Yesterday, Microsoft announced that it was laying of 5000 people from its workforce.  Sure we can blame the failing economy, but many people are contributing this major layoff on the Window’s Vista operating system. While it has not been yet reported if any of the layoffs are going to affect the Microsoft Advertising division, it has been reported that they are looking to expand this division post-layoff.

Microsoft AdCenter has come a long way in the past couple years. One of the last major search engines to step up its advertising platform, I have to admit they are doing a great job of trying to keep up with Google’s advertising technologies. AdCenter has already surpassed Yahoo’s Panama system, which is often far more complicated and tedious to manage (try making bulk changes on the fly!!!).

Recently added to MSN’s arsenal is the desktop software (currently in Beta) that rivals Google’s Adwords Editor.  Microsoft Advertising has also expanded it’s program to offer a more CPA-focused capabilities.  While the advertising programs keep improving one thing that MSN should concentrate on is expanding its user-base.

eVolving Interactive uses MSN to bring in supplementary traffic for its clients. We have found that the inventory has consistently stayed low. I believe that MSN could be a leader in Search Engine Marketing if they did a better job trying to attract everyday people into using it’s search engine.

In a time of economic distress, Google still managed to increase it’s revenue 18% from the previous year’s Q4, according to ClickZ’s, Zachary Rodgers.

The article mentions that CPC’s keep increasing and this is a sign that people are still clicking on Sponsored Links. This is not surprise to anyone that works in Search Engine Marketing (SEM). We have seen increasing prices for clicks especially on Google. We have yet to see any CPC’s decrease without campaign optimizations in order to adhere to best practices on increasing quality scores.

In fact, every day we have seen that we have been having to increase our bids to maintain results. The downside is that this affords advertisers even less clicks.

Of of Google’s SVP’s was quoted as saying, “If a recession caused less commerce to take place, that would adversely impact us and you’d see CPCs go down,” he said. “The CPC question as we see it is really driven by users, and it’s not quite as much the number of advertisers coming in and out at any given time.” (source:http://www.clickz.com/3632477)

I don’t think this necessarily means that commerce is driving ad spend, but I believe it’s people having more time to surf the internet. Many of the ads that account for Google’s ad revenue is probably coming from service oriented advertisers–lawyers, insurance, etc.

One example of this is the law industry, we have seen that CPC’s have been steadily increasing no matter if you have a great quality score or not. The traffic is there–people are losing jobs–they need a way to make money some how.