Microsoft adLab

Microsoft is taking paid search seriously - as they should. It's a multi billion dollar industry (with incredible growth) and they realized they "dropped the ball" in the paid search arena by getting into the game a little later than their major competitors.

Microsoft has set up a research center in Beijing called "adLab". It's short for AdCenter Incubation Lab. The adLab has about 22 scientists on board in Beijing, with another 20 or so at Microsoft's headquarters in Redmond.

"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," said Tarek Najm, general manager of AdCenter.

It looks to me like the adLab is set on cranking out some cool stuff - like video hyperlink ads.

"The technology "can detect product items displayed on a television screen during a show or commercial," Microsoft said. Consumers can then "zoom into products featured on the television screen and click through to detailed product descriptions and information on where the products can be bought", according to the announcement.

"Until now, there is no way for the user to actually interact with these ads in the video," Microsoft data-mining analyst Li Li is quoted by the Seattle Post-Intelligencer as having said."

Having another big player in the pay per click/search marketing arena is sure to bring a lot of changes and innovations in 2006. Nothing drives innovation like competition.