Filed under: Internet, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Marketing and advertising, Walt Disney (DIS), Viacom (VIA), News Corp’B’ (NWS), Technology
According to this article, advertisers who use the World wide web to get their message across might not like Microsoft’s (NASDAQ: MSFT) Internet Explorer 8 beta. That’s because the software giant is incorporating technology into the browser that’ll make it harder for data collection that could be used to target ads. In addition, the browser will be able to block some ads entirely, as well as block content from another website from appearing on the current site a user is viewing. The rationale for the latter is that the outside website could be capturing data on the user’s habits.
All this adds up, in my mind, to a legitimate fear for advertisers. Look, I’m like anyone else. I don’t want a lot of data collection going on. But, there are basically only two ways for companies like Yahoo! (NASDAQ: YHOO) and Google (NASDAQ: GOOG) to make money off web content: engage a subscription model, or utilize ad platforms to monetize eyeballs. The World wide web has proven to be very resistant to subscription models. Sure, some do work to great success. For the most part, however, surfers don’t want to have to throw a credit-card number into a form to be able to see content. It just doesn’t work. They want unfettered access to sites. If this is to be the case going forward, then highly-targeted ads are going to play an increasing role in the solution to monetization challenges. Web sites aren’t like cable channels, which have the dual revenue streams of subscriber fees and ad sales.
And, keep in mind that the companies mentioned above aren’t the only ones who rely on targeted ads. How about Disney (NYSE: DIS)? News Corp. (NYSE: NWS)? Viacom (NYSE: VIA)? They all have major Internet strategies that utilize ad revenues. And let’s not forget the extraordinary irony here. Mr. Softy has its own Internet strategy that needs ads to survive. I guess it’s a tough position to be in: the designers want to enhance the attractiveness of World wide web Explorer to users by helping them avoid the very thing that powers, in part, shareholder value for the maker of World wide web Explorer. A conundrum, to be sure. I personally hope a solution can be found that will allow advertisers to continue selling their wares. I don’t find advertising to be evil. I think it’s a great industry that serves an important function in the economy. Microsoft had better think about that.
Disclosure: I own Disney; positions can change at any time.
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