Microsoft’s MSN Swats PopUp Advertising

Super annoying popup and pop-under advertisements may be headed the way of the Dodo, now that Microsoft has decided to phase them out across its MSN Internet units around the globe by the summer.

Last week Microsoft confirmed that internal research showed customers were growing increasingly dissatisfied with the obtrusive popup ads that are shown on parts of the MSN network. The company announced it will no longer sell such ad formats to advertisers.

Not selling or serving popups is already practiced by Microsoft in the United Stares and the ban is scheduled to commence shortly in the United Kingdom, the Nordic countries and Belgium, and will be extended to all territories in the coming months.

According to the Reuters wire service, Microsoft reported in a Security and Exchange Commission document that its MSN division had a $79 million operating loss in the quarter ended Dec. 31. But revenue jumped 16 percent year-on-year in the quarter, to $546 million, as the unit shifted its focus to boosting advertising revenue and developing subscription-based services.

The decision to drop popups may be associated with the success of paid search listings and integrating paid search into MSN’s entire network. An eMarketer study showed that US paid search advertising spending soared 123% in 2003, rising from $923 million in 2002 to over $2 billion last year. Estimated to grow by $0.5 billion this year and again in 2005, paid search will remain a substantial part of online advertising revenues.

With such a potential HUGE advertising format to concentrate on, it may be in Microsofts best interest to follow their current path of keeping users in their network to capitalize on other advertising revenue, instead of scaring them off with quick-buck popup ads.

 back to top