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Herbold Artzt MICROSOFT'S NEW WORLD SOFTWARE POWERHOUSE WORKS TO BECOME HOUSEHOLD NAME

By Published on .

Microsoft Corp.'s new $100 million ad campaign asks the question, "Where do you want to go today?"

The answer for Microsoft is simple: Everywhere.

The business software giant is taking steps to turn into a major consumer technology company. The future of Microsoft begins today, when:

The company starts its global brand-building campaign, centerpiece of a long-term strategy to make Microsoft a household name.

Robert Herbold, Procter & Gamble Co.'s new-media and advertising wiz, comes aboard as chief operating officer, bringing consumer expertise and corporate efficiency strategies sure to make Microsoft more competitive.

Chairman Bill Gates unveils strategies for the Microsoft Network, an online venture that will be a key part of an ambitious move into electronic commerce, banking and the interactive realm.

One hint at the future is the title of Mr. Gates' keynote speech this morning at Comdex/Fall, the computer industry's big show in Las Vegas: "Information at Your Fingertips, 2005." The talk offers a look into the coming computer-communications market.

The world's largest personal computer software marketer (sales: $4.7 billion) and Mr. Gates, the richest American (net worth: $9 billion), have the ability to deliver the future.

"Bill has the vision thing," said Jesse Berst, editorial director of Windows Watcher newsletter, Redmond, Wash. "We've had companies like IBM that have had the resources but not the vision. And we've had companies that have had the vision but not the resources."

Until Microsoft.

Already dominant in PC software, Mr. Gates, 39, is boldly assembling an unparalleled set of interactive technologies for consumers and business with software at the base.

"Bill Gates will be a player in multiple industries because software plays such a critical role for many industries," said Tim Bajarin, president of Creative Strategies Research International, a San Jose, Calif., market researcher.

The Microsoft Network, for example, has the potential to dominate the online market because it will be built into the company's heavily promoted next generation PC software, Windows 95.

"To the extent that Microsoft wants to dominate the computer industry and the computer industry is coming to dominate every aspect of American life, they could have tentacles into most aspects [of daily existence] by the turn of the century," Mr. Berst said.

Microsoft is out to give one look and feel to the global brand. That includes big-picture moves like image ads and smaller moves like replacing curious localized company logos with one global logotype.

Microsoft will spend $100 million on global TV, print and outdoor ads over the next eight months. The U.S. will get half the budget, with a $25 million year-end blitz.

The campaign will run in six countries that account for 84% of Microsoft revenues: the U.S., Canada, Germany, France, the U.K. and Australia.

The campaign starts with 60-and 30-second versions of the "Anthem" spot; an eight-page insert in consumer magazines; product spreads for home software; and a three-page "manifesto" Nov. 15 in The Wall Street Journal, said Greg Perlot, director of advertising.

"There's this truth about what this technology is doing in the world," Mr. Perlot said. "Our proposition is that Microsoft markets the software that gives you access" to the world.

Microsoft's democratic message isn't so different from what Apple Computer has claimed since its fabled "1984" spot. Like Apple then, Microsoft has a vision. Unlike Apple, Microsoft has the clout to deliver.

Microsoft will continue to spend about $50 million a year on business-to-business product ads. But the new $100 million consumer push is a dramatic response to a shifting market: In the booming home PC arena, consumers may be more influenced by mass media than by the tech crowd the industry has long courted.

The campaign is open ended so it can grow as Microsoft moves into online services and interactive technology.

This is the first campaign from Wieden & Kennedy, Portland, Ore., and President Dan Wieden is upfront about similarities to the agency's famed Nike work.

Microsoft will get immediate help in its consumer charge with the arrival of Mr. Herbold, the new exec VP-chief operating officer and fourth member of Microsoft's "office of the president" strategy team (See story on Page 4).

Mr. Berst said Microsoft's purchasing policies are "atrocious," largely because high profit margins cover such sins. He argues Microsoft needs to make expense cuts as it shifts into lower margins of the consumer market. Enter Mr. Herbold.

The new executive will oversee manufacturing, finance and other operations, but he won't run marketing or advertising. Those areas are managed by Steve Ballmer, exec VP-sales and support and one-time P&G assistant product manager.

Mr. Herbold said one of his main roles will be helping set priorities. "There are a lot of opportunities out there," he said. "The key task of the company is to sort those out."

From the customer's standpoint, Microsoft is a mixed blessing. A survey of business and home PC users released last week by International Data Group ranked Microsoft No. 1 among computer products marketers in "meeting computing needs."

But Microsoft also came out tops for being "aggressive and arrogant." Maybe the $100 million ad campaign will fix that.

Michael Wilke contributed to this story.

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