RSSMicrosoft Makes Largest Buy in History
By Nate Mook | Published May 18, 2007, 11:54 AM
Furthering the pace of consolidation in the Internet advertising industry, Microsoft on Friday announced it will acquire aQuantive for around $6 billion - its largest acquisition in history. Microsoft is paying nearly an 85 percent premium for the company.
Microsoft was rumored to be bidding for 24/7 Real Media, one of the smaller advertising firms up for sale, however WPP Group announced it won the deal Thursday for a price of approximately $649 million. Last month, market leader DoubleClick was acquired by Google, and Yahoo purchased ad firm Right Media.
aQuantive is perhaps best known in the industry for its ad agency Avenue A | Razorfish, one of the largest in the world. It offers marketing consultation, media planning and buying, and creative services to advertisers.
The company additionally offers DRIVEpm, a tool that matches advertiser campaigns with available publisher inventory and maximizes the return. aQuantive's Atlas platform also helps optimize marketing campaigns and improve publisher revenue.
"Today's announcement represents the next step in the evolution of our ad network from our initial investment in MSN, to the broader Microsoft network including Xbox Live, Windows Live and Office Live, and now to the full capacity of the Internet," remarked Microsoft CEO Steve Ballmer. "Microsoft is intensely committed to creating a thriving advertising business and to partnering closely with all key constituencies in this industry to help maximize the digital advertising opportunity for all."
aQuantive's 2,600 employees will continue to operate as part of Microsoft's Online Services Business. Unlike the Google-DoubleClick deal that Microsoft claims reduces competition by combining companies offering the same services, Microsoft says aQuantive is complementary to currently available MSN adCenter solutions.
All these companies are making a tremendous investment in hopes of big bucks. The big problem is the future of the net. Do you know what the net will look like in 10 years? Does anyone?
We're already seeing huge changes in hardware. In 10 years none of us may have a hard drive. Input devices will be drastically changed. We may have little or no storage. This kind of short term thinking may come back to bite them in the ass.
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|Hmmm.
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|isn't google's market share more than microsoft's not sure why they are worth so much.
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|a better bet would have to buy Crysler. least that way they would have a product...
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|It's a ridiculous premium to pay for playing catch-up to Google. I thought the price Google paid for DoubleClick or whatever that company was that they purchased recently was too much, but this is even more so.
Meanwhile, the execs at both companies are smiling all the way to the bank, while the employees are stuck doing the work. And I bet they're going to be doing plenty of it to make up for the inflated sales prices.
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|Word on the street is Microsoft is going to buy Sony next. I heard this from a reliable source.
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|Why would they want it? lol
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|I was going to say exactly, but then I thought for the exclusive PlayStation games.... but the only one I can think of is Gran Turismo.
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|I'm sort of wondering "why"? What are they really going to bring to Microsoft? Will that 6 billion pay off with eventual profits? It's certainly a hell of a lot of money... I'm not seeing the benefits here for such a high cost.
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|It probably comes down to numbers. They probably have figured that buying this company in the long run will be more cost effective than building from the ground up. 2600 employees is a whole lot of people to already have in positions already doing work you want them to do.
6 billions is still a lot though - it will be intresting to see how this pans out.
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|Numbers and time... they're in a race to get market share before they fall too far behind. Back in the browser wars when they were way behind Netscape, they could throw money at the problem to catch up, but Google and Yahoo have a substantial amount of money too.
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