Jamie Thomson

Thoughts, about stuff

Why Microsoft need advertising

with 4 comments

I’ve noticed alot of people in the press (most notably Mary Jo Foley) questioning why Microsoft are trying so hard to get into the advertising game rather than concentrating on their core competencies. Well for those that are too dumb to realise the bleeding obvious (which it is) Mike Arrington of Techcrunch has summed it up perfectly today where he states:

Microsoft’s core revenue is derived from Windows and Office, and the future doesn’t look <http://www.techcrunch.com/2008/04/11/gartner-says-vista-will-collapse-and-thats-why-the-yahoo-deal-must-happen/&gt; to be very bright for desktop software sales. Google’s revenues, currently at $20 billion a year, could someday surpass Microsoft’s (Microsoft is currently at about $50 billion/year in revenue) if nothing is done to change the game.

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Written by Jamiet

May 22, 2008 at 10:01 am

Posted in Uncategorized

4 Responses

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  1. But just to make the opposing argument: both Google and Microsoft’s revenues are dwarfed by the revenues of any of the large oil companies (for example I see Chevron’s turnover is approx $200 billion per year). Does that mean that Microsoft should become an oil company? Of course not, it’s a software company. So why should a software company, however much trouble it’s in, try to become an advertising company then?

    Chris

    May 22, 2008 at 4:29 pm

  2. Chris,
    That’s not apples to oranges though. Dragging oil out of the ground isn’t encroaching on Microsoft’s core business but free services that do the same as Micrsoft’s existing software most definately does.
     
    -J

    Jamie

    May 23, 2008 at 5:34 am

  3. Yes, but though Microsoft and Google are competing in many areas, just because Google is funding their efforts through a profitable advertising business does that mean Microsoft should too? If Microsoft’s Windows cash cow is going to stop being the moneyspinner it has been for the last 20 years then a new source of revenue is needed, definitely, but my point is that it’s wrong to suggest that this should be advertising.

    Chris

    May 23, 2008 at 6:36 am

  4. OK mate. We’ll have to agree to disagree then :)
     
    Admittedly I don’t think advertising is the be all and end all (paid-for services are going to be big as well) but advertising is going to be huge.

    Jamie

    May 23, 2008 at 7:29 pm


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