Microsoft and media, once again

Earlier this week a Reuters story about Microsoft’s investment in its media business quoted MSN GM Bob Visse saying Microsoft was making a”big, multi-million dollar investment” in support of a “decent-sized media operation.” And MSN itself is getting a glossy re-design for Windows 8. Does this mean Microsoft is doubling down on its historically money-losing media business? It’s sending a lot of contradictory signals.

I’m going to stick with my midsummer analysis: Microsoft will pick a few areas for focus. I also think there’s still a good chance it might keep its Bing search engine but spin off the rest, possibly into some joint venture with Yahoo or even AOL. MSN parted ways with MSNBC in its joint online news venture earlier this year, and it continues to get hammered by advertising industry groups (this week it’s the ANA) for its stance on Do Not Track browser technology.

“Big” and “multi-million dollar” sound a little contradictory in the context of a company Microsoft’s size. A billion-dollar investment would be big, and it’s going to take more than a decent-sized team to create content, let alone many of the brand-advertising services that MSN has scaled back on recently. From the tenor of that AdWeek story, it sounds like Microsoft was making a full-on pitch to convince that it’s serious, and that it has opportunities in Windows 8 tablets and Xbox. There’s a whiff of a chance that Microsoft might even consider advertising on Windows screens, but only a whiff.

That platform combination – even without much smartphone traction – is indeed intriguing. One could argue that as portals lose steam in online advertising, core platforms become a potential power base. But third-party ad networks seem entrenched, and the old OS-browser-portal bundle, though it left a sour taste in regulators’ mouths, actually was never as influential as it seemed. The fact that Apple, Google, and Facebook have similar multi-channel platform — if not OS schemes — in place, weakens the Microsoft potential. Ad-powered content and communication aggregation vehicles need to succeed on their own strengths, not as a part of an OS.