This is Bill Gates, the richest man in America, just talking at this point, but while visiting with an Indian television channel he pointed an MSN missile at Google’s ad territory:

In its bid to share revenues with users, Microsoft may give free software or even cash to users, said Gates, who did not discuss further details.

Rebating, eh?

It is widely known among publishers and affiliates that Google doesn’t share all the numbers. It seems somewhat ironic that Gates would point out that “Google keeps all the money with itself” when Microsoft has long since been villified for its own wealth.

Nicholas Carr believes: “What Gates is saying - and it will not be music to Google’s ears - is that there’s too much profit right now in online advertising.”

Any company that achieves the level of financial success that Microsoft, Google and WalMart (different industry) have enjoyed are rewarded with a gigantic bullseye on their war chests.

umair makes an intriguing point:

Will Google’s margins erode as competition picks up? More than likely, not very much. The converse will be (and already is) true: competitors are engaging in serious price competition, to offset the disporportionately lower utility advertisers derive from advertising on smaller networks with less efficient transaction mechanisms. It’s their margins that are eroding; this is the trend that’s likely to continue.

My 2 1/2 rusted pennies
Microsoft is clearly frightened by Google, as evidenced by the almost uncanny GOOG stock juggernaut and search dominance which despite their best efforts hasn’t been able to wrestle. I’ve written here previously that Vista might be Microsoft’s last dance. Either things go very well and they enjoy a new renassicance or end up falling further.

This thinking might be very wrong. Instead, I the real trump card, the real opportunity that Microsoft has to crack Google’s war chest is MSN Adcenter. If that thing tanks, they are going to have a real hard time turning the ship around even if Vista rocks our world.

Adcenter is the key and Gates is very wisely choosing this as the trojan horse to send into Google’s camp. It could just be the ultimate achille’s heel, er, steal. Oh, I can’t wait to get a chance to run Adcenter! Hurry up, MSN, the sands are running low.

Did this post make you go hmm?

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