What Business Will Microsoft Really Be In Come 2010?
We knew Microsoft's been wanting a piece of the advertising business during
the last couple of years, judging from key acquisitions it made and its $6 billion
investment in aQuantive just a couple of months ago. But this week, we found
out just how big a piece of that market Microsoft wants. Speaking in Paris this
week, Microsoft CEO Steve Ballmer predicted that advertising would become
25
percent of the company's business "within a few years."
Now, assuming that "a few years" means the next three or four, and
assuming Microsoft continues to grow its revenues at its current pace, Redmond
could be generating well over $15 and maybe be approaching $20 billion in ad
revenues by 2011. Over the next few years, Ballmer said he expects all media
and marketing to go digital.
"Over time, all ad money will go through a digital ad platform,"
Ballmer told the gathering of European ad agencies and clients. "All media
goes digital, all advertising goes digital."
It makes you stop and wonder what business Microsoft will actually be in at
the turn of the decade (heck, some people wonder even now what business it's
in). While the company derives the vast majority of its current $51 billion
in revenues from desktop and server versions of Windows and associated business
applications, it's investing more and more heavily in a variety of consumer
markets. And as it does so, it takes on a raft of new competitors fighting wars
on multiple fronts.
It's hard to imagine Microsoft taking its eye off the business-software ball,
given its laser focus there for well over two decades. But when you look at
the development disaster that is Windows Vista and the delays with Windows Server
2008 and SQL Server, maybe it already has.
This could be a healthy thing for the business-software market in general if
Microsoft continues to aggressively pursue this advertising course. I mean,
who needs the Department of Justice or the European Union to slow down Microsoft,
when the company can do that very thing on its own?
Posted by Ed Scannell on 10/04/2007 at 1:23 PM