What kind of business has Microsoft Corp. (NASDAQ: MSFT) lost to Google Inc. (NASDAQ: GOOG) in the online advertising business? Plenty, if you go by the estimates. It's that kind of midnight fear that caused Microsoft CEO Steve Ballmer to give his internet ad sales chief a call from a recent Hawaiian vacation. What prompted the action? No small potato -- Google announced that it was buying DoubleClick for $3.1 billion.
Was Microsoft's leader sweating out of desperation based on Google's existing advertising revenue dominance that seems to have Microsoft on the defensive like never before? Sure, Microsoft's been on the defensive before, but not when the stakes were this high -- we're talking a level approaching $3 billion a quarter of ad revenue with a cost that is relatively inexpensive (except for partner revenue share Google must pay out).
Although the on again / off again talks of Microsoft buying Yahoo! to try and beat Google have again fallen by the wayside, that does not mean Microsoft and Yahoo! may not partner to fend off the threat of losing all internet ad revenue to their collective largest competitor -- Google. Microsoft's Yusuf Mehdi, the internet ad head for the software maker, says that "Really the one and only thing is the volume of search ... but that's a big thing." Yep -- I agree. Google's numbers prove it.
Microsoft may have lost $2 billion in ad sales to Google
Posted May 7th 2007 12:25PM by Brian White
Filed under: Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
Reader Comments (Page 1 of 1)
5-08-2007 @ 10:01AM
Steve said...
Unfortunately for Microsoft it is just the beginning.
The search engines still deliver poor results, and from a business point of view... it is not exactly an advertiser friendly platform.
When is Google going to come out with their own operating system? Isn't their vision focused on the organisation of information.
http://www.imitrust.com/thepit