Microsoft NOT Spending $1.8 Billion On Windows 8 Ads - Business ...

Microsoft will almost certainly NOT be spending up to $1.8 billion to launch Windows 8, as reported by Forbes last week.

Sure, it's possible that the company could blow a budget that size on a launch. But to do so it would have to colossally overspend its money, with ads in places they don't need to be. That would be a sign of desperation and waste.

And historically, Microsoft has never spent that kind of money.

The number appeared unsourced in a story by Dave Einstein, who blogs on Forbes but isn't a staff writer. That's the first red flag: Einstein doesn't specifically say where he heard the $1.8 billion number from.

He does mention "Microsoft analyst Rob Enderle," who turns out to be the self-described "most quoted technology analyst in the U.S." (which is not the same as being the most-respected tech analyst in the U.S.).

Historically, Microsoft has never spent anywhere near $1 billion on a product launch. It may have spent $400 million on Windows Phone 7.

And, according to Ad Age, there was $500 million behind the Kinect game device.

Microsoft doesn't break out its ad budget by product, but its 10-K filing with the SEC also pours skepticism on the idea that it would burn $1 billion on a single launch.

Recently, Microsoft's total sales, general and admin budget has hovered between $13.2 billion and $13.9 billion per year. That includes all sorts of non-advertising expenses. So the company certainly could spend $1.8 billion if it really wanted to.

But in the last fiscal year, total sales and marketing expenses increased only $726 million or 5%, the company reported. In fiscal 2011, "Windows Division? ? Sales and marketing expenses increased $182 million or 6%, reflecting increased advertising of Windows and Windows Live," the company said.

Those are the kinds of ups and down in the MSFT ad budget.

What is more likely to happen is that Microsoft will commit half a billion or more to the launch, and various partners ? laptop makers and so on???will commit hundreds of millions more in co-op dollars to co-promote products with Windows 8.

That might come close to topping out at $1 billion, but that's all.

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Source: http://www.businessinsider.com/microsoft-not-spending-18-biilion-on-windows-8-ads-2012-10

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