1) You are Doug Stotland. What approach (or approaches) do you favor? Why?
Due to Microsoft’s late arrival to search engine advertising, it faced a fierce competition among other search engines, especially Google, which already builds up the relationship between advertisers and thus brings more and more internet traffic. It was not easy to serve as a profitable platform if advertisers don’t come and as a new comer, it would be much more difficult for Microsoft to surpass Google to be a leader in online advertising. Therefore, the challenge Microsoft confronted was recruiting advertisers and publishers as many as possible at the same time.
To evaluate the strategic options, Microsoft firstly has to recognize itself as number one software company in the world. They have a strongest team of technical experts and are skilled at marketing so that the general public has a strong awareness toward their brand name. If I were Doug Stotland, I would choose to adopt three following approaches: recruiting premium publishers to show contextual ads, leveraging other Microsoft services and differentiation.
Firstly, recruiting premium publishers gives more opportunities for Microsoft to access large amounts of visitors. To maintain its brand image, it would be more appropriate to select those publishers consistent with Microsoft’s culture and thus control quality. No matter what types of content that publishers focuses on, it would be easier for Microsoft to execute a quality control as well as differentiate themselves, comparing to the services that recruiting small publishers as Google and Yahoo had already provided. Secondly, lots of people in the world use MSN as a platform to communicate so that Microsoft could use its own strength to leverage its services. As the top seller of display advertising, Microsoft could provide some benefit for display advertisers also advertise on online pages. (Figure: Worldwide instant messenger users)
An estimate users of instant messenger:
˙AOL: 53 million
˙MSN: 27 million
˙Yahoo: 22 million
˙Google: 866,000
2) Suppose Microsoft goes forward with the deal with Digg. Where will adCenter be in 12 months?
What Doug Stotland concerned was Digg traffic was not enough for adCenter as a newcomer in online ad market. Obviously, if Microsoft had to sign up with premium publishers, the quantity of traffic that publishers offer did matter. However, the reasons why Microsoft wins the software competition are not only because they are good at marketing but also they require the advantage of technological expertise. Therefore, to cooperate with publishers in similar background would help Microsoft developing and strengthening the relationship with those advertisers. In an initial stage, cooperation with Digg.com would be a conservative step but would still bring profit to Microsoft.
Due to Microsoft’s late arrival to search engine advertising, it faced a fierce competition among other search engines, especially Google, which already builds up the relationship between advertisers and thus brings more and more internet traffic. It was not easy to serve as a profitable platform if advertisers don’t come and as a new comer, it would be much more difficult for Microsoft to surpass Google to be a leader in online advertising. Therefore, the challenge Microsoft confronted was recruiting advertisers and publishers as many as possible at the same time.
To evaluate the strategic options, Microsoft firstly has to recognize itself as number one software company in the world. They have a strongest team of technical experts and are skilled at marketing so that the general public has a strong awareness toward their brand name. If I were Doug Stotland, I would choose to adopt three following approaches: recruiting premium publishers to show contextual ads, leveraging other Microsoft services and differentiation.
Firstly, recruiting premium publishers gives more opportunities for Microsoft to access large amounts of visitors. To maintain its brand image, it would be more appropriate to select those publishers consistent with Microsoft’s culture and thus control quality. No matter what types of content that publishers focuses on, it would be easier for Microsoft to execute a quality control as well as differentiate themselves, comparing to the services that recruiting small publishers as Google and Yahoo had already provided. Secondly, lots of people in the world use MSN as a platform to communicate so that Microsoft could use its own strength to leverage its services. As the top seller of display advertising, Microsoft could provide some benefit for display advertisers also advertise on online pages. (Figure: Worldwide instant messenger users)
An estimate users of instant messenger:
˙AOL: 53 million
˙MSN: 27 million
˙Yahoo: 22 million
˙Google: 866,000
2) Suppose Microsoft goes forward with the deal with Digg. Where will adCenter be in 12 months?
What Doug Stotland concerned was Digg traffic was not enough for adCenter as a newcomer in online ad market. Obviously, if Microsoft had to sign up with premium publishers, the quantity of traffic that publishers offer did matter. However, the reasons why Microsoft wins the software competition are not only because they are good at marketing but also they require the advantage of technological expertise. Therefore, to cooperate with publishers in similar background would help Microsoft developing and strengthening the relationship with those advertisers. In an initial stage, cooperation with Digg.com would be a conservative step but would still bring profit to Microsoft.
Furthermore, if Doug Stotland decided to take those three approaches: recruiting premium publishers, leveraging other services and differentiation, Microsoft had better signed with Digg.com as a new partner to sell and serve the ads. On Digg’s side, they would be glad to cooperate with such large organization to reach a win-win situation.
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