Microsoft invests heavily in Context Sensitive Ad arena

by Darren McLaughlin

Microsoft knows what a big problem Google represents for them, and they’re putting in $2 billion to bolster their web strategy. A good portion of the money is to be used to combat Google’s popular Adsense publishing program. Microsoft has successfully used the strategy before:

“If you look at Microsoft historically, it’s usually had a second-mover advantage,” said Todd Lowenstein, a co-portfolio manager for HighMark Capital Management’s Value Momentum Fund who holds shares of Microsoft.

“Microsoft hasn’t really been the one to innovate, but to copy and then leapfrog the first mover and that’s been the company’s modus operandi,” he said.

One need only remember Netscape to remember what happened there. At one point Netscape controlled 95% of the browser market, but they’re barely remembered now. Microsoft is planning on building the core of it’s web presence around Live.com.

At the core of Microsoft’s software services vision is Windows Live, an advertising funded one-stop shop for Microsoft’s web services from e-mail to instant messaging to blogs.

For people who make their living from context sensitive (or most of it, like me), this is great news. Currently, MSN is a clear third behind Google and Yahoo when it comes to online presence, and they’re not involved with publishers yet, at all. This seems to be changing in the next few months, which can only bode well for webmasters, who will no have a third viable and powerful alternative for ad placements.