Commentary

Today's News

  • by , Featured Contributor, February 22, 2008
Editor's Note: Dave Morgan's Spin column was meant to blast on Thursday, but because of email snafus, did not. We're still sticking with the headline "Today's News."

Today has been a big day for news. Not only did the U.S. Navy ship Lake Erie shoot down a dying spy satellite that was falling from orbit, but Microsoft announced that it is going to "open up" its software platforms, Google announced the launch of a CPM-based Web video network, AdSense for Video, and Reed Elsevier announced several major transactions to reduce its exposure to "cyclical" advertising markets by selling magazines like Variety and New Scientist, while it buys consumer data company ChoicePoint for $4.1 billion.


What does all of this mean for us and the online ad industry? Here are my thoughts:

Satellite shoot-down. As hard as I try, I don't think that I can make this one very relevant to our industry, unless of course, you think that it might increase the likelihood of Microsoft buying Yahoo, since it is possible that it could create anxiety in China, which could help depress the growth rates of Chinese Internet companies, which could cause Alibaba to trade down, which would reduce the value of Yahoo's holding in the company. Of course, the fact that a ship-born missile with a couple of days of modification can find and destroy a cold satellite bouncing on the edge of space in an irregular obit, while it is circling the globe once every 90 minutes, trivializes many of the challenges that we have in delivering the right ad to the right person at the right time in the right place.

An "open" Microsoft. You know that Microsoft is having to finesse things when its general counsel has a major speaking part in a software release press conference. Yes, it appears that MSFT is opening up APIs and third-party access into many of the most important software platforms in the name of being "open." Clearly the Web-driven shift from proprietary software to Internet-delivered Web services and data services is now causing Microsoft to take some aggressive steps to catch up. How significant will this be? I don't know. I can't imagine developers of Facebook widgets suddenly shifting their efforts to build Vista widgets without the same kind of loose standards, easy-to-launch capabilities and free viral "friend"-driven distribution capabilities that are on Facebook and other social networks. To many Web developers, "open" APIs are just yesterday 's SDK (Software Developer Kits). They make good trade press, but not good platforms.

AdSense for video. This one will be big. Google knows that controlling the online ad market is all about controlling the most and best real estate and eyeballs and offers. More and more Web real estate, user attention and online ad offers are going to shift to video, and Google is going to make sure that it gets the most out of it. By jumping in aggressively, and with lots of pre-sold ads, the company brings liquidity to a market that hasn't had it before. Think what Google did when it bought Applied Semantics and brought search ads out to individual Web sites in the form of contextual ads. It created liquidity for a lot of Web real estate that no one had monetized well before. Now third-party advertising amounts to almost one-half of Google's revenue. Of equal importance is the fact that this will be CPM-driven. That means that Google has a chance to train its million-plus advertisers on a new way to buy marketing. Couple this with the news from ANA today that marketers are losing faith in the television ad model, and you realize that this will be a very big debut . Certainly, the fact that Tremor Media and Brightcove -- both big Web video players -- are launch partners makes you take the potential here seriously.

Reed escaping the ad business. Reed has been transforming itself from a publishing company into a digital data company for some time. Just look at what it has done with Lexis-Nexis over the past ten years. ChoicePoint is a great acquisition, and if you believe that the future of marketing will be digital and data-driven, Reed will now control one of the largest and most exploitable consumer marketing databases in the world. With U.S. companies selling relatively cheaply these days given the depressed U.S. dollar, it is a surprise that we haven't seen more acquisitions like this by global companies with strong euros to spend -- it's certainly happened in the Manhattan apartment market!

Did I miss anything big today? If I did, please forgive me. I'm in Mexico and a bit under the weather with the flu. Of course, by the time you read this, there will probably be another five big announcements. That's the way our industry has been lately.

Dave




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