Clearing out my browser tabs and stumbled onto this. It’s a description for a Microsoft advertising patent where the price of content can be varied depending on whether the user chooses to view ads.
Patent US8065696 – Control-based content pricing – Google Patents.
Looks like Microsoft’s slow play ad strategy is still in play. They’ve been talking about this for 5+ years so I’m not surprised with this.
The biggest mistake here on Microsoft’s behalf is that no one is made aware of these ads until they happen to stumble on them. No one is going to expect ads to be loaded in their paid-for OS, so a notification of that at first boot would be appreciated. Further, no one is given the option to disable them (though I’m sure it’d take little more than an editing of the hosts file). Finally, there’s also the fact that these ads haven’t decreased the price of the OS, else that’d be a point Microsoft would no doubt flaunt.
via Microsoft’s Big Hidden Windows 8 Feature: Built-In Advertising – HotHardware.
Last month, I wondered about the current state of politics within Microsoft when their IE browser team announced they would ship the next browser with Do Not Track turned on by default.
Now, BI reports that Microsoft is clearly messed up:
Nonetheless, two sources tell us that times are rocky inside Microsoft Advertising.
An ad executive involved with the IE10 dispute likened Microsoft’s browser and ad departments to entirely separate companies. Indeed, IE lives within the Windows division — Microsoft’s core business, and a major source of revenue (about $19 billion a year) and profit (about $12 billion a year), while Microsoft Advertising is part of the Online group, which is on track to lose more than $2 billion this year.
The source told us that the disconnect left the advertising team in the dark about the do-not-track default.
“The decision was made with zero discussion or awareness by the Microsoft Advertising side of it,” the source said. “And yet by the same token the company has been putting them, forcing them, forward in front of the rest of the advertising world to back it, and that’s been tough.”
via SOURCE: Microsoft May Abandon The Ad Business Over IE10 Fiasco – Business Insider.
I have many thoughts on this which I will list in no apparent order:
- Taking impairment charges are one of the many loopholes for gaming public markets. It’s the gift that keeps on giving to managers of public companies.
- Notice that the write down barely had any impact on the stock price. That’s because shares are valued based on future earnings so “in theory”, this should not impact share price (“The company said the accounting move will not affect ongoing operations or financial performance.”)
- Ballmer was super pissed after Doubleclick-Google. He wasn’t squarely pissed at Google, he was also pissed at his corp dev team
- As a result, there was a lot of competition at the various fiefdoms, which made Microsoft somewhat dysfunctional from the outsider’s perspective
- From a top down strategic perspective, Microsoft’s story was very sound, holistic, and defensible. It was a platform strategy
- The issue with a platform strategy is that it takes a lot of work to take all of the pieces of a puzzle (that came via acquisition) and turn it into a single platform
- Perhaps Ballmer saw this acquisition as a hedge more than anything else. He was worried more about the downside risk of the online ad world changing into an exchange platform driven model and not having a horse in the race (kind of like what happened when iPhone and Android burst onto the scene and Microsoft was a non-factor).
Microsoft this afternoon said it expects to take a $6.2 billion non-cash non-tax-deductible goodwill impairment charge in the June quarter in connection with its online services division, mostly due to the 2007 acquisition of the online advertising software company aQuantive for just over $6.3 billion.
via Microsoft To Take $6.2B Non-Cash Charge On aQuantive – Forbes.
Microsoft announced Thursday that the next version of its browser, IE 10, will ship with the controversial “Do Not Track” feature turned on by default, a first among major browsers, creating a potential threat to online advertising giants.
via In Ad Network Nightmare, Microsoft Making ‘Do Not Track’ Default for IE 10 | Threat Level | Wired.com.
This is interesting on so many levels:
- Internal politics at Microsoft since they own web advertising businesses
- IE’s role in a changing landscape where their market share is in decline
- Strategic implications on their biggest competition (Google)
- Power shift to media is can track intent without cookies (search engines)
- Whether this announcement at this juncture is good or bad for DNT
Ultimately, I’m curious whether this means Microsoft is no longer making decisions like a monopolist (or a firm with a lot of market power).