Microsoft adCenter

This morning, I attended a briefing at Microsoft that was meant to introduce what's new with MSN/Windows Live.  Overall the event was well attended and well organized by Microsoft.  The first session, the one I was most interested, was about what Microsoft was doing in the advertising space.

We were shown a bunch of slides as to what Microsoft's version of Adsense would do for advertisers and publishers.  It was a lot of marketing on how it would have better targeting and relevance.  There were a lot of words, but there was not stake in the ground as to what it would do better.  I couldn't stand it for long so I asked a question point blank:  "Can you give us the bottom line?  How much more money will publishers make using Microsoft as opposed to your competition?"  (Google of course).  The answer was surprising, and so were the follow on questions:

The answer I got was; "Google is doing a great job with adsense, and we cannot match the revenue a publisher will make with adsense, but we will give a lot more control to the publisher as to the kinds of ads that get shown on their page".  This was shocking, I thought, for sure, Microsoft would start by making publishers more money.

Immediately after this answer, another question was asked by Ken Gullickson sitting on my left: "How much of a discount will publishers have to take vs. Google to get the benefit of controlling the ads?"  The answer was "it will be a very very small discount to what you get from Google on some of your inventory, but not all of your inventory".  The answer was not satisfying, and Bill Gurley, sitting on my right went straight to the jugular and asked: "How's that going to work with Google's exclusivity clause, if you don't offer ads on all the inventory?"

Three questions by VC's and that was it for Microsoft adCenter.  There was one great piece of advice offered though from our table.  "Why don't you guys (Microsoft) dramatically change the revenue split, say keep 10% and make it transparent to disrupt Google's game?"  That was a great suggestion, but the sideways answer made it clear that Microsoft could not do that at all.  If they did, it would sure affect Google's share price.

Here is where I come out of this as a VC and publisher.  On my ads, I pretty much only care for the dollars it brings in, given there is some broad editorial control over the kinds of ads (adult, gambling etc.).  If I get clickthroughs, then the ads are relevant.  I don't want more relevant ads if come with less clickthroughs.  So I don't get why a publisher would accept less revenue for more relevant ads?  If publishers could make more money, they would definitely switch out of Google, and I think Microsoft needs to understand that fast.

Comments

[Jawad (Shuzak)]

Great insight. As leaders in the market, Google is in a defensive position. If this is indeed a zero-sum game, as Steve Balmer would like us to believe, then Microsoft has no option but to push its war machine on the offensive. But by worrying more about revenues and less about market share, Microsoft is headed towards an inevitable turmoil.

It doesn't take a genius executive to realize that cash is king. If Google offers more cash, I will switch to Google. If AdBrite offers more cash, I will switch to AdBrite.

It is a shame that Microsoft needlessly gives away its ground.
Jawad Shuaib

[DC]

Hi Baris,

This is a great post, and there are a couple of ancillary take aways from MSFT's comments. The first possibility is that Google's AdSense TAC must be so high on publisher ads that MSFT realizes that there is no room to beat GOOG just by driving up TAC. Another possibility is that GOOG's market is so liquid due to the massive amoung of publisher inventory (which in turn drives the massive amount of advertisers) that the eCPM's that they can drive to publishers coupled with aggressive TAC has already become insurmountable. Given that the second possibility should have already seemed fairly obvious to other companies in the market, it's surprising that MSFT has chosen to attack Google 'head on'. If you know they have hegemony in the contextual text advertising marketplace, why would you attack them in that marketplace instead of innovating around new kinds of ad marketplaces (eg, RightMedia's open exchange approach, or a rich media marketplace in which goog is still in its infancy, or a demand generation network not tied to Direct Marketing, there are hundreds of opportunities). If you're Google, you HAVE to like the answers that microsoft provided at this event. Shocking, frankly.

[metin]

Do you have any expertise or comments regarding 'Interactive Marketing' utilizing events, venues, and sponsors via digital technology and tracking of ROI?

[uksikak]

I asked. Hopes breathing finally got up the job, the fact, where everybody milk squirt could.

[ogexyzehiwd]

From casadas calientes someone like i was getting nutty being you can find away to.

[iqewsatu]

The relentless command of the way southern belle behavior but id almostgotten use.So lexi belle jizzbomb would be bad to drive back now, feeling.I felt totallysatisfied, as the deck and emotional camilla belle nude hell of her clitoris against.

[ogelyflify]

Linda whispered as she came face male ejaculate to matter. Fuck you want me tofuck.

[Bald Head Shaving]

hey thanks for your fantastic post !! i really appreciate it .

[Dental Care]

They are tools that help increase traffic for MSN.

[Scalp]

I really do not know much about this technology but I think it's a very good stage that could implement new ideas to settle further.

[Cosmetic Dentistry]

I really apreciate your information because it's really useful

[Hypertension Symptoms]

Microsoft always invents solutions to their users.

[Viagra Online]

Hello fellas let me introduce you to a great medication viagra its the best treatment for ED

[Buy Viagra]

hi friends, i really like this king of blogs are very intresting and helpfull, you are doing an a special work, congratulations.

[Silagra]

But does not true that Google is more consolidated than Microsoft?

[Buy Cialis]

excellent information I enjoy the reading, oh and by the way, beautiful baby!!
n_n
LOVE [KAT]

[Buy Vardenafil]

cool site!!!!
and yes beautiful baby!
;)
you are damn proud of her is it? I have a two years old boy, and he is y life!
XD
debra

[Buy Zenegra]

is good for him to be proud of his baby!! is part of him, and probably one of the most important!
cheers!!
tatiana

[Erectile Dysfunction Treatments]

I have children too!
three little monsters!! jajaja
but lovely
they are my life!!
peter

[Generic Sildenafil Citrate]

Make adds at microsoft is a big deal if you have an ambitious business. so think about it

[Online Pharmacy]

Google AdSense is a fast and easy way for website publishers of all sizes to display relevant

[Buy Viagra No Prescription]

and is it good??
danielle
ooh and cute baby!!
;)

[Cheap Viagra]

some times thia dd center gives me problems due the constant actialization of the data base

[Laser Hair Loss Treatment]

This was shocking, I thought, for sure, Microsoft would start by making publishers more money.

[Erectile Dysfunction]

I visit their ad center once per week!! a nice one.