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MSN Touts Video Efforts as Sales Questions Linger

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If Microsoft wants out of the online ad business, it has a strange way of showing it. As rumors swirl that talks between Microsoft and Yahoo over a potential search ad deal could also result in Microsoft handing over its display ad business, the software giant last week threw an upfront-esque shindig in New York.

The company formally introduced Robin Domeniconi, the Time Inc. vet who was hired to lead digital sales in January, and then unveiled half a dozen original series concepts while touting its strength in video.

Such enthusiastic salesmanship and long-term positioning seemed to fly in the face of the rumored abandonment of display sales—leaving buyers puzzled. “That would surprise me if they were willing to drop MSN,” said Michelle Lawrence, group media director, Horizon Media. “That’s such a massive site.” Indeed, MSN still reaches 100 million users each month, per comScore. Lawrence also found it ironic that Microsoft—in pursuit of Google in search—“might eliminate something that they’ve got an advantage in.”

Others suspect that Microsoft’s Google envy may be leading to ill-conceived sacrifices. “It doesn’t make sense to split up display and search for either party at a time when marketers want integration,” said Bryan Wiener, CEO of 360i.

Wiener fears Microsoft may fundamentally see Web advertising as an engineering endeavor. “Microsoft has to decide if they want to be in the ad sales business altogether,” he said. Dropping display would be “indicative of a fundamental misunderstanding of where the advertising business is going.”

Based on last week’s presentation, Microsoft’s programming and ad sales executives believe the business is going toward video, particularly entertainment. “That is an area that I’m absolutely leaning into in the next year,” said Scott Moore, executive producer & general manager, MSN. “The entertainment category has no dominant leader online. It’s an area we believe is ripe.”

In the works are comedy projects featuring The Office’s Rainn Wilson and The Kids in the Hall’s Dave Foley. Microsoft also is planning to launch Cinemash, a show in which comedic stars act out favorite dramatic roles; and Last Night on TV, a daily review of prime-time TV hosted by the comic duo Frangela.

Moore said each show will be developed in conjunction with advertisers, while keeping MSN’s existing user base in mind. “I’m not a fan of doing original, standalone stuff that you have to promote an inordinate amount,” he said. “I’m more interested in doing stuff that is organic to the experience we’re already programming.

We know we have an audience [for entertainment]. Why not give them more in video, which advertisers want and we can sell at a higher CPM?”

Unless, of course, if Yahoo ends up doing the selling.