Where the focus is everything about online marketing, including key business strategies, innovative marketing methods, effective online advertising techniques, emerging advertising trends in technology and much more.
Regardless of whether Microsoft or Google comes out on top, the high-stakes battle is making most online marketers winners.
Microsoft was late in recognizing the profit potential of online search. Meanwhile, upstart Google surpassed older search sites such as AltaVista, America Online and Yahoo to become the clear leader in search and, therefore, online advertising revenue.
In late 2005, Microsoft chairman Bill Gates and chief technical officer Ray Ozzie wrote widely quoted memoranda acknowledging Google's success and stating that Microsoft would refocus the company's MSN division to address the "Internet services disruption."
The Microsoft executives said the software giant would introduce advertising-supported services to the company's vast portfolio of services and software, which would enable it to access a greater portion of the growing online revenue opportunities. Microsoft, which had become accustomed to defending a leadership position in desktop and server software, is now on the attack, trying to catch up to hyperactive Google, which has become an incessantly moving target.
Who Should Be Afraid
Although some online entrepreneurs may be fearful of becoming casualties in the escalating competition between Microsoft and Google, it's traditional media companies that are much more likely to see their revenue streams reduced.
For the overwhelming majority of online sellers and service providers, the Microsoft-Google tussle will create more opportunities than it takes away, observers say. Neither MSN nor Google are primarily focused on the areas of selling products, search engine marketing, developing interactive advertising platforms or generating content. MSN may even provide a boost for the partner companies in its shopping and content portals, since MSN search does not exclude other sellers.
Google likewise opens search to anyone and everyone, and one of its main tenets is to remain inclusive. The company's unofficial motto is "Don't be evil," a play on the nickname "Evil Empire" given to Microsoft by high-tech insiders. So far, most industry watchers claim that Google has remained true to its original precept of exposing the universe of digital information and supporting search through ads. The company does not directly sell products or services, and it continues to derive revenue from sharing in advertising dollars, which creates opportunities for both publishers and advertisers.
However, Google is showing an interest, albeit limited, in software development and distribution. Google now offers a desktop search application and Picasa, an image searching utility that could someday become supported through advertising. Google also reached an agreement with longtime Microsoft foe Sun Microsystems to cross-promote products and jointly market "Microsoft-alternative" applications such as OpenOffice.
Regarding the heightened Microsoft-Google competition, Rachel Lyubovitzky, vice president at search engine marketing company Searchfeed, says she doesn't see any negatives for her customers. She says that by aggregating consumers who were previously a fragmented audience, the companies are "helping to organize Internet populations so that they will be more receptive to people's messages."
By convincing a majority of consumers to have either MSN Hotmail accounts or Google home pages, both companies are gathering information en masse, which advertisers love. However, even these users will continue to spend most of their time enjoying the diversity of content and search services available outside of Microsoft and Google, enabling plenty of room for creativity and innovation.
The online advertising market continues to grow rapidly, and Microsoft's announcement that it would begin to support some of its multibillion dollars in software and services through advertising is likely to further accelerate the growth. However, it may take several years for Microsoft to develop ad-supported services for the company's recently announced Windows Live initiative, so don't expect a major impact in the next 12 months.
Google's new search services - which will streamline consumers' ability to find video, music and text published in books - will likely also create a wealth of new advertising inventory options and contribute to market growth.
During the first nine months of 2005 advertisers spent $8.9 billion online, a nearly 29 percent increase over the previous year, according to Pete Petrusky, director of advisor services for accounting firm PricewaterhouseCoopers.
Petrusky expects the double-digit growth of online advertising to continue for the foreseeable future, at the expense of other media buys. Online advertising revenue topped $12 billion in 2005, equal to the amount spent in consumer magazines, and closing in on the $16 billion spent on cable, according to Petrusky.
Increasing inventory through new services led by Microsoft and Google could correct what Petrusky sees as an imbalance between the amount of time spent online and the advertising dollars generated. "The Internet captures about 15 percent of people's media consumption time," says Petrusky, "... but only 3 to 4 percent of total ad spend" that includes magazines, newspapers, television and radio.
Newspapers, which have been losing revenue to online classified ad services such as Craigslist and Yahoo, will likely have more trouble competing online when both Google and Microsoft enter the arena. Television broadcasters will see their advertising revenue decline further as Microsoft and Google make it easier for people to browse video and audio content online.
Although both companies are rolling out dozens of new services, they cannot keep up with the wide variety of services created by entrepreneurs - there are too many moles to whack for either company to be dominant in all areas. In the areas where Microsoft and Google do compete with smaller companies, having a powerful brand alone isn't enough to convince consumers to switch, according to Greg Sterling, program director with analyst firm The Kelsey Group.
"New services can't be marginally better; they have to be much better" to prompt changes in user loyalty, Sterling says. For example, MSN search and Google's comparisonshopping engine Froogle and Gmail email have had trouble gaining traction. Therefore, there will always be enough room for innovators such as Digg.com, Flickr.com or MySpace.com to innovate and carve out a niche (or be acquired by big players looking to expand).
Competition Is Good
The intensifying Microsoft-Google rivalry will create a better audience for advertisers and will spur innovation in the technologies that enable people to more quickly find what they are seeking. Microsoft's interest in advertising- supported services will also provide a necessary counterbalance that prevents Google from becoming a dominant player.
"The more options, the better" for advertisers, says Michael Stalbaum, CEO of interactive marketing and advertising agency UnREAL Marketing. For several years Google has been expanding its reach as the largest player in the largest segment of online advertising dollars, so increasing competition from Microsoft could provide an important alternative solution.
According to Nielsen//NetRatings, the volume of Internet search queries grew 15 percent between June and October 2005 to more than 5.1 billion. Continued on Page 2...
Print
Email
Digg This
