Last year, Microsoft adCenter introduced changes to their Ad ranking system for advertising in the US. This represented a shift towards a more Quality Based Ranking system, along the lines of what Google AdWords and Yahoo’s Panama already have in place.

It appears that this change is now expanding into more widespread coverage. On the adCenter blog on Wednesday, Microsoft announced the introduction of this system to the Canadian and UK markets.

While it may seem Microsoft is only playing “catch up” with this initiative, they have been busy making other improvements to their system as well.

Though still low on the totem pole for market share, Microsoft is forging ahead with a level of energy that would seem alien over in the Yahoo trenches. With projects such as the Excel addon, Desktop Editor and Analytics, Microsoft may give Google some real competition in the not too distant future.

A scan of the Yahoo blog yields a host of “how to” and “tips and tricks” posts, but nothing particularly significant in the way of badly needed innovation.

In fact the last significant improvement Yahoo has implemented was the change to minimum bids. While that has been handy for getting alerts when minimum bids are about to become too low, it’s not been the sort of improvement that painfully awkward interface really needs.

There is speculation that Microsoft is overtaking Yahoo’s position for paid traffic as well.

While I don’t know if this is indicative of anything, I have noticed a recent decrease in the number of impressions in our own Yahoo accounts. Unfortunately, the bid prices have not decreased as yet.