Microsoft are challanging another industry after its recent move in the hosting market that brought 4.5 million domain hosted in Windows platform. The software gians is now looking forwar to gain bigger share in the online advertising market.

Microsoft Corp. Chief Executive Steve Ballmer said this week he expects his company to invest in its online business as rapidly as other big online companies. Speaking at the company’s Strategic Account Summit for advertisers, Mr. Ballmer said Microsoft intend to spend about $2 billion more than analysts anticipated next year on new products and opportunities.

Microsoft is boosting its MSN search engine, which it sees as a key area of growth. The company plans to spend $1.1 billion in research and development in its fiscal year ending in June 2007, up from $500 million in the 2005 fiscal year and $700 million in the current fiscal year.

The Silicon Valley company unveiled adCenter, a new ad delivery and auction system, it hopes to use to tap into the boom in online advertising. Steve Balmer said Microsoft is committed to spend more money to compete Google and Yahoo.

MSN began using its own technology for delivering search results. It however remains less popular than Google and Yahoo. According to Nielsen/Net Ratings Google had 49% of the American search engine market share in March, while Yahoo had 22.5% and MSN 11%.

Microsoft believes that getting more people to use its search engine will make more people to spend in advertising with their adCenter.

US companies spent $5.1 billion on search-related ads in the U.S. last year, up 31% from the year before, according to the Interactive Advertising Bureau trade group and PricewaterhouseCoopers LLP.