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They will most likely purchase a PPC company if they want to risk it. But most likely they will either stick with Overture or Google.
MS will stay with overture for now, because the only other real option (at the moment, and given the context and scale of MS search) would be Google. MS has pretty much said they wanna go head to head with Google in search, so why would they want to put money in Goog's pocket to help the "enemy" fight the war? Doesn't make a lot of business sense.
MS prolly has a dozen or so guys locked in a basement in Redmond "tinkering" with their own in house system, something they can tie in with both MSN search and whatever desktop search they end up releasing with (or shortly after) Longhorn. MS has a history of dumping their "partners" as soon as they can come up with software on their own and get the whole pie instead of just a slice.
(Like I said, I'm just fart-in-the-wind-guessing here, but it follows a certain logic).
Having said that, Microsoft if very good at running a channel. If they were to build a PPC, I would suggest that it would be made available to the channel readily. They would drive the client aquisition whilst keeping the costs low.
Also remember Microsoft have one important thing that would attract advertisers - searches. They already have good reach, so an advertiser would be forced to enter thier program.
I would also suggest that Microsoft would not do a hard transistion but may use a bit of their own results supplemented by a third party (Overture) for a period of time, until critical mass had been reached.
Relying on someone elses technology is not always the best thing to do. Relying on either Google or Overture has to be a short term play at best.
This is a problem because?
> test and test their technology which cost money and time.
Microsoft has a kings ransom of time and money. Time is on their side - and we know of their fortunes.
> They will also have to attract thousands of advertisers.
They have the name address and phone number of every top advertiser on the planet in their enterprise support and contact database.
> cancel their contract with Overture,
Which is nonexclusive.
> making it seem like they have expendable traffic,
Which they have tons of. They don't currently make a great deal of money off raw page views on MSN or the MS network sites.
>They will most likely purchase a PPC company
I don't see that happening at all. There are other opportunities there for Microsoft. Step one, is embedding search in the task bar and shoooing away the competition like a pesky sketter.
> stick with Overture
For the near term - yes. At least until Longhorn ships.
If they launced their own ppc tomorrow, all Overture advertisers would lose a substantial amount of traffic. Why does anyone think it would be difficult to get those advertisers to spend their money with MSN?
MS might be holding off due to fear of more anti-trust suits.
Sure, they could make a pile off their own PPC network, but if they went ahead with it, I can guarantee Overture, Google, and every other PPC company would band together for a class action suit. MS would win, of course, but it would still cost them a small fortune in the meantime in litigation. Would the profits from having their own PPC outweigh the costs of yet another major court case?
Like I said in the other post, they'd lose (probably), but it would be worth their while to try and slow the juggernaut.
And suing MS has become and international sport. If the big PPC players don't take a whack at it, someone will.
And how long has it taken MS to get a beta version of search out there - that quite a lot of people have said is getting close to a good enough release version. In theory Google and friends should have years on MS - what will MS Search be like in a year?
MS has brand, reach, advertisers, money. Innovation follows money, bright people (eventually) follow money, and customers follow after all that.
If MS didn't buy a search company, they certainly won't buy a PPC company.
We all know that as soon as MS release a PPC option that we will all give it a try, and they will win or lose on ROI rates - not lack of advertisers.
All advertising companies would sue since they block pop-ups now(Automatically and without permission)and they basically have a monoploy on the search engine market when Longhorn comes out(2006). They also pre-set your homepage to www.MSN.com, if they did something like their own PPC it could be big trouble.
MSN would have 100,000+ advertisers the day they started their own PPC.especially if they would offer e.g. $300 to every advertiser signing up... would only cost them $30M (MS makes that in half a day in profits)... advertisers would go crazy with the initial low bid prices - so why they don't do it? (OK, btw... I am also hoping for adsense V2 :)
My post was purely to answer value for money for buying FW!
With regards to buying a PPC - forget it. They would be saddled with a monster that would need to be changed. Why not set your own monster up in the way that fits your requirements - having first lured some of the best minds away from leading competitors... far cheaper.