With Microsoft looking to step into the search engine market as a force in its own right, Yahoo is bracing itself for losing its search ad deal with MSN.
"The right thing for us to do," Yahoo senior vice president Ted Meisel told reporters, "as a business, is assume one day that MSN will develop its own ad network. I don't know when that day is or if it will come. Until then, we're going to continue to serve them well."
Yahoo's paid listings distribution deal with MSN runs through June 2006. MSN replaced Yahoo's search engine with its own in January, complete with a reported $150 million ad campaign to promote the new engine.
Yahoo chief executive Terry Semel has also been quoted as saying MSN was liable to become a full-out search-and-ad network competitor to Yahoo and Google—and that that was a good thing. "It's good to have good competition," he said.
