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Social media and analytics counter online ad crisis December 3, 2012

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UBS Securities’ annual media investment conference gets underway today, and media buying agencies are lowering their ad spending forecasts. Even online advertising – that looks relatively healthy with projected double-digit growth – is facing a bit of an identity crisis. Content and media sites are struggling to accommodate the polarizing forces of programmatic ad-buying and so-called “native advertising.” While there’s no single solution to thriving in digital advertising, several social media-driven angles bear watching.

Brand-name online publishers have been uncomfortably coexisting with ad networks since the beginning of the internet, but what used to seem an efficient way of unloading remnant ad inventory now threatens premium slots sold for high CPMs. Early last month, Federated Media Publishing, itself a network of mostly tech blogs, cut back its sales force to shift emphasis to its automated display ad Lijit Network. And depending on your perspective, real-time bidding exchanges from Google, The Rubicon Project, and Facebook, are either the latest scourge driving down CPMs or, in Facebook’s case, a way to raise the value of its bargain-basement inventory. As we wrote, third-party big data audience analytics plus real-time bidding enable advertisers to buy targeted audiences across the web, without relying much on media companies.

Faced by network-driven programmatic buying, and former premium ad spots going unsold, companies like Federated, and even the New York Times, are responding via native advertising. Native advertising is the latest buzzphrase describing content marketing, sponsorships, and advertorials – marketing vehicles that blend in more naturally with content than banner ads, and that often take advantage of social media technologies.

Countering the crisis

Here’s how some companies are thriving amidst the digital advertising disruption:

  • Facebook’s sponsored stories – that blend users’ Facebook activities with marketing messages – are a prime example of native advertising. But that approach is most useful to content or retail sites with large volumes of users that do a lot of posting. Facebook and Twitter aren’t renting out that technology to other publishers, but it might be an opportunity for Amazon or Best Buy. Likewise Facebook’s exchange only uses its own inventory, notwithstanding the usual talk of a web-wide Facebook ad network. Its exchange is driving investment in marketing companies like Triggit, but it doesn’t help other sites. Facebook won’t even sell ads on Zynga anymore. But content sites should pay close attention to tracking and analytics techniques Facebook is trying out. Its View Tags are new, but potentially offer better attribution analysis, something other content publishers could emulate.
  • LinkedIn has been firing on all cylinders lately, but most of its revenue is tied one way or another to jobs and recruiting. In an effort to expand its advertising business, the company launched very limited access to a new Ad API. LinkedIn is positioning the API as a way for preferred partners to buy text or small image ads. The approach seems overly cautious in not letting its three designated marketing partners (Adobe, Bizo, Unified) do much creatively, although they can better track and integrate LinkedIn inventory with broader web campaigns.
  • Spiceworks is another B2B advertising business that is thriving. Spiceworks offers free, SaaS network management and help desk tools to IT professionals at small and medium-sized businesses. In doing so, it has built up a pretty targetable audience of 2 million highly engaged users that participate on message boards, reviews and ratings, and self-help systems. Advertisers like Dell and Rackspace can do the native advertising thing, and Spiceworks is an effective distribution channel for white papers and product info.
  • There are plenty of tactics to increase audience engagement on content and retail sites. Two that play off the data analysis theme come from Demandbase and Bloomreach. Demandbase enables site personalization based on its analysis of what company a site visitor is coming from. Companies like Cisco, Dell, and NetSuite do account-based targeting of ads and content. Bloomreach draws on web-wide analytics that drives content personalization, which, in turn, makes SEO more effective. Bloomreach’s platform is most effective for merchants with lots of products and content about them; customers include blue-chip retailers like Bluefly, Williams-Sonoma, and Nieman Marcus.

The countervailing forces of programmatic buying and native advertising will wrench online advertising back and forth for at least the next 24 months. To prosper, publishers and other content-oriented sites must emulate analytics and targeting tactics driven by sites with active user communities.

Running the online advertising numbers October 29, 2012

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Several big digital advertising companies reported their third-quarter results over the last week or two. Those reports reveal a few key trends: Google and Facebook are gaining share, mobile advertising is growing but still tiny and search-dominated, and slow progress in digital brand advertising means that television isn’t going away.

Google. Google’s ad revenue grew 16 percent to $10.9 billion. For once, its ad network sales grew faster (21 percent) than sales on its own sites (15 percent), although its own sites still make up two thirds of the total. That likely means that Google’s display ad network sales grew faster than search. While paid clicks were up 33 percent, the average cost per click was down 15 percent, which most observers blame on mobile search pricing. Google dropped broad hints, rather than clear guidance, about its overall mobile business, including Motorola, but it appears to be on the way to $2 billion/year in mobile search and advertising.

Facebook. Facebook’s ad sales grew faster than Google’s, showing a 36 percent improvement year over year to $1.09 billion. Facebook has a relatively small search business based on some revenue sharing with Microsoft, so it will probably maintain its number one spot in U.S. online display advertising this year. Some forecasters had been predicting that Google would take the lead, based on its ad network growth. Facebook revealed that it had over $150 million in mobile ad sales for the quarter. That figure is still only 14 percent of Facebook’s total, and much smaller than Google’s, but it relieved investors and might very well give Facebook second place in mobile ad revenue.

Yahoo. Yahoo’s display ad business was flat at $452 million. While search was up 11 percent to $414 million, that was due to guaranteed revenue from Yahoo’s search partner, Microsoft, rather than to organic growth.

Microsoft. Ad revenue from Bing, MSN, and Microsoft’s ad network business was up 15 percent to $655 million. Microsoft said search was up, but display ads down across the board.

The other big U.S. online advertising player, Aol, will report its earnings next week. Aol had over $335 million in ad revenue in the second quarter, with its ad network business growing twice as fast as sales on its own properties, and search (via Google) slightly down.

Key takeaways

Earlier this month, the Interactive Advertising Bureau released its 2012 first-half report, showing overall U.S. growth at 14 percent. That’s healthy compared to most traditional media categories, but slowing versus last year. According to the IAB, search still dominated, but mobile and digital video were each worth over $1 billion in first-half sales.

Search and free online classifieds decimated the newspaper business, but I would not expect online video and display advertising to gut the television industry anytime soon. TV is still best at delivering emotional messages to big audiences. The TV industry is likely to add targeting techniques learned online to multi-channel campaign selling sooner than online delivers mass-reach video. And much of the recent action in online advertising is in ad networks and real-time bidding. Those technologies better suit direct marketing, though they offer some efficiency in brand ad-buying.

Mobile advertising still feels like search right now, although Facebook is mixing some social flavoring with its direct-marketing mobile ads. Brand advertisers are still figuring out what to do with social media, whether it’s mobile or web-based. To-date, ads on social media have proven only modestly effective for direct marketing, and proponents believe branding is the true promise for the medium. Quite a bit of brand advertising spending depends on buyers measuring the efficiency of their buying, based on assumptions proven years ago on television. Testing for branding effectiveness achieved via TV and print is costly.

Social media could not only provide a vehicle for harnessing an audience’s social connections, but also a relatively cheaper way to test results by measuring interest and incorporating CRM data. Ad sellers who can put together programs for delivering and measuring that combination will make lots of money in years to come.

Yahoo Q3 still seems sluggish October 23, 2012

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Yahoo’s mediocre third quarter seems to have pleased Wall Street. Profits came from an asset sale, and its most important business – online display advertising – was flat at $452 million after paying out revenue-sharing (ex-TAC). Search was up 11 percent to $414 million, but only because Yahoo continues to get guaranteed revenue from Microsoft. Its search business is not growing organically, despite its “upside” potential.

Google’s quarter was “disappointing,” but it grew advertising (search and display) 15 percent on its own sites and 21 percent on partner sites. Google partners use both its search and display ad network, but that growth was probably driven by display. Yahoo’s woes come not from losing money but from stagnant growth. But critically, Google continues to gain share against Yahoo in display ad sales. Facebook is set to report its results later today, and will almost certainly gain share versus Yahoo, and probably against Google. Facebook may even be growing mobile ad sales.

So why did investors react so positively? They’re probably happy to see new CEO Marissa Mayer looking comfortably in charge, and saying she’s going to shift resources into mobile development. I dunno. Mobile advertising is barely getting started. I’d rather hear more about ad targeting, brand advertiser products, and what Yahoo intends to do about ad networks.


Amazon’s online advertising potential October 5, 2012

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I really wanted this Advertising Age story to deliver the goods: “Amazon Breaks Silence on Ambitions in Advertising…” Unfortunately, it seems that Amazon was its usual close-to-the vest self, even as it promoted its offerings – I hesitate to say “platform” – to an audience of advertisers and agencies. Why should anyone care? Because Amazon has the reach, the data, and the ad inventory to be a really important player in digital marketing, potentially disrupting companies like Google, Facebook, and the portals.

Ad Age says Amazon has “hundreds” of sales people and 92,000 square feet of New York office space. Amazon pumped Kindle, but also talked up its ad inventory on its owned-and-operated content site IMDB as well as its content/retail hybrids Soap.com and Diapers.com, and its own and Zappos retail sites.

In my experience of working with Amazon, it’s a numbers-driven company. So when it makes the decision to sell third-party ads on screen real estate it could be using for Amazon promotions, it knows what it is doing. Those ads are likely effective for advertisers, and profitable for Amazon. Unlike social media and portals that infer purchase intent from content behavior and self-expressed Likes, Amazon has tons of data on actual purchase and search behavior. Its targeting should be top-notch, for both brand-building and actual conversions. With Kindle and apps, Amazon has a mobile story that’s more robust than most content companies or ad networks.

Because Amazon is so secretive – even in its financial documents – it’s difficult to get a read on just how much ad spending it absorbs. But I wouldn’t be at all surprised if Amazon’s ad revenue were bigger than that of a company that gets a lot more attention as a media business: Twitter.


Facebook, privacy, and growth October 2, 2012

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It’s Advertising Week in New York, so Facebook posted to its users an explanation of how social media marketing and privacy can co-exist, prior to trumpeting its wares to Madison Avenue.  And of course the Wall Street Journal, the self-appointed privacy cop of mainstream media, offers its own take. Quoting:

At the core of Facebook’s expanding ad strategy is the fact that the social network knows a lot about its users’ true identities. While Google largely makes inferences about people based on their searching and browsing habits, Facebook is built on people volunteering personal information that’s valuable to marketers, including names, friends, phone numbers and tastes.

If only. Facebook would love to convince advertisers it had such an effective marketing platform. Besides that fact that Google and Yahoo both agree with Facebook that maintaining an authentic single identity is critical for reasons other than advertising, the naiveté of calling a search an inference – search is way, way more predictive of purchase intent than Likes will ever be – just makes you shake your head.

But then Facebook pulls this. I’m paraphrasing, “Dear FTC, Like buttons represent freedom of speech, so they shouldn’t have to adhere to COPPA kids’ privacy standards.” While trying to enforce COPPA on a distributed network is probably impossible, did the company really have to call attention to it right now? Especially when just about everyone thinks the Like infrastructure will eventually power an ad network?

That so-far hypothetical ad network would be a much more lucrative service than analytics sold separately. So perhaps whining about COPPA is a damned if you do, damned if you don’t dilemma.

Manufacturing Yahoo strategy news September 28, 2012

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Does it strike you as a cheap trick to release a year-old strategy document created by an exec who’s no longer there for a CEO who’s long gone and say, Hey, this might be what Yahoo’s going to do, or, Uh-oh, Yahoo doesn’t have a strategy because what’s leaked hints at this old one? I guess that’s what happens when a company cracks down on unofficial communications. And Yahoo’s no Apple.

A revived text-ad contextual display network wouldn’t be high on my priorities list for a Yahoo turnaround. At best, it might be a complementary effort to what Yahoo needs to really focus on: brand advertising. This new initiative from Time Inc., that uses glitzy AOL ad formats that blend advertising and content from name brands like People, Real Simple, Sports Illustrated, and InStyle is the kind of thing that Yahoo should be inventing.

Yahoo content categories like news, sports, finance, and women may not give advertisers that automatic warm brand-y feeling, but they just happen to be online category leaders. That’s not boring. It’s reach and target-ability.

How Yahoo could re-boot search September 24, 2012

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Yahoo is scheduled to describe its latest turnaround strategy on Tuesday, and reportedly search is high on its priorities list. Search is the engine that drives online advertising, accounting for half of U.S. spending by most estimates, and twice as big ($15 billion) as the next category, banner ads ($7.6 billion). Big players in display ads like Yahoo and Facebook, both of which use Microsoft for core search technologies, tinker with their offerings to try to steal share from Google. So far they’ve had little success.

New CEO Marissa Mayer ran Google’s search business at one point, so she knows what works. How could Yahoo – whose Overture acquisition actually invented paid search before Google – return its search business to past glories? It could start by working on the following:

  • Microsoft. Yahoo’s decision to outsource search technology to Microsoft has never really paid off. The combination has not gained share versus Google. Microsoft is still paying Yahoo a guaranteed bonus because it can’t match Google’s revenue per search figures. The contract for that bonus ends next year. Yahoo will likely renegotiate the deal. Although Microsoft has seen tiny increases in its own search share, that’s mostly been at the expense of Yahoo. But it would miss Yahoo as a distribution partner; there simply aren’t that many places where big audiences do general-purpose searching. Yahoo could threaten to switch over to Google, though that might raise antitrust concerns.
  • Attribution. One reason for Yahoo to stick with Microsoft is the potential to use search to increase the value of the display ad businesses of both companies. Big agencies don’t need Yahoo to integrate their display and search campaigns, but they could use help in what the industry calls “attribution,” i.e., understanding the influence of and attributing the proper value to different ad units instead of just giving search all the credit as the “last click” before purchase. With the threat of privacy regulation looming over ad networks and third-party data collectors, the value of consumer behavioral data collected on one’s own site could increase dramatically. As portals with large audiences consuming a broad variety of content and communications, both Yahoo and Microsoft could gain some competitive advantage in attribution analysis and behavioral targeting over Google, that depends on an ad network of third-party sites.
  • Social search. Regular readers know I’m pretty skeptical of the impact of social media on the kind of directed shopping search that pays Google’s bills. Still, social signals are valuable inputs into search results, and Microsoft has done a better job presenting them to users than Google has. Yahoo has minimal social data, so sticking with Microsoft – that has data sharing arrangements with Facebook and Twitter – is its best chance of tapping into social search.

Yahoo is not in a great position to go after mobile search, though neither is it particularly disadvantaged. Google has caused some Wall Street concern that lower mobile search costs-per-click could drag down its overall average. But Yahoo and Microsoft don’t have much to lose. Unfortunately, Yahoo’s Axis search-browser hybrid gives a better demo on a tablet than on a phone. While it’s an interesting example of how a search user interface doesn’t have to be blue links, it’s not likely to have any significant impact on mobile search. Phone-based search may ultimately depend on voice input, and will certainly benefit from presenting coupons and offers among results.

No, Yahoo’s best chance at search is on bigger screens. Its prowess in selling glitzy display ads to brand advertisers remain one of its remaining assets. So connecting the dots for advertisers and agencies via attribution and behavioral and social inputs is Yahoo’s most promising search strategy option.

Question of the week

What else should Yahoo do to gain share in search?

Google implements Do Not Track. Now what? September 17, 2012

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Google became the last of the big browser companies to support the Do Not Track privacy initiative by adding it into its latest developer version of Chrome. While this adds momentum and a little clarity to the movement, it leaves key questions unanswered. Will Do Not Track ease user privacy qualms, fend off restrictive government regulations, and prove a major disruption for digital advertising? Perhaps. Strict Do Not Track adherence could shift the balance of power in online advertising.

A quick refresher: Do Not Track is an HTTP header-based scheme to enable users to essentially set a beacon via their browser informing web sites that they don’t want to be served ads via third-party tracking mechanisms. Do Not Track is explicitly aimed at behavioral ad targeting based on a user’s web browsing habits. The major browser providers have now all committed to supporting Do Not Track, but their implementations vary.

But that’s not surprising. Remember, the final details of exactly how Do Not Track works aren’t finished. U.S. government regulators are dancing around the issue, hoping the industry can come to a comfortable self-regulating scheme. Neutral industry bodies like the W3C and IETF are circling efforts from advertising and publisher site groups. There’s still a debate over whether Do Not Track should cover cookies and tracking, or just advertising served based on them. Microsoft’s aggressive intent to implement Do Not Track as an opt-out option was seen by some as taking the privacy high ground but by others as going too far: both the Mozilla and Apache organizations think Microsoft has overstepped the bounds on user intent.

Advertising apocalypse?

Online advertising doomsayers like to characterize the worst-case outcome of Do Not Track as an online advertising apocalypse. Proponents point out that behavioral targeting represents less than 20 percent of today’s online ad revenues, and that brand-name publishers with desirable audiences can continue to go about their business. Long-tail sites are the most at risk, they say.

Indeed, cynics have some circumstantial evidence to help make the case that privacy hype-mongers like the Wall Street Journal might be happy with the contextually-targeted status quo. And Microsoft insists that its implementation is not a sign that it’s giving up on the advertising business.

True, search and pay-per-click direct advertising could thrive even under strict Do Not Track implementations and wide adoption. But even CPC ads – where no one pays unless a user explicitly expresses interest by clicking – would waste impressions, potentially crowding out more effective ads. And re-targeting, that is, serving up relevant ads based on previous behavior like clicks, searches, or browsing, would be devastated. Facebook’s real-time bidding “exchange” depends on re-targeting to add value (and raise Facebook’s pitiful CPMs). And the still nascent mobile ad space would benefit greatly from re-targeting.

Shifts in ad data value

Should Do Not Track derail third-party targeting, it might end up putting targeting power back in the hands of sites that collect interest information gathered on their own sites. Draft legislation seems to protect Facebook’s info on its users, gathered via profile data and Likes. Facebook’s own ad inventory would gain relative value, even if Facebook couldn’t build out the ad network we all expect it to. Likewise, Do Not Track wouldn’t seem to affect info gathered by sites with big audiences that visit lots of home-grown content – Yahoo’s fingers are crossed. Data derived from users expressing interest via explicit posting within a network like Twitter’s would also gain value.

It’s never clear whether users say they’re more concerned about privacy than their actual behavior supports. Meanwhile, it’s an election year and the ad industry hasn’t even played the jobs card. Mainstream legislators hope the industry can come up with its own solution for privacy concerns. Browsers are now moving more or less in the same direction. The next milestone to watch for is whether and how third-party ad networks fall in line.

Question of the week

How can online advertising thrive without wrecking user privacy?

Takeaways from Facebook’s Q2 earnings call July 30, 2012

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Last Thursday, Facebook did its first earnings call as a public company. Though it showed a solid 32 percent revenue growth to $1.2 billion, reactions were mixed at best and the stock suffered. Unrealistic expectations are causing people to overlook Facebook’s fitful progress in online advertising, and signs that it really does have a clue in mobile.

Here are the important takeaways from the call. Executive commentary is taken from the transcript.

Its business model appears solid. Advertising sales were up 28 percent to $992 million. Observers seemed far more disappointed by slowing revenue growth than by Facebook’s loss, that was driven by $1.3 billion in stock-based compensation expenses from its IPO. Excluding that, the company showed a healthy 43 percent operating margin, and would have had a $515 million operating profit.

With 955 million active monthly users, Facebook’s user base is huge and growth is naturally slowing. Still, Facebook claimed that the number of monthly users even in the mature U.S. market was up versus the last quarter, and that it detected no slowdown in activity, even among younger users. So much for the “fad” fading.

Its role in online advertising is expanding. Before and during the call, Facebook has been trying to illustrate that its social media advertising platform can be effective for marketers, even as it remains cautious in its deployment of ad formats. The company is paying to do the necessary research to show off its advertising ROI, and it is poised to gain significant share even without making much of a dent in brand advertising. Home-grown display ad revenue from the big three portals – Yahoo, MSN and AOL – was flat or down this quarter. Facebook is the only big player growing sales of display ads it sells on its own site; the portals and Google are growing via ad networks.

Facebook attributed its ad revenue growth to an 18 percent increase in the number of ads delivered and, more important in the long run, a 9 percent hike in price per ad sold. It boosted the number of ads shown per page, but that effect was muted by mobile usage. In fact, the number of ads shown in the U.S. actually declined two percent. Facebook managed to counter that by being able to charge even more in the U.S. with its Sponsored Stories social units that show in the news feed. U.S. CPMs were up over 20 percent. That U.S. figure is quite promising for future Facebook growth.

It’s starting to monetize mobile. Half of Facebook’s monthly active users came from mobile devices. CEO Mark Zuckerberg said mobile users were 20 percent more likely to use Facebook on a daily basis than web users. He said that by the end of June, Sponsored Stories were generating $1 million in sales a day, half mobile. At that rate, it won’t take long for Facebook to be a leading player in mobile advertising. Of course, that’s an easy thing to say, as it only takes $100 million a year to be a “leading player.” Google is the only company with a billion-dollar mobile ad business yet.

Facebook blamed relatively flat sequential growth in fees revenue to mobile gaming, where most social games don’t use its payment system. It’s an open question whether Facebook can take its payment system beyond its site. But it sounds like it won’t be using a Facebook phone to do so. In response to a question about integrated mobile devices versus apps, Zuckerberg said, according to the transcript, “There are lots of things that you can build in other operating systems as well that aren’t really like building out a whole phone, which I think wouldn’t really make much sense for us to do.”

Facebook’s near-term success depends on how it works the following:

  • Ecosystem mining. Zuckerberg hinted that Facebook wouldn’t take as big a cut – in terms of ad spending as well as its 30 percent fee on virtual goods – from other businesses that use its platform as it does from social gaming. That’s not just a mobile issue: he specifically mentioned web-based music and e-commerce.
  •  Ad expansion. Facebook said fewer than half its ads were social, and a very small percentage were Sponsored Stories. Critics make a valid point that many Facebook advertisers come from its apps ecosystem. But COO Sheryl Sandberg described a $2.75 million campaign from Electronic Arts for the Battlefield 3 console game. Brand advertisers are very interested in social marketing, but they’d also appreciate a few more traditional formats as well.
  •  Mobile substitution. Facebook said daily web usage in the U.S. declined relative to mobile. To-date, mobile usage has been incremental to more ad-friendly web usage. Google is worried about mobile search ad CPC. But while Facebook’s mobile ads look relatively cheap, it’s demonstrating that in-stream ads can carry a premium over other formats.

The victim of expectations, Facebook’s IPO and public market performance is a wet blanket on consumer and social media startups. But Facebook itself is building what looks like a sustainable business with the potential to accelerate its growth engine in the next 12 to 18 months.

Question of the week

Where will Facebook’s growth come from?

Handicapping Microsoft’s media business July 24, 2012

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Microsoft’s struggles to make a successful business out of advertising led to the company posting its first-ever quarterly loss. The main culprit was a $6.2 billion write-down of the goodwill associated the 2007 acquisition of aQuantive – a company that combined advertising technologies, networks and an agency business. But Microsoft’s continuing losses in its search and ad-driven Online Business division didn’t help. Some have been saying for years Microsoft should never have gotten into media. Is it about to get out?

Microsoft is sending signals that it might be about to dramatically restructure its ad-based businesses:

Why media?

In the past, I’ve tried to make the case for why Microsoft needs to have an advertising and search business. But I’m beginning to have my doubts, and my argument was always stronger for search. Search is technology- and scale-driven, is a core navigation/UI mechanism that threatens Microsoft’s Windows and browser franchises and is the unchallenged cash cow that powers Microsoft’s chief technology platform rival, Google.

A competitive search offering could fuel a display advertising business with user intention data valuable for re-targeting and advertising attribution analysis, two key factors in raising display ad CPMs. Years ago, Microsoft was an early leader in advertising yield management (acquiring Rapt Inc. in 2008) and attribution analysis. Advertising complements Microsoft’s digital living room and mobile efforts. And many consumer app and cloud businesses are paid for via a combination of advertising and fees, even if the idea of B2B marketplaces with advertising as one of the exchange currencies never caught on.

But Microsoft’s recent big acquisitions – Skype and Yammer – may employ freemium business models, but they don’t depend on advertising. They’re far closer to traditional Microsoft strengths in unified communications and enterprise software. Other social media acquisitions by enterprise software firms, like Salseforce.com and Oracle, display much more of a marketing focus than Microsoft’s.

Here are potential scenarios for Microsoft’s advertising and media business:

  • Stay the current course. Keep investing in MSN and Bing, build out ad networks and exchanges with other portal partners like Yahoo and AOL. Jump hard on local and mobile and buy a Yellow Pages company if that’s what it takes. Odds: 3:1.
  • Pick a spot.  Focus on one or two core advertising businesses, but de-emphasize the others and stop hoping for synergies. Pick only 2 of the following: Bing, MSN, targeting/hosting technology, ad neworks/exchanges, MSN, local/mobile. Odds 5:2.
  • Unload the media business. At the risk of being the boy who cried wolf, I could see Microsoft keeping search technology, but spinning off MSN and Bing to a joint venture with Yahoo, perhaps with AOL in the mix. Odds 2:1.

Some hybrid of the second and third scenarios is looking increasingly likely.


Question of the week

What will Microsoft do with its media businesses?