Microsoft Corp. Founder Bill Gates introduced a demo version of MSN Virtual Earth. The new service combines search technologies with aerial mapping photography. 

MSN Virtual Earth provides users with an aerial view of the location on a map with layers of relevant links and businesses on top of it. Advertisers' links are shown under the search results. 

Micrsoft's demo of Virtual Earth is seen as another competitive step against Google and Yahoo! in the satellite mapping and local search space. Last week, Google announced the launch of its Google Earth aerial mapping and search service.

"MSN Virtual Earth will provide a core set of reference points such as maps, aerial imagery, photos, consumer and business directories and ratings and reviews and allow the broader community of consumers and businesses to contribute their own location-specific information to create an always expanding, dynamic and relevant local search experience. MSN Virtual Earth uses location as the way in which people interact with the information on the web so that they can more easily find, explore and plan activities relevant to that location. MSN Virtual Earth will be a free to consumers. There will be some advertising opportunities for our business customers," says Tom Bailey, director of sales and marketing, MapPoint Business Unit, MSN.