Microsoft opens up the search market?

Jonathan Bowers, February 6th 2008, 3:56PM

It has been almost a week since Microsoft put a deal on the table for Yahoo! to consider. While we don't seem to be hearing much yet from Jerry Yang and his board of directors the rest of the industry has plenty to say - especially Google.

Google is vocal but not quite uniform in its response. One minute, MD for UK Sales Mark Howe is welcoming the competition and the next, senior vice president David Drummond is appealing to competition commissions that a merger will give rise to unfair dominance.

Naturally, the online marketing community is welcoming a long overdue challenge to Google's advertising strength but there's more to this bid underlying Google's concern than many realise. Focus has been placed on the online applications side of a deal but Microsoft has for a while now been developing its demographic ad/search capabilities and has only one rival in this area - Yahoo!.

It is difficult to get hold of accurate figures, but Wikipedia cites Windows Live Hotmail as having 260million accounts in existence which means a hugely valuable database of user information activated when users browse after login. In recent statistics, comScore places Yahoo as the web mail leader with 255m accounts so while something is a little awry it is clear is that Microsoft - with the addition of Yahoo's user data would indeed be a very formidable force in the digital advertising market.

With Google's sign up email (gmail) tiny in comparison, the ability to target ads to the right demographic is one of Google's weaknesses within the market. And with the search leader's DoubleClick acquisition moving forward Microsoft needs to do something to avoid being left behind entirely. The Yahoo! bid brings it back in the eyes of all involved as a force to be reckoned with.

I for one am very excited about how this will develop over the coming weeks and months.

Tags: advertising, google, microsoft, search, yahoo!
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Microsoft and Facebook - the demographics challenge

Jonathan Bowers, October 5th 2007, 11:05AM

In the search arena, there is one advantage Microsoft has over the market leader and this is the ability to target ads demographically.

I attended a seminar yesterday organised by Don't Panic and Manchester Digital which included speakers from Google, Hitwise and Microsoft. The most exciting presentation of the day came from Mel Carson of Microsoft who talked us through the new Adcentre and the demographic developments that give them an edge.

With 25 million Instant Messenger and Hotmail/Live email accounts in the UK, they have gender and age details on many of us that can help marketers to get closer to their target audience.

Microsoft has made some interesting acquisitions over the last few years that help to shape this area of the business that still represents only 5% of turnover. Inspiring developments in both image and video search are on the radar but one recent partnership which does ring some alarm bells on the demographics front is the purchase of 5% of Facebook.

Privacy was mentioned more than once yesterday. If Microsoft starts to offer targeted ads on Facebook the move will certainly fuel the personal information debate. That is, unless Facebook creates a privacy setting to block targeted ads on profile pages.

I can't think of many richer sources of personal information available online and the question is, does Microsoft have the right to resource it? Some would argue that it is better to receive an advert for a product or service that you want than one that you don't.

One thing Mel made clear was that Microsoft is keen to listen to businesses, work with them and deliver ad relevance, so morality aside, Microsoft's allegiance with Facebook is a step forward for businesses and their online reach.

Tags: advertising, facebook, microsoft
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Online adspend up, Microsoft + ITV play catch-up

Jonathan Bowers, May 21st 2007, 3:07PM

For the first time since Internet adspend began its dizzying climb, television advertising spend has dropped. A new report into online adspend shows that in the UK internet advertising has now broken the £2bn mark. When I began watching these figures in early 2005, internet was catching up with radio spend. In the UK, we now spend almost 4x more on online ads than we do on radio advertising and display advertising has also been dwarfed.

So it is no surprise that Microsoft has just gone all out, spending a reported $6bn on online advertising company aQuantive Inc. But it's still playing catch-up with both Google and Yahoo! having made similar acquisitions previously.

I'm interested in the fate of TV adspend. Until now, overall marketing budgets had been increasing with TV spend increasing also. Now this trend has slowed and actually reversed, the future of Independent television is evolving. In the UK, ITV is the broadcaster that feels slow to respond to such changes. The new website does not live up to the hype and the other major stations appear to be drawing ahead in the IPTV race.

Interesting times ahead.

Tags: advertising, broadcasters, microsoft
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Microsoft vs Google developments

Jonathan Bowers, May 2nd 2006, 6:06PM

Since I logged on this morning and read about Amazon and this weekend's change of search allegiance from Google to Microsoft for A9.com and alexa.com, America has woken and the debate has moved on a pace.

The New York Times has published an article discussing just how potentially serious this battleground is and it is being debated all over the net.

Microsoft's concerns centre around Google's potential to become a kind of operating system of the Internet in the same way that Windows is the dominant operating system of personal computing.

And Microsoft has announced that it is boosting its spending by $2billion, which comes shortly after Google's talk about increasing theirs by $1.5billion.

Nicholas Carr poses an interesting question. Was it money that pressed the change from Amazon - if so how much did it cost Microsoft and could this be part of a bigger deal?

While the world is talking about it, the companies involved are not showing their hands, so who will make the next move?

Tags: google, microsoft
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Microsoft redundant defense in EU case

Jonathan Bowers, April 25th 2006, 10:53AM

Microsoft's EU hearing began in Luxembourg yesterday and things went as expected. The software company's lawyers claimed that the ruling was flawed, which came as no surprise. What did interest me was the use of figures about the sales of Windows XP Home Edition N, the without media player package they have been forced to introduce in Europe.

Under 2,000 units have been bought as opposed to 35m packages with media player. Microsoft's lawyers argued; “The failure to offer a product that nobody wants cannot be an abuse.”

Surely these figures show a much deeper situation that is conveniently ignored and relates to working practices and public perception.

When buying a PC, 90% of people are offered the Window's operating system. Since January, have they all been given the option of Edition N? Moreover we don't know whether sales people see it as a product worth promoting. Why offer the reduced version rather than the one with 'extras.'

For those a little more computer savvy it still comes down to an attitude to technology. If Window's Media Player has worked for you, why change it. Internet culture is based on convenience and efficiency and the maxim 'better the devil' often applies. Human nature means we get comfortable with one way of doing things and wont change unless it's very easy or is forced upon us.

While Microsoft fights this case, it doesn't have to reveal any source code - the same code that will make it easier for competitiors to develop media players as easy to use in Window's as Microsoft's own. In the meantime, users will continue to take the easiest option.

Window's is not just software, it's routine, it's convenience and it's such a part of daily life that it requires a massive shift in user habit to imagine it as a less dominant part of the computer experience. This is why the sales figures shouldn't surprise and why they are unreliable in Microsoft's defence.

Tags: microsoft, monopolies
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