Microsoft Corp said on Friday that a new engine for its MSN Search service will start up in July, another step in its plan to challenge Google Inc.'s pole position as the Web's top search destination.
As part of that upcoming shift, MSN - the Internet arm of the world's largest software maker - said it will change the way that it displays text advertisements that are listed alongside search results.
Paid listings, or advertisements that piggyback onto search results, have become a hugely profitable component of the search industry, estimated to be worth $2 billion in 2004.
Instead of including paid listings within search results, which critics say results in misleading search results, MSN said it will display paid listings separately at the top and to the right of search results generated by its search engine.
"We're really close to finding out what really strikes consumers as the most relevant search results," said Karen Redetzki, an MSN product manager.
Redetzki said MSN will list three paid listings at the top of every search result, of which at least two will be advertisements sold directly by MSN.
Currently, Microsoft's paid listings are sold through an intermediary called Overture Services, which became a subsidiary of Internet media and portal company Yahoo Inc last year.
Yahoo also declared its intent to become a search industry heavyweight last year, taking on Google and MSN.
MSN said that it would continue to work with Overture to bring in paid listings, although it has clearly shifted away from relying on such providers.
In January, Microsoft ended its relationship with another paid listing company, LookSmart, and last September said its relationship with Overture would eventually change, but remain intact for the medium-term.