Edelman May 12th 2008 Final

Slide 1: Italian Digital Market Luca Colombo Marketing Director Online Services Group Microsoft Italy May 12th, 2008

Slide 2: # Information pollution & overload # The rise of the virtual universe # Almost no privacy on the web # More googles & facebooks # All Digital Devices will be connected & networked # Rise of the Mobile Internet # Stride against digital divide # Internet Connectivity # Rise of individual & enterpreneur

Slide 3: Italian Market Overview Nielsen Online, Mar08 Nielsen Online, Mar08

Slide 4: Italian Internet Audience

Slide 5: Italian Mobile Market * Browser based activities (include Played Games, Messaging, Personal Utilities, News and Media) Source: M:Metrics, Feb08 Source: M:Metrics, Feb08

Slide 6: Mobile Internet from Telcos TIM con claim jpeg

Slide 7: Mobile in Italy – IM, Email, SN Source: M:Metrics, Feb08

Slide 8: Advertising Market (*) SEAT Pagine Gialle “2007 has been a positive year for online advertising market in Italy growing by 40%. In 2008 we expect to register the same Mauro Lupi trend bringing the overall online President, Ad Maiora ad market close to the €1B Vice President, IAB Italy mark”

Slide 9: # Information pollution & overload # The rise of the virtual universe # Almost no privacy on the web # More googles & facebooks # All Digital Devices will be # Rise of the Mobile Internet connected & networked # Stride against digital divide # Rise of individual & # Internet Connectivity enterpreneur Media distribution & production Roles of media changes Everyone is a media player Fragmented Media Environment Is the end of print?

Slide 10: Verticals outpacing Population Source: Nielsen Online, Mar08

Slide 11: Social Networks in Italy Source: Nielsen Online, Member Communities, Mar08

Slide 12: Social Networks Potential How much is reliable the following media to gather information before buying a product? Hi Sat Incredibly optimistic about social media. Specific challenges 1) Tons of inventory. Lack of scarcity creates a liquidity challenge. Working on bringing big brands aboard. 2) People who are visiting social networks there for different reasons, different uses. Figuring out how to target. 3) What's the value of a "friend"? Trying to figure out new metrics to communicate with marketers. How often an info/opinion found on ... affected your buying decisions? 2007 Q4 Earnings Conference Call One area of specific weakness: social networking. The company is having trouble monetizing "social networking" inventory (e.g., MySpace). Guaranteed payments to MySpace, et al, caused the "Traffic Acquisition Cost" rate to jump to almost 90% of network revenue from 84% last quarter. This is not a big deal for Google, but unless Google can figure out a more effective monetization scheme, it's bad news for MySpace. 58% 51% 67% Digital PR , Millward Brown Delfo , Mar08

Slide 13: Instant Messaging Source: Nielsen Online, Mar08

Slide 14: 25M (Feb07) Source: Microsoft, Feb08 Source: Microsoft, Feb08

Slide 15: Windows Live Agents

Slide 16: Windows Live Activities/Games