The extension takes the deal, due to expire in June 2005, to June 2006.
Given Overture's ownership by Yahoo!, MSN had been expected to create its own paid-for search technology rather than extend the deal.
Last year, MSN pledged its allegiance to Overture, having said its tests showed it provided the best results. However, it has since developed its own natural search tools.
A beta version launched last month.
"Overture has been a strategic partner of MSN since 2001, and we look forward to continuing our productive relationship," said Yusuf Mehdi, corporate vice-president for the MSN Information Services & Merchant Platform division at Microsoft. "We are pleased that our collaboration has helped to grow the online ad industry, and benefit consumers and advertisers."
Ted Meisel, president of Overture, added: "MSN is a valued industry partner, and we are pleased to extend our successful relationship in the US and around the world. We appreciate the vote of confidence from MSN and look forward to working with them on innovative sponsored-search solutions."
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