Video services

Microsoft On Demand

Microsoft Corp. (Nasdaq: MSFT) may be in the process of losing its only interactive guide foothold with Comcast Corp. (Nasdaq: CMCSA, CMCSK), but it could be dealing itself back into the U.S. cable fold thanks to its $6 billion deal for Internet ad giant aQuantive Inc. (Nasdaq: AQNT) . (See Microsoft to Buy aQuantive and Comcast to Drop Microsoft TV Guide .)

Atlas On Demand, a unit of aQuantive, has developed a system that ties the measurable results of Internet advertising with the world of cable video-on-demand (VOD).

Among recent cable hookups, it's heavily involved in a dynamic VOD advertising trial Charter Communications Inc. has undertaken in the St. Louis area. Rather than running static ads already baked into the files of some "free" VOD titles, the Charter pilot is demonstrating how ads can be inserted digitally on the fly at the start and end of the VOD program. Cable operators eventually want to target those ads based on demographic data, but, for this trial, Charter is inserting ads from a rotating playlist. (See Charter Tests Dynamic VOD Ads.)

Atlas also played a role in a similar project headed by Sunflower Broadband , a cable operator based in Lawrence, Kan.

But aQuantive's bread and butter is Internet advertising, another area of growing importance to cable operators, and, in particular, Comcast and its Comcast Interactive Media (CIM Labs) division, which operates the Comcast.net portal. Comcast has said 70 percent of its 12 million high-speed customers use that as their home page.

Speaking at the MSO's analyst day earlier this month, company officials claimed Internet advertising could turn into a $1 billion revenue stream within five to six years.

— Jeff Baumgartner, Site Editor, Cable Digital News

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