Microsoft Takes Giant Step Into Advertising

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Redmond, Wash. Microsoft greeted 700 advertisers and agency executives assembled on its sprawling campus here last week with a simple message: The software giant is dead serious about advertising.

How serious? Enough to double its R&D budget for its online business to $1 billion in the next fiscal year, setting up the possibility of an arm’s race with archrival Google that should spur more sophisticated ad options. And serious enough for both chairman Bill Gates and CEO Steve Ballmer to predict advertising would act as a major growth driver across its $40 billion-plus business.

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