Being in the shadow of another company is certainly not something Microsoft is used to. Sure, Sony gave the software company a proper thumping with PlayStation 2, a hard lesson that propelled an aggressive dropping of Xbox 360 gamer bait in time for Christmas. "In time for the holidays" was a strong left hook to Sony's chin before the tech giant could throw out the monstrously high-tech PlayStation3. Microsoft is hoping an early attack put a crack in Sony's glass jaw.
Microsoft's new plan of action smacks of a similar counterattack strategy. In the search marketing business, it's been a losing battle for second place. Not realizing the early importance of search technology, Gates and company outsourced their afterthought to Yahoo!'s Overture Services. As their share of the search market has gone from bad to worse, dropping by as much as eight percent in recent years, that strategy has proven ineffective.
Though some have speculated a stronger relationship with Yahoo! is forthcoming, the relationship is scheduled to come to genial close in June. It appears that's when MSN will make its push for at least second place, if not able to over come a strong memetic force in Google.
The AP reported that 25 percent of sponsored links come from Microsoft's recent testing of adCenter and that in June that percentage will grow to 100.
Yesterday, Microsoft unveiled its adCenter Incubation Lab, shortened to adLab for the time constrained, a joint-effort between MSN's adCenter and Microsoft Research that has given way to a state-of-the-art laboratory in Beijing. adLab has "a mission to research and incubate advanced technologies for MSN adCenter, designed to provide advertisers with rich targeting capabilities based on audience intelligence information and give consumers a more relevant online experience."
That relevant online experience includes advertising across several platforms from blogs to search to video all aimed at targeting a precise audience. Microsoft demonstrated some of these technologies at their recent adCenter Demo Fest.
" These prototypes hold the promise to change online advertising dramatically in areas such as paid search, behavioral targeting and contextual advertising. Also shown were projects addressing areas of incubation in their earliest stages of investigation, such as ad bar-code readers, social network mining, and video and large-display ads," said Microsoft in a statement.
The adLab team in Beijing consists of letters-after-their-names scientists with specializations in data mining, information retrieval, statistical analysis, artificial intelligence, auction theory, visual computing and digital media.
One of the more interesting highlights of the adLab was the discussion of video hyperlink ads that detect products shown on TV and allow an instant referral to information about the product.
So basically, as Mike Meyers is making fun of product placement in Wayne's World, a Doritos hyperlink could appear in future syndicated showings, taking would-be customers to information pages as well as where Doritos can be bought.
"The exciting work being shown at adCenter Demo Fest and the new Microsoft adLab reflects Microsoft's commitment to innovation in the field of ad products," said Tarek Najm, general manager of adCenter at Microsoft.
"The Microsoft team of top researchers in this field is unsurpassed and certain to produce compelling advances that will impact and ultimately change the game in online advertising."
And if they can make good on those promises, the game just might be changed.
they're happy being #2 in search (even made an unofficial statement to that effect ) 
