Microsoft AdCenter Case (Andrea's Input)

1.) You are Doug Stotland. What approach (or approaches) do you favor? Why?
Since the main challenge confronting Adcenter is to deliver large quantities of traffic to advertisers I have chosen an approach of obtaining the most advertisers while Microsoft’s high quality. If Doug I would recruit premium publishers to show contextual ads focusing on the broad sites. The broad sites would increase inventories across all categories. The large amount of consumers we could contact as long as the longer times users spend at these broad content sites should increase profits. I would choose this approach rather than recruiting major search engines due to losses from guaranteed revenues to advertisers. As for differentiation I would choose demographic targeting of which competitors don’t use.
In order to lower cost is to have Microsoft’s staff recruit advertisers rather than outsourcing the job. I would take advantage of Microsoft’s current services by optimizing both text ads and display ads. By leveraging display ads Microsoft could offer higher payments to advertisers. Again in order to lower costs I favor using LiveSearch for direct traffic.
One key to moving for Microsoft adcenter to gain advertisers is what Natala Nenezes said “We need to lower the barriers to advertiser entry to their absolute minimum. I interpret this as requiring the least amount of effort from advertisers when joining adcenter.

2.) Suppose Microsoft goes forward with the deal with Digg. Where will adCenter be in 12 months?
Going along with the deal with Digg probably makes it more difficult for Microsoft to reach their goal growth and profit margins. The economic cost of investing in Digg is the opportunity cost. This opportunity cost is what they could have been gaining from investing the money in a broader area, not just technology. On the other hand if adequate funds were invested in publishers in conjunction with the technology area Microsoft should be in a positive position. Determination of where adCenter will be in 12 months shouldn’t based solely upon Digg there are many other factors.