At the end of the week of Microsoft's Round 2 of layoffs, the dust is continuing to settle, especially in the advertising space.
Microsoft officials have acknowledged that cuts announced this week massively affected its Massive in-game ad unit. But according to a spokesperson, "the reports of a 75 percent workforce reduction are inaccurate. In total, the Massive business unit will see a headcount reduction of 28 percent."
Massive isn't the only part of Microsoft's ad business to feel the impact, however. Microsoft officials have been laying the groundwork for Microsoft's move to make all of its various ad platforms look and feel like a cohesive entity, known as "Microsoft Advertising." But it wasn't until this week that the effects of those consolidation moves became clear.
From the aforementioned spokesperson, whom I asked about rumors of other Microsoft advertising cuts:
"Rapt and AdManager are being consolidated with AdCenter and PubCenter. A key strategy of APS (Advertiser and Publisher Solutions Group) is to consolidate various platforms around a common platform. Customers have been very clear about wanting a "one-stop shop" for our advertiser and publisher technologies, and that remains the mission and goal with these changes.
"Atlas Enterprise is not being phased out. It will be integrated into the core Microsoft Ad Platform, giving customers additional capabilities and building upon their investment in Atlas."
Rapt is a product Microsoft acquired when it bought Rapt Inc. -- "the leading provider of advertising yield management solutions for digital media publishers" -- in March 2008. AdManager is a sell-side tool that currently is part of Microsoft's Atlas suite of products aimed at smaller publishers. Atlas Enterprise is buy-side tool for agencies and advertisers.
Microsoft bought the Atlas assets in 2007 when it paid $6 billion for ad company aQuantive.
AdCenter is Microsoft's core online ad platform. PubCenter is Microsoft's Google adSense competitor -- a public beta of which recently went live.
Microsoft doesn't always phase out the products it buys when it aquires companies. Just look at the Microsoft Business Solutions side of the house -- home to the Great Plains, Navision, Axapta and Solomon offerings. Microsoft is still supporting all four ERP platforms (to varying degrees). (Navision, for its part, has three upcoming relases on its roadmap extending out to 2017!)
But back to Microsoft and online advertising.... CEO Ballmer has made it clear Microsoft sees search and advertising as two areas where the company is going to continue to invest, no matter what. (And, as we know, Ballmer's Google obsession runs deep.) But this week's cuts show Ballmer & Co. aren't willing to invest 100 percent blindly. Even online advertising has to show it is cutting costs, just like the rest of the company....