MSN is adding a little razzle-dazzle to the search engine scene. The tech giant launched its own search engine on Feb. 1, and has invested US$100 million in developing superior search algorithms to provide more relevant results and grow a loyal user base. Marketers already on board with keyword buys include Dell, Lavalife and LLBean.

Competitors aren’t standing by idly, either – Google and Yahoo both recently introduced desktop search tools, and AOL launched a local search service at the end of February.

The heated competition means the race to offer the latest technology is speeding up, and mobile search could be the next big thing. While insiders say discussion about m-search is still premature, two U.S. companies, Medio Systems and Fast Search & Transfer ASA, are already developing related applications to sell to telcom carriers.

Which could mean great marketing potential, says James Prudhomme, AOL Canada search product manager: ‘When you walk in front of a Starbucks, you can (potentially) have an offer from Starbucks beamed into your phone.’ His colleague Jonathan Lister, senior director for AOL Canada’s media network, agrees. ‘The linchpin will be [global position system] and mapping. That’s really what the differentiation for m-search will be.’

Lister says AOL research indicates 60% of AOL search users already have transactional intent, and as many as 20% have local intent – a combination that makes the prospect of m-search marketing very appealing.

Meanwhile, MSN Canada marketing manager Lesley Wheldrake reports that, while the company has nothing to announce right now, it’s definitely looking into m-search. And mobile users can already search with Google SMS.

Still not all industry pundits are entirely sold. Toronto-based search engine optimization consultant Kevin Jackson predicts m-search users are more likely to use the service to look up phone numbers and addresses to places they already plan to go.