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March 14, 2006


posted by MR WAVETHEORY at 3/14/2006 11:03:00 PM

Mr. Softie has fired its first shot against Google. Microsoft Developing Web's Largest Advertising Network - Ad Testing Begins on Office Live, Windows Live Mail and MSN Spaces. Apparently, most of Microsoft's next generation initiatives will be advertising supported. The announcement is interesting for several reasons. First, Microsoft's test partners are brand advertisers as opposed to direct marketers (which are Google's primary customers). Since the vast majority of ad dollars are spent on brand advertising, the market size is significantly larger. Second, Microsoft is not merely focused on search. In fact, the announcement shows that Microsoft's advertising strategy is much broader as tests are conducted through Office Live, Live Mail, and MSN Spaces. Finally, the message is clear - Microsoft will not take the heat from Google lying face down. Google will have to spend more money either on acquisitions or on talent, meaning that costs will be going up. This announcement really marks the beginning of the end for Google. The barriers to entry for Google's businesses are very low as evidenced by Amazon's unexpected announcement that it will be attacking the online storage market which Google has been secretly working on and also plans to enter. And yet the barriers to success are very high. Google has shown that it can only succeed in one business - search. Watch out Google.

Coca-Cola Brazil, JCPenney and Monster Worldwide are among the 20 global marketers participating in the initial ad tests. The results of the multiple ad formats being tested will help determine which ad offerings provide the best return on investment for marketers while adding value to the consumer experience.

“Taking part in the Windows Live Mail beta program is something that perfectly matches Coca-Cola’s day-by-day attitude,” said Monica Horcades, marketing director for Coca-Cola Brazil. “We understand that one of the most important roles of a global brand like us is to believe, support and stimulate innovation in communication of all kinds, especially on the Web. Coca-Cola has always been a pioneer on talking to young people wherever and whenever they are. It’s in our brand’s DNA. And we believe that Windows Live Mail is going to be a great way to do that.”

Microsoft will continue to invest heavily in MSN.com, as well as continue to explore new advertising opportunities on Live.com, OfficeLive.com, Microsoft.com, the Xbox Live® service, Internet Protocol television (IPTV), mobile devices and other Microsoft properties.

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