[AnthonyMouse]

>Those are just guesses at their motivation, but I cannot come up with any better explanations. Can you?

Think about it from a game theoretical perspective. How can they lose?

1) They get to pretend they're protecting users. Look at us we turned on Do Not Track by default (because you're too stupid to do it yourself, naturally -- wait, sorry, you're not stupid, come back)!

2) It makes their competitors look like they're not protecting users as much as Microsoft claims they are. Look how sinister Google is, they don't even turn on Do Not Track by default in their web browser. And Mozilla is therefore just as evil (notwithstanding that they're a nonprofit with a far less clear incentive than Microsoft to want to track you and pretty unambiguously have it turned off by default as a result of realism rather than malice), so doesn't that just make you want to come back to Windows and Internet Explorer?

3) If they manage to scuttle Do Not Track, yay! Now they get to keep tracking the people who use Bing, etc.

4) When having it turned on by default becomes the obvious deal breaker everyone expected it to be when taking part in a voluntary consensus-based process with advertisers, the subsequent falling apart of talks makes the advertisers look like dirtbags, which falls right into Microsoft's narrative of trying to make any of their ad-funded competitors (but especially Google) look like they're constantly doing something sinister.

5) If they don't manage to scuttle Do Not Track, yay! It's on by default in Internet Explorer. This hurts Microsoft's online services, but it likely hurts their competitors more, and Microsoft has historically been very successful with a strategy based on destroying competitors.

Realistically, the response to Microsoft turning it on by default should have been extremely simple: Make the spec say that the browser must have it turned off by default, and then allow websites to ignore the flag whenever the browser implementation doesn't comply with the spec. Then Microsoft can do whatever they want, but if they do the thing that breaks the consensus then the flag is no longer respected, but just for Internet Explorer users. Everyone else gets the same Do Not Track that everyone else agreed was a good idea, and Microsoft's strategy backfires because now their browser is the least privacy-protecting one since even the users who actually want to turn it on can't when all advertisers are ignoring the flag just with Internet Explorer.

[jordo37]

Microsoft has substantial investment in advertising solutions and advertising companies of their own so 4) doesn't really work. Appnexus is just one example of an advertising startup that has taken considerable investment from MS in recent years and having DNT on by default would be very bad for their business.

[AnthonyMouse]

4) is about image rather than reality. Microsoft likes to portray themselves as the people who demand your money instead of your privacy (even though they really take both). And people continue to think of Microsoft as a software company rather than an ad broker notwithstanding their nontrivial advertising interests as you point out.

This leaves them in a position that allows them to paint advertisers as unscrupulous and have the taint stick more to their competitors than to themselves, which they've clearly been taking advantage of.

Moreover, if Microsoft could somehow eliminate all of internet advertising for everyone, I expect they would do it. Because as much as it would hurt Microsoft, it would destroy their most viable competitors. And it's more profitable (at least in the short to medium term) to have a monopoly on a market a fraction of the size than to have your margins and market share continually eroded by vigorous competition.