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Microsoft to take on YouTube with new video ad service

Microsoft enters the ring for video advertising

Microsoft is set to launch a new video ad service to rival Google's popular YouTube platform.

The software giant will soon unveil the Microsoft Video Network, according to The Independent, and will cater for the UK advertising market.

The service will address an industrywide shift from TV advertising to online advertising, Microsoft's UK GM of Advertising, Own Sagness, said.

The way the Microsoft Video Network will work is by allowing advertisers to programmatically buy video ad space across 350 accredited third-party websites.

Microsoft properties accounted for nearly 163 million unique users in the US in February 2014 according to comScore, not far from Google's 187 million figure.

Big money

The service will be part of a wider platform for quickly and easily buying ads on 350 Microsoft-approved third-party websites.

The so-called programmatic advertising market, which is essentially an automated ad buying system, is expected to be worth £6 billion (US$10 billion, AU$10.8 billion) in the UK by 2017.

Microsoft already earns $3.5 billion (£2.1 billion, AU$3.8 billion) annually from online advertising, putting it in third place after Google and Facebook. This latest move shows that it is eager to push even higher.