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MSNBC taps start-up for ad technology

MSNBC.com inks a deal with a little-known start-up to place keyword-related ads on its site, a sign that joint venture partner Microsoft may plan to rely less on Overture Services.

MSNBC.com, Microsoft's online news venture with NBC, has inked a deal with a little-known start-up to place keyword-related advertisements on article pages, a sign that the software giant may plan to rely less on commercial-search partner Overture Services.

The Redmond, Wash.-based company said Tuesday that it is joining forces with WebRelevance, an 11-month-old company from Seattle, on ads for the news site. The start-up has developed technology that analyzes the content of a Web page, down to a handful of terms, in order to deliver an ad related to those keywords.

The deal will allow the news site to target promos at certain audiences. For example, an MSNBC.com news article on Lance Armstrong could trigger an ad for bike equipment, using the relevance technology.

Keyword-related advertising is a relatively new strategy for MSN and MSNBC.com, as it is for all the major search providers. The MSN portal started using a similar system from Overture, its longtime provider of sponsored-search results, for ads on pages of its entertainment and technology pages. The Pasadena, Calif.-based search company introduced the system in June and has earmarked it as a key area of its growth.

Yet Yahoo's planned $1.6 billion buyout of Overture has likely put a strain on the Overture-MSN relationship and may be pushing Microsoft and its units to forge alliances elsewhere or to ultimately construct its own service.

Last week, Microsoft Vice President Yusuf Mehdi reaffirmed that the Web portal will maintain its relationship with Overture while it explores long-term alternatives.

Charles Tillinghast, a vice president of sales and business development at MSNBC.com, said Tuesday that the company chose to work with WebRelevance because it provides back-end technology that isn't tied to front-end ad partners. By contrast, Overture sells its keyword-related ads to up to 95,000 advertisers. With WebRelevance, MSNBC.com will display commerce-related ads from Microsoft's MSN Shopping site.

"What we really wanted was just a piece of software to integrate with our e-commerce partners," said Tillinghast. "We look at this not as search technology, but as match technology. It evaluates the story and makes the best possible match to the story. We found that WebRelevance had the highest contextual fit."

Unlike Overture's simple text ads, MSNBC.com is using WebRelevance to display graphical promos for MSN Shopping partners. The ads will appear at the top right of news pages. The news site also displays content-targeted text ads on news pages in partnership with Sprinks, which is owned by Primedia.

The WebRelevance system of keyword advertising is an offshoot of the popular market for paid-search results. Overture spawned an industry around allowing marketers to bid for visibility in search results, via the placement of text ads. Contextually-targeted ads on Web pages have been pegged as the next trend in online advertising, which has been depressed since the dot-com demise.

In theory, the search-based technology could help deliver a greater number of targeted ads to a Web page. As the ads are designed to be relevant to people's interests, visitors might then click on them more often.

Financial terms and duration of the WebRelevance deal were not disclosed.