand on the concept with a new technology that allows viewers to click on cars, clothing or other products that appear in online movies or TV shows. For example, viewers of "Sex and the City" could click on Carrie Bradshaw's designer shoes or Kamali sweaters as she walks down a New York street and immediately be transported to advertisements for those products. "Until now, there is no way for the user to actually interact with these ads in the video," said Microsoft data-mining analyst Li Li, who was showing off the technology as part of the company's annual adCenter Demo Fest Thursday. The video hyperlink ads are just one way that Microsoft is looking to take a bigger bite out of the online advertising market as it attempts to catch up -- and possibly surpass -- Google and Yahoo.

The article went on to share comments from Microsoft about the future of their demographic database and how it wil be available for use by paid search advertisers.

For example, Daimler-Chrysler could use Microsoft's search tool to determine what percentage of women between the ages of 18 and 24 conduct searches for Dodge Caravans. Or they could use data-mining technology to determine what blogger holds the most influence on car shoppers. "As an advertiser you want to advertise on that guy's blog first, because he influences the whole network and there is a ripple effect," Najm said. With technologies like those, Najm said Microsoft is starting to shape the online advertising category.

Interesting...very interesting.