Online Efficiencies
Forbes on Books

Steve Berkowitz: Smart Guy, Tough Job

BerkowitzMy thanks to former colleague Juliana Aldous for posting about this recent cnet article about a fellow we both used to work for, Steve Berkowitz.  (It seems to be my week for missing earlier articles of interest...)

Steve has always been one of my favorite executives in this business.  He's a smart guy but I'm not sure I'd want to have his latest job at Microsoft; I think they're too often focused on me-too initiatives that are late to the party.

A few of the more interesting excerpts and points from this article:

It (advertising) needs to evolve from text-based to understanding the intent.

Good point.  That gets me thinking about the power of video on Google.  Can you imagine a world where Google search results include a video box with an ad?  Below that video box are links to other related video ads.  The video ad starts playing immediately, no user response required.  I know Google prides itself on a clean interface, but adding a video box would be pretty simple and wouldn't clutter things up.  Think about all the advertisers that would pay big bucks to have their 20- or 30-second video play automatically when someone sees relevant search results; a video automatically running on the results page will capture a lot more attention than a static link off to the side.  Wow.

For us, the challenge is that it (Microsoft's own ad engine) is an investment.

Yep, and Microsoft certainly has the deep pockets to fund this sort of thing, like Xbox, Soapbox, Zune and any other profit-sucking products they've launched in an effort to be disruptive and me-too-ish.  Yuck.

Now, if we can't win the audience game, then AdCenter may not be a great investment.  But it has a great potential to touch this $500 billion advertising market, which is three times as big as the software market.

Three times as big as the software market?!  No wonder they're throwing money at this like crazy!  There's no way Microsoft is going to pull back here anytime soon.  The real disappointment is that it took several years of Google's success to show Microsoft that there's a huge opportunity here.  With all the smart, aggressive people at Microsoft, why are they just now launching AdCenter?!

So sometimes I think we get ahead of ourselves in technology, and we think that the technology, which is cool to us, is actually what consumers want.

Sounds like Microsoft needs to buy every employee a copy of Pip Coburn's book, The Change Function (see my review here).

But it's hard, because you've got two sets of constituencies (the early adopter and the traditional consumer).

Here's a good example of where Microsoft needs to stop thinking like a shrinkwrap software vendor and more like a nimble, Web 2.0 outfit. Why not have two services which share many common back-end features?  One service is aimed at the broader consumer audience and the other offers new, untested features the early adopter might be interested in; these early adopters can also help test the new features and provide feedback, ultimately leading to new feature sets for the consumer version.

I don't know how interesting it (user-generated content) is going to be for advertisers.

If eyeballs are there you can bet advertisers will be interested.  Plus, if Microsoft didn't think there's money to be made they wouldn't be building that (YouTube knock-off) Soapbox service.  Rather than just building a copycat service though, why not try and one-up YouTube and give content creators a cut of the resulting advertising income?  You know that's coming one day from Google/YouTube, so why not beat them to the punch?  Use AdCenter to serve up relevant ads for user-generated videos, paying a portion to the owner of the blog/website showing the video and a separate cut of the revenue to the content creator.  All those people uploading zillions of videos to YouTube every day will suddenly switch to Soapbox, or at least post their videos on both sites.  If you think of blogs as user-generated content, which they certainly are, Google does a fine job monetizing user-generated content today.  So how big a leap is it to say the same thing can and should happen with user-generated videos?  It's the next logical step and one that nobody dominates yet.


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