Microsoft's 'Do-Not-Track' Feature: Good for Consumers?

It's been a bad week for Microsoft.

On Monday, Google (GOOG) overthrew Microsoft (MSFT) as the third most valuable company in the U.S. based on market capitalization. (Microsoft has since reclaimed this title). Microsoft, once the top dog among tech companies, has continued to lose market share and dominance in the tech world as consumer demand has shifted away from the PC and software business.

Microsoft's stock has gained 12% so far this year—less than the S&P 500 (GSPC)—while shares of Google rose 14% and Apple shares more than 62%. Microsoft stock has been flat over the past decade. During that same period, Apple's stock has gained 313% and Google's 27%.

Related: Apple Shares Fall After iPhone 5 Sales Fail to Meet Analysts' Expectations

On Wednesday Microsoft received another blow. The company introduced its latest version of Internet Explorer to advertisers, expecting rave reviews. But advertisers panned the product and expressed unhappiness with the browser's do-not-track default setting which prevents advertisers from monitoring Internet sites consumers are visiting.

Microsoft's Head of Advertising Rik van der Kooi says the company "is putting consumers first." Advertisers say it will damage consumers' experience online because the result will be less content and offerings currently supported by advertising.

In a letter to Microsoft CEO Steve Ballmer, top marketing and sales executives at some of the world's biggest companies including Coca-Cola, Ford and Walmart said the new default setting on Internet Explorer "will harm consumers, hurt competition and undermine American innovation and leadership in the Internet economy."

Related: Jobs Data Disconnect from Consumer Spending, Markets Disconnect from Reality

The Daily Ticker's Henry Blodget agrees that consumers could end up being the loser.

"Why would you choose to look at irrelevant ads when a little technological tweak could make it that they're much more relevant to you," he says. "Relevant advertising is good."

The Daily Ticker's Aaron Task gives Microsoft some credit for trying to put consumers first but he and Blodget say the biggest issue for the company remains its overall size and future direction.

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