Microsoft Joins the Mobile Ad Race With Windows Phone 7

ballmerphonesMicrosoft officially launched its new Windows Phone 7 mobile operating system today, and hopes to follow in the footsteps of competitors Apple and Google by seizing a portion of the smartphone OS market, and the revenue generated from ads served to those devices.

At a launch event in New York this morning, Microsoft CEO Steve Ballmer announced a total of nine handsets running the platform from manufacturers including HTC, Samsung, and LG, which will eventually be available across 30 global markets. Microsoft executives joined Ballmer on stage to demo the capabilities of the new platform, as well as those of third-party applications running on it, including games, and productivity and social networking tools.

At launch, it’s ad inventory in those third-party apps that Microsoft hopes to monetize, following the announcement of its mobile advertising SDK late last month. The kit will allow developers for the Windows Phone 7 platform to easily integrate ad units into their applications, which Microsoft then plans to sell on their behalf to ad networks and advertisers through its mobile exchange platform and direct sales teams.

As smartphones continue to proliferate among U.S. consumers, advertisers are becoming increasingly interested in marketing to those devices. A plethora of mobile ad networks and mobile ad technology companies now specialize in serving rich ad experiences into iPhone, Android, and BlackBerry devices – including Google’s AdMob division and Apple’s rival iAd network. With the launch of its Windows Phone 7 SDK, Microsoft has officially thrown its own hat into the ring.

The question is whether there’s room for another player in the mobile OS market. From the standpoint of both developers and advertisers, the level of investment they dedicate to the platform will depend entirely on the scale it achieves. With Apple and BlackBerry devices already enjoying a firm foothold in the market – and Google’s Android on course to outpace both of them by next summer – it’s unclear whether Microsoft’s platform will gain enough traction to attract the attention of either of those parties.

Microsoft has already announced the integration of a number of mobile advertising networks with its exchange, including Millennial Media and InMobi. Those networks buy from a wide range of inventory sources, however, so their involvement does little to indicate the kind of advertiser interest the platform will receive. As evidence of developer interest, however, Microsoft says it has measured more than 300,000 downloads of the Windows Phone Developer Tools, but insists it will not exert pressure on those developers to participate in its ad exchange.

So far the release of Windows Phone 7 appears to have been well received, dominating buzz on Twitter and accounting for a number of the site’s “trending topics” this morning.

According to Microsoft, the first devices running the platform will be available in the U.S. next month.

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