Microsoft Switches to adCenter, but Might Join Forces with Yahoo

After months of testing, Microsoft announced yesterday it switched to its own ad brokering service, through which advertisers can directly place ads on the software giant's sites, without going through Yahoo, Reuters reported.

With adCenter, Microsoft proclaims its independence from Yahoo, up until now Overture being responsible for placing the ads on MSN.

Currently, the advertising service is limited to the ads placed on the search engine, but the Redmond company plans to extend it onto other software platforms, including the Xbox games and mobile phones.

However, despite the separation from Overture, there are rumors in the IT community that Microsoft and Yahoo have been discussing a possible partnership.

"One faction within Microsoft Corp. is promoting a bold strategy in the company's battle with Google Inc: Join forces with Yahoo Inc.

That would be a major departure for Microsoft, the software maker that is legendary for toiling on its own until it captures a new market. However, people familiar with the situation say that Microsoft has considered the idea of acquiring a stake in Yahoo, and that the two companies have discussed possible options over the course of the past year,"
The Wall Street Journal says.

Microsoft sees adCenter as a powerful competitor, able to compete with the online search leader's AdSense.

"Further development of adCenter is key, our goal is to create the Web's largest advertising network, giving us an engine that will enable us to monetize our services and compete against Google," CEO Steve Ballmer said in a memo sent to Microsoft employees the same day Microsoft's stock plummeted 11 percent.