Microsoft to Upgrade Search Ads

Microsoft Corp., owner of the No. 3 Internet search engine, is upgrading its software to let advertisers target ads to specific audiences by age and location, matching a similar service offered by search leader Google Inc.

The new adCenter product was released in Singapore and France and is set for testing in the U.S. next month, Redmond, Wash.-based Microsoft said Monday.

The technology will put Microsoft in competition for ad dollars with Google and No. 2 search engine Yahoo Inc.

AdCenter will include features to help advertisers stay within budget by estimating how many people will click on spots and the monthly cost for search terms.

The service will suggest search terms to advertisers and provide them with reports on the profile of Web surfers who clicked on ads. Microsoft currently uses technology from Yahoo to link ads to search results.

About $5.4 billion, or 42%, of the total $12.9 billion spent on online advertising in the U.S. this year will be for search-linked ads, according to New York-based research firm EMarketer Inc.

The services auction off keywords so that when a user enters that word into the search engine the ad appears alongside results of the search.