Microsoft to Depart From Online Ad-biz? Not Likely!

By Matt Van Hoven 

A brief report in Wired today indicates that because of Microsoft’s failed attempt at staking out a significant portion of the online ad business (after the Yahoo! deal went awry), it could leave the space all together.

Click continued to see why Microsoft might want to continue the fight.


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Research provided by Cowen and Company, a M&A advisory company, shows that despite 15 percent growth in the online ad market, Microsoft may need to bail on the effort. Damn!

That would, of course, lead the way for Google to completely take over, given the almost-failed Google/YahooI deal which would leave Yahoo! (which only grew 9 percent compared to Google’s 30 percent) way behind.

When we read this, we couldn’t hep but doubt the thought of Microsoft leaving such an untapped market. So we were somewhat reassured in the company’s bravado when we read the following bit in a Times article published today:

“Google’s domination of the search market continues unabated, but Microsoft hasn’t given up on it. Microsoft CEO Steve Ballmer recently said that his company is willing to lose ‘5% to 10% of total operating income for several years’ to fund its ongoing attempt to make inroads into the search market. Much more than search is at stake. Google wants to replace Microsoft’s desktop-based applications, such as Office, with its cloud-based applications, such as Google Docs.”

So while Microsoft is behind in the search, it may have a chance to impress us again with the upcoming launch of Windows 7, a stripped down version of Vista.

Times writer Preston Gralla notes that “If Microsoft wants to eat into Google’s share of the search market, there’s only one thing it can do: Build better search.” Well no kidding. But, as we noted above, that’s exactly what Ballmer said his company is ready to do (or, is doing already).

Here’s a question for you; if Google continues to outpace Microsoft in the search realm, does it stand to do the same in the software war? Do you use Google software versions of Word/Excel/Mail et cetera? Could we be seeing the slow death of Microsoft’s stranglehold on consumer software? We prefer NeoOffice to Microsoft Office hands down, mostly because it’s free. But where do you stand?