Aggressive spread of Windows Live on mobile

Microsoft is aiming to repeat the success of its personal-computer-based Windows Live with its launch in Thailand of Windows Live on mobile.

The move to push the mobile phone application in Thailand is a precursor to Microsoft's plans to kick off lucrative mobile advertising services sometime in second half of this year.

Windows Live on mobile was launched last week under the theme "Everything is Now". Using the new application, mobile phone subscribers will be able to enjoy their online community wherever they are, with the same features as those on the PC version.

Microsoft's United States head office has contributed a big budget to support the local Everything is Now campaign for three months until the end of April, aiming to equal the success of its PC-based Windows Live, only this time on mobile phones.

Nearly two-thirds of Thailand's Internet users - 9 million out of the 15-million total - are users of Windows Live, spending a cumulative 2.4 billion minutes online with MSN messenger.

This large online community has provided significant revenue for Microsoft from online advertising. The jump from the PC environment to mobile phones offers much bigger market opportunities for generating online revenue. Penetration of mobile phones in Thailand is about 86 per cent of the population, with 65 million mobile devices in use around the country.

Microsoft's strategy is to convert these subscribers to Windows Live and MSN services without the need for a personal computer. It pursues a phenomenon called "mobile first user", in which people are gaining their first experience of the Internet on mobile phones, rather than personal computers.

The phenomenon will soon be dominant in emerging countries like Thailand, where the mobile penetration rate is higher than that of personal computers, according to the marketing director in Southeast Asia for Microsoft's Online Services Group, Craig Law-Smith.

Thailand has the third-largest number of Windows Live users in Asia following China and Taiwan. Thailand is also in the top ten countries in the world for data usage on mobile phones through General Packet Radio Services (GPRS) connections.

"We've done a good job with Windows Live on PCs, and now we're going from that success to mobiles. Unofficially, Windows Live on mobile has been available for a year, but with limited features - only MSN Messenger and Hotmail. But we've got quite a number of users already, and with a zero budget. That's why our head office has given us a budget to promote Windows Live on mobile in Thailand," Law-Smith said.

Thailand is the first country in Southeast Asia to receive direct budgetary support for marketing Windows Live on mobile, and the second country in Asia following India, which received financial support last year.

To access Windows Live on mobile, users can access Mobile.Live.com.

Microsoft Advertising Thailand's national sales manager, Kamolpat Swaengkit, said the launch of Windows Live on mobile was paving the way for a new online advertising channel - mobile advertising - that was expected to become significant in the future.

"Our business model and system infrastructure for serving mobile advertising are ready but until we get a significant number of Windows Live on mobile users, we are unable to sell mobile ads. We should wait until at least one to two million mobile subscribers are continuously using Windows Live on mobile," she said.

She said there was a possibility that the mobile advertising business would begin in Thailand in the second half of this year. Overall spending on online advertising is expected to increase from 1 per cent to 5 per cent of total advertising spending in Thailand this year, she said.

Microsoft began selling online advertising five years ago, and its revenue from this source has been increasing by an average of 20 to 30 per cent per year. At present it has more than 120 customers, including large corporations in the telecom, consumer, financial services and IT industries, and their online advertising spending on Microsoft's Windows Live and MSN generates about 80 per cent of the company's total online ad revenue.

 This year's online advertising expenditure in Thailand is expected to increase by 30 per cent over last year's Bt1.5 billion, according to Siwat Chawareewong, managing director of M-Interaction, an advertising agency specialising in online ads.

Although this growth rate is slower than last year's 50 per cent and 100-per-cent growth between 2005 and 2007, online advertising is still expected to grow even when Thailand's total spending on advertising is expected to fall from Bt90 billion to around Bt85 billion, he said.

"The top three categories of online advertising are display or banner ads, search-marketing ads and e-mail ads.

"Online advertising in Thailand is expected to grow continuously over the next several years. Currently, online ads amount to only 1 per cent of total advertising spending, while the world's highest percentage, in the English language, is around 16 per cent. Online ad spending in developed countries averages around 10 to 12 per cent of total ad spending per year," Siwat said.