How to Fix Microsoft for $5 Billion

by: Thomas Jowers

Microsoft (NASDAQ:MSFT) recently made available to the masses. I personally love will be my number 2 search engine after (my own search engine that is currently being redesigned).

I am about to propose that if Microsoft gave me $5 billion from its war chest, I could make its online venture be positioned better and maybe even profitable.

Like I said, I like Bing, I think it will even get them a small sliver of marketshare from Yahoo (YHOO), but not Google (NASDAQ:GOOG), not yet.

Here's my fix.

($50 Million) Take your 5 smartest guys in search, lock them in a room and an account with $50 million. Tell them they couldn't come out till they had a competitor to Adsense. This would give everyday webpreneurs the ability to show Microsoft ads on their sites and earn a portion of the profit. If Microsoft could only get a portion of Google's users, that would be considered a win. And Microsoft would be serving up hundreds of thousands more ads per day!

($100 Million) Buy Marchex Inc. (NASDAQ:MCHX). This site operates a hefty online presence and is trading at a 75% discount from a year ago. Snap it up - it's cheap and increases your ad serving abilities.

($10 Million) Merely a rounding error for Microsoft, but I believe buying Miva (MIVA) would increase its advertiser base and the number of ads shown. It would be nice to also use its online properties to increase traffic.

($3 Billion) Buy Interactive Corp. (IACI). This company is not doing well in search but it is doing great in running its other online properties like,,, and to name a few. Microsoft would gain an instant 2% in market share for search but it would get an impressive portfolio of online businesses that ARE profitable!

($18 Million) Purchase Looksmart (LOOK). Again, it is a small blip on Microsoft's books, but again, it comes with a list of advertisers and partnerships that Microsoft could leverage. It should wait to purchase Looksmart till December, because that is when It loses a partnership with IAC.

($70 Million) (TSCM) - yes, buy it. This would be great to help push software purchases of Microsoft Money. It would also take a swipe at Yahoo Finance which is one of the most preferred finance sites. Bank and finance ads pay a premium for placement. You also get a small portfolio of great domains/sites as well as a large advertising company called

($1.1 Billion) Buy ValueClick (VCLK). This company was nearly bought a few years ago but for a much higher price. Microsoft went with aQuantive instead for $6 Billion. Microsoft could use the 15,000 US sites and 5,000 global sites to sell ads on! It has a hefty global reach.

($250 Million) Buy This site already helps advertisers show ads on over 100K websites, including some really well known sites. Microsoft could be to ads what eBay (NASDAQ:EBAY) is to unique junk. "The largest online ad marketplace"

So far I have spent about $4.6 Billion, that leaves me with $400 million to play with.

Microsoft is the largest online retailer. But that is not why I want to see a partnership - rather it is because of cloud computing.

Amazon (NASDAQ:AMZN) is the leader of in cloud computing, and a Microsoft and Amazon partnership would be unstoppable. You could search on and see a link to related products on Amazon. You then could sign up for future cloud computing subscriptions through Amazon but for Microsoft products, i.e. Office.

I also want to see a seperate building for online services. I want Microsoft's search and online business to be run like a seperate entity but still under the Microsoft umbrella.

There you have it. My $5 Billion duct tape fix for Microsoft. It would make the company a powerhouse in online advertising and might be enough to make a dramatic shift in online market share. It currently has less then 10%

Disclosure: I currently own MSFT and TSCM.