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Upfronts 2010: Microsoft Makes Its TV Pitch

Upfront Central: Complete Upfront Coverage from B&C

Microsoft is continuing its efforts to get a slice of the
television upfront market, rolling out new content offerings and packages to
advertisers looking to reach engaged users, according to Keith Lorizio,
Microsoft's VP of U.S. digital ad sales.

In a live Q&A with B&C
Business Editor Claire Atkinson at B&C'sUpfront Central event, April 6 at NewYork's Roosevelt Hotel, Microsoft VP of U.S. Digital
Ad Sales Keith Lorizio discussed the company's efforts in a number of areas,
including through its Xbox Live service.

"Are we competing for TV dollars? Yes," Lorizio said, noting
that the Xbox service--which originally served as an online gateway for gamers
to play one another online but has evolved into a true multimedia set-top box--is
in 20 million homes worldwide, with 72% of those in the U.S.

Microsoft is also expanding its original programming, with
an added focus on interactivity. The second season of Endemol's 1 Vs. 100
just finished its run on Xbox Live. The game lets Xbox Live users play the game
live each week, with a host asking a randomly selected user questions. Winners
get Xbox Live marketplace points (redeemable for games and downloads) and free
downloads. Microsoft worked with Nielsen to measure viewership for the series,
an important step as the series relies on ads similar to those on network
television for revenue. Sprint served as the sponsor for the series.

"You have online users competing from across the globe,"
Lorizio said. "It is very much an experience that cannot be duplicated on TV."

Lorizio also said the company is interested in a digital
upfront, which would let ad buyers commit money to programming and content they
believed could deliver results for the brands they represent. Microsoft has
held events in the last couple of years but is looking to expand them. "I am
passionate about that; I think it would help both parties," Lorizio added.

The company also sells scatter ads for television networks
on a CPM basis, and counts NBC
Universal and A&E Networks as clients.

But Microsoft is not ignoring its bread & butter:
digital advertising. With the MSN Network, and Fox Sports on MSN
consistently among the most popular Websites on the Internet, there is ample
opportunity for brands looking to reach a wide swath of people. To that effect,
Microsoft once again inked a deal with Discovery Communications, which last
year launched a campaign across the MSN Network, Microsoft's mobile platform
and on Xbox Live to promote the fourth season of Deadliest Catch. In
2010, Discovery is making a similar buy for the new season of the series, and
also made a buy for its special miniseries Life.

Of course, Microsoft is also a major ad buyer itself, with
ads for a number of products running regularly across a number of television
channels. With Apple's iPad launching to major buzz, Lorizio says that the next
wave of Microsoft commercials may have a different tone than the genial "I'm a
PC" campaign.

"I think there is a little bit of aggression that is held
back," he said. "I would expect that to change very quickly."

And Microsoft needs to stay aggressive. Despite having a
market cap rivaled only by Exxon-Mobil, challengers like Apple and Google are beginning
to make their mark, both through devices like the iPad and iPhone, and with
free software like Google Docs, which competes with Microsoft's dominant Office

"The advertising business is absolutely critical to
Microsoft as it moves forward," Lorizio said. "Shrink-wrapped software on the
consumer front is changing; people are demanding stuff for free."