Microsoft's announcement that they intend to enter the ring and compete in online advertising has smart folk all over the place talking about whether or not they can compete or even win.
Of course, this is classic Microsoft non-innovation -- wait until an idea has legs, then buy a position or muscle in using established distribution power. It's a strategy that has worked well for them, and may well work this time.
What interests me, and what no one seems to be talking about, is the emerging dichotomy of players. You're either selling advertising opportunities, or you are buying them. You either have an online offering so compelling that people will find you without advertising -- in which case you can sell advertising. Or you have to buy advertising to support the world of really compelling things to do online.
The ends of this spectrum are relatively clear. Cool blogs are over to the right. [Ignoring for the moment that successful blogs typically have promotion strategies.] Free online gaming sites would be over on the right. Free information sites are on the right.
Over on the left are the products and services who are supposed to foot the bill for all the stuff on the right. [Except for those of us who are essentially volunteers]
There are a handful of people in the sweet central spot -- like perhaps iTunes -- that can play for both teams. This group has to make their choices very carefully to preserve their brand value, and avoid getting pushed to one end or the other.
As I write this, I'm also realizing that the team on the left offers goods and services we are actually willing to pay for. Like cars, cell phones, tax preparation and music. That's why they can afford advertising. Over on the right we have a lot of free content -- in many cases, content that is offered free to attract you to the advertising. Or to attract you to the superior subscription service.
Cowboy bars work this way, too. Girls get in free. Cowboys pay a cover charge.
Where will it all end? How much of the free content can we expect the product world to pay for? And what happens when they start to get stretched too thin by all this fragmentation?
