|
Google, Microsoft, Buzz, Baidu the Ad Wars Begin
Microsoft (News - Alert) (NASDAQ:MSFT) dominates the lucrative world of software, and it's number one of just a handful of giants in the high-margin world of creating the software that runs servers for businesses. But these days there are few things more important from Microsoft in Redmond, Wash. to Buzz (OTC:BZTG) in Phuket, Thailand, than becoming a digital advertising powerhouse and take some of Google's (News - Alert) 80% and growing Market Share. Microsoft was willing to go so far as to spend $47.5 billion to buy Yahoo! (Nasdaq:YHOO). The company walked away from that deal on May 3 when Yahoo held out for more.
But Microsoft has no plans to walk away from its online ambitions. That's because the company sees a huge threat to its core businesses from Web-based software programs, for word processing or collaboration, that are paid for by online advertising. Baidu (NASDAQ:BIDU) and Buzz lead up the Asian contingent in the race to dominate local Cyberspace.
Why do they all want to be one of the leaders in digital advertising?
No. 1, today it's a $40 billion industry that's projected to double in the next two to three years, with most of that growth occurring in Asia, to an $80 billion industry. So it presents a significant growth opportunity for the all the companies.
No. 2, the online advertising business is about software algorithms. It's about software that makes decisions within a millisecond of what ad to serve. It's software that manages massive amounts of data. It's software that provides workflow tools for publishers and advertisers. It's software that helps publishers optimize yield. It's software that helps advertisers maximize return on investment. A big growth opportunity, and it's a software business. The revenue streams are limited only by the companies imagination.
No. 3 is, Everything on the Web will be complemented with advertising-funded services and subscription services. And so they think it's strategically better for them [to be in the online ad business] than turning over the monetization of online services to a third party, who may not have their strategic best interest in mind.
Well, certainly having an online ad platform is better to than relying on a third party to provide that monetization. So strategically, it's important to all web companies.
The biggest question is around search. Advertisers say that, to spend more money on search with you, we'd like you to get more search share. Got it. To grow search share, the race is to deliver new and innovative approaches to search. Who ever is clever and creative, and do it in a way that attracts consumers, will grow share.
As a community-building service, TMCnet allows user submitted content which is not always proofed by TMCnet editors. If you feel this entry is of inferior quality or wish to report it for some reason, please forward the URL to "webedit [AT] tmcnet [DOT] com" with your comments.
[ Back To TMCnet.com's Homepage ]
|
Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 16-18, 2008. Los Angeles, California.
