Microsoft Maintains Sharp Focus Post 'GoogleClick'

Remains Committed Long Term to Online Ad Business

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SEATTLE (AdAge.com) -- A lot has happened since Microsoft's last Strategic Account Summit, the annual May gathering of its biggest ad clients. For one thing, Google last month said it would acquire DoubleClick, the biggest ad-serving player on the web and a company Microsoft was said to be interested in.
Kevin Johnson is president of the Microsoft's platforms and services division and responsible for the $27 billion Windows, server and tools, and online services businesses.
Kevin Johnson is president of the Microsoft's platforms and services division and responsible for the $27 billion Windows, server and tools, and online services businesses.
But one thing that hasn't changed is Microsoft's commitment to long-term investments and partnerships in online services, media, and advertising, Kevin Johnson, one of the Microsoft's top executives, wrote in a letter to clients on the first day of the summit.

Mr. Johnson is president of the company's platforms and services division and responsible for the $27 billion Windows, server and tools, and online services businesses. "Some of you have asked if we remain as committed following the announcement of Google's proposed acquisition of DoubleClick," he wrote. "Many of you have also expressed your concerns about the impact that such an acquisition will have on the online advertising landscape. While we share your concerns, we maintain our sharp focus on this industry and we will continue to invest heavily in innovation and partnerships in this area."

Earlier in the week, Mr. Johnson answered Ad Age Digital's questions via e-mail on the integration of Microsoft services, life post DoubleClick and buy vs. build.

Ad Age Digital: How do you see Live, MSN and Microsoft's other services fitting together? It's been difficult to buy across all those areas in the past. Do you see that changing?

Kevin Johnson: We launched Microsoft Digital Advertising Solutions in response to advertisers telling us their No. 1 pain point was the fragmented buying process. Microsoft Digital Adverting Solutions is our version of a one-stop-shopping experience for advertisers that offers inventory from across the entire company -- that includes Live, MSN and Microsoft's network properties. We believe this is a major differentiator for us as marketers search for the best way to reach consumers who are splitting their time everyday between cellphones, video games, websites, e-mail, etc.

Ad Age Digital: There's lots of buzz about Silverlight. Where does that fit into the advertising business?

Mr. Johnson: Silverlight is a great example of technology that will empower content owners, designers, advertisers and agency creative staff to deliver the next generation of the user experience, which will translate into more clicks, more brand connections, and more revenue for the whole ecosystem. Because the technology helps create more immersive customer experiences across a variety of browsers, you'll get deeper engagement of your content and your advertising, which will help us all grow our businesses.

Ad Age Digital: You guys lost out on the DoubleClick bidding. How do you keep that from happening again?

Mr. Johnson: Obviously, we don't disclose our acquisition strategy and thoughts ahead of time, but a few points should be made. Like our competitors, we're looking at possible partnerships and acquisitions every day. Some will make sense and others won't. We are confident in our plan to build organically, and are pleased with the innovation from our R&D investments in key areas such as AdCenter and search. Where appropriate, we acquire and partner to supplement our business. We've demonstrated this with recent acquisitions of companies such as ScreenTonic, TellMe, Medstory and Massive, along with partnerships with media companies such as NBC, Newscorp, and CBS on video.

Ad Age Digital: What type of acquisition is right now most important to Microsoft?

Mr. Johnson: We look at potential acquisitions through the lens of what will help us remain competitive in the changing face of digital media. Today the industry focuses on search-based advertising. We believe that's only the beginning of the digital advertising opportunity. As we map out our future we're looking at what will help us achieve our goals -- whether it's through an acquisition, partnership or building it in-house.

Ad Age Digital: Has there been a more open attitude toward buying rather than building all in-house?

Mr. Johnson: No one scenario is right. We will continue to have a selective approach to partnerships and acquisitions and, of course, will continue to innovate and build world-class products and platforms for the marketplace.
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