Microsoft Memo: We'll Win in Display

Most analysts and investors still believe Microsoft’s bid for Yahoo was strictly a search play. Display ads — if they figured into the strategy at all — were mere garnish to the main dish. Microsoft needs to compete harder with Google, and Google’s power is contingent on its search market share. End of story, right?

Not exactly. In a memo to staff, Microsoft Platforms & Services President Kevin Johnson, identified the company’s top ad-related priorities ahead of its Advance08 advertising conference this week. Among those priorities: “Win in display advertising.”

“We have an advantage in tools, agency assets/relationships and a team laser-focused on capturing the display ad platform opportunity. As we build from a position of strength, we will increase engineering resources to drive even more innovation,” Kevin wrote.

It’s an area where Microsoft needs to show it means business. After all, the company has no fewer than five display platforms, including the MSN Network, DrivePM (courtesy of aQuantive), MSN Direct Response, AdECN, and high-profile individual relationships with sites like Digg, Facebook and WSJ Digital. Yet it has not yet consolidated those offerings into a unified platform offering, the way Yahoo, through AMP, and AOL, through Platform A, have both begun to do with their sprawling display ad holdings.

ClickZ will be on the floor at Microsoft’s Advance08 event tomorrow and Wednesday, so check back with us for insights on how Microsoft plans to position its ad platforms and services in the wake of the Yahoo deal implosion.