Microsoft adCenter hopes Bangalore will help it take on Google’s AdWords

Microsoft has opened a new research and development center in Bangalore, targeted primarily at improving its fledgling online ad business ‘adCenter’ and muscling in on the booming global online ad market dominated by archrival Google. The latter already has a huge research and development team in India which has been responsible for creating several of its products.

The new, 154,000 sq ft facility ‘Vigyan,’ located at Cosmo Lavelle in the heart of the city, is the third of Microsoft’s big R&D facilities in India and its second in Bangalore. It opened the first one in Hyderabad in 1998 and another one in Bangalore in 2005.

The move comes a year after Microsoft and Yahoo pooled their search efforts together, resulting in many Yahoo developers moving to Microsoft in India.

“The last one year has been an exciting and exhilarating journey for the entire team. Apart from ensuring that the Yahoo India employees who joined Microsoft India R&D have a smooth transition and the combined team has a strong engineering charter, we also worked hard on designing our new home,” Sanjay Anand, GM in charge of the adCenter team at Bangalore said.

Qi Lu, President, Online Services Division, Microsoft promised “greater and improved innovation for consumers, better volume and efficiency for advertisers and better monetization opportunities for web publishers,” thanks to Microsoft’s efforts at the online ad market place.

That is perhaps easier said than done.

Rival Google has a nearly unassailable position in the search and online ads business. Out of the $50 billion or so expected to be spent on online ads (excluding mobile ads,) this year, as much as $35 billion is likely to pass through Google’s cash-counters.

Microsoft and Yahoo, however, have a higher share of the market in the US, where Google’s share is estimated at just around 45%, including both search and display market (roughly equal pieces of the pie.)

Microsoft said it was won over by the “availability of world class talent, advanced infrastructure and proximity to the booming emerging markets” in India in its decision to set up its second facility in Bangalore.

“Bangalore has been our home ever since we established the Microsoft Research India lab, and moving to the new, larger lab space is indicative of the increasing interest in research in the country,” said P Anandan, Managing Director of Microsoft Research India.

He said the design of the new facility will provide “a comfortable working environment that encourages creativity and collaboration while being energy efficient and environment friendly.”

Microsoft’s R&D unit in India started with about 20 people and has grown to 3900 plus in around 13 years.

Global Mobile ad-revenue will double this year to $3.3 billion: Gartner