Microsoft to Spend $1 Billion on Ads (MSFT)

Microsoft MSFT is expected to spend $1 billion on advertising for its Wii-rival Kinect device, and its Windows Phone 7 roll-out. The Kinect is a motion-sensitive controller that works with the company's existing Xbox game system. Kinect uses a sensor, camera and microphone to detect players' movements and translate them into on-screen actions. The ad budget for Kinect sits at $500 million. According to a New York Post report, "Microsoft, which has fallen behind competitors in areas such as smartphones and tablet computers, wants to ensure Xbox remains a major player in the video game business." "Kinect is the largest, most integrated marketing initiative in Xbox history, bigger than its launch," said Robert Matthews, general manager of global marketing communications for Xbox. "We are going to be spending millions to launch this globally." Microsoft has partnered with Burger King BKC, Pepsi PEP, and Kellogg's K to promote the new Kinect device. Further, Microsoft is about to blitz the mobile phone market with its new Windows Phone 7. The operating system, partnered with phone-makers, is Microsoft's most recent attempt to penetrate the competitive mobile phone industry. An additional $500 million will be spent on advertising for WP7. Shares of Microsoft are up 0.75%, to $25.73 this afternoon.