Bullish Microsoft Prophesies 25% Online Ad Growth

20 June 2002

Microsoft’s lossmaking MSN web portal, seemingly oblivious to the pall of gloom enveloping most other ISPs, is predicting 25% growth in online ad revenues for Europe, the Middle East and Africa during its fiscal commencing July 1.

MSN sees ad salvation in the automotive and financial services industries, sectors whose substantial marketing budgets allow them to channel funds from more traditional media.

Such advertisers are “spending between half a million dollars to several million dollars on the network already,” according to Yusuf Mehdi, corporate vp of MSN personal services and business. “In EMEA (Europe, Middle East, Africa), we think we can do better next year.”

Despite his bullishness, Mehdi backed away from making a new forecast for the ISP’s break-even – originally predicted for 2002 but since postponed as the dotcom collapse decimated the online ad market. Nor would he offer a quantified ad forecast for MSN, which claims a global audience of 270 million unique monthly users across thirty-four markets, in eighteen languages.

The entrail-rakers were skeptical at Mehdi’s sanguinity, as they were at the unquantified optimism of Judy Gibbons, vp of MSN EMEA. “We've reached the bottom. As advertising budgets remain tight the degree of enthusiasm people have for online advertising is increasing,” she said.

Opined one unnamed London-based analyst: “The news from everywhere is that the market is still falling. Everybody is backing away from a forecast of a Q2 rebound.”

Data sourced from: The Washington Post Online; additional content by WARC staff