The new PPC service, to be called MSN Keywords, will start off with a limited number of advertisers, but should eventually mean advertisers have yet another place to spend their pay per click budgets.

Ask Jeeves also recently announced its entry into the pay per click market, and there are a variety of smaller and local search engines offering pay per click ads.

Meanwhile, Yahoo! announced the launch of its new program to display contextual ads on small publisher sites.

All of these services are clearly targetting Google's market. But will they cut into Google's revenues to any great extent? Or will they just expand the market for paid search ads?

The answer will lie in how well each service performs in producing clicks that convert to sales. If an advertiser can spend $10 on Google and make $100, and do the same on Yahoo! and MSN and Ask Jeeves!, they're likely to advertise on all of them instead of choosing one service over another. But if there are big differences in the cost of conversion, businesses - at least those who track conversion metrics - will quickly drop the underperforming PPC engines and focus their spending where the dollars do the most good.