Microsoft Unveils Its Master Plan - Get Google

31 July 2006

Microsoft last week unveiled to analysts its three-tier vision for the future. Search, search and search.

The Redmond, Washington-headquartered software titan is to focus its R&D effort on integrating search capabilities into all its products - from video games through business software to operating systems.

Says Kevin Johnson, co-president of the platforms and services division: "Search will not be a destination, but it will become a utility [increasingly] woven into the fabric of all kinds of computing experiences."

The intent is to seamlessly integrate internet search into the Windows desktop operating system, Office productivity software, Xbox video games and Windows-driven cellphones.

Although Microsoft denies its objective is to topple Google, there is little doubt that besting its deadly rival is uppermost in its mind. Johnson cited analysts' forecast that the $27 billion (€21.18bn; £14.48bn) online advertising market will double in size over the next three years. "That's a great opportunity," said Johnson, "and Microsoft is uniquely positioned."

Opined Goldman Sachs haruspex Richard Sherlund: "Microsoft has to do well enough to keep people in the Microsoft environment - on the desktop, the Web or gaming online - so they don't leave the Microsoft environment to go to Google for search."

In May Microsoft formally launched its own search advertising technology, called AdCenter, into which it has integrated advertising technology acquired in its purchase of video game ad seller, Massive {WAMN: 05-May-06].

AdCenter enables marketers to measure clicks on their purchased keywords by time of day, day of the week and often by the age, gender and geographic location of the person seeing the ad.

Hypes Microsoft's chief of advertising strategy for internet services Yusuf Mehdi: "You get better information on what's working in your ad campaign and better return on investment. That's something you can't do on other systems."

Like Google, which is currently immersed in a click-fraud class action.

Unlike Google, however, AdCenter requires searchers to register and submit personal details. Given the growing antipathy towards Microsoft's surreptitious information-gathering tool, the so-called Windows Genuine Advantage, searcher-registration could rebound heavily on the software titan.

Microsoft is under no illusion that its ad growth will be swift.

In fiscal 2007 it projects online services revenue will increase by between 7% to 11%, garnering a maximum of $2.6bn. That would be a decided improvement on its just-ended fiscal with revenue down 2% to $2.3bn and its online unit floundering in a $77 million sea of red ink.

Google, in its last quarter, reported profit doubled to $721m while revenue grew 77% to $2.4bn.

Data sourced from New York Times; additional content by WARC staff