Microsoft muses on free desktop apps
Published: 15 Nov 2005 09:35 GMT
...in MSN's Money unit, wrote in the winter 2005 paper.
Microsoft has been mulling a shift to ad-supported software for some time. A paper prepared for a summer 2004 Thinkweek gathering noted the decline in consumer software and suggested Microsoft's MSN online business might benefit from moving from a subscription model to one paid for through advertising.
The more recent paper outlines a number of factors for identifying which desktop software could be ripe for moving to an ad-based model. Such factors include whether the software is frequently used online, whether it contains good data for targeting ads and whether it is likely to face ad-supported competition. Among the products it identifies as meeting some of those criteria are Works, Money and OneNote.
But others both inside and outside Microsoft have called on the company to go beyond the types of services offered by MSN. An online version of Office is one of the products most often talked about. The company has in the past mulled such a move. But a commercial product never materialised, due to internal political battles and fears of cannibalising revenue from Office, which is among the company's most profitable products.
Plan extends to Windows
The company's exploration of ad-supported software extends even to Windows, its most important product. An ad-supported version of the operating system could make some sense, the Microsoft researchers argue in their Thinkweek piece, noting that the product reportedly earns $9 (£5) per year per user.
"It seems possible that we could match that revenue via ads, but there are difficult UI issues to solve, since the OS does not have a natural way to display ads that does not annoy users," the Microsoft workers said in the paper. One suggestion is a low-end version of the operating system that comes bundled with other ad-supported programs, such as Works, Outlook Express and Windows Media Player. However, the writers point out that "it's not clear how to prevent these elements from being replaced."
The key is creating a robust enough advertising business to pay for more expensive content than what has been traditionally offered for free on the Internet. At the centre of Microsoft's efforts here is a product called AdCentre. Its initial role is to offer the same kinds of text-based keyword ads as Google serves up though its AdWords, but Microsoft's ambitions for AdCentre go much further.
Executives see AdCentre, which has been known internally by the code name Moonshot, as a way to offer all manner of ads, text, display and video for use both online and offline on a PC, and on other devices, such as the Xbox gaming console or mobile phones.
"It's not just about (ads that run) in your PC with your browser open," Joanne Bradford, Microsoft chief media revenue officer, said in an interview last week. "Today, it's keyword... We believe in the future it will be about display (ads), video and all that is advertising."
Microsoft is clearly looking to forge new ground with AdCentre, said Matt Rosoff, an analyst at Directions on Microsoft. "It's pretty clear that AdCentre is going to be more...
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