Yusuft Mehdi: Interactive Advertising Bureau MIXX

YUSUF MEHDI: Thank you very much, Randal.

It’s a privilege and honor to be here today to share with you Microsoft’s perspective on the future of the Internet, and how that will shape both our business of advertising, and the way consumers interact with technology.

And so the title of the talk that I have here is “Misses, Home Runs, and Game Changers.” And I’ll be honest with you, sitting here in this audience of a lot of advertising experts, it’s kind of a humbling thought and maybe it’s a bit of an overachieve. So, I’ll be happy with a solid single or even a double on the home run metaphor.

But nonetheless I want to go ahead and try and give you a little bit of our perspective from Microsoft in three parts. The first part will be kind of a retrospective look at advertising that’s occurred over the last four or five years on the Internet in particular, and give you effectively five lessons that we have learned that have led to either hits or misses.

The second part is I’m going to sort of I guess put our money where our mouth is, and show you how we’re applying those lessons to the way we build advertising products and market our own products through a case study of Bing, which is our newest search engine release that we have been marketing.

And then finally, I’m going to show you a peek at the future in terms of where we see technology going, and I brought a special demonstration we haven’t showed anywhere really except for a few places, to kind of give you a little bit of a mind expansion, if you will, of where things could possibly go.

So, let’s first start with the past, the retrospective, and I want to basically pull up a slide that I think has probably been overdone. I’ve seen this slide a gazillion times. It’s the whole cliché of how quickly technology moves from the beginning to mass adoption, anywhere between 50 and 100 million years.

And the reason I put this slide up is because as I was preparing for this talk, and I was trying to think about what are some of the lessons learned, what I found is that in this rush of getting a mass audience, what really happens is even though users move more quickly to adopt technology, the advertising actually doesn’t follow at the same rate. If you studied how the adoption of technology and advertising goes, even something like the Internet, which has now been in Web form for about 15 years, there’s still about 30 percent of consumer time on the Internet but only about 10 percent of the dollars are there, and there’s a lag.

And that really raised the question, well, why is that? Why are we, despite the consumer excitement, is advertising not hitting? What are things that we can learn about where it does work and where it doesn’t?

So, I’ve got five lessons that I’ve picked out that I’m going to share with you, and we’ll start with the first one, and take some examples.

I’m not sure how many of you recall the milliondollarhomepage.com. A young fellow named Alexander Tew, in 2005 he was a 21 year old looking to go to college, and he was trying to figure out how he was going to pay for this mountain of debt, and he decided I’m going to create a Web site, I’m going to sell some advertising to raise money. So, what he does is he has about a million pixels and at a dollar a pixel you can buy advertising space.

And he starts out first with friends and family after the first week, and started selling, and he raised about US$4,700. And over the course of just under five months he ends up raising the million dollars. In the final week he had a thousand pixels he sold on eBay, auctioned them off for about $38,000.

And he had major brands on there. He had the Times, I think Yahoo! bought, Tenacious D, Orange. A lot of people had bought advertising on the site, and it was a great success, he was able to go to college. That was one of the hits I would say is back then to be able to go to raise a million dollars like that, and it became a cultural phenomenon that the media followed.

Now, the mishap is that after the first semester he decides he’s going to drop out of college, and he’s going to create another version of this, and so this is a version called Pixel Lotto where he says I’m going to do it at $2 a pixel, and raise $2 million. I’ll keep a million, and we’ll give a million out to the winner of the lotto.

And then not surprisingly after a few weeks, what happens is it basically fails, he makes about $100,000, and the site shuts down.

Why is that? And it’s because the first lesson is you have to be authentic. You have to be a trusted brand. Everyone can connect with someone trying to raise money to go to college. Most people in the room can understand that. You connect, you’re able to get people behind your cause. When it turned into more of a moneymaking scenario, it just kind of fell flat.

So, the first thing is even as you go off in the Internet and there’s a lot of exciting technology, authenticity of who you are and what you’re trying to do with your advertising must connect.

The second lesson I want to talk to you about is really relentless measurement and optimization, and that’s one of the powers of digital in the Internet is that you can measure at insanely deep levels.

And a great example of that is a company called Zappos that, as you all know, sells shoes online. And the story here, again going back to about 2000, the company started there, they were looking to sell shoes, and they couldn’t really get anyone to fund the company, because people said, you know, selling shoes online is going to be a very difficult task. I can’t imagine that it could be done, it will be quite expensive.

And a couple of great ideas that came from the Zappos team. First is — and this was a bet a long time ago now that it could be sold through search engine marketing, and that the goal was not really to build the Zappos brand so much as it was to sell the shoes. And so people knew the brands of shoes, you know, Vans, Rockport, and so you didn’t have to go build that, you could actually use the search engine marketing to use the brands that were already built. People knew about shoes, so they knew what they wanted to look for. And the margin was quite good on those shoes, so you could actually do a lot of optimization.

And not surprisingly, as the system got going, they were able to really get a lot of tweaking and optimization on search, and they sold, starting from about a million dollars up to about $400 million in shoes sales from nothing, and they were just again very smart use of the technology.

The third lesson I wanted to show you or third kind of takeaway was the notion of be social.

Now, here’s one where Starbucks is a pretty well-known brand. Most of us have a regular and daily relationship with the brand, and they probably are at the very top of it.

And yet they wanted to go deeper. They said, how do we get more connected with our consumers? And they have a new concept of basically consumer generated connection with the brand.

So, they have a site called My Starbucks Idea where people can come in and submit ideas about how they would like products named, tips like should we put racks in the bathroom to hold purses, what the message should be on the cups. And what they do is the community votes on these ideas, and everyone — again they have a very engaged community, and then they have a selection of sort of idea experts that pick out the best ideas. Those get surfaced to management, and then management takes action on them.

So, they created a site, they did some of the work, they deliver on the results. They have had over 75,000 ideas that have been put on the site. And this is really a hub for consumer connection. And it is pretty amazing. So, even there with a fantastic brand the notion of using the social opportunity to take it to the next level and build a better product comes through.

And then one other example I wanted to give you is the opportunity to be responsive. We’re at the end of fashion week, so we might as well bring up one of these fashion stars. Ashton Kutcher I think is a great example. January 28th just of this year, he’s a big Twitter user, he had 7,000 followers on Twitter. His wife, Demi, had 3,800. And it starts out he put up a blog about they were doing some construction outside his bedroom. And so he did a rant online and put the blog up, and it got a huge amount of reaction.

And slowly he started getting in there, and really connecting with people, and just kind of ran with it. And soon if you recall it was a race to see who would have the first million followers on Twitter, and Ashton was racing with Oprah Winfrey. He ultimately ended up being the first to a million followers on Twitter.

Then as of today you’d be surprised, how many do you think he has? Three-point-six million people follow him. That’s more than most television shows. It is an amazing figure.

Now, I don’t know where the business model is on that, so we’ll see if that still ends up being a hit or a miss down the road, but you can’t deny that being opportunistic as new technology comes, you can build an amazing following and loyal following of brand.

So, that kind of gives you a sense of a few of those. The last one I’m going to show you is — and this is the last lesson that we’ve learned a lot is that ads are content. And I’ve seen this on our MSN properties, and I’ve seen it as well on Bing, which is that the advertising that works the best is the stuff that connects with consumers.

Now, Burger King is probably one of the best in terms of creating ads as content. You all have known and seen much of their great work in the past, and from their agency.

I think the two that really sort of strike out for me are one was the Burger King freak-out. I don’t know if you guys have seen that. They basically did this great play where people walk into the store, and they say, well, we’re out of Whoppers, we don’t sell Whoppers anymore, and people actually are outraged by it, because they really came in for the Whopper.

So, they created a couple of these videos, they put them online, and the videos went just completely viral all across the Internet.

And then what happened is people started creating their own versions of those, and within a few weeks they have over 150 versions of the freak-out on the site that are out there where consumers have just taken that. And even though it’s an advertisement, it’s become content, it’s become entertainment, people are using that on the Web.

The other thing they did was they did a promotion called — I think it was called the Whopper sacrifice, and basically if you would delete 10 friends off your Facebook page, because, you know, everyone has 500, 600 friends on there, they will give you a coupon for a free Whopper.

So, what happened — and this is an app on Facebook. And so what happened is the thing took off. I think they had 250,000 people take advantage of that. So, I think Facebook ended up shutting that down, because of change of terms of service, which I think is a true story. But nonetheless, again you have an amazing connection of advertising as content.

So, really some fantastic history, so that kind of closing up that first part, my sort of takeaway, we said, hey, Yusuf, what are the learnings for you in the last four or five years of digital advertising, and I said these are the five that stand out for me: being authentic with your brand, opportunistic and responsive, the measurement of the Internet which begs that capability, and then of course the notion of connection socially and ads as content.

So, now I want to shift to the second phase of the presentation and talk about how are we using those lessons and applying them to what we do, both with the consumer products we build and the advertising that we drive, and I’m going to use Bing as a case study for that.

So, Bing, as you all know, is the release of our search engine that has been out for 90 days, and I want to talk to you a little bit about how we’re applying some of those lessons. And I’ll start first with authenticity.

So, one of the key things when we set out to build the next generation search for the Internet is we went out and we talked to a lot of consumers, because it has to be a consumer driven phenomenon. Not surprisingly, when we asked consumers, they said, you know, search is pretty fantastic today, and we’re really not sitting around waiting for another search engine. That kind of became a little bit of an internal motto, which is the world isn’t sitting around waiting for another search engine. Nonetheless, we knew that there were problems with search, and that there was a big opportunity.

So, what we did by studying the consumer opportunity is we found a couple things. One is that search today really is used in a couple of ways. There’s a traditional search that most of us know, which is I’m looking for a Web site, I’m trying to get to the American Airlines Web site, or I need to get my passport updated, what is that passport.gov site I have to go to.

And in that the way the search works is you type in 2.8 keywords into your address bar, and then you get 100,000 blue links, and the relevant one is at the top.

And that for everyone today is still magical, because it is an amazing phenomenon. Even if only one out of two times you get the right answer, it’s still quite good.

But what you find in marketing 101 is you can’t just go and say I’m going to be 10 percent better than the verb of the category, the player that’s got 80 plus percent share; you have to be first and best in a new area.

And as we studied what consumers were doing, what we found was there is big opportunity, which is people are using search to do new things. So, if today’s search is about get me to that Web site for my passport update, what’s happening now is people are doing searches saying I want to get more information and knowledge. They’re asking very sophisticated questions, like where does President Obama stand on health care reform. Imagine trying to do the query for that answer. Or what are the 10 causes and characteristics of the latest form of brain cancer? It isn’t like getting to a particular URL will get you that answer.

And then the other area is people actually trying to complete tasks where someone says I need to plan a family vacation to Hawaii. And what they want is not necessarily just the Orbitz or Expedia link, they want to know what are the hotels that are good for kids, what will that weather be like at the time, should I buy travel insurance, what should I go and do when I’m there. And search engines are not built to do those type of experiences. They’re lacking a bunch of that capability.

So, what we’ve done now with Bing is we’ve said, okay, to be authentic and to be opportunistic we wanted to build on those things. And to do that I want to kind of show you just a couple things that we have in the product that maybe bring to life some of that capability.

So, I’ll just show you a couple things. I’ll pull up our demo. And this is our Bing homepage. And one of the things that you’ll know from the Bing homepage that we did right away is people have really connected with the information discovery in a much richer way. This is the stage, for example, of the Emmys.

And what we’ve done with our homepage is we pull up these really rich, beautiful graphics, and we let people come and discover the Web. And it’s become a huge hit with kids in elementary schools. In fact, many kids in elementary schools are switching off of Google to the new Bing homepage because they love this ability to explore on the page.

But now what I want to do is I’m going to show you a little bit about where we’re going with search. You all know how you can do a query to go and find results. What we’ve done now is we’ve built a new metaphor for searching that’s called visual search. We just launched this a week ago. So, even 90 days after we released search, we came out with new features. And I want to show you some examples of things you can do.

My wife’s birthday is coming up, and I’m looking for handbags. Imagine now trying to find a handbag, especially if you’re me. What do I type in the search engine, how do I find it?

Here what we do is we have the ability to come in and say, show me all the handbags that are out there on the Internet, and watch what I can do here. I can just scroll 2,000 handbags. Because what we found in research is that the human eye can detect 400 percent faster an image than if you’re trying to read text.

Now, I’m not really well versed on how to do that, so I can come and use some tools. I can say, for example, I need a type of brand. Let’s say that B. Makowsky is a good brand. I’ll have to get some advice later if that’s the case or not. And let’s say that I know she needs a shoulder bag. And despite it’s New York, I want to keep this price under let’s say $300, $350. (Laughter.) And here are some bags to buy from.

Imagine trying to formulate that as a query. Imagine trying to type that in and get what you want, and visually get that, today, in today’s search. Extremely hard. Here’s how we make it better.

Let me give you another example. We talked about information discovery, and I talked about kids in schools really connecting with Bing. You want to come and learn about the U.S. government: How many politicians are there in the U.S. government? And we can come in and say, okay, there are 600 politicians in government. And I can scroll through and see their faces and see who they are.

But now let’s do a little bit of a test. Let’s go to U.S. senators. Not surprising, you know, 100 senators. And let’s say how many of them are female. Anyone want to take a guess? Go ahead, shout them out. Ten, three? Everyone bids low on this one. There are 17 female U.S. senators, women senators, and you can come in and see who they are, and you can click on any one of them, and learn some more about that; again a powerful way to discover.

And then finally let’s talk about line of succession. Does anyone know the line of succession? I didn’t. You can come in and you can see here is the line of succession, and here is who they are. And if you hover over different people, you see kind of the affiliation and where they are.

And so the ability in that case to again discover information in a visual way has just changed, search is changing, the way people interact will change.

And finally I’ll just give you an example of how again we’re trying to take the product over. Let’s say we’re looking for a digital camera. My daughter has been asking me for a digital camera. Again I can sort through, and she says, daddy, I want the pink one, the small one that I can put in my bag. And I can scroll this way until I see, oh yeah, there’s that ELF that maybe I want or the Canon Slim.

Or I can do — a lot of people in this room tend to be self-directed. I can say I need a camera that’s 12 megapixels or better, and I want it to be optical zoom of four to six times or better, and here are the three cameras that I want. I want this Canon. This Canon Powershot sounds pretty good. And I can come in and take a look at that particular Canon camera or I can even come back and just look at any of the Canon cameras that are available.

And if I find, for example — let’s see here, when I find the camera that I want, I can come in and take a look at it. And what we’ll do now is we’ll put all of this information right at your fingertips. So, these are the reviews written anywhere on the Internet. We grab all the reviews, put them in one place. We give you all the details. So, here’s a great summary, every gory detail if you want it about that particular product, expert reviews, or even the prices across the Internet; you can see all the prices.

And so again what you see now is that the world of search is changing. It’s no longer just a command line. You should be able to effectively just talk to it or click to it and say, here’s what I really need to see, here’s what I really need to learn, and be able to get to those results.

Okay, so I want to come back then and talk a little bit about now how are we taking some of those lessons in marketing and applying those to Bing.

So, one of the big things about it is what we’re trying to do is we’re trying to build a loyal fan base for the product. And this is like most people who have a marketing challenge. You can’t just go out and put your message everywhere; you have to sort of pick and focus, and you have to drive dedicated messages.

So, in the product I showed you here, we’re really good in four areas: travel, health, shopping, and local. And what we want to do is we want to find those people on the Internet, and serve great targeted messaging and targeted advertising. And we’ve been doing some of that and had some good success over the first 90 days, growing share.

And the way we’ve done that is by really connecting the message with the advertising and doing rigorous measurement, if you think of that Zappos example.

And I want to show you a technology we’ve built in-house where we’re now using it internally, but you can imagine some of this we might bring as well to our search advertising platform, and it’s a demonstration of a new product that we call sort of user level targeting.

And this is we’ll pull up our demonstration here, and what you’ll see is here’s a new tool for us to be able to go and measure how we are able to run a campaign.

So, let me first start out with pulling up this screen here. This effectively — this is a little bit of an eye chart for people in the back. That’s what happens when you sit in the back row. You’ve got to come up front if you want to see all the good stuff.

What you see here is this is the marketing campaign that we run. It has all of the advertising broken out by search engine marketing or e-mail marketing.

And what you can see here is you can see a bunch of data. This is some sample data. So, even though it’s directionally accurate, I’ve kept the complete data proprietary. But you can see, for example, the number of unique users, the number of paid sessions.

And the big thing that matters for us on fan base is sessions per user, because that’s the thing that drives loyalty is the number of times that people return and see your site.

You can see where the ads run on which publisher.

And what I’m able to do now is I’m able to come in and take a look in particular at a certain type. So, in search the way it works is there’s a power law, reverse power law on search where 39 percent of the people account for 65 percent of the searches, and those are called sort of the heavy searchers. What I can do here is I can actually take a look and say let me segment and see how my ads do with the heavy users versus the light users.

So, for example, here are the light users, which means they only come about four times a month, and I can see what are the ads that work for them. There was an ad about plasma TV, there’s about food under $20, why vitamin D. These are the ads that the light users are responding to.

I’m able though as well to come in though and say show me the heavy users. These are people who come 40 times in a month, and these are the people I really want to advertise to.

So, cookie by cookie, anonymous individual by anonymous individual I can actually see which are the ads that work. And so for them shopping, travel, health, these are the types of services that are doing really well, here’s where the ads are running, and where I’m having great success.

And so what you can see now is what we’re doing with Bing through rigorous measurement is really getting targeted, matching the exact ad online with the exact user. And it’s not just a user we want, but do they stick, do they come back, and that’s been part of the magic that’s led to our early success with Bing.

Okay, so then the final couple things I want to show you, talk about in terms of the lessons that we’re applying, is how we’re using that in some of the other marketing. So, I talked a little bit about what Starbucks is doing through social media. We’ve created our own sort of Facebook and fan pages. We have now 160,000 fans of Bing where we talk and create a community.

One of the things I thought was interesting though is we did some marketing. We did a test, for example, with Ryan Seacrest on Twitter, using the Ashton Kutcher example, and he’s the host of American Idol. So, every time he goes to a new city, he Tweets or blogs about where he’s going, about auditions. We did something where we had his results posted on Bing pages. So, he sends a Tweet, and there’s a bit in the URL. He did just one Tweet for us. Within one hour we had 40,000 visitors to the Bing site that came and experienced the product.

Think about that. Think about if you told your marketing team, go out and get me 40,000 qualified trials for my product, how long would it take you to get that up and running? And that’s just one example of kind of the power of social media and how we’re using that.

The final example is ads as content. So, we’ve done a lot of advertising. Our agency has done a phenomenal job for us.

One of the areas that we’ve done really well is we’ve created though some ads where we’ve actually done in-show integrations with Jimmy Fallon, and we’ve done some great stuff with NBC on Jon Stewart, where again we’ve done advertising as content where there’s almost shows in common. We actually created a fictional telethon called Bingathon. I don’t even know if it worked that well or not, but there was a lot of buzz. It was kind of like that Madmen episode where Don Draper is saying, hey, we’ve been talking about it for 15 minutes, and whether it’s good or bad, you can’t deny that. We’ve done some things like that in terms of the lessons.

So, those are some of the things I wanted to give you a sense of in terms of how we’ve done the lessons. Now I want to shift to the final part of the presentation, which is kind of a peek at the future, and talk a little bit about where we’re going.

You might recognize this picture of Tom Cruise here in The Minority Report, and you might recall how in that movie he was able to do a bunch of things on the picture and on the screens. And as I’ve talked to a lot of people, for some reason that really connects, and the reason is that I think the ability to use technology, to go beyond maybe a little bit like I showed you with some of those demonstrations on the handbags where you can just start to tell it what you want or just click and not have to know all the computing behind it, really makes the thing come to life and becomes more of an emotional connection. And that is what we are aiming to do at Microsoft as we invest in technology for the future.

One great area where that’s happening is going to be the future of gaming, and we have a project that we call project Natal that will be the next generation of Xbox gaming where with cameras and microphones you’re now able to become the human controller, if you will.

What I want to do is I want to run a video that gives you an example of that, and then we’ll show you a demonstration after that. So, let’s go ahead and run this video, and give you a sense of what the future of computing will be like when you are effectively the tool that operates the whole system.

(Video segment.)

YUSUF MEHDI: Okay, so that kind of gave you a little bit of a sense of where things can go, and now what I’d like to do is do a very special demonstration for you. It’s one we got from our Chief Technology Officer in Microsoft Research labs, and it is basically building on what you’ve seen here using different real pieces of code we’ve put together in a presentation. It’s an area that was really about an individual architect that is now doing kind of in the home. So, let me set it up for you.

This will be now right here this will be my home office, if you will, and it’s got full screen walls where I’m able to interact with computing technologies. As you can see up in this corner, I’ve got cameras, and there’s a microphone that can detect my voice. And then there will be some touch screens and Surface Computing capabilities that allow me to do it.

Again I’m an architect. I’m putting together a pond project, and I’m just going to walk you through a scenario here with some of our technology of how that would work.

So, I’m going to go ahead and walk into my room, and maybe just like you saw, as I walk in, it’s able to sort of recognize that it’s Yusuf here, and it pulls up some of my recent information. So, for example, this might be the desktop of pictures that I’ve had. It’s got my schedule. It has the time of the day and the weather. And then my screensaver in this case may be more of sort of a window with a nice beautiful beach scene, even though I don’t have a window in my office.

So, what you can see here now is we have like a nice full desktop, and then here is a Surface Computer, like you’ve seen, and I can walk up to the Surface Computer. And as I walk up, it recognizes that I want to do some computing tasks, and it has whole information about the conference center. Then I can come up and press pond project, and when I do up will come the wall where I’m able to then look at all my information, schedule, model, views and budget.

And what I can do is I can now navigate on the desktop. So, here there’s now immediately comes up a touch control, and I’m able to touch the screen and navigate around. And I can basically have as much space as I’d like.

So, I’ll come down to the corner, and then here, for example, is the pond project, and I can just touch and expand like you see now on various devices, and dive into the details of this particular project.

And when I do, some controls will come up. So, I can run analyses or simulations. I’ll press simulation, and up will come some controls that will allow me to interact with the eco. So, for example, I can move a slider bar up and down on this touch screen to change the temperature of the ecosystem, and you can see what the interaction will be like. I can see what happens with the model just by touching that.

Now, I’ve got a notification here that there will be an upcoming meeting. So, I remember that I’m going to have a meeting to do. So, what I’m going to do is I’m going to go ahead and move some of this to the side. So, I can just reach up and grab the corner of this desk space, and slide it down, and down we’ll move and up will come, for example, the recent interactions I’ve had. And I can move that up and say bring back the notes on the idea board, and then what you’ll see is these are all the notes of things we’ve been working on.

And like you saw in the video from Natal, I can walk up, I can have, for example, let’s say an article, a piece of research that I’ve brought up, and bring it up to the board and have it scanned, and then I can just pin that on the board, and there is that document.

And I can take out any type of computing device. You can imagine I can take out my phone, a Zune High Def. Let’s say there’s a photo here that I want to put on. This is a photo we took from last night. And I can walk up to the board, I can effectively pinch this and place it on the screen, and we’re able to do that.

And so now I have a great amount of information that’s on the board, and I can effectively build my own experience here on the board to interact with the touch screen.

We could also have a digital assistant. So, this is DAG. DAG stands for Digital Assistant Guide. So, he can come up at any time to remind me, and I can interact with him.

Hey, DAG, what’s up?

DAG: I have some answers to the question raised at the meeting this morning. Want to see them now or should I just post the information to the project site?

YUSUF MEHDI: You can just go ahead and post it to the project site. Thanks, DAG.

DAG: Done. You also have a meeting with Patricia San Juan in a few minutes.

YUSUF MEHDI: You know, I don’t recall what that meeting is about. Can you give me a little bit more information so I can be prepared for the meeting?

DAG: Of course. Here’s some background.

YUSUF MEHDI: Okay, so here’s some information about the water usage, but the price estimates look higher than what I recall. Can I get some more background on the price, why the price is so high?

DAG: Let me check on that. Here. If we zoom in on this part, we can see that the pricing of some of the upstream dependencies has changed. Would you like me to get Patricia San Juan on the line?

YUSUF MEHDI: Yeah, that would be great, DAG, thanks.

DAG: Is there anything else?

YUSUF MEHDI: No thanks, DAG, I’m all set.

PATRICIA SAN JUAN: Oh, hi. It’s good to see you again.

YUSUF MEHDI: Good to see you, too, Patricia. Let’s talk about that pond project.

PATRICIA SAN JUAN: Now, my team has refined three of the designs since our last conversation. Here’s what we came up with. Now, given what we know from you and the customer, these are the three we think would work the best, and number three is the one the customer liked the most, but we’ve come across a small problem. I’m hoping we can talk through some of our ideas on how to make this work.

So, let’s set aside the other two for a second.

YUSUF MEHDI: Sounds good.

PATRICIA SAN JUAN: Okay. Now here’s the problem. The water system the customer was so excited about is in a great spot, and the model shows that it really enhances the existing day lighting system, but the model also indicates that we may come up against some of the regulatory changes that are starting to take hold in some other cities.

So, our solution is to use a different water capture system here and here.

Okay, now watch the other variables and see if there’s anything you’re concerned about.

YUSUF MEHDI: It looks goods.

PATRICIA SAN JUAN: Plus we get a sourcing incentive since we can get most of the materials right here in town.

YUSUF MEHDI: Let’s get the local.

PATRICIA SAN JUAN: So, this way we keep the aesthetics the customer likes, we’re forward compliant with the regs, and we end up saving a bit of money.


PATRICIA SAN JUAN: What do you think?

YUSUF MEHDI: What’s not to like?

PATRICIA SAN JUAN: I think it’s going to be great.

YUSUF MEHDI: I do, too.

PATRICIA SAN JUAN: I can’t wait to start construction.

YUSUF MEHDI: Sounds good. Thanks, Patricia.

So, you get a sense there of how you can interact with the computer, you can touch screen, you can talk, we can work together on it.

I want to sort of close that example by picking up that pond project, and now I can actually simulate viewing that pond project and being immersed inside the experience. Some of the things we’re doing now with Bing maps is the ability to do 3D virtual simulation and bird’s eye view. Let me show you how we can do that here on the screen.

Hey, DAG, can you please pull up the pond project and display it for me here in 3D?

DAG: Right away.

YUSUF MEHDI: Okay, so here what you see in the foreground is the pond project as we’ve been assembling it, and now what we do is we have a simulation of what it would look like in the background. So, we’ve been able to take imagery of the background of the city, and now I’m in it. And as I move from side to side, what will happen is the simulation will automatically move. So, I can imagine that I’m actually up here on the pond project, and I want to see what the views are like.

So, if I come way over here, I can see there’s a water view, which is nice, from the pond project, and I can effectively walk around immersively in this experience and get a sense of what that will be like.

So, with that, I’ll go ahead and close that, and I’ll come back to the slide to effectively summarize what we’ve got. But that gives you a sense of where you can go with computing. There are a lot of amazing opportunities in there, and you can see the user experience and the ability to change is going to radically change how people will touch computers. So, in spite of that curve I showed you at the beginning of the presentation, as they say, you ain’t seen nothing yet. The amount of what we’re going to be able to do with technology to change the experience is going to be immense.

So, I want to come back and then summarize here and just close with a couple points just Microsoft’s perspective.

There are only a couple lessons learned. There was one view from us, as I said. Many of you are experts and we stand I think humble about all of the great work that’s going on, all of the amazing work that you all do.

The value-add that we bring with Microsoft I think is a couple things. First is that we are going to be a major player in all aspects of the ecosystem. We are our own publisher, producing content, hosting advertising. We’re clearly an advertiser as well as we market our own products, like Windows 7 and Bing and Zune. And we’re also an advertising partnership first and foremost especially at this conference with Microsoft Advertising.

And while there is a great many set of new technologies that are coming, many of which we don’t even know how they’ll go, what we can say is we’re here to partner with you, we’re here to learn as we go, and to invest in a big way to make this very exciting business that we’re in a huge hit for everyone, consumers, advertisers and publishers.

So, I’m going to close with a video, but first I want to thank you very much for your time, thank you for the partnership that you’ve done with us as a company at Microsoft Advertising, and we look forward to continuing the dialogue together. Thank you very much. (Applause.)

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