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Sep. 26, 2007 at 10:09am Eastern by Greg Sterling
Microsoft Hoping aQuantive's McAndrews Can Outfox Google
With the aQuantive acquisition now done, Microsoft is moving to try and thwart Google on multiple fronts, both competitive and regulatory. It is lobbying in the U.S. and before the EU to stop the DoubleClick acquisition, arguing it would create an online ad monopoly. And the longer the investigations, discussion of investigations, and hearings (which start in the U.S. Senate Judiciary Committee tomorrow) go on, the more it becomes possible that the deal might be blocked. However, such a scenario remains unlikely.
On the competitive front, a number of interesting pieces appearing today in the New York Times and Wall Street Journal examine the quick ascent of Brian McAndrews, the former CEO of aQuantive, within Microsoft and his strategy "to defeat Google" for ad revenues.
The WSJ's Inside Microsoft's Plan to Bring in Outside Talent discusses the culture and politics of working at Microsoft and the historical challenges of retaining outside executives there. The article Microsoft Fires Volley at Google in Ad Battle is a broad overview of the relative positions of the companies and discusses Microsoft's recent (still rumored) efforts to buy into Facebook.
For purposes of this post, the most interesting of the three articles today is the New York Times article, Microsoft Takes Aim at Google's Ad Supremacy. The piece also focuses on McAndrews, but with a more substantive discussion of his strategy:
Mr. McAndrews has a long-term strategy that boils down to divorcing online advertising from Internet searches. The two have been viewed as a couple, because so many people use portals and search engines as their home base on the Web, but Mr. McAndrews says that model shortchanges advertisers and Web publishers.
Mr. McAndrews’s proposed system, called “conversion attribution,” would track all of the online places where consumers see ads and give advertisers a fuller picture of the various ways that consumers reach them. Tracking is important, because the site that gets credit for prompting a user’s visit is the one that gets paid for it.
Mr. McAndrews contends that search engines, which long have claimed credit for sending people to companies’ Web sites, do not deserve it all.
“Google gets all the credit, and in fact, you might have just gone to Google to type in the U.R.L.,” Mr. McAndrews said, pointing out that people often search for companies’ names after seeing their ads elsewhere.
Using technology from aQuantive’s Atlas division, Microsoft will be able to provide advertisers with a log of all the places on the Internet where people see ads before going to the advertisers’ Web sites. The data is based on individual computers’ electronic signatures, not individual people.
Atlas, which delivers online ads to Web sites, has been working on such a system for more than a year and is running pilot tests with it. DoubleClick introduced a similar technology in July.
The effort to get a more accurate and holistic picture of the relative influence of search and display advertising and the myriad websites consumers consult "in the funnel" is part of the maturation of the industry, tracking and Web analytics.
It's unlikely, however, that Microsoft will be able to downgrade the importance of search in the online ad landscape, because it's so central to the consumer experience. Recognizing that, Microsoft is spending a great deal and putting lots of effort into upgrading and differentiating its search engine. On that front there will be some announcements coming out of the company's Searchification event later today.
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By Greg Sterling
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