Why Online Ad Models threaten Microsoft Corp?
Consider some questions that come to mind often when we read about Microsoft and its desperate sounding recent announcements:
- What is it about Google and Yahoo! that causes world’s largest software company Microsoft (MSFT) to twitch?
- Is it the coolness of being world’s most visited Search Engine or Web Portal or Auctions provider that Microsoft misses in not being a Google (GOOG) or a Yahoo! Inc. (YHOO) or even an eBay Inc. (EBAY)?
- What is it that made Microsoft ready to pledge US $ 2 billion in trying to compete with Google and Yahoo!?
In May of 2006 during its annual MSN Strategic Account Summit, Microsoft pitched hard to advertisers. A week earlier Microsoft anounced plans to invest roughly $2 billion in its new businesses, largely MSN and Windows Live.
What is common in Yahoo! and Google is their multi-billion dollar (and growing) advertising revenue model. But why is an Ad based business model a threat to Microsoft which dominates 90% of world’s PC desktops? The reason is that this model could potentially make the current model of Microsoft (as a provider of OS and Software) obsolete.
Continued… Microsoft Corp V/s Google V/s Yahoo! Inc.
Tags: 185, 196
10 opinions for Why Online Ad Models threaten Microsoft Corp?
Blackbeard
Oct 12, 2006 at 9:34 am
A couple of things. First of all, Microsoft makes roughtly twice as much bottom line profit as Google or Yahoo make in REVENUE. Why? Well all businesses run Microsoft products and those businesses don’t want to switch to open source software or ad-supported software, so let’s just throw that idea out the window. You don’t make $40 billion selling software and services to consumers, you make that by selling software and services to businesses, which Google and Yahoo have no hope in denting.
Second, and more importantly, Microsoft’s AdCenter is awesome. It’s a very solid advertising system that is more advanced than Yahoo’s and has a lot of really great potential. It’s not as popular as Google’s yet, but as a user of all three systems I have to say that Microsoft’s offers the best return on investment.
Your blog post is lame and you don’t know what you are talking about.
An IT Consultant
Oct 12, 2006 at 10:48 am
Just a few points from an IT PROFESSIONAL:
1. Open Source OS’s like Linux are now more than ready for the desktop market. Not only that but Linux machines have been configured with superior to the upcoming Vista release with lower memory consumption. Also, software installation on Linux is simplified with Debian’s Fink system as well as Ubuntu excellent implementation of Debian solid features while making it easy for non-techies to use. I’ve had tech-no nothing friends in businesses make the switch with “wonderful” results.
2. Open Source word processers (open office for exmaple) now do over 90% of what MS office does for 100% less on the cost. Even if it was 25% of the cost Ms can’t compete with that nor universal ability to share documents which MS has fought tooth and nail agains (and is losing). Also, Open Source database like Postgres, MaxDB(previously known as SAP DB) and MySQL (now user friendlier non-enterprise version of MaxDB) does a better job than tools like MS SQL Server 2005, and Apache is certainly a better web server than IIS 5.0 or 6.0. PHP is a superior to the old ASP 3.0 and even .NET in many case (java if you want all the capabilities). MS doesn’t really have anything original on its product line.
3. Word Processing applications are starting to be done OVER THE INTERNET. The web technology is there, Google now has a word processor on line for free and ThinkFree has an identical business model. MS Office is the only real reason people use the MS Operating system. So if you can produce similar or identical documents using a web based system or open source word process that is free, people don’t need to pay MS $500-$900 for their licences. Oh, that goes for E-mail clients as well.
4. The spyware preinstalled on Windows XP and to be included in Vista has already caused many reluctant people to switch. The result: Beaming faces and a vow never too look back plus the occasional comment “why did I wait”?
5. Google is know as the dominant leader in internet ad technology. (This could make Google dangerous to the Internet community if we are not careful). Ms once again has done too little too late to control this aspect of internet which they know. Plus they know the points I’ve mentioned above better than I do. This is one reason they’ve resorted to this blatent spyware (WGA) which is buggier than any other technology MS has ever released (and that is quite an accomplishment). Its a sign they are trying to get up their cash flow to attempt to ride out the storm of a battle I believe they are finally losing. (and good for the world). OS’s and IT tools have become a commodity, especially with higher bandwidth on the internet.
6. The numbers are already coming back: Users of Open Source are WAY up, even in US and Canadian governments, several countries are boycotting MS (India, and China who doesn’t really pay MS much, is using Red Flag (Chinese version of Linux) and Europe is huge on Linux. Even the UK is telling MS they have stepped way out of line with the WGA and enforced their massive fine for now allowing people too see what heck their OS is doing. South Korea is also pissed, fining them for antitrust violation with Windows Media and IE and starting to take measure to reduce and remove MS from homes and businsses. Oh, Ms is losing their market share on internet browsers as well. Slowly but its building up especially since IE is the main source of computer hijacking. (Eweek gives several high level examples of how people have done this as hijacking is a MAJOR money generator in the IT world)
In conclusion, glad to know you work for someone who we are seeing the beginning of the end for. Even Bill Gates saw this coming years ago and got out while the getting was good leaving his partners to sink with the ship. (smart if unethical fellow). The person who wrote this blog obviously touched someone’s nerve. Which the facts I’ve given aside, often indicate the the nerve owner is worried about something.
Anonymous
Oct 12, 2006 at 10:48 am
“I have to say that Microsoft’s offers the best return on investment.”
Right. Lunchbreak is over, Bill is waiting for his Frapachino.
William Bunker
Oct 12, 2006 at 9:23 pm
Hello Senor! I am glad you have chosen to comment on the topic I discussed 4 days ago on my blog http://receiptforlabor.blogspot.com“.
I also noticed a comment about business models. I read somewhere that upgrading to Vista will cost something between $2k and $3K per employee. This cost could be destroyed in numerous ways, such as recycling their old XP installs, buying new used XP installs, or installing open source OS’ indeed! There is a good new Linux coming out that is not at all complicated nor difficult to use. Also it is still free, and will cripple Microsoft if they don’t move next.
In the marketplace only, of course. All violators will be towed at owner’s expense. Frankly, I’d rather see free OS’. It’d reduce the cost of doing business and the cost of living for new computer users.
Keith
Oct 13, 2006 at 11:39 am
In fact, I am no longer afraid of Microsoft. It is Google that is growing strength every single minute, while Microsoft is an enterprise sitting on a massive Titanic.
Ujwal Tickoo
Oct 14, 2006 at 1:01 am
Blackbeard,
1) Thanks for taking the time to express your thoughts. I expunged some sentences from your comment because these were not upto the standards I expect of comments on my blog. Any personal attacks, racial statements or plain rude sentences will get deleted.
2) “All businesses run Microsoft products and those businesses don’t want to switch to open source software or ad-supported software, so let’s just throw that idea out the window.”
Not correct. There is enough data available that shows that Linux and other Open Source software is gaining ground for Server side implementations in Enterprises. You can either disagree or do more research on this topic. I consider the growth of Open Soure as an established and well known fact…
I would agree that Desktops still are dominated by Windows. However, just as Command Prompts gave way to GUI interfaces — there is no gaurantee that 5 years down the line — web based software applications won’t replace desktop applications (from MSFT or some other vendor).
3) “Microsoft’s AdCenter is awesome. It’s a very solid advertising system…and has a lot of really great potential. It’s not as popular as Google’s yet, but as a user of all three systems I have to say that Microsoft’s offers the best return on investment.”
Adoption of AdCenter will be the test. While you are very heavily pro-Microsoft as is clear from your ready debunking of me and my post : your passion for Microsoft does not make the company a winner in the Online world. period.
However, I do respect your right to be pro-Microsoft and speak in their favor. There is place for divergence in my world…
Btw: I am neither pro or against MSFT. Infact I am a regular user of Windows and other Microsoft Software along with Software from Yahoo! and Google.
TheBizofCoding
Feb 20, 2007 at 9:36 am
Microsoft Vista's Lowered sales expectations, reflects the results of company's decisions of not keeping customers at the core of its Operating System upgrade agenda. Microsoft recently acknowledged that Vista will find moderate uptake in …
TheBizofCoding
Apr 17, 2007 at 1:41 am
In a weird twist of fate Microsoft has raised antitrust concerns about Google's recent $ 3.1 billion to buyout of Internet Adserving firm DoubleClick. Microsoft 's complaining that Google would have a dominant position in Online …
TheBizofCoding
Apr 24, 2007 at 7:03 am
TheBizofCoding is now just over a year old. It got honored by listing in India's Top Technology and Web 2.0 blogs by long time pro-blogger Amit Agarwal in his post "India Blogs 1.0 - The Most Widely Read Blogs in India"….
TheBizofCoding
Jan 30, 2008 at 3:32 am
Happy to share that today Jan 30th, 2008 TheBizofCoding officially crossed the 100,000 Page View mark. I started this blog in 2006 March and have had a fantastic time writing this journal, sharing my thoughts and reading your comments. My hea…
Have an opinion? Leave a comment: