Microsoft enlists Seinfeld to boost its image

Microsoft Corp., weary of being cast as a stodgy oldster by Apple Inc.'s advertising, is turning for help to Jerry Seinfeld.

The software giant's new $300 million advertising campaign, devised by a newly hired ad agency, has been closely guarded. But Seinfeld will be one of the key celebrity pitchmen, say people close to the situation. He will appear with Microsoft Chairman Bill Gates in ads and receive about $10 million for the work, they say.

The new ad effort is expected to use some variation of the slogan “Windows, Not Walls,” according to several people familiar with the matter. Those people say the point is to stress breaking down barriers that prevent people and ideas from connecting. The campaign, said to debut Sept. 4, is one of the largest in the company's history.

The attempted image overhaul comes as Microsoft executives privately acknowledge that Windows – the company's most important brand – has grown stale and has been battered by Apple's “Mac vs. PC” ads. Those ads, created by Omnicom Group Inc.'s TBWA/Chiat/Day, feature a nerdy PC guy getting upstaged by a hip Mac counterpart.

Microsoft's immediate goal is to reverse the negative public perception of Windows Vista, the latest version of the company's personal-computer operating system. Windows is Microsoft's largest generator of profit and revenue, accounting for 28 percent of the company's revenue of $60.4 billion in the year ended June 30.

The software has sold well, and Microsoft retains an overwhelming share of the market for operating system software over Apple. But Apple's computer sales have been rising, and Vista is dogged by the notion that it has technical shortcomings and is hard to use. Apple's latest Mac vs. PC ads take swipes at Vista. Microsoft says early problems with Vista have been largely alleviated.

While Apple's digs at Microsoft through its advertising campaign have been vexing, Apple is on a hot streak with its products that Microsoft hasn't been able to match.

Apple's Macintosh computer business is dwarfed by Microsoft's share of the PC software market, but it has been gaining, accounting for 7.8 percent of new PC shipments in the U.S. in the second quarter, compared with 6.2 percent during the same period the prior year, according to research firm IDC. The vast majority of the rest of the market is made up of Windows PCs.

During the second quarter, Apple said it sold 41 percent more Macs than it did during the same period the prior year; that compares with growth of 15.3 percent in total PC shipments world-wide, according to IDC. Apple's desktop and notebook computers have won converts among onetime Windows loyalists.

Microsoft's campaign highlights the crucial role of Windows in the company's broader efforts to expand into new areas. Money from that division is invested into other areas, such as online services that are crucial to Microsoft's long-term growth.

“They are not seen as cool,” says Robert Passikoff, president of Brand Keys, a New York branding firm. “Apple is cool. Can anyone even recall a Microsoft ad? No.” Apple and its brand-obsessed CEO, Steve Jobs, have been producing distinctive advertising since its famous “1984” campaign, which debuted that year in the Super Bowl.

The planned appearance of Gates in the ads is one sign that Microsoft will continue to use its co-founder's own celebrity status, even now that Gates has stepped away from full-time work in software to focus on philanthropy.

Over the past decade, Microsoft has paired Gates with a range of celebrities in lighthearted videos. A recent video, shown at computer-industry events, portrayed a comical depiction of Gates' last day at Microsoft, showing him with rapper Jay-Z, rocker Bono and actor Matthew McConaughey, among others.

For its new campaign, Microsoft also considered a range of other famous personalities, including comedians Will Ferrell and Chris Rock, according to people familiar with the matter.

A spokeswoman for Seinfeld declined to comment. A Microsoft spokesman declined to comment on details of the campaign.

In an e-mail to Microsoft employees in July, Microsoft chief executive Steve Ballmer wrote, “Now it's time to tell our story.”

He added: “In the weeks ahead, we'll launch a campaign to address any lingering doubts our customers may have about Windows Vista.” He said that later in the year the company will roll out “a more comprehensive effort to redefine the meaning and value of Windows for our customers.”