Apple Vs. Vista

In my family, we have 2 Windows Vista laptops, 2 Windows XP Desktops, and 2 Windows XP Laptops. Oh, we also have one Mac Laptop.

But enough about me, on with the latest Apple Ad:

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Microsoft ups the ante

From Fortune Mag:

Microsoft sweetens pay-to-search deal

By Yi-Wyn Yen

It’s been four months since Microsoft introduced its cashback rebate scheme that pays people to use its Internet search service. But Microsoft continues to fall behind Google in search.

On Wednesday, Microsoft (MSFT) plans to unveil a new rewards program to get more consumers searching on the company’s Live Search engine. While a company spokesperson would not discuss details of the latest rewards gimmick, a Microsoft executive says the promotion is designed to generate user loyalty and more searches on Live.

The program gives consumers a discount every time they use Live Search to find and buy a product like a digital camera. The company is banking that as more people spend time on Live, the more advertisers will promote their products, and Microsoft will grab a bigger piece of the paid search market.

So far, cashback does not appear to be helping the company’s search efforts. For the seventh straight month, Google (GOOG) widened the gap with Live Search. The search king extended its lead to 63% in August while Microsoft dropped to 8.3%, according to comScore’s latest monthly report for U.S. traffic. For the first two months of the third quarter, Live Search has lost 14.4% of its traffic from year-ago levels.

A Microsoft executive says comScore’s figures do not accurately reflect how well the cashback program is doing. “Those numbers don’t seem right to me. We just had our highest month ever [for unique visitors in August],” says Brad Goldberg, Microsoft’s general manager for search. “There is always going to be volatility with monthly metrics. Cashback is a long-term bet.”

ComScore’s numbers represent total market share. While Microsoft is steadily losing search traffic share, Live Search continues to gain more users as more people search. Goldberg says the company is pleased with cashback’s progress though he would not reveal the number of transactions made or how many people that have enrolled in the program.

The cashback promotion is part of Microsoft’s broader goal to combat Google’s ever-growing share of the online ad market. The program marks Microsoft’s first major initiative to grow search traffic since the company ended talks with Yahoo (YHOO), the No. 2 search engine that owns roughly a fifth of the U.S. search market.

Goldberg hints that the company plans to offer consumers even more savings leading up to the holiday season. “We look at traffic, different tactics, and ways of execution… and we’ve learned that the higher the rebate [we offer], the better,” Goldberg says. “I’m not joking. EBay’s a good example. They have a relatively high rebate level in the 20%-30% range and they had a big increase in traffic as a result.”

Analysts say that Microsoft needs more advertisers to join the cashback program to attract more consumers searching on Live. Cashback has enrolled than 700 merchants, including eBay (EBAY), Hewlett-Packard (HPQ), and Overstock.com (OSTK).

“Our assessment is that MSFT is gaining supply side traction with advertisers and if that remains sustainable, they should eventually gain traction with end users (traffic) as well,” writes Sandeep Aggarwal, a senior Internet analyst with Collins Stewart, in an e-mail to Fortune.

Microsoft, with its deep pockets, may be committed to cashback for the long haul, but industry observers say the company needs to produce results soon.

Search marketers put a January expiration date on Live’s cashback program. “The whole value of cashback is tied to the retail season,” says John Tawadros, the chief operating officer of search marketing firm iProspect. “I would think advertisers are thinking about it now and looking at adopting cashback to differentiate themselves with the competition. After the holiday season would be a perfect time to assess if this has taken off or not.”

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The Bill & Jerry Show going away

From the L.A. Times:

No more yada yada: Jerry Seinfeld and Bill Gates ads are ending

5:46 PM, September 17, 2008

Microsoft is preparing to pull its TV ads featuring comedian Jerry Seinfeld and Microsoft's co-founder and chairman Bill Gates.

Microsoft spokesman Frank Shaw said the end of the Seinfeld ads was planned well in advance, and wasn't coming in response to any criticism of the spots. "All along we said we were having a teaser campaign," he said. "We're getting ready to start the second phase. This was the plan all along."

The news, broken this afternoon by Valleywag, comes just days after Microsoft aired the latest in the series of commercials, produced by Crispin Porter + Bogusky, featuring the two men in comic situations. The ads have been largely panned as a strained effort on the software giant's part to not only promote Windows but also portray Microsoft as cool and in touch with regular consumers -- basically, to counter the stodgy image painted in Apple's "I'm a Mac, I'm a PC" ads.

Seinfeld, who reportedly received $10 million for his efforts, was a superstar in the 1990s with his hit show. Using him now, in 2008, only added to Microsoft's image as being behind the times, critics said. Some viewers, such as the writers on Ars Technica, said the ads just left them scratching their heads. (If you can't easily find the ads on YouTube, Microsoft provides them on its site).

In the first ad, the two meet each other in a mall and pick out new shoes. In the next ad, which is in two parts, Gates and Seinfeld stay with a so-called normal family so they can work on a shared problem: To break out of their elite bubbles and connect with real people.

But the stay with the family doesn't go well, culminating with Bill Gates telling a little girl, "You're not so real." (I actually howled.)

Just unleash Gates, without the cardigan and avuncular image, sticking it to the smug "I'm a Mac" guy.

-- Michelle Quinn

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Jerry Seinfield & Bill Gates Part 2

Again, another Microsoft commercial about nothing.

Click here for the first in the series.

Here's the latest:

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Thumbs down for Bill & Jerry

Last week I posted the first in a series of ads that Microsoft is running that features Jerry Seinfield and Bill Gates.

It includes a "Butt Wiggle" but doesn't sell anything. Some critics are impatient because they wanted the ad to say something, or be something. Instead, it's about nothing, like Seinfield's hit TV show.

From the Wall Street Journal comes this report:

Critics Say Gates-Seinfeld Duo
No Laughing Matter

Microsoft Ads Draw
Attention, Not Praise;
Missing the Creativity?

By NICK WINGFIELD and SUZANNE VRANICA
September 8, 2008; Page B11

Jerry Seinfeld's long-running sitcom is often described as a show about nothing. The same might be said of a baffling new Microsoft Corp. commercial featuring the comedian and Bill Gates -- not, as "Seinfeld" characters might say, that there's anything wrong with that.

The first highly anticipated commercial in an ambitious $300 million campaign to burnish Microsoft's Windows brand was mostly panned by early viewers. The TV spot -- which began airing during an NFL game on Thursday and was later seen hundreds of thousands of times on YouTube -- follows Messrs. Gates and Seinfeld around a shopping mall as the Microsoft chairman tries on shoes, but doesn't mention Windows once.

A blogger for Computer World wrote: "It's one of the worst, most pointless ads in history" while a headline in the Sydney Morning Herald read: " 'Bizarre' Microsoft ad misses mark."

See the recent Microsoft ad featuring Jerry Seinfeld and Bill Gates. (Sept. 7)

Still, some ad-industry professionals praised the quirky commercial for not using Mr. Seinfeld in a more conventional way to, say, directly hawk Windows Vista, a current Microsoft operating system that has been criticized by many reviewers. Despite the negative online chatter about the ad, Microsoft has succeeded in getting people talking about the commercial, ad experts say.

"The initial reaction might be on the fence or leaning negative but the ad did its job," says Dean Crutchfield, a brand consultant. "Most companies would have to spend a billion dollars on advertising to get this kind of attention."

"The fact that they have the blogs, the business community and mass media talking about it means they hit a nerve," says Allen Adamson, managing director of the New York office of Landor Associates, a corporate branding firm owned by WPP Group.

Microsoft spokesman Tom Pilla said the company was pleased with the initial reaction to the ad. "It's exactly what we were trying to achieve, which was to drive buzz," Mr. Pilla said.

Microsoft

Bill Gates and Jerry Seinfeld star in a new Microsoft ad campaign.

In an interview Friday, Bill Veghte, senior vice president of Microsoft's Windows and online services business, said the first commercial was a "conversation starter, an ice breaker" that will be followed by further ads that he declined to describe. Mr. Veghte says the campaign is intended to create more excitement around what Windows can do.

"Some of that magic has faded into the background a bit," Mr. Veghte said. "I though it was absolutely essential we amplify not only the practical but the magical."

Microsoft is seeking to counter the bad buzz around Windows that Apple Inc. has egged on in a long-running advertising campaign, which features a young, hip character representing Apple's Macintosh and a clueless oaf who stands in for Windows personal computers.

Mr. Veghte says the ad campaign is part of a much broader push to boost Windows, including more extensive testing of Windows Vista PCs aimed at speeding up the time it takes to start up and shut down the machines. Microsoft is also cooperating with major retailers, including Best Buy Co. and Circuit City Stores Inc., to create stores-within-a-store that will showcase Windows-powered PCs, Internet services and mobile devices. Mr. Veghte said the company is also evaluating whether to do its own stores in addition to partnerships with other retailers.

Microsoft went to great lengths to keep its ads a secret including having some employees at the Everett Mall in Seattle -- where the ad was filmed earlier this summer -- sign confidentiality agreements. Mall management declined to comment last week about the ad effort and referred calls to Microsoft.

The first commercial didn't give viewers many clues about how Microsoft intends to make Windows more appealing. The ad concludes with Mr. Seinfeld asking Mr. Gates if a day will come when computers will be "moist and chewy like cake so we can just eat them while we're working."

Madison Avenue ad experts say they're eager to find out what else Crispin Porter + Bogusky, the ad firm behind the new spot, has up its sleeves. Crispin is known for giving new life to tired brands, including Burger King.

In the advertising business, the first commercials that launch a bigger campaign -- dubbed "teaser ads" -- are often greeted harshly. They often are designed mainly to attract attention, and are followed by other ads that explain the true message of the marketing effort.

Still, some brand experts gave the initial work a failing grade. "Despite this attempt to be cool, the commercial does nothing to change Microsoft's brand image, says Leslie Smolan, chief strategy officer at Carbone Smolan Agency, a New York-based branding firm.

"It's big, it's got deep pockets -- certainly deep enough to buy any celebrity it wants," Ms. Smolan said. "What it doesn't have is creativity, the key ingredient Microsoft has always lacked."

Write to Nick Wingfield at nick.wingfield@wsj.com and Suzanne Vranica at suzanne.vranica@wsj.com

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Seinfield and Bill Gates

A sample of what 10 million will buy. (The amount Jerry got for the series of ads.)


Find more videos like this on AdGabber

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Google's Web Browser "Chrome"

I'm finally back home after taking an extra day off from the Labor Day weekend. Monday I took my son to Chicago and this morning he caught a flight to Boston, then this evening he travels to Iceland for 3 months.

As I was waiting for his plane to take off, I saw the news from USA Today:

Google takes aim at Microsoft with new Web browser

By Michael Liedtke, AP Technology Writer

SAN FRANCISCO — Google is releasing its own Web browser in a long-anticipated move aimed at countering the dominance of Microsoft's Internet Explorer and ensuring easy access to its market-leading search engine.

The Mountain View-based company took the unusual step of announcing its latest product on the Labor Day holiday after it prematurely sent out a comic book drawn up to herald the new browser's arrival.

GOOGLE CHROME: Company statement on its new browser

The free browser, called "Chrome," is supposed to be available for downloading Tuesday in more than 100 countries for computers running on Microsoft's (MSFT) Windows operating system. Google (GOOG) said it's still working on versions compatible with Apple's (AAPL) Mac computer and the Linux operating system.

Google's browser is expected to hit the market a week after Microsoft's unveiling of a test version of its latest browser update, Internet Explorer 8. The tweaks include more tools for Web surfers to cloak their online preferences, creating a shield that could make it more difficult for Google and other marketing networks to figure out which ads are most likely to appeal to which individuals.

Although Google is using a cartoonish approach to promote Chrome, the new browser underscores the gravity of Google's rivalry with Microsoft, whose Internet Explorer is used by about 75% of Web surfers.

Google's lead in the lucrative Internet search market is nearly as commanding, with its engine processing nearly two-thirds of the Web's queries.

For the past few years, Google has been trying to take advantage of its search engine's popularity to loosen Microsoft's grip on how most people interact with personal computers.

The assault so far has been focused on a bundle of computer programs, including word processing and spreadsheet applications, that Google offers as an alternative to one of Microsoft's biggest money makers, its Office suite of products.

Google has tried to make its alternatives more appealing and accessible by hosting them for free over Internet connections instead of requiring users to pay a licensing fee to install them on individual computers, as Microsoft typically does.

Meanwhile, Microsoft has tried to thwart Google by investing billions in the development of its own search engine and making an unsuccessful attempt to buy Yahoo Inc. for $47.5 billion.

The tensions between Microsoft and Google now seem likely to escalate with Google's foray into Web browsing.

Until now, Google had been trying to undermine Internet Explorer by supporting Firefox, a Web browser developed by the open-source Mozilla Foundation. Bolstered by an advertising partnership with Google's search engine, Firefox ranks as the second most popular browser, with a market share of more than 10%. Google recently extended its advertising alliance with Firefox through 2011.

Bearing the stamp of Google's renowned brand, Chrome could be an even more formidable rival to Explorer.

Still, Google's name is no guarantee of success. For instance, Google's instant messaging service hasn't made come close to catching up to the market-leading products made by Yahoo, Microsoft and Time Warner's AOL.

In a blog post Monday, Google touted Chrome as a more sophisticated Web browser better suited for displaying the dynamic and interactive content blossoming on the Web as people migrate from television, radio and newspapers.

"The Web gets better with more options and innovation," Sundar Pichai, Google's vice president of product management, and Linus Upson, Google's engineering director, wrote in the posting. "Google Chrome is another option, and we hope it contributes to making the Web even better."

Microsoft brushed aside the threat posed by Google in a statement Monday from Dean Hachamovitch, Internet Explorer's general manager.

"The browser landscape is highly competitive, but people will choose Internet Explorer 8 for the way it puts the services they want right at their fingertips ... and, more than any other browsing technology, puts them in control of their personal data online," Hachamovitch said.

Even as it has backed Firefox, Google has openly fretted about the possible ramifications of Microsoft's huge lead in Web browsing.

Google is worried that Microsoft could abuse its power by manipulating Internet Explorer's default settings in a way that might diminish traffic to Google's search engine, which serves as the hub of the largest online ad network.

In 2006, Google contacted the Justice Department to raise alarms about changes to Internet Explorer that Google believed made it more difficult to install search toolbars made by Microsoft's rivals. Although regulators decided not to intervene, Microsoft subsequently modified the way Explorer handled the selection of search toolbars.

So, once I got home, I went to their site and downloaded the Chrome Browser. Over the next week, I'll play with it and see if there is a reason to have it along with Explorer, Firefox and Safari that I already use.

For more on this, check out these stories from my email:

Google Bows New Web Browser
Reuters
Google on Tuesday unveiled what it calls "a fresh take on the browser," introducing a public trial for the new software for Windows users. Versions for Apple and Linux devices are also in the works. The announcement comes days after Microsoft launched Internet Explorer 8 and Mozilla introduced the latest iteration of its Firefox Web browser.

In true Google style, the company plans to make the software code for "Chrome," as the browser is called, open to other developers to enhance and expand. "We realized that the Web had evolved from mainly simple text pages to rich, interactive applications and that we needed to completely rethink the browser," Google Vice President of Product Management Sindar Pichai and Engineering Director Linus Upson said in a jointly authored blog post. Chrome promises to load pages faster and more securely, but it will also feature seamless functionality with Google's other software applications.

In response to Chrome, Dean Hachamovitch, general manager of Microsoft's Internet Explorer, said in a statement that, "People will choose Internet Explorer 8 for the way it puts the services they want right at their fingertips, respects their personal choices about how they want to browse and, more than any other browsing technology, (it) puts them in control of their personal data online." - Read the whole story...

Google Points Another Missile At Microsoft
Silicon Alley Insider
Henry Blodget says that thinking of Google's "Chrome" as just another Web browser misses the bigger picture. If all goes according to Google's world-domination plan, "Chrome" will be more than just another browser icon on your desktop. It will be a full software suite that comes pre-loaded on your computer a la Microsoft's Windows and software monopoly.

Instead of using operating system software to get there, Google has started with search, an application, and expanded outward. Its new browser will integrate Google's search and all of its other applications -- Google Gears, Google Apps, Google Earth, etc. -- seamlessly. Crucially, Chrome will also be able to run without Windows, says Blodget, it will be free, and it will probably come pre-loaded on users' computers once Google gets around to making the appropriate bundling deals.

What exactly is this software, Blodget asks? Essentially, it's a Windows replacement, a Web-based operating system. As Google says in its description of Chrome: "What we really needed was not just a browser, but also a modern platform for web pages and applications, and that's what we set out to build." - Read the whole story...

Mozilla Unworried By Partner Google's Browser
GigaOm
- Read the whole story...

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Seinfield's Back

For those of us that still get a chuckle out of Jerry and the gang's antics in reruns, we may enjoy his Microsoft ad campaign.

At least that's what they're banking on:

Microsoft enlists Jerry Seinfeld in its ad battle against Apple

Microsoft is turning to Jerry Seinfeld to star in a new $300m advertising campaign, one of the largest in the company's history.

Suzanne Vranica And Robert A. Guth
21 August 2008 06:45

Microsoft Corp., weary of being cast as a stodgy oldster by Apple Inc.'s advertising, is turning for help to Jerry Seinfeld.

The software giant's new $300 million advertising campaign, devised by a newly hired ad agency, has been closely guarded. But Mr. Seinfeld will be one of the key celebrity pitchmen, say people close to the situation. He will appear with Microsoft Chairman Bill Gates in ads and receive about $10 million for the work, they say.

The new ad effort is expected to use some variation of the slogan "Windows, Not Walls," according to several people familiar with the matter. Those people say the point is to stress breaking down barriers that prevent people and ideas from connecting. The campaign, said to debut Sept. 4, is one of the largest in the company's history.

The attempted image overhaul comes as Microsoft executives privately acknowledge that Windows -- the company's most important brand -- has grown stale and has been battered by Apple's "Mac vs. PC" ads. Those ads, created by Omnicom Group Inc.'s TBWA/Chiat/Day, feature a nerdy PC guy getting upstaged by a hip Mac counterpart.

Microsoft's immediate goal is to reverse the negative public perception of Windows Vista, the latest version of the company's personal-computer operating system. Windows is Microsoft's largest generator of profit and revenue, accounting for 28% of the company's revenue of $60.4 billion in the year ended June 30.

The software has sold well, and Microsoft retains an overwhelming share of the market for operating system software over Apple. But Apple's computer sales have been rising, and Vista is dogged by the notion that it has technical shortcomings and is hard to use. Apple's latest Mac vs. PC ads take swipes at Vista. Microsoft says early problems with Vista have been largely alleviated.

While Apple's digs at Microsoft through its advertising campaign have been vexing, Apple is on a hot streak with its products that Microsoft hasn't been able to match. Apple's Macintosh computer business is dwarfed by Microsoft's share of the PC software market, but it has been gaining on its larger rival, accounting for 7.8% of new PC shipments in the U.S. in the second quarter, compared with 6.2% during the same period the prior year, according to research firm IDC. The vast majority of the rest of the market is made up of Windows PCs.

During the second quarter, Apple said it sold 41% more Macs than it did during the same period the prior year; that compares with growth of 15.3% in total PC shipments world-wide, according to IDC. Apple's desktop and notebook computers have won converts among onetime Windows loyalists.

Crucial Role

Microsoft's campaign highlights the crucial role of Windows in the company's broader efforts to expand into new areas. Money from that division is invested into other areas, such as online services that are crucial to Microsoft's long-term growth. Windows is also a bedrock product for sales of other Microsoft software, such as the Office group of programs.

"They are not seen as cool," says Robert Passikoff, president of Brand Keys, a New York branding firm. "Apple is cool. Can anyone even recall a Microsoft ad? No." Apple and its brand-obsessed CEO, Steve Jobs, have been producing distinctive advertising since its famous "1984" campaign, which debuted that year in the Super Bowl.

The planned appearance of Mr. Gates in the ads is one sign that Microsoft will continue to use its co-founder's own celebrity status, even now that Mr. Gates has stepped away from full-time work in software to focus on philanthropy. Over the past decade, Microsoft has paired Mr. Gates with a range of celebrities in lighthearted videos. A recent video, shown at computer-industry events, portrayed a comical depiction of Mr. Gates's last day at Microsoft, showing him with rapper Jay-Z, rocker Bono, and actor Matthew McConaughey, among others.

For its new campaign, Microsoft also considered a range of other famous personalities, including comedians Will Ferrell and Chris Rock, according to people familiar with the matter.

A spokeswoman for Mr. Seinfeld declined to comment. A Microsoft spokesman declined to comment on details of the campaign.

In an email to Microsoft employees in July, Microsoft Chief Executive Steve Ballmer wrote, "Now it's time to tell our story."

He added: "In the weeks ahead, we'll launch a campaign to address any lingering doubts our customers may have about Windows Vista." He said that later in the year the company will roll out "a more comprehensive effort to redefine the meaning and value of Windows for our customers."

Microsoft's large business-to-business presence has always made for a difficult marketing mix with consumer branding. Windows is used by both constituencies.

Mr. Seinfeld is just one piece of the makeover. The campaign will likely include videos of recent consumer focus groups that Microsoft held. In the studies, participants -- who said they had negative impressions of Vista -- were shown a version of Windows called "Mojave." After trying Mojave and liking it, the participants were told that the software was actually Windows Vista.

The campaign is the brainchild of Crispin Porter + Bogusky, a Miami-based ad shop that has helped revitalize brands such as Burger King. Microsoft hired the firm earlier this year after considering several ad agencies including WPP Group PLC's JWT, Publicis Groupe's Fallon and its longtime agency Interpublic Group's McCann Erickson.

Big Test

The campaign is a big test for Crispin Porter + Bogusky. In choosing the firm, a unit of MDC Partners, Microsoft broke from McCann Erickson, which has managed the software maker's previous efforts including the 2002 "Realizing Potential" Microsoft corporate ad campaign and the "Start Something" campaign for Windows XP in 2005. McCann remains on Microsoft's agency roster working on other Microsoft ad duties such as Xbox.

While Crispin Porter + Bogusky has won awards for its Burger King ads, which highlighted the company's king pitchman, not all its pitches have hit the mark. The agency had come up short on its work for Miller Lite with its "Man Laws" ad campaign that featured boxer Oscar De La Hoya and actor Burt Reynolds. The work failed to increase sales. The two companies eventually parted ways.

Even though Mr. Seinfeld's popular sitcom stopped production in 1998, the 54-year-old comic still has major appeal with consumers, according to Davie-Brown Entertainment, a marketing company owned by Omnicom Group. The comedian ranks 41st out of more than 1,900 celebrities in terms of broad appeal, the firm's data show.

Still, after 10 years of reruns and only occasional appearances by Mr. Seinfeld in the media, keeping the franchise fresh with younger adults is a concern. Last week, Sony Corp.'s Sony Pictures Television, which distributes "Seinfeld" in U.S. syndication, announced the "Seinfeld Campus Tour," in which it's sending a 60-foot "Seinfeld"-themed bus to U.S. colleges to drum up interest in "a new generation of viewers," a spokeswoman said.

Mr. Seinfeld had been a spokesman for American Express, and his "Superman" commercials and Web videos in 2004 won raves. People familiar with the Microsoft campaign say that the company was aware of trying too hard to pander to youth, so didn't want a celebrity that was too hip, or a possible flash-in-the-pan.

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Another Email Marketing Guide

And this time it's from Microsoft. Click here to go to the download page.

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The Microsoft vs Google Battle Update

From my email:

Inside Microsoft's War Room
by Steve Baldwin , Monday, July 7, 2008

THE TITANIC CLASH BETWEEN MICROSOFT (aka "The Evil Empire") and Google aka "The Don't Be Evil Empire") is accelerating, and while most attention focuses on the ongoing on-again, off-again Yahoo deal, the most significant elements of Microsoft's strategic plan are being laid irrespective of the deal's ultimate outcome.

What are these elements? What are their chances of success or failure? Let's take an imaginary walk through Microsoft's War Room, spend some time studying the "threat board," and assessing the major threats and opportunities as they might be perceived by a Redmondian. (Note: all points in this article are conjectural and have not been conveyed or even suggested by any living and breathing Microsoft employee).

Contingency Plans for a Google-Ruled Web
While most outsiders accept the proposition that Microsoft, with or without Yahoo, will do what is required to restore some semblance of parity to Web-based search queries, various contingency plans have been prepared to deal with a Web ruled by Google. These plans will only be implemented if Microsoft is unable to succeed in any of the following short-term tactical objectives, which include Delay and Defend (by lobbying aggressively against a Yahoo-Google search alliance), Acquire and Assimilate (by buying several large chunks of non-Yahoo traffic), and Bribe and Switch (using its new Cashback service). I very much doubt that we've seen all of these tactical objectives emerge yet.

One obvious plan that Microsoft hasn't tried or even hinted at might be called "Subsidize and Subvert," in which Microsoft would extend a reward offering to Google's thousands of Adsense publishers, enticing them to switch to a Microsoft contextual network through a direct subsidy or revenue guarantee. After all, Adsense contextual revenue constitutes 32% of Google's cash flow, and many of Google's long-tail partners have long ached for a more lucrative deal. Frankly, I find it remarkable that Microsoft didn't target Google's partner network a long time ago.

Let us assume, however, that all of the aforesaid tactical objectives fail, and Google (or Google-Yahoo) continue to grow query and click share to 90% and above within the next year or so. At this point, Microsoft would be forced to execute one of the following contingency plans:

Domination of the air. Most observers agree that the mobile era we're about to enter will represent the biggest platform change in computing history. Even today, roughly a billion mobile devices are shipped each year, and, as pointed out by experts such as AMR Research's Jonathan Yarmis, this number both dwarfs the roughly 100 million PCs sold annually and creates a much-faster evolving computing market (due to the short 21 month life cycle of such devices). The applications-driven nature of these devices creates an opportunity for an applications/OS vendor to dominate delivery of information services in a way that may replicate the control Microsoft enjoyed in the PC era. And while open source advocates like to point out that operating systems such as Symbian and Android provide more opportunities for innovative application development than a closed OS like Windows Mobile, business users are less interested in new and cool applets than in seamlessly extending their work environment to the mobile sphere. Microsoft can gain dominance by providing the best mobile integration of its industry standard Office productivity suite. After all, the 2001 consent decree that has been prohibiting it from integrating certain applications into its desktop OS does not extend to the mobile environment.

Complete control of the home. Xbox is the "Trojan Horse" whose characterization as a gaming console obscures the fact that it is a powerful multipurpose device capable of serving up the entire gamut of interactive services, including IPTV, VOD, media serving, and other next-gen entertainment content. Query-based search will be the primary interaction mechanism for accessing content on the Xbox, and Microsoft (through its internal efforts or through acquisitions) will control the serving of traditional text-based units, modular IPTV spots, rich media, and in-game advertising (projected to be worth about $2.5 billion annually by 2010). This new den-based computing platform is rapidly becoming, in the words of an associate of mine, "the new AOL" in the sense that it functions as a primary place for users to gather, surf, play, search, communicate, and shop. With worldwide sales at 19 million units (and more sales coming thanks to last week's price cut), Microsoft has made a long-term investment in a Google-proof fortress that can only be penetrated if Google buys Nintendo or Sony.

So there you have it. If Microsoft is unable to defeat Google in Web search, it will strategically retreat to higher ground (mobile and the home) and fight a long withering battle where Google's control of the territory is weakest. It is impossible to know at this juncture what this conflict's resolution will be, how it will alter the digital marketing ecosystem and change our own roles as marketers within it -- but it is our dollars that will ultimately separate winner from loser.

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Advertising Overload?

Do we really need this? Or is it Microsoft that needs it?

Microsoft Launches Microsoft Advertising
Microsoft has announced the formation of a new brand identity--Microsoft Advertising--that encompasses the growing list of products and tools it offers advertisers and publishers. Mediaweek's Mike Shields reports. more »

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