First Mover: Frank Holland

Microsoft’s longtime operations exec on what it’s like to manage advertising

For most of your Microsoft career, you’ve been responsible for the company’s supply chain and operations strategy. Why move into advertising?

It wasn’t an obvious thing that I wanted to take the job when it was discussed. [In] one of the first discussions I had, I was interested in Steve [Ballmer’s] perspective on the advertising landscape just generally. The story that he wove and the vision that he has is a really compelling one—the power of not just display, but also of search and those two things needing to be equally balanced on the scale of advertising, because one fuels the other.

Did you know much about advertising?

I [didn’t] know anything, really, about the advertising business. I’ve got a long history of connecting our customers to our services and products in the past. So the theory is—and the intent that I’ve got—is that I’m going to do the same thing with our advertising products.

But don’t people wonder what the ops guy is doing running the ads business?

In any other company it would probably be a very weird thing. You want someone that understands the way the company works generally.

Does Madison Avenue get that?

The first thing that struck me the week I stepped into this job is, wow, this is a relationships business. The way you talk to marketing executives is so different from the way you talk to CIOs. CIOs tend to buy things off of a road map. They’re very analytical about stuff. It’s not that marketing executives aren’t, but you have to establish really strong ties with the market in order to take your craft into it and have it resonate.

What does Microsoft offer advertisers that rivals can’t?

What you currently have is a really fragmented way of brands trying to reach people. It’s super-confusing. What we hope to do is combine the power of our display assets, our communication assets, our entertainment console [Xbox] and the phone inventory. It’s a very compelling story to have that kind of breadth across that device ecosystem. I think we can be a huge player. We’ll always look to be the platform provider, helping people pull the noise out of the system.

Microsoft’s online services division, which includes Bing, continues to lose money. What will it take to turn that around?

We obviously want the business to be profitable. When you lose north of $2 billion a year, you’re investing pretty heavily in the technology. Our first priority is to get really high-quality relevant search results. The second ever-present priority is to make sure that we’re a continuing critical player and we lead the pack in terms of a must-buy on the display side.

There’ve been reports of a frenemy-type deal among Microsoft, AOL, and Yahoo to sell remnant advertising.

I can’t really confirm and I can’t deny that anything is going on. I think it’s probably one of the worst-kept secrets in the industry. We’re always working with our partners and the interesting thing about this business is that you can compete on one level and you can collaborate on another level unlike in any other business that I’ve seen.

You’re a history buff. With which historical figure do you most identify?

Eisenhower, when he was given this enormous responsibility to go off and coordinate not just the American presence in the war but the international presence in the war. The way he did it was a very people-oriented take. While I don’t have a global conflict on my hands, I certainly have a huge opportunity to make the resounding voice of Microsoft heard in the market. His people skills really interest me. It’s kind of tough to pick a hero like that and say you identify with him, but I certainly identified with the struggle that he had.