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Microsoft is going all out to sell its new Windows Phone 7 smart phones and Kinect accessory for the Xbox. Rather than going the typical Ballmer commercial route, it's instead spending a cool $1B USD on promotions.  (Source: YouTube/Microsoft)

Windows Phone 7 will launch in early November in the U.S.  (Source: Jessica Rinaldi/ Reuters)
By breaking the bank, the electronics giant hopes to lure in new customers

Microsoft Steve Ballmer is putting his money where his mouth is, so to speak.  In an effort to promote his company's upcoming Windows Phone 7 platform and the $149 USD Kinect hardware extension for the Xbox 360, he is pledging a cool $1B USD in advertising money.

The Redmond software giant has plenty of cash on hand, as showcased by its Yahoo bid in 2008 which involved close to $23B USD in cash equivalents.  The cash comes chiefly from Microsoft's enormously profitable and successful Windows operating system.

Outside the personal computer OS world, Microsoft has struggled to establish itself as a market leader, though.

In the smartphone market, its Windows Mobile market share has languished, being gobbled up by more nimble competitors Apple (iPhone) and Google (Android).  Microsoft tried to revitalize its phone efforts with the launch Kin -- a series of beginner smart phones.  That launch proved a flop, as the phones were pulled off the market only weeks after their introduction.

Last week, Microsoft officially unveiled the finished hardware and software for its new Windows Phone 7 platform.  Despite lacking features like copy, cut, and paste, third party multi-tasking, and hot-swappable microSD memory Microsoft is hoping that customers love its streamlined interface and diverse hardware lineup, consisting of 9 initial launch models from notable names like Samsung and Dell.

Microsoft Xbox 360 has been more successful thus far than Microsoft's phone efforts.  Nonetheless, it trails Nintendo's Wii in number of console units sold worldwide, despite launching earlier than the Wii.  Microsoft hopes its Kinect motion controller, which rivals the Wii's popular built in motion-controller and Sony PlayStation 3's Move accessory will be the extra boost its console needs to overcome its Japanese foe and seize the market's top spot.

Kinect, previously dubbed "Project Natal" will receive half of the advertising money -- rough $500M USD.  The company plans to air ads on Nickelodeon and Disney's websites; the popular ABC "Dancing with the Stars" reality TV show and Fox’s "Glee"; and Time Inc.’s magazines
People and InStyle.

It also plans a Times Square Event, a YouTube page takeover, a Kellogg's cereal promotion, a Pepsi promotion, and a Burger King promotion in support of Kinect and Windows Phone 7.

It has already begun to air a series of new Windows Phone 7 ads, which emphasize the OS's focus on letting you perform tasks quickly and "get back to life".

Microsoft's past advertising efforts have come with mixed results.  Some like the Jerry Seinfeld-Bill Gates commercials were met with confusion or apathy, while others like the "Lauren" 
Laptop Hunters commercial were received much more enthusiastically.

The company vitally needs these new projects to succeed, though, so it seems reasonable for it to invest such a large sum in trying to promote them.  The ultimate question, though, is whether that massive initial investment will pay off in terms of market share, and, in turn, revenue.



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Selling add ons to 6 year old consoles...
By Acanthus on 10/18/2010 4:54:53 PM , Rating: 2
LOL.




By jdsal on 10/18/2010 11:50:27 PM , Rating: 2
Yes, and thank you MS for maximizing my entertainment dollars!


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