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December 13, 2007

Year in preview: Mobile, video ads to grow big in 2008

Posted by Benjamin J. Romano at 1:54 PM

The Interactive Advertising Bureau and American Association of Advertising Agencies shared some choice predictions for 2008 in their SmartBrief e-mail today.

What sector of online advertising will show the greatest growth in 2008?

Display -- 23%
Search -- 16%
Video -- 45%
Mobile -- 18%

Where is your interactive marketing budget headed in 2008?

Our spending will go up in 2008 -- 75%
Our spending will do down in 2008 -- 11%
Our spending will stay about the same -- 7%
Don't know/Not applicable -- 7%

Which advertising platform do you expect to take off in 2008?

Smartphone/mobile device -- 36%
Social networks -- 24%
Targeted digital cable -- 22%
Product placement/brand integration -- 12%
None of the above -- 6%

Where will ad spending grow the most in 2008?

United States -- 30%
China -- 30%
India -- 22%
Russia -- 4%
None of the above -- 14%

December 11, 2007

New guildlines for mobile marketing

Posted by Tricia Duryee at 10:32 AM

The Mobile Marketing Association has released the latest edition of its "consumer best practices guidelines for cross-carrier mobile content services in the U.S."

Although that sounds like a mouthful, at least 500 member companies follow these practices today. For example, Microsoft did so when it launched advertising on its mobile MSN.com property Monday.

Unlike with other media, mobile allows ads to be portrayed in several ways, including text messages or banner ads on mobile Web sites.

These new guidelines appear to cover the ever increasing number of techniques.
They include free-to-end-user guidelines for messaging, sweepstakes and contests, mobile Web and interactive voice response, affiliate marketing, participation TV and word-of-mouth verification.

Hard to know what some of that stuff even is, but this all comes under the heading of self-regulation. The committee that comes up with these guidelines comprises Alltel Wireless, AT&T Mobility, Bango, Chapell & Associates, denuo Group (a Publicis company), Jamster, Lavalife Mobile, mBlox, MMA, MTV Networks, MX Telecom, NeuStar, Qmobile, SinglePoint, Sprint Nextel, Sybase 365, Telescope, Teligence, The Walt Disney Company, T-Mobile USA, VeriSign, and Verizon Wireless.

The guidelines can be downloaded here.

December 10, 2007

Microsoft adds banners to mobile MSN

Posted by Tricia Duryee at 12:20 PM

Microsoft said this morning that for the first time it is adding banner and text ads to its MSN Mobile properties in the U.S.

The ads, at mobile.msn.com, will start appearing today. After a brief look on my phone, I saw mostly Microsoft house ads, but then I found one on a sports story that asked me to take part in a survey.

For kicks, I clicked on the banner. The landing page thanked me and said my answers would not be sold or shared with anyone. I bravely continued. It asked me about 10 questions, ranging from what year I was born to my behavior on the phone and what I thought of certain banks.

The ad was clearly for one of Microsoft's three launch partners: Bank of America. The other two advertisers are Paramount Pictures and Jaguar, said Phil Holden, director of Microsoft's online services group.

Putting ads on the mobile Web is not new. In fact, a number of companies and online media brands have already been doing it for quite some time. Companies such as Third Screen Media, Medio Systems, Thumbplay and Admob are all active in the space.

For now, what Microsoft is doing is pretty limited. The ads don't take into account the user's search history, their location, or any other information. On the MSN search page, there are no relevant text links on the results page.

"That is in the pipeline, but it wasn't enabled on Monday," Holden said.

It will be launched when it's time, he added.

"Most consumers don't even know what they can do on the mobile phone today. If I talk to my friends outside of the technology space, they don't know you can get e-mail and IM on your phone. In many cases, the iPhone has helped that in terms of the hype it's gotten and awareness" he said.

The mobile ad-serving technology was created by Microsoft's Advertiser & Publisher Solutions Group and through the acquisition of ScreenTonic SA and aQuantive.

Here's a screen shot of what it will look like. Depending on your phone, the ad may appear as a text link or a banner.

msftad1.PNG

Avenue A benefits decision driven by profit-margin pressure

Posted by Benjamin J. Romano at 11:30 AM

Microsoft intends to hold Avenue A | Razorfish, the advertising agency it obtained with the aQuantive acquisition, "accountable to deliver profit margins in line with others in our industry," Avenue A President Clark Kokich told employees in an e-mail Sunday night.

He was responding to several requests for clarification from employees who learned last week that they would not be getting Microsoft benefits, as I reported Friday. One reason given last week: Avenue A is in a different industry than Microsoft and, therefore, should have a different compensation structure. Employees who read Kokich's e-mail last week weren't sure whether that would mean more or less total compensation, but many feared the worst.

Kokich's Sunday e-mail, obtained by The Seattle Times, starts to clear up that question and provides interesting insight into how the agency business is expected to operate under Microsoft's new Advertiser and Publisher Solutions group.

"Profits come from creating high value client work combined with disciplined business management. I certainly don't believe that any of our competitors can beat us on either of those two dimensions. So given that we need to deliver industry-benchmark levels of profitability, we need to think carefully when we are considering new expenses.


"If we take on the expense of Microsoft's benefits package, we'll be offering benefits in excess of those offered by our competitors. This might mean that we would have to offer less in other forms of compensation. We need to learn more before we make those kinds of trade-offs. That's why we're planning to conduct further competitive analysis and to hold a series of employee focus groups this spring. We need to get this right."

More than just a difference in benefits, moving to the Microsoft plan would have stripped some Avenue A employees of their titles -- not an insignificant change. Kokich continues:

"In addition, full integration into Microsoft's compensation program would mean that virtually all of our director, vice president, and president titles would go away. These titles are relevant not only to employees, but to our clients, prospects, and to the industry as a whole, especially when we speak at industry events, serve on panels, and pitch new business. It would also require us to adapt to Microsoft's salary and bonus structure. These changes would negatively impact our ability to compete for the best talent in the industry."

Kokich said the benefits decision was not mandated by Microsoft. "We decided this was the best course of action and Microsoft agreed. They listened well and showed a lot of flexibility -- a good sign as we go forward as an important member of the Microsoft organization."

He concludes by saying the changes will not result in a reduction in total compensation and benefits.

Although for Avenue A employees who are watching their peers in aQuantive's Atlas and DRIVEpm divisions get the full Microsoft benefits package, maybe the concern is not a reduction, but a less-substantial relative increase.

December 7, 2007

Avenue A employees not getting Microsoft benefits

Posted by Benjamin J. Romano at 8:01 AM

Here's the full text of the email Avenue A | Razorfish President Clark Kokich sent to employees Wednesday, informing them that they would not be getting Microsoft benefits, as reported in today's story.

From: Clark Kokich Sent: Wednesday, December 05, 2007 9:54 AM

Subject:

Hello to all:

I would like to let you know of some decisions we've made regarding our total rewards programs.

After several months of careful consideration, we have made the decision to decouple the programs for Avenue A I Razorfish and for Atlas/Drive. As you know, the two groups operate in completely different competitive environments. AA-RF competes within the marketing and technology services industry. We are an agency, while our sister divisions are software and media companies.

As aQuantive, we did our best to maintain one overall total rewards program that tried to balance the needs for these two different types of businesses in one corporate parent. This challenge became more and more difficult as each business matured. Now, as part of Microsoft, which is a mature company with very well-defined programs based on the software and media model, we believe it is no longer tenable for us to attempt to treat all parts of our business the same. It would mean causing AA|RF to conform so closely to the software and media model as to make it non-competitive within its own industry. In order to continue to succeed, we must design our total rewards system to match the expectations of our industry. This includes our approach to salary, benefits, bonus, titles, levels, tools, career development, and performance management.

In order to assure that we can continue to hire, retain, and reward the best people in our industry, we will be launching a competitive review of total rewards within the marketing and technology services industry. In addition, we will be conducting a number of focus groups with Avenue A I Razorfish people around the country to hear from you directly about what offerings you value the most. The combination of these activities will help ensure we understand clearly what we need to do to in order to compete for talent in our industry. This research and analysis will begin after the first of the year and will be completed in the spring.

All legacy aQuantive groups will continue on our existing programs through the first half of 2008. At that time (concurrent with the beginning of Microsoft's new fiscal year), we will make the change to a decoupled approach. Atlas, Drive and Franchise Gator employees will be fully integrated into the Microsoft total rewards program starting July 1, 2008. And at the same time AARF employees can expect to see changes to our own program, some right away and some over time, as we focus towards an agency-driven total rewards package.

I feel good about this direction. In the past we've on occasion made sub-optimal decisions in our desire to maintain one total rewards program across widely disparate businesses. We now have the opportunity to offer programs that will allow us to continue to build Avenue A I Razorfish by attracting the best and brightest in our industry.

Clark

I'd love to hear whether people think this is fair or justified. Add your comments below.

Avenue A employees not getting Microsoft benefits

Posted by Benjamin J. Romano at 8:01 AM

Here's the full text of the email Avenue A | Razorfish President Clark Kokich sent to employees Wednesday, informing them that they would not be getting Microsoft benefits, as reported in today's story.

From: Clark Kokich Sent: Wednesday, December 05, 2007 9:54 AM

Subject:

Hello to all:

I would like to let you know of some decisions we've made regarding our total rewards programs.

After several months of careful consideration, we have made the decision to decouple the programs for Avenue A I Razorfish and for Atlas/Drive. As you know, the two groups operate in completely different competitive environments. AA-RF competes within the marketing and technology services industry. We are an agency, while our sister divisions are software and media companies.

As aQuantive, we did our best to maintain one overall total rewards program that tried to balance the needs for these two different types of businesses in one corporate parent. This challenge became more and more difficult as each business matured. Now, as part of Microsoft, which is a mature company with very well-defined programs based on the software and media model, we believe it is no longer tenable for us to attempt to treat all parts of our business the same. It would mean causing AA|RF to conform so closely to the software and media model as to make it non-competitive within its own industry. In order to continue to succeed, we must design our total rewards system to match the expectations of our industry. This includes our approach to salary, benefits, bonus, titles, levels, tools, career development, and performance management.

In order to assure that we can continue to hire, retain, and reward the best people in our industry, we will be launching a competitive review of total rewards within the marketing and technology services industry. In addition, we will be conducting a number of focus groups with Avenue A I Razorfish people around the country to hear from you directly about what offerings you value the most. The combination of these activities will help ensure we understand clearly what we need to do to in order to compete for talent in our industry. This research and analysis will begin after the first of the year and will be completed in the spring.

All legacy aQuantive groups will continue on our existing programs through the first half of 2008. At that time (concurrent with the beginning of Microsoft's new fiscal year), we will make the change to a decoupled approach. Atlas, Drive and Franchise Gator employees will be fully integrated into the Microsoft total rewards program starting July 1, 2008. And at the same time AARF employees can expect to see changes to our own program, some right away and some over time, as we focus towards an agency-driven total rewards package.

I feel good about this direction. In the past we've on occasion made sub-optimal decisions in our desire to maintain one total rewards program across widely disparate businesses. We now have the opportunity to offer programs that will allow us to continue to build Avenue A I Razorfish by attracting the best and brightest in our industry.

Clark

I'd love to hear whether people think this is fair or justified. Add your comments below.

December 4, 2007

'Mommy, Why Is There a Server in the House?'

Posted by Benjamin J. Romano at 9:33 AM

That's the title of a new children's book from Microsoft. It's part of a marketing campaign for the company's Windows Home Server product.

The marketing company behind the effort is Creature, an independent Seattle agency that has also done work for Google, Nike and Starbucks.

"When people hear the word 'server,' they equate it with work and a place where information is shared, managed and secure," Steven VanRoekel, senior director, Windows Server Solutions Group, told AdWeek. "There is a sense of pride in telling people that they are running a server in their home."

The 24-page children's book will apparently be sold at Amazon.com, but I couldn't find it this morning. At the Windows Home Server Blog, a post from Nov. 30 says the book "will help parents explain why there is a new member of the family. We are sure the book will become a best seller!"

An excerpt: "But guess what? Some servers aren't boring. They don't go in offices ... they go in houses! Maybe in your house! How does it get there?

"When a mommy and a daddy love each other very much, the daddy wants to give the mommy a special gift. So he buys a 'stay-at-home' server."

November 30, 2007

Adobe, Yahoo teaming up on ad-funded software experiment

Posted by Benjamin J. Romano at 6:15 AM

As more software functions move to the Internet, where the traditional software licensing business model has limitations, companies are experimenting with new business models such as subscriptions and advertising-supported software.

Microsoft is trying it with its Works suite, which comes standard -- and free to the user -- on many new computers. Likewise, Google Docs and Spreadsheets -- online versions of the productivity apps dominated by Microsoft -- are advertising supported. Now Adobe, a leader in rich Internet applications with its Flash player and nearly ubiquitous PDF reader and writer, is getting into the act with help from Yahoo.

On Thursday, the companies announced a partnership to allow publishers to serve contextual ads into PDF documents. Like all of these early ad-funded software efforts, this is a test program for starters and it's opt-in.

From the release: "The new service allows publishers to generate revenue by including contextual, text-based ads next to Adobe PDF content, with Yahoo! providing access to its extensive network of advertisers to match a broad range of subject matter. For advertisers, Ads for Adobe PDF Powered by Yahoo! extends reach by delivering advertising across a new channel of content, while also providing the ability to track advertising performance, just as they can today with ads placed on Web sites."

DigitalCameras222.PNG

This in-PDF advertising seems clearly targeted at the long tail of the Internet, as this excerpt from AdWeek's coverage of the news illustrates:

The program will open up new real estate for its advertisers, according to Todd Teresi, svp of Yahoo!'s publisher network, especially among small-time customers that don't even have Web sites. Example: Local youth soccer leagues that create weekly e-mail newsletters could generate funds through contextual placements for soccer equipment and jerseys -- and even minivans, he said.

"The primary users long term are going to be down the tail," Teresi said.

The program is offered as a free service to US-based publishers who produce English content. Early adopters include IDG InfoWorld, Wired, Pearson's Education, Meredith Corporation and Reed Elsevier.

November 29, 2007

EA boss calls in-game ad revenue forecasts 'wildly high'

Posted by Benjamin J. Romano at 3:53 PM

I'm thinking Alex St. John over at Wild Tangent would agree wholeheartedly with John Riccitiello, CEO of Electronic Arts, the biggest video game publisher, who said today:

"You can't be as bullish as analysts are on in-game advertising and be sane," he said. "In-game ad expectations are wildly high."

One widely reported forecast by the Yankee Group has in-game ad revenue reaching $971 million by 2011 up from just $77.7 million last year.

2003844689.gif

Riccitiello's comments came in an interview with Dow Jones.

Microsoft, for one, has been particularly bullish on in-game advertising, acquiring the Massive Network for as much as $400 million, according to unconfirmed reports, last year. Here's an in-depth look at Massive's business from earlier this year.

That deal and others helped build hype around the nascent in-game ad business, Riccitiello told Dow Jones. EA, which controls several top titles in the sports category that advertising leaders say are a natural fit for in-game promotions, is cranking out about $30 million a year from in-game ads -- a small slice of total revenue.

I spoke with St. John earlier this month. He says in-game advertising is much less efficient than other options his company offers in the category of around-game advertising. Particularly for casual games, more flexible models are working better at Wild Tangent. Some examples include giving advertisers the opportunity to sponsor game play sessions; and giving players the choice of viewing a short pre-roll ad while a game is loading, or paying for the game session.

October 8, 2007

Toyota advergame on Xbox Live to promote Yaris

Posted by Benjamin J. Romano at 3:28 PM

People on Microsoft's Xbox Live gaming service can download a free game that's actually an advertisement for a car. The game, Yaris, debuted today, according to this New York Times story. It's the first free advergame to be distributed over Xbox Live Arcade, the story says.

The Times' coverage goes over the other advergames that Microsoft's Xbox team has been involved in, most notably the ones promoting Burger King, which were sold with burgers and fries, only at Burger King restaurants. Microsoft Entertainment and Devices Division President Robbie Bach told an audience earlier this year that he wasn't expecting the success of the Burger King promotion.

"If you had asked me a year ago, 'Gosh, you're going to do a promotion with the Burger King on Xbox Live Arcade and it's going to generate headlines in the business press about how we lifted Burger King's sales,' I would have been truly surprised," Bach said at Microsoft's Mix conference in May. "... It had a demonstrable impact on their financial results."

More companies are jumping on the video game advertising bandwagon, as the Yaris example illustrates. There are several different flavors of video game advertising, and Microsoft is wading deeper into all of them. Check out this story on the workings of Massive, the in-game advertising network Microsoft acquired.

Sony, too, is moving on its own into in-game advertising, according to this story from paidContent.org.

August 29, 2007

MSNBC, Conde Naste team on content; CNN choses Google

Posted by Benjamin J. Romano at 10:50 AM

MSNBC.com, the Redmond-based news organization owned jointly by Microsoft and NBC parent GE, will present content from several Conde Naste outlets under a deal announced today.

According to a press release:

"The CondeNet brands that will share content with msnbc.com include Style.com, Men.Style.com, Epicurious.com, and Concierge.com. Content from Conde Nast's publications, such as Vogue, Glamour, Self, GQ, Details, Men's Vogue, Vanity Fair, Gourmet, Bon App├ętit, Conde Nast Traveler, and Conde Nast Portfolio will also be available on MSNBC.com."

In another development, CNN.com -- which ranks third, just ahead of MSNBC, on the list of most-visited news sites -- will use Google's pay-per-click advertising technology exclusively. It previously used Yahoo's technology. See coverage from IDG News Service.

No word if Microsoft's adCenter was in the running for this high-profile customer.

August 21, 2007

More perspectives on in-game advertising

Posted by Benjamin J. Romano at 8:45 AM

Adweek has a broad look at the market for in-game advertising and the fact that it has not lived up to the hype of just a year ago from in-game advertising purveyors, including executives at Massive.

This story provides great ad-industry context to help understand our recent profile of Massive, which Microsoft acquired, and its business model. I also focused more on how Massive fits into Microsoft's advertising strategy.

The Adweek story outlines several gripes advertisers and analysts have with dynamic in-game advertising as it exists today, including:

Lacking impact and interactivity;

Effectiveness, execution and measurement tools remain "iffy";

Distribution mainly to the PC (read: hard-core gamers), but not as much happening on the consoles (read: the TV in the living room).


August 9, 2007

aQuantive shareholders agree to Microsoft acquisition

Posted by Benjamin J. Romano at 10:43 AM

In a brief, well-attended -- by aQuantive's past standards -- shareholder meeting this morning in Seattle, owners of the company overwhelmingly approved Microsoft's proposed acquisition, which will net them gains of more than $30 a share, 85 percent, over the price before the deal was announced.

On May 18, Microsoft announced plans to buy the Seattle-based digital advertising company for $6 billion, or $66.50 a share.

The crowd of about 25 shareholders and current and former employees applauded when the vote tally was read. Out of 79,985,251 shares outstanding eligible to vote on the acquisition, the holders of approximately 58,197,697 shares of common stock, 72.7 percent, cast ballots in favor of the acquisition. Here's the regulatory filing confirming the vote.

One man with a big smile on his face was Hoby Douglass. He joined what was then Avenue A in 1999, before the company went public. He was wearing a baseball jersey identifying him as employee No. 106.

Douglass said the jersey was used in a marketing campaign to attract new hires.

"We did a pub crawl all over town and came up to people and said. 'Do you want to work here? Do you want to work here?' Because that's the way it was back then. And we got some new employees out of it, so it was great," he said.

Today, the company has about 2,400 employees globally who will soon become part of Microsoft, which has close to 79,000 full-time workers. The deal is expected to be finalized later this month.

Douglass later left aQuantive, but he said he continued to buy shares of its stock on the open market to add to what he accumulated as an employee. He said he did so because he always had confidence in the company's management.

"I knew the management and I thought, this is not a risk," Douglass said. "They've proven me right."

August 8, 2007

aQuantive Q2 profit down, shareholders vote tomorrow

Posted by Benjamin J. Romano at 10:33 AM

Seattle-based digital advertising house aQuantive today reported second quarter profit of $9.6 million, down 22 percent from a year ago on cost increases. Shareholders of the company, which Microsoft is planning to buy for $6 billion, are scheduled to vote Thursday in Seattle on whether to approve the acquisition.

Revenue on the quarter increased 48 percent to $156 million.

See coverage of the earnings announcement from The Associated Press.

July 25, 2007

Microsoft to handle ads for Digg

Posted by Benjamin J. Romano at 11:56 AM

In the second significant advertising deal Microsoft has announced today, the company will "sell and serve the ads on Digg," according to this blog post by Digg founder Kevin Rose and a Microsoft press release.

Rose compared the deal to a similar one Microsoft inked with Facebook in August 2006.

The announcement says Digg, which allows users to vote on the Web's best content, has 17 million unique visitors a month.

Other details: The deal is for three years. Microsoft is the "exclusive provider of display and contextual advertising on Digg." Microsoft will work with Digg's current advertising provider, Federated Media Publishing. Financial terms were not disclosed.

EA Sports, Microsoft make in-game advertising deal

Posted by Benjamin J. Romano at 9:46 AM

Microsoft and EA Sports announced today that five of the video-game publisher's biggest titles will be incorporated into the Microsoft's in-game advertising network.

The titles are: "Madden NFL 08," "NASCAR 08," "NHL 08," "Tiger Woods PGA Tour 08," and "Skate."

Advertisements will be placed in the games via the Massive Network, which Microsoft acquired last year.

It's doubtful that Peter Moore, the Microsoft video games executive who is leaving to head EA Sports, had much to do with negotiating the deal, terms of which were kept private. I'm asking about that and will post a response here.

(Because in-game advertising is handled by Massive, which sits within Microsoft's Online Services Division, Moore, who is part of the Entertainment and Devices Division, had nothing to do with the deal, according to an e-mailed statement from a Microsoft PR firm.)

During the E3 Media and Business Summit earlier this month in Santa Monica, I had a chance to talk about in-game advertising with Jeff Bell, corporative vice president of global marketing in Microsoft's video games business.

Bell brings an interesting perspective to the discussion because before coming to Microsoft, he was with DaimlerChrysler, where he worked on the Jeep brand. He tried several game-related advertising strategies including in-game ads (his team helped get Jeep as the vehicle featured in Microsoft's "Zoo Tycoon" game) and adver-gaming. He was also named Interactive Marketer of the Year by Advertising Age in 2005.

From our conversation, this EA deal sounds like just what Microsoft is looking for.

I asked him what role the company sees for in-game ads, and how much advertising is appropriate.

Bell: "I think there we do know and the data is overwhelming, that if you're in a reality based game, people don't want to see Acme. They don't want to see Blogo Shoes. They want to see 7-Eleven and they want to see Adidas. And so, from that standpoint, both from a product realism, as well as an advertising realism, they would like to have the real thing.

"I think where you cross over is you're not going to be seeing Massive or advertisements in 'Mass Effect.' So science fiction doesn't make as much sense.

"For us, I think we tend to focus more on the sports franchises, the reality based driving franchises, Tony Hawk, obviously has been a pioneer in that particular realm of being able to present things in the real world, real advertisements that can attract that audience."

He said EA is leading the way with advertising in sports games, but because of the slow and complex process of negotiating advertising agreements with sports leagues, franchises and stadiums, the area is just now building momentum.

I also asked Bell if he thinks game buyers should get a price break on games that carry a lot of advertising, the reason being that now publishers have a new revenue stream to tap.

Bell: "It's an interesting question, but it's so theoretical at this point, meaning that the business is still driven by the revenue from the sales of the games themselves that, there, I think we're all interested in the growth of the advertising model, but it is at present only a very small part of our overall revenue."

July 6, 2007

Microsoft-aQuantive deal clears regulatory hurdle

Posted by Benjamin J. Romano at 9:14 AM

The Federal Trade Commission has completed its 30-day review of the Microsoft aQuantive acquisition and raised no red flags. In a regulatory filing today, Seattle-based digital advertising company aQuantive said requirements under the Hart-Scott-Rodino Antitrust Improvements Act "have been satisfied."

In a statement, Microsoft indicated that the acquisition is on track to be completed this year.

"We're pleased that the FTC's automatic 30-day review period has concluded without a second request for information and look forward to finalizing this transaction by the end of the year, if not considerably sooner," said Microsoft spokesman Guy Esnouf.

On May 18, Microsoft announced plans to buy aQuantive for $6 billion, about an 85 percent premium to the company's market value the day before.

Shareholders in aQuantive will vote on the deal at a special meeting Aug. 9.

July 5, 2007

Mobile advertising: Big bucks in 2011

Posted by Tricia Duryee at 12:09 PM

JupiterResearch analyst Neil Strother put out a report recently that forecasted the market size for mobile advertising.

The conclusion is that the opportunity holds great promise.

By 2011, the market could be as large as $2.9 billion.

The caveat is that there is a lot of fragmentation and significant hurdles that could easily dampen results.

The key questions the report attempts to answer are: What ecosystem are mobile advertising networks operating in?; What hurdles do these networks face? What conditions are necessary for mobile advertising to achieve rapid growth?

July 3, 2007

aQuantive sets vote on Microsoft acquisition

Posted by Benjamin J. Romano at 10:53 AM

In a proxy filing today, aQuantive announced an Aug. 9 shareholder meeting to vote on the company's proposed $6 billion acquisition by Microsoft.

A letter to shareholders contained in the filing describes, in part, the mechanics of the transaction, which involves a Microsoft acquisition company called Arrow Acquisition. "The merger agreement provides for the merger of Arrow Acquisition with and into aQuantive, as a result of which aQuantive would become 100% owned by Microsoft."

The letter also reminds shareholders of the merger price: $66.50 a share, "a premium of approximately 85% over the $35.87 closing price of aQuantive common stock on May 17, 2007, the last trading day before the merger agreement was publicly announced." The company's shares gained slightly to close at $64.90 in an abbreviated holiday session.

aQuantive, a Seattle-based online advertising powerhouse, is holding the meeting in the swanky Hotel 1000, where shareholders will need to bring a couple of those aQuantive shares to trade for valet parking. Not surprisingly, the company's board of directors unanimously suggest a vote in favor of the transaction.

Meanwhile, according to this Bloomberg report, German authorities have started their review of the proposed acquisition, "triggering at least a 30-day review."

Microsoft submitted the bid, worth about $6 billion, on June 21, according to the German Competition Authority's Web site. The agency has opened an initial 30-day probe and will rule by July 23, Christiane Moch, a spokeswoman for the office said by telephone today.

The regulator can clear the takeover or start an in-depth probe that would last until Oct. 22, Moch said.

June 14, 2007

WSJ: FTC reviewing aQuantive deal ... as expected

Posted by Benjamin J. Romano at 3:50 PM

A report in The Wall Street Journal this afternoon cites lawyers close to three big online advertising deals -- including Microsoft's $6 billion purchase of Seattle-based aQuantive -- saying that the Federal Trade Commission is investigating them for antitrust concerns.

At least in the case of the aQuantive buy, no big shocker. When Microsoft announced the deal May 18, General Counsel Brad Smith told reporters and analysts, "The transaction is obviously subject to [Hart-Scott-Rodino] review. It's also subject to potential review outside the United States. We've been assessing that. We believe it will require a notification in Germany; at this point we don't believe it will require notification in the European Union as a whole." He added, "Acquisitions of complementary assets such as the Microsoft-aQuantive deal normally do not raise antitrust concerns."

According to the Journal story, the FTC is also reviewing Yahoo!'s purchase of Right Media. Google's purchase of DoubleClick is already being reviewed -- something Microsoft urged the government to do. In May, Microsoft was confident that its acquisition would increase competition in the online advertising market.

"Obviously, as you all know, we've consistently stated, that given the importance of this business to the future development of the Internet, we think it's very important that enforcement agencies fully study the competitive implications of acquisitions in this sector," Smith said. "... The Microsoft-aQuantive transaction will promote competition and the Google DoubleClick transaction will reduce competition, and it's really as simple as that."

June 5, 2007

InfoSpace nabs Virgin Mobile UK

Posted by Tricia Duryee at 11:20 AM

Bellevue-based InfoSpace said on Saturday that it will work with Virgin Mobile in the United Kingdom to provide search capabilities on Virgin mobile phone.

That will offer Virgin subscribers in the U.K. the ability to search the Web, sites made explicitly for mobile and Virgin Mobile's own portal and storefront, including ringtones, games and other content.

The new business is a reflection of InfoSpace's recent partnership with FAST Search & Transfer, a developer of search technologies, and InfoGin, a leader in the field of Web-to-mobile content adaptation.

InfoSpace has been trying to play in the mobile search arena for some time, transferring its knowledge over from the Web, where it owns properties such as Dogpile.com, and leveraging its expertise in mobile.

It's unknown whether mobile carriers would want to partner with InfoSpace after a series of events over the past two years. It started off when Cingular Wireless stopped using the carrier to aggregate its ringtones. Then, the company, under pressure from shareholders, decided to return about half of its cash balance -- or about $200 million -- to its shareholders.

Still, it faces major competition in mobile search, not only from the big online players such as Google, Yahoo! and Microsoft, but also from mobile upstarts such as Seattle's Medio Systems and JumpTap, based in Massachusetts.

In fact, in the U.S., Virgin Mobile gets its search technology from JumpTap.

May 21, 2007

Marchex developing Spanish-language sites

Posted by Kim Peterson at 10:00 AM

Seattle-based Marchex said today it's partnering with Fox's Latin American Channels division to develop a number of Web sites that it owns, including futbol.com, fotos.com, deportes.com (sports) and mujer.com (woman).

Turns out that Marchex's ongoing domain-buying spree is not just limited to English-language sites. The company owns thousands of domain names, including most of the Zip code sites in the U.S. (like 98109.com).

Marchex said it recently acquired about 100 Spanish-language Web sites for $10 million in cash. It plans to make money by selling advertisements on those sites.

May 7, 2007

AdCenter isn't the only one with problems

Posted by Kim Peterson at 1:47 PM

I wrote a story in today's paper about Microsoft's advertising system, adCenter, and some of the ups and downs it has gone through in its first year. You'll likely hear more about Microsoft's advertising plans tomorrow when Bill Gates speaks at the company's annual Strategic Account Summit.

I talked to quite a few Internet marketers about adCenter, and found that across the board they praised adCenter's return on investment, but complained about the low traffic coming in to Microsoft's search engine. The story also mentioned some of the technical issues that adCenter has had, including some problems with usability and speed.

Someone who has worked on the adCenter application for the last two years wrote me to say that Google and Yahoo! have had similar technical problems as well.

My story was about adCenter specifically, and not what's happening with the competition. But in the interest of fairness, here and here are some examples of glitches with Google adWords.

Some advertisers had a messy time converting to Yahoo!'s new Panama advertising system. You can read more about those glitches here.

May 1, 2007

Adweek gives aQuantive unit a B

Posted by Kim Peterson at 10:24 AM

Adweek puts out critical report cards on 10 interactive advertising agencies, including the Avenue A | Razorfish unit of Seattle's aQuantive.

No agency gets higher than a B+, and Avenue A| R azorfish gets a B. With the highest annual revenue of any of the 10 -- $268 million -- the agency gets an A for numbers. But it got hit with a C+ in the creative and the emerging media categories. AdWeek called the unit's use of Web animation "uninspired" and said that its work on a Red Bull site fizzled.

"The marriage of metrics- and response-focused Avenue A and Web design rollup Razorfish has worked better than most imagined," the judges write. "The challenge for the agency will be making sure its disparate offerings do not lose out to more focused providers."

April 17, 2007

Microsoft upgrades adCenter

Posted by Kim Peterson at 3:16 PM

Microsoft said today that it has upgraded its adCenter online advertising system. At the same time, some adCenter customers said they saw a huge drop in Web traffic. Not sure if the upgrade caused the traffic to tumble; according to this blog Microsoft is playing down any connection.

The adCenter upgrade has an interesting feature. Microsoft said it will begin assessing the content of the ads and landing page in relation to the user's likely intent. (The landing page is the page you get to after you click on an ad.)

AdCenter still mostly works with Microsoft's search engine. Sounds like Microsoft is getting confident that it can figure out user intent on search.

April 16, 2007

Mobile advertising group makes a local selection

Posted by Tricia Duryee at 3:00 PM

Seattle-based OpenMarket, a division of Amdocs, said today that John Lauer, its vice president of sales and carrier relations, has been elected to the Mobile Marketing Association 2007 North American Board of Directors.

The MMA is a global association dedicated to establishing practices and guidelines for advertising in the mobile industry.

Other local executives serve on the executive committee and board.

From the executive committee:

-- Vice Chairman Jay Emmet is the president of mBlox, which has offices in London, Singapore and Sunnydale, Calif., but Emmet lives in Camas.

-- Director at large Matt Champagne is director of mobile product management at Microsoft's MSN and Windows Live divisions.

On the board of directors:

-- Doug Busk is vice president of industry relations at Bellevue-based SinglePoint.

-- Chuck Mildes is senior manager of off-deck content services at Bellevue-based T-Mobile USA.

April 13, 2007

DoubleClick: What's the big deal?

Posted by Kim Peterson at 2:47 PM

Google is buying online advertising giant DoubleClick for $3.1 billion in cash.

Why is DoubleClick worth so much to Google?

DoubleClick is huge in the online advertising business. It works directly with ad agencies to buy up online advertising space and measures how many clicks an ad gets. It also works with the publishers, the Web sites that own all of this valuable space.

DoubleClick is setting up a stock market-like exchange for those buyers and sellers to get together. There, they can run auctions for advertising space, and DoubleClick gets a cut of each transaction. The idea is that the exchange will help Web sites sell space that would otherwise be undervalued or unused.

The company has huge customers, including Ford Motor, MySpace and AOL.

DoubleClick has been in hot water for some of its practices. The Federal Trade Commission began investigating the company in 2000 after DoubleClick said it was going to begin using personally identifiable information gleaned from its new subsidiary, market researcher Abacus Direct. DoubleClick backed off and eventually sold Abacus.

Microsoft was reportedly also going after DoubleClick. I've asked the company for reaction to the sale and will update with its response.

Update: After first saying Microsoft would have a statement, a company spokesman e-mailed me this afternoon to say a statement will not be issued at this time.

YellowPages opens Seattle office

Posted by Tricia Duryee at 2:37 PM

YellowPages.com, owned by AT&T, said it is opening a Seattle office.

The opening corresponds with analyst expectations that online advertising in directories will increase as more people turn to the Internet rather than a phone book for numbers and addresses. In fact, online directory ads are expected to increase by 31 percent in the next four years, according to the Kelsey Group, an analyst firm.

The company expects the Seattle office to open on April 23, with as many as 30 employees who will be signing up local advertisers.

Seattle and Denver are among the company's first offices to be opened west of the Mississippi, following new offices in Philadelphia, New York City, Boston and others.

YellowPages.com said Seattle was selected because a large percentage of people who use its site are from there.

YellowPages.com had more than 1 billion network searches last year.

April 10, 2007

Yahoo! scores Viacom ad deal

Posted by Kim Peterson at 3:24 PM

Yahoo!'s new online advertising system, Panama, scored a big win today with an exclusive, multi-year agreement to provide all the advertising for Viacom's Web sites, including sponsored search and contextual ads. The sites include MTV.com, comedycentral.com and Nickelodeon.com.

Viacom's sites saw about 90 million unique viewers in February. Not a bad haul for Yahoo!

This Marketwatch article mentions why Viacom wouldn't have given the deal to Google -- Viacom is suing Google-owned YouTube for copyright infringement -- but what about Microsoft? Is Yahoo!'s win a loss for Redmond?

Tricia Duryee
Tricia Duryee
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Angel Gonzalez
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