Microsoft: Mobile Devices to Show Banner Ads

Microsoft opened its annual online advertising conference — advance08 – on Tuesday by announcing it will show display ads when users view Windows Live services on mobile devices. The company also announced it will expand its advertising plans to include its Live Search Mobile service.

The new offerings enable advertisers to present banner ads on mobile devices via two Windows Live for mobile services — Windows Live Hotmail and Windows Live Messenger.

“Now advertisers in France, Spain, the U.K. and the U.S. can extend their advertising campaigns by creating banner ads that will be visible across Windows Live Messenger and Windows Live Hotmail,” Phil Holden, director of mobile Web services, said in a blog post regarding the conference Tuesday.

The announcements come even as Microsoft (NASDAQ: MSFT) renews its pursuit of a deal with Yahoo (NASDAQ: YHOO), at least as far as its search business is concerned. However, the conference was scheduled months ago so any correlation between the two is likely just coincidence.

In recent years, Microsoft has been stymied seemingly no matter which way it has turned in the online advertising business. If nothing else, however, Microsoft is tenacious in pursuit of any goal it views as important, and it’s clear from the three-month battle to buy Yahoo outright that gaining advertising dominance fits those criteria.

However, the mobile display advertising arena promises to be no less competitive than online markets – and the field of players includes all the usual suspects.

Google (NASDAQ: GOOG), for example, launched its own mobile display ad initiative last month, entering the fray of a market already becoming crowded with Yahoo, AOL, and MSN.

Microsoft itself made initial moves into the mobile display ad market in December and earlier this year, when it launched display advertising on its MSN Mobile content platform.

The company is now expanding that to Windows Live Hotmail and Windows Live Messenger, Brian McAndrews, senior vice president of Microsoft’s Advertiser and Publisher Solutions group, said in a statement. McAndrews came to Microsoft last year when the company bought out his firm, aQuantive, for $6 billion.

Additionally, the company said it has begun beta testing mobile advertising on Live Search Mobile in the U.S., enabling advertisers to use Microsoft’s adCenter to design ad campaigns. The beta will be expanded in the second half of the year. Microsoft also announced that Windows Live for mobile services are now available in 49 markets.

The market for display ads on mobile devices is still nascent, especially when compared with the well-established market for online advertising. That means there are still opportunities in mobile advertising that Google doesn’t yet own, so much will come down to execution on the various competitors’ parts.

“It’s very early and they [Microsoft and its competitors] haven’t yet figured out how to integrate the ads into the applications so they’re not intrusive,” Tim Bajarin, president of Creative Strategies, told “You want the ads to be something of interest to the user.”

Microsoft has one advantage, and that is the 430 million Windows Live users it has signed up – principally for Live ID and its free e-mail and messenger offerings. Beyond that, however, speed of execution is important because all of the major players are trying to be first – including Google with its Android mobile device operating system and application platform.

Also important, say analysts, is figuring out how to present the ads.

“It’s a tiny screen and they have to figure out how to not annoy the crap out of the users,” Rob Enderle, principal analyst at Enderle Group, told “This is one of those areas where Microsoft needs to do a better job first.”

Speakers at Microsoft’s advance08 conference this year include company chairman Bill Gates, political writer Arianna Huffington, film director James Cameron, and former Disney head Michael Eisner.

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