p2pnet news | Advertising:- “Desperate and brilliant” is how TechCrunch’s Michael Arrington characterises Microsoft’s partnership with eBay and the latter’s PayPal.
Bill and the Boyz opened a new site, “in an unsavoury alliance with eBay and its No Australians Please PayPal to lure consumers who search on Microsoft Live and make a buy on eBay,” posted p2pnet yesterday.
In a Washington Post OpEd, Arrington says the move is “desperate” because, “Microsoft is giving away most of the search revenue to get market share gains” and “brilliant” because, “they have such a small share of search revenue today that they have little to lose, and they are hitting Google hard in their core business”.
Microsoft’s core revenue, “is derived from Windows and Office, and the future doesn’t look to be very bright for desktop software sales,” says the story, going on:
“Google’s revenues, currently at $20 billion a year, could someday surpass Microsoft’s (Microsoft is currently at about $50 billion/year in revenue) if nothing is done to change the game.
“Remember how everyone feared Microsoft’s dominance in the OS and Office worlds in the late nineties? That’s Google today in the search advertising space, a much bigger long term market.”
“The first thing I thought when I saw Live Search CashBack was that Microsoft is hitting Google where it hurts, in exactly the same way that Google is hitting Microsoft with their free online Office offerings. Google isn’t making much money on Docs, but it sure threatens Microsoft’s core revenue stronghold.
“Similarly, Microsoft isn’t likely to make much profit on Live Search Cashback, since they are giving most of the money back to users. But it hits Google in its sweet spot – commerce search. And it may have a bigger impact and a faster impact on Google than people realize. Docs is a still a future revenue threat to Microsoft – Live Search Cashback is taking money out of Google’s pockets today.
“The question, as I said above, is how much money they’re taking out of Google’s pockets. That’s yet to be seen. But Microsoft also made it clear that this is just a first step in the search war, and things are guaranteed to get a lot uglier in the near future.”
The one thing Arrington doesn’t mention is: it all hangs on you, the online ‘consumer’.
You have to be driven by the ads to continue consuming, consuming, consuming in a manner which’ll keep Google, Microsoft and the people paying for the ads in the first place, fat and happy.
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