[LINK] "Free computing" and the advertising model

[rchirgwin at ozemail.com.au]

MS has filed a patent to cover the idea of advertising-supported computing:
http://informationweek.com/news/showArticle.jhtml?articleID=191502430

I'm going to leave aside the rights and wrongs of the usual "Microsoft 
versus the world" debate. Instead, run up some numbers US dollars 
throughout).

1) Global advertising market in 2006: $400 billion (source: Zenith Media)

2) Assumption: 4% compounding growth over 10 years - global ad market in 
2016 = $592 billion.

3) Total computer industry 2005: $2 trillion (Source: AIIA); compounded 
at the same rate = $2.9 trillion.

4) Total advertising industry as a proportion of computer industry: 20%

The best the computer industry can manage is that the advertising 
industry offers top-up revenue in the big picture. The mouse can't eat 
the elephant.

Moreover, there's this utterly idiotic faith among the proponents of 
these models that advertisers themselves actually *care* about anythong 
other than the eyeballs. If the model doesn't instantly work for the 
advertiser, it will be dropped: there will be no long-term commitment 
from advertisers. They will simply cancel the contracts - as any 
publisher could tell anyone who asked.

And yet more: the greater the number of advertisers within a medium, the 
less effective and valuable the medium becomes.

OK; Microsoft's pataent is just flag-planting. It cannot be stupid 
enough to think the business plan holds water, but "just in case" it 
wants to make sure it holds the colony. But the journalists and editors 
who don't bother even a cursory look at the numbers should hang their 
heads in shame ...

RC