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Don't Underestimate Microsoft

An article published in today's MercuryNews.com  titled "Hooked On Google" by Elise Ackerman explores whether or not Microsoft still has a fighting chance in todays changing technology/media landscape.  When compared to the enormous success  the likes of Google has experienced over the last couple years, the picture indeed looks grim.  Ackerman points out in his article:

"Microsoft's page views, an approximation of how long visitors spend at its sites, was down 12 percent in December to 18 billion, according to the research firm. Google's page views were up 90 percent to 13 billion.

Microsoft has steadily lost ground in search, despite developing its own search engine in 2004. As of November, Microsoft's share of Internet searches has fallen to 8 percent. Two years ago, when MSN search was released in beta, Microsoft share's of U.S. searches stood at 14 percent, according to Nielsen//NetRatings.

Microsoft's Internet slide is reflected in its online sales. During the quarter ended Sept. 30, sales for the online business unit were $539 million, down 5 percent in a year. Google, in cruel comparison, reported revenue of $2.69 billion, an increase of 70 percent."

In fairness, Ackerman does offer that despite the above situation Microsoft has had a rather active 2006 by introducing a "slew of online offerings":

"In addition to the widely praised Virtual Earth, an exact 3-D representation of major cities, there were three new search services, a new portal, online video, classified ads, mobile e-mail and social networking. And perhaps most importantly, there was new adCenter software released in May that was supposed to help Microsoft make more money from its online offerings."

However, I think this misses a more important point why Microsoft should not be underestimated. 

Reason 1: They are the only major operating platform that cuts across desktop PCs (Microsoft OS), Mobile Phones/PDAs (Microsoft Mobile), TV (Microsoft iPTV) which both Verizon and Comcast are deploying across their massive Fiber and Coaxial nets, and Game Consoles (Xbox & Xbox 360).

Reason 2: Due to the reach across their installed platform base detailed above, Microsoft is in an enormously unique position to be one of the first companies to have a viable cross channel digital media offering.  From behavioral targeted web, e-mail and search  properties, to instant message, in-game  (via their purchase of Massive Inc. last May), mobile  and interactive TV advertising the folks in Redmond seem to be slowly transforming themselves from a software company to a media company.  Even though it does not exist now, it does not take one to imagine Microsoft's plans for using adCenter as the hub of their emerging cross channel media universe.

Reason 3. One word: PASSPORT.  Microsoft Passport accounts are central repositories for a person's online data and can include personal information such as birthdays and credit card numbers. They can also act as a single key to access many online accounts.

Microsoft uses Passport authentication for its Hotmail e-mail service, MSN Messenger instant messaging service, XBox Live Service, and Mobile Services. Several online retailers, such as eBay, Canon, Expedia and Starbucks, also use Passport authentication. Microsoft estimates there are 200 million active Passport accounts. 

It does not take a rocket scientist to guess that Microsoft will use this Central Customer Information (CIF) file to help deliver more personalized content/advertising to its opt-in customers as its able to understand their behaviors and activities across digital media platforms.

Its important to note...that I am hardly a fan of Microsoft.  Indeed, I have switched my work computer to the Powerbook just a couple of months ago.  I am a huge fan of the iPod (with exception to their Nazi DRM platform) and also plan to be one of the first to buy an iPhone when it is released.  I also do not proclaim to have a crystal ball that give me any special insight that the points made above will make a lick of difference.  All I am doing is agreeing with Gartner analyst,  Allen Weiner, when he states at the bottom of Ackerman's article: Don't Underestimate Microsoft.

Jeremi Karnell-President, One to One Interactive

 

The Internet Through 2014

A colleague sent me this movie yesterday, I highly encourage everyone to check it out. It's a Flash animation which, in 6-8 minutes, narrates the past, present, and future of the internet. While I seem to be alone in believing Microsoft will be dominating Google in two years, the ideas proposed are nonetheless fascinating.

The feature that has always gotten me behind the future of Amazon is their automated customization engine. Their ability to provide recommendations based on viewed pages is amazing in that (A) the recommendations are often actually relevant, and (B) the engine is uniqely able to do its job with little to no need for users to fiddle with settings. I have no idea why the rest of the internal retail universe hasn't at least tried to mimick their highly functional ease of use, but the idea of Amazon taking their ace and joining forces with Google to cover all forms of content? Pure brilliance.

And besides, the video's music just made me happy.

Broadband Group Sets Online Video Ad Guidelines

Posted: MediaDaily News, November 30, 2005

IN-STREAM ADS THAT RUN AS pre-roll or mid-roll should not exceed 30 seconds, according to new guidelines of the Interactive Advertising Bureau released Tuesday. The final guidelines, released by the IAB in conjunction with its broadband committee, also recommend at least 200 Kbps for encoded bit rates--and state that at a minimum, viewers should be able to start and stop the ads and adjust the volume. The guidelines also say it's "recommended and acceptable" to give users the ability to fast-forward, rewind, pause, and zoom during the ads--but also state that the fast-forward button need not be enabled while the ad is playing. --Gavin O'Malley