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September 28, 2006

Microsoft makes impressive leap into the Media biz

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What’s the best way to jump into the media business and make yourself a formidable threat to your opponents?

Step 1: Align yourself with a powerful social networking site
Step 2: Launch your own multi-platform media advertising strategy
Step 3: Partner with a respected news agency to explore ways of developing other digital services and attract new eyeballs.

So far, Microsoft looks to be making the perfect attack, as it prepares to tackle the media business by land, air and sea.

Last month Microsoft announced it’s pairing with Facebook, which will allow them to act as the exclusive seller and manager of all Facebook’s display ads and provide the site with sponsored text link ads. If Microsoft was looking to enter the media arena, this was a good first step. And it seems that’s exactly what Microsoft was planning to do.

Earlier this week, Microsoft announced its official launch into the media realm, offering up a unified advertising strategy nicknamed Digital Advertising Solutions. With the new offerings, Microsoft will offer ad space on several of its most widely used platforms, including MSN, Windows Live, Xbox and future Windows Mobile and IPTC ad properties.

What’s powerful about this offering is how widespread and targeted the advertising options are. Since Xbox appeals to very specific demographics, advertisers can create highly targeted, niche-based ads to address their individual needs. And because the Windows Live audience may differ widely from the Windows Mobile audience, advertisers can select which platform is most compatible with their audience and only target them. This kind of advertising strategy will be an enormous hit with advertisers looking to save money and increase conversions.

It’s especially powerful when you consider that the combined reach of these platforms is estimated at 465 million users. And that doesn’t even include individuals using MSN Messenger. Watch out, Google and Yahoo, here comes Microsoft.

All of that was pretty impressive on its own, but then today I hear that Microsoft struck a non-exclusive deal with the BBC to explore plans for “next-generation web 2.0 and ways to share online content in the future”. Hmm. More chances for advertising and to provide exclusive content to users? Microsoft seems to be getting all its ducks in a row – targeting newspaper sites, social networking arenas, and a multitude of media outlets. Where else is there for them to go?

I admit it, I’m impressed.

Impressed because, if done correctly, Microsoft has a real chance to offer a great value to its advertisers and make Google and Yahoo! very uncomfortable. Where Microsoft tops Google and Yahoo! is in its video games and mobile platforms. By leveraging these two assets, particularly Xbox, Microsoft has a real chance to gain ground.

I’m also very interested to see where this BBC deal goes. Bill Gates said Microsoft was looking to allow “people to enjoy digital content anytime, anywhere on any device”. I can’t help but wonder if this deal is related to this Mix 06 video where the BBC’s Director of New Media and Technology Ashley Highland talks to Bill Gates about using the Internet to make content accessible to everyone. Check out the demo midway through, it could be very telling.

We’ll have to see how successfully Microsoft is able to leverage its new ventures, but the potential is there. This could develop into a very powerful pairing for a company with a lot of ground to make up.

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