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Windows Live Expo, Microsoft's entry in the classifieds war, has upped the ante against Google Base, Yahoo! and the rest of them by signing with AdMission (formerly iPix) to use its Spotlight Ads technology.

While advertisers can still post ads for free, the Windows Live team is betting that high-value advertisers will pay $19.99 to upgrade to the Spotlight Ads platform. The platform, rooted in AdMission's photo-and-virtual tour upload technology, enables advertisers to have a thumbnail photo of their product included in a banner or skyscraper format that is created on the fly, based on user searches.

The banners can present up to 15 competing thumbnails at a time, limited only by upload speed. When individual thumbnails are clicked on, they reveal extensive information about the product, and even enable "buy it now" transaction completions right on the site (although Microsoft isn't using that capability). Users can also send selections to a friend.

Windows Live Expo is starting with Real Estate and Autos because they lend themselves well to high-value, highly visual offerings worth paying for. But the platform may eventually be extended to additional categories. Pets, for instance, have done well in other Spotlight Ads installations. Spotlight Ads is currently in use by several newspaper sites, including The Arizona Republic’s and

I find it interesting that Microsoft isn't relying on internal resources to develop the equivalent of Spotlight ads. It may be attributable, in part, to various patents that AdMission has on the technology. But it is also probably attributable to Microsoft's current mania to publicly pit its internal teams against each others.

The result may be a series of fast moving, highly flexible products — but almost certainly guarantees branding confusion and overlap as well. Some people, for instance, may think to look for classifieds in Windows Live Local. Kate Kaye from ClickZ has more here (including quotes from me and Mike Boland).

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