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How Is Microsoft Spending a Billion Dollars?

If you had a billion dollars to spend, how would you spend it? Would you advertise your new mobile operating system and motion-controller game peripheral? No?

Well, that's how Microsoft is about to spend a cool bil. The combined advertising budgets of Windows Phone 7 and the Kinect game add-on (what is it with Microsoft and the word "kin," anyway?) will amount to one billion dollars.

Yeah, we know. That's chump change in Redmond. Still, we're about to be bombarded with messages about a mobile OS that's arguably behind its two biggest competitors feature-wise and a motion-control function that delivers more or less what the Wii introduced years ago. Just how successful these initiatives will be, of course, remains to be seen...but let's not forget that it took pretty much a decade for Microsoft's game-development efforts to actually turn a profit.

For partners, all of this stuff is peripheral at best, although some partners might be able to cash in on Windows Phone 7 somehow. The greater point here, and the one we keep making in this space, is that moves like this one in Redmond signal where Microsoft's priorities are and where they're going to be going forward.

There's no doubt that the Microsoft Partner Network is bringing sweeping changes in comparison to its predecessor, the Microsoft Partner Program. And we believe, based on feedback we've had, that the MPN will be much more about big, global partners than the more egalitarian MPP was.

So, mid-size and smaller partners, you could soon see a decrease in marketing funds, support and other investment flowing from Redmond. Maybe you're feeling the pinch already. Yet Microsoft -- and we get that we're talking about a huge, multi-faceted company here -- is letting $1 billion flow into one area (games) that has mostly been a money loser and another (mobile) that the company has shockingly mismanaged in recent years (and months, for that matter). Oh, and by the way, that $1 billion is just for advertising. Don't forget that.

Microsoft will have an enterprise presence for many years to come, as well it should. And a lot of partners will be able to continue to profit from that aspect of Microsoft's business. But if you're wondering where the company wants to head for the next few years to come, don't ask your Partner Account Manager (if you still have -- or ever had -- one). Follow the money, or just turn on the TV. You won't be able to miss what Microsoft is buying with its billion dollars.

How do you feel about Microsoft investing so heavily in advertising for games and Windows Phone 7? Have your say at lpender@rcpmag.com.

Posted by Lee Pender on 10/18/2010 at 1:23 PM


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