Microsoft to Boost Web Ads
Microsoft said Wednesday it has started testing online ads on Live, its new web services network, as the software giant tries to catch up with online rivals like Google and Yahoo that have successfully generated millions of dollars in revenue from online ads.
Microsoft said it will display ads from about 20 advertisers as part of a year-long trial program on the network, which includes the small business site Office Live, email service Windows Live Mail, and social networking service MSN Spaces.
Microsoft said the ads on Office Live, a web service offering web hosting, domain name registration, and tools to create web sites for small businesses, will help generate revenue to offer consumers these online services for free or at a low cost.
“Advertising is a very important business model for Microsoft worldwide because an increasing number of advertisers are becoming more global,” said Joanne Bradford, corporate vice president for global sales and marketing at Microsoft, in a statement. “With ad-supported software opportunities, we’re able to offer great services at low or no cost for our consumers and a vast ecosystem for advertisers.”
So far, Microsoft has lagged significantly behind online rivals in making money off its online traffic. MSN attracts more than 465 million unique users worldwide per month, but Microsoft make far lower in ad revenue compared to rivals.
Microsoft's MSN Internet unit generated about $1.4 billion in online advertising revenue in 2005, compared to Google’s $6 billion, and Yahoo’s $4.6 billion. Internet advertising is estimated to be a $15-billion market and is expected to reach $26 billion in 2009, according to Forrester Research.
The Redmond giant is now determined to catch up. Microsoft said it will test different ad formats to determine which provide the best return on investment for its advertisers. Initial advertisers include Coca-Cola Brazil, JCPenney, and jobs site Monster.com.
Catching Up with RivalsIn November 2005, Microsoft Chairman Bill Gates sent a memo outlining the company’s new focus on the Live network, a portal that would bring many Microsoft services under a single roof (see Microsoft Puts Windows on Net). The company said the Live.com portal would eventually be used to create an advertising network.
The idea will be an attempt to catch up with online rivals like Google and Yahoo that have successfully used similar services like email and news content to peddle ads, said analysts.
“Microsoft is now Googleizing their network to a certain degree,” said Richard Williams, senior analyst with the brokerage firm ICAP. “Google has already proven that you can have strong revenues from an ad-supported network. The question is, will Microsoft’s audience be receptive to it.”
Microsoft said it will continue the trial through the year and will work with about 100 advertisers in nine markets to learn about their needs and to develop new advertising methods for the Windows Live platform
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Creating a Business Strategy
HTML clipboardFirst, know what your vision for your company is. If there were no barriers, nothing stopping you from taking your company as far as you could -- what would that look like? Next, what are your company's core operating values? What are its guiding principles? In other words, why are you in business and how do you do business?
Now create a 3 to 5 year plan. Your long-term plan is based on the broad objectives that will help you get from where you are now, to where you want to be.
Now create a 3 to 5 year plan. Your long-term plan is based on the broad objectives that will help you get from where you are now, to where you want to be.
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