Microsoft's Internet group is developing a pay-per-click ad-bidding system that pairs search results with sponsored text messages from advertisers. Yahoo's Overture Services currently supplies MSN with sponsored search links, which complement MSN-sold "featured sites."

But the new MSN service, called AdCenter and set to roll out in Singapore and France in the coming months, will bump Overture ads in the long run and let MSN own a major source of its advertising revenue. (Microsoft splits fees collected from marketers with Overture.)

Microsoft does not have a specific date for a U.S. launch, but it envisions operating the ad network globally, said Adam Sohn, an MSN spokesman.

"Call this the third leg of the search stool," said Sohn. "First, we introduced algorithmic search, then desktop (search), which is still in beta, and now the advertising platform."

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