Ballmer: Advertising Is the Future

Microsoft CEO Steve Ballmer wants to grab the worldwide advertising opportunity by the horns. It's one big steer to bring to the ground.

Ballmer laid out Microsoft's advertising opportunities during the company's annual shareholders meeting this morning.

He spoke about the blurring lines between media, software and advertising. "It's a huge opportunity," he said. Ballmer observed that the online advertising market would surge from $40 billion today to about $80 billion in 2010.

"There's a much larger advertising [opportunity] as well, $600 billion worldwide," Ballmer said, referring to broadcast, print and other advertising channels. Ballmer predicted a dramatic "shift to digital advertising," for which software would play a pivotal role.

He made a valid observation. Many advertisers and content providers are seeking to reach consumers in more places and by more interactive means. Software will be the major mechanism for delivering new advertising solutions in more targeted and interactive ways. Simple example: Advertising placed in online or console games.

"Our goal is to be a powerhouse in digital advertising," Ballmer said. He spoke about delivering "breakthrough, next-generation advertising solutions."

Clearly, Microsoft has big plans for its aQuantive acquisition. As I explained last month, Microsoft is organizationally three businesses: desktop and server platforms, consumer electronics and advertising and search. But the strategy is much broader, as Microsoft seeks to develop more operating system platforms for more devices.

By no means is Microsoft abandoning its core. Rather, the company is expanding the core into providing the plumbing for the future delivery of advertising, media and interactive content.

Microsoft's CEO donned his Chairman Bill Gates hat during opening remarks. He spoke about "changes" and future technology, in a way similar to Gates. The two men must share the same speech writer.

For Gates, this was his last shareholders meeting in his current role. Gates is due to retire—the transition from monopolist to philanthropist—on June 30, 2008. "When we meet a year from now, I will be a part-time chairman by then," Gates said during his opening remarks.

Gates spoke about future investments and made absolutely clear that SharePoint, with "over 100 million customers," would anchor Microsoft's server applications portfolio. He likened SharePoint to Office, asserting that SharePoint would similarly take a "central position as a key tool."

Gates described Web-based access to information as "a major trend." In a surprising public declaration, Gates said that all Microsoft's software would eventually be available in the data center and the cloud—meaning online.

source: microsoft-watch.com

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