Some more on the acquisition: will Google’s revenue model hold?

By Kip Kniskern | Posted February 1, 2008 2 comments

Interesting that yesterday Ben Romano from the Seattle Times published an article on what Microsoft perceives to be the future of internet advertising, a future that doesn’t necessarily value Google’s model of contextual advertising in search.  He spoke with Brian McAndrews, former CEO of AQuantive and now the Senior Vice President of the Advertiser and Publishing Solutions Group at Microsoft:

"While search has been the main driver of the blistering growth of online advertising in the past, at least partially because of the ‘last ad clicked’ performance measurement standard (pioneered by Atlas in the late 90s), we do not believe this will necessarily be the case in the coming years. The current system for tracking ad conversions, while the best available for years, is not optimal because it gives all credit to that last ad seen or clicked — often a search engine — and not any credit to other ad units the consumer may have seen prior that helped influence the user to seek more information about the advertiser. Thus, Search has gotten more than its share of the credit, but that’s starting to change…"

Why is this significant?  Well take a look at the numbers for online advertising that just landed in my inbox from comScore:

comscoreyahoo

With AQuantive and MSN.com, Microsoft is well positioned in online display ads, and the Yahoo! acquisition move would strengthen it by a significant margin.

Posted February 1st, 2008 at 5:02 am
  • pjzedalis

    Yes.

  • Tegrity

    Yes, the question is, at 44 Billion, will it be enough in the current economy to make sense in the longer run?