Are Microsoft's online advertising tools enough to trump Google?

In the Google vs. Microsoft battle, the metric most often compared is search share. In that category, it's evident that Microsoft isn't even holding its own; it is losing steadily.

But what about in online-advertising tools? Can Microsoft parlay its software-development experience into superior tools for those willing to give its adCenter platform a whirl? The Softies are attempting to send that message with some of Microsoft's latest Live-centric announcements and unveilings.

On January 16, Microsoft provided an update on some of the tools being developed by its AdCenter Lab team.

(AdCenter Lab is the year-old joint venture between MSN's adCenter team and Microsoft Research that is charged with "a mission to research and incubate advanced technologies for MSN’s adCenter.")

A year ago, adCenter Lab researchers showed off 15 prototypes of the "approximately 40" ad technologies on which they were working. This week, the team said it was working on "more than 60 online marketing tools and technologies, which are at various stages of development, testing and integration into Microsoft advertising products and services."

Among some of the new wares Microsoft's adLabs team highlighted this week:

* Video-display ads that use Javascript for highlighting and commenting. Also allows for authentication using Windows Live ID, "so users can choose to view comments from their friends only." Available to the public in demo form only.

* Video hyperlinks, "the first stand-alone product developed by adCenter Labs," lets marketers embed video hyperlinks within online video ads. Microsoft says a pilot ad for Kohl’s department store using these hyperlinks is slated to appear in spring 2007. There's a demo of the hyperlinking technology on the AdLab site.

* Large display feedback is vision-based technology that creates interactive public displays -- using a computer-vision algorithm that tracks hand movements -- that consumers can remotely control. No public demo yet available.

* Keyword optimization for paid-search and content ads. A keyword optimization demonstration is available on the adLab site.

* Contextual advertising tools, which classify Web sites and keywords into hierarchical taxonomy in order to help increase relevance of contextual ads. No public demo available yet, but Microsoft has been testing its "ContentAds" capabilities with selected advertisers since last fall.

"All we need now is AdCenter to syndicate MSN's Content Ads onto non-Microsoft sites and Google may have a serious competitor," the Live watchers over at LiveSide.net blogged recently.

Somewhat surprisingly, Microsoft didn't mention some of the online advertising analytics work it's been doing. Last summer, company officials said that Microsoft is working to incorporate the Deep Metrix technology it acquired in May 2006 -- technology currently going by the codename "Gatineau" -- into the base adCenter product.

The goal stated at that time was to add Deep Metrix's analytics -- statistics on page views, referrals, conversions, paid search, etc. -- into adCenter by late spring or early summer 2007, officials said.

Microsoft may have shared more information on these adCenter tools and technologies via a Webcast, entitled "Using adCenter Research Tools and Demographic Targeting to Increase ROI," on January 17. I tried to watch that Webcast, but, as seems to occur almost every time I try to watch a LiveMeeting conference, things went awry.

(This time, I couldn't get sound. A help-desk support person asked whether I was running Internet Explorer 7, which I am. I get the feeling this was a bad thing,. Regardless, it was no Webcast for me.)

I did see, via the Webcast slides, a reminder of why Microsoft has decided to reemphasize its own MSN Web portal and make it a key component of its online-advertising story, howeer. On a slide entitled "MSN has broad reach," Microsoft officials listed the following MSN statistics:

* 96 million unique monthly users across the U.S.

* 44 million visit the MSN homepage monthly

* MSN reaches 61.95 percent of the U.S. Internet audience

* MSN has one of the savviest Internet audiences, with 79 percent going online five or more times per week; 84 percent using broadband for Internet access; and 59 percent purchasing something online last month.

"MSN users shopped and purchased online in the past 30 days more than AOL, Google or Yahoo (users)," according to Microsoft.

If you find yourself wondering why Microsoft is consumed with the idea of making Live/online services (especially online advertising) one of the main pillars of Microsoft 2.0, there's your answer.