What Does $500 Million Buy You?
March 31, 2006
On March 16th, Microsoft’s Chief Executive Officer, Steve Ballmer, outlined Microsoft’s vision for how people, armed with the right software, are the key to driving business success. Called ‘People-Ready’, this vision for business is the backdrop for a series of innovative solutions in new and existing categories that Microsoft will bring to market over the next year.
If you really feel you need more ‘People-Ready’ drivel, Microsoft’s press release can be found here .
What really stuns the Brothers is the fact that the press release indicates that ‘Microsoft will make a series of investments including a $500 million global marketing and sales campaign designed to broadly communicate the company’s software value proposition for business.’
Now the Brothers aren’t advertising gurus, but frankly they don’t think the money Microsoft spends on advertising is well spent. For example, a previous campaign for Office portrayed Microsoft customers who didn’t upgrade to the latest versions as dinosaurs, and the Brothers guess the point is, because they were unwilling to use the latest software Microsoft is pushing they are doomed to extinction. Never mind that most customers chose to pass on the latest version of Office because it didn’t include any compelling new features or fix any long standing annoyances in the individual Office components such as Word and Excel. And why dinosuars, is it just because dinosaurs are easier to illustrate than Luddites?
Does Microsoft really think that depicting those of us who are existing customers but who won’t upgrade as dinosaurs is going to suddenly make us sit up and say, ‘Hey, we don’t want to be dinosuars do we? Guess we better send that check to Microsoft even if we don’t need the software.’ So instead of spending money on ads to get people to upgrade to versions they don’t need, why not spend it on making a compelling version?
So what kind of ads will $500 million buy them this time? Well the first people-ready ads are out. They depict employees standing around in common areas in offices and factories saying they are ‘Ready’ to head out and take care of business. But everytime the Brothers look at one of these ads, instead of seeing Microsoft’s copy here is what they see:
People-ready?—The Puli Brothers Larger view…
And while we are on annoyances, if you are using IE, it likely resized the larger version of the above image to make it fit in the browser, but at a size that makes the text unreadable. So if you want to read it, here is what you have to do:
Resize a Picture:
When you view a picture that is too large to fit completely within the browser window, Automatic Image Resizing resizes the picture for you so you can see it in your browser window without having to scroll up and down or to the left and right. An Automatic Image Resizing icon will appear in the lower-right corner of the picture you want to resize (you may have to move the cursor over the lower left-hand corner of the image before the resize icon will appear). You can use this icon to resize the picture so that it either returns to its original size or fits within the browser window.
And now back to our main point…
Maybe it is that the Brothers take an unusual look at business. They think that a public corporation should only keep the money that they can truly reinvest to make even more money for their shareholders. All other monies earned by the corporation that the corporation cannot use to make more money for the shareholder than the shareholder could make investing it on her own should be returned to the shareholder.
Okay in the interest of complete disclosure the Brothers have to admit that they do currently own Microsoft shares.
If dinosuars and these people-ready ads are the best Microsoft can do, then they ought to just give the money back to shareholders. Do you really think these ads are going to significantly change the rate at which anyone purchases either Office or Windows?
Do they really think they have to tell us the Microsoft ‘value proposition’ or shouldn’t the product’s features speak for themselves?
And IBM shareholders, before you laugh too loud, you might want to consider that in response to Microsoft’s People-Ready campaign, IBM is getting ready to invest $300 Million.
There is an old expression often attributed to the late Senator Everett McKinley Dirksen ‘A billion here, a billion there, and pretty soon you’re talking real money.’ Well $500 million is real money to the Puli Brothers and they would rather have it added to the next dividend then thrown away on meaningless ads.