Updated: 5/6/06; 3:32:53 PM.
Steve Kirks' Radio Weblog

Saturday, May 6, 2006

Update: Microsoft chases search ad revenue.

(InfoWorld) - Microsoft launched on Thursday its online advertising sales platform for search engine advertising in the U.S. at an event in Seattle, the company said. The move opens the way for Microsoft to challenge Google's business model for search advertising revenue.

AdCenter will now be the sole platform serving up advertisements on MSN, Windows Live, and other Microsoft Web sites, Microsoft said. Microsoft has previously relied on partners like Yahoo to sell advertising on its behalf, said Nate Elliott, an analyst with Jupiter Research.

The launch of adCenter in the U.S. is an important milestone for Microsoft, which says it is shifting from being a software company into a provider of online media through sites like MSN and Windows Live.

AdCenter works in a similar way to Google AdWords and Yahoo's advertising platform, where advertisers set the amount they want to pay each time someone clicks on their ad. Pledging a higher fee than other advertisers delivers a higher placement of the ad on the page. The ads are displayed on pages where users search for certain words that are chosen by the advertiser.

AdCenter uses a slightly more intelligent targeting system than the others, targeting ads based on user demographics in addition to the words they type into the search field, Elliott said. If it works better, advertisers will be drawn to it, he said.

Initially at least, adCenter is likely to be very attractive to advertisers, Elliott said. Because at first there will be a smaller number of advertisers using the platform and bidding against each other, the prices will be low, he said. "In the early days, there will be some bargains," he said.

However, Microsoft will have to improve the volume of users on its sites if it is to grow adCenter into a major revenue earner, he said. Microsoft "is not representing nearly as many searches as Google and Yahoo and that's their biggest problem," he said.

Microsoft said it will continue to evolve adCenter to become a one-stop shop for advertisers to buy search, contextual or display ads across Microsoft's online sites including Windows Live Mail, Windows Live Spaces, Windows Live Safety Center, Windows Live for Mobile, Office Live, Office Online, and the Xbox Web site. The service will also let advertisers track their ad campaign performance.

In fiscal year 2007, which begins on July 1, Microsoft plans to spend about $1.1 billion on research and development in its MSN Internet unit, which includes adCenter, said Steve Ballmer, Microsoft's chief executive officer, at the MSN Strategic Account Summit on Thursday. That is up from $500 million in fiscal year 2005, he said.

"This is really a platform play. We need an ecosystem, as we call it, around our Live platform, just as we needed an ecosystem around Windows," Ballmer said at the event, which was made available in a replay on Microsoft's Web site.

As part of the adCenter launch, Microsoft also announced that it bought DeepMatrix Corp., a provider of Web analytics for online marketers and publishers for an undisclosed sum. Microsoft plans to use DeepMatrix's products to offer Web analytics applications as part of adCenter in the future.

Microsoft also announced the acquisition of Massive, which specializes on placing advertising in video games. Among other things, Massive allows developers to place items bearing brands, such as soda cans and billboards, at natural places within game environments, according to Microsoft. The company plans to use the Massive technology to deliver in-game ads for Xbox Live, MSN Games and MSN Messenger. It is exploring ways to integrate the technology with Windows Live and adCenter.

Microsoft first launched adCenter in France and Singapore in 2005 after announcing the development of the platform earlier last year. Some advertisers in the U.K. will be able to test the service starting in June, Microsoft said.

(Juan Carlos Perez in Miami contributed to this story.)


  • Massive buy bolsters Microsoft's ad revenue plans
  • Microsoft's Vexcel buy maps out next Google hit
    The Data Integration Company.

    By Nancy_Gohring@idg.com (Nancy Gohring). [InfoWorld: Top News]
    11:43:40 AM    comment [] | trackback []

    To Blog Or Not To Blog . Michael Hiltzik of the Los Angeles Times hasn't exactly been pulling his punches. By washingtonpost.com. [washingtonpost.com - Howard Kurtz (washingtonpost.com)]
    11:20:55 AM    comment [] | trackback []

    The Washington Media are a Joke.

    Stephen Colbert at the White House Correspondents Dinner

    After declaring that he is well-known for being funny, Washington Post columnist Richard Cohen launches a weird snit today against Stephen Colbert for his speech at the White House Correspondents Dinner:

    Colbert was not just a failure as a comedian but rude. Rude is not the same as brash. It is not the same as brassy. It is not the same as gutsy or thinking outside the box. Rudeness means taking advantage of the other person's sense of decorum or tradition or civility that keeps that other person from striking back or, worse, rising in a huff and leaving. The other night, that person was George W. Bush.

    Two years ago, President Bush appeared in a skit at the same event in which his administration's inability to find WMDs in Iraq was a bottomless source of comedy. The only journalist in attendance who objected was David Corn of The Nation:

    ... at one point, Bush showed a photo of himself looking for something out a window in the Oval Office, and he said, "Those weapons of mass destruction have got to be somewhere."

    The audience laughed. I grimaced. But that wasn't the end of it. After a few more slides, there was a shot of Bush looking under furniture in the Oval Office. "Nope," he said. "No weapons over there." More laughter. Then another picture of Bush searching in his office: "Maybe under here." Laughter again.

    Disapproval must have registered upon my face, for one of my tablemates said, "Come on, David, this is funny." I wanted to reply, Over 500 Americans and literally countless Iraqis are dead because of a war that was supposedly fought to find weapons of mass destruction, and Bush is joking about it.

    Washington journalists like Cohen, who didn't raise as much as a peep when Bush laughed off the false cause that sparked a war, have now spent five days haranguing a cable TV comedian for making the president huffy. [Workbench]
    11:18:44 AM    comment [] | trackback []

    Thursday, May 4, 2006

    A picture named mac.jpgApple's new TV ads are great, incredibly irreverent and cleverly produced, and Macs are easier to connect than Windows machines, but the bit about PCs getting stuck is way off base. My Macs, even the super-high-end desktop machine, do exactly what they say the PCs do. Okay, I'm still using PowerPC Macs, but that's all they sold when I bought these machines, less than a year ago. And that's another thing not to like about Apple. They're always making you feel stupid for having bought their latest and greatest. I'd like to see Microsoft fire back with ads of their own about Apple's planned obsolescence and how much it costs, really, to keep up with them. You have to be rich to love Apple. PCs, even if the OS and apps are butt-ugly, and the viruses are just awful, are computers lots of people can afford, people who couldn't afford Macs. And dollar for dollar, Windows machines perform better than Macs. [Scripting News]
    9:50:26 AM    comment [] | trackback []

    Blu-ray discs delayed by a month (Reuters).

    Matsushita Electric Industrial Co.Ltd., best known for its Panasonic brand, displays the new Blu-ray Disc drive for personal computers and Blu-ray discs in Tokyo, in this April 21, 2006 file photo. (Toshiyuki Aizawa/Reuters)Reuters - While high-definition DVD titles trickle into stores, the arrival of the first titles in the rival Blu-ray Disc format has been pushed back by a month until June 20.

    [Yahoo! News: Technology News]
    9:47:30 AM    comment [] | trackback []

    © Copyright 2006 Steve Kirks.
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