This week, Microsoft announced the acquisition for an undisclosed sum of Navic Networks of Waltham, Mass., a privately held company with about 80 employees specializing in addressable advertising and interactive television applications. Much press comment has been to devoted to the interactive television technology which, for example, would let a user interactively request more detailed information during a commercial. This seems unlikely to me, but then I find it hard to believe that viewers sit for hours watching the home shopping networks.
The real pony to my mind is in the addressable advertising – via cable or satellite set top boxes Navic’s technology can individually address each consumer household, monitor what channel they are watching, and deliver targeted advertising on an individual household basis. Moreover, as Benjamin Romano reports at the Seattle Times, "Navic’s technology reaches some 35 million digital set-top boxes in North America via cable providers including Charter Communications, Cox and Time Warner."
With that kind of demographic information, Navic surely has a leg up in selling advertising although they do have to share the booty with the cable and satellite operators. It’s not all a bed of roses though, as the cable operators have also formed Project Canoe to sell targeted ads themselves while Google TV has partnered with Dish Network to do the same thing.
Still, the big question is why Microsoft wants to be in this business. Brian McAndrews recites the current Microsoft mantra, "In the long run, we want to be a platform across all media," but that only begs the question of whether the ad biz is really the most profitable investment for Microsoft’s cash.