While Jay-Z is on the agenda for Microsoft's seventh annual MSN Strategic Account Summit next week, the real star of the conference will be MSN's adCenter.

MSN adCenter is Microsoft's platform for creating and delivering online advertising. The adCenter product has been in beta test for months and is widely expected to be launched in the U.S. in June. And adCenter also is a key part of Microsoft's services push in fiscal 2007, company officials told analysts on the Microsoft Q3 FY 2006 earnings call on April 27.

The MSN Strategic Account Summit is a who's who among advertising, marketing and technology experts. On the keynote list are Chairman Bill Gates; CEO Steve Ballmer: President of Microsoft's Entertainment and Devices division Robbie Bach; President of Roc-A-Fella Records Jay-Z; Google's Vice President of Advertising Sales Tim Armstrong; and Yahoo's Chief Sales Officer Wenda Harris Millard.

The three-day invitation-only event will address some generic advertising topics, such as "Marketing: The Key to Connection" and "The Power of Story in Making Connections." But it also will include updates on Windows Live Services, adCenter and Microsoft's mobile and entertainment strategy. And Microsoft will also likely discuss its soon-to-be-revamped MSN.com home page. A beta version of that page is available here.

A session on something known as the "MSN Media Network" also is on the Summit agenda. Earlier this year, when word of the existence of an MSN Media Network leaked, Microsoft denied that it was rebranding MSN as the MSN Media Network. But the company didn't comment on claims that it was building up its movie, audio, TV and other online content.

Harrison Hoffman, co-founder of the LiveSide.net Web site, which tracks Microsoft's Live services strategy, said he was expecting search and advertising to be key focus areas at the MSN Summit.

"It will be interesting how they choose to respond to the latest statistics that show their search share is still losing ground to Google," Hoffman said. "We're also hoping to hear about the expected move into video game advertising, as signalled by the recent press stories concerning their acquisition of Massive," a company which inserts advertising into videogames.

Matt Rosoff, an analyst with Directions on Microsoft, said if he were to speculate, "I wouldn't be surprised if they announced a competitor to Google's adSense, or some other sort of ad revenue sharing deal with third parties--perhaps, for example, a sharing deal for commercial sites that tap into Windows Live Search or Virtual Earth.

"They might also talk about advertiser opportunities in other Microsoft businesses, particularly Xbox, and offline clients, such as Windows Live Mail Desktop," where Microsoft has been testing ads, as of late.

During Thursday's earnings call, Microsoft officials acknowledged that Microsoft's MSN business had slipped back into the red. They attributed losses, in part, to Microsoft's planned transition from Yahoo to its own adCenter for serving ads. Microsoft's revenue per search fell as it undertook that transition, officials said. Three months ago, adCenter was generating 18 percent of MSN's U.S. search traffic. Now it is generating 70 percent, officials said.

Officials also said to expect Microsoft to accelerate its pace of investment in adCenter and other Live services in fiscal 2007, which commences on July 1. Microsoft will be spending copiously on adCenter, search (especially in the areas of relevance, mobile and local search), content for its MSN and Live portals and infrastructure for supporting these services in the coming year. These investments will impact Microsoft's profit in 2007, but position the company for years ahead, especially in the advertising arena, officials said.