Microsoft Acquires Ad Firm aQuantive for $6 Billion
May 18, 2007 11:47 PM
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Microsoft picks up an internet ad firm for a hefty sum
Microsoft Corp. announced today it will
acquire aQuantive, Inc.
for $6 billion, roughly $66.50 per share in an all cash transaction. This will be the largest purchase the software giant has ever made, spending roughly three times as much money as it has on any other company. The company’s goal is to provide the advertising industry with an internet-wide advertising platform and a set of tools and services that help its constituents bring in the highest possible return.
The acquisition of aQuantive will allow Microsoft to build and strengthen its relationships with advertisers, agencies, and publishers. It will also help the software giant build and support next generation advertising solutions and environments such as cross media planning, video-on-demand and IPTV. The combined technologies and portfolio provide for constituencies as follows:
Advertisers and ad agencies will benefit from a world-class media planning, buying and campaign management solution to drive maximum ROI and optimize their reach to audiences across the increasingly fragmented, interactive media landscape.
Media owners/publishers will gain access to best-in-class inventory optimization and monetization solutions across a full suite of rich media, video and targeting capabilities.
The broader advertising ecosystem will benefit from the leading interactive advertising agency, Avenue A | Razorfish, continuing to serve its impressive client roster, while also embedding the voice of the marketer into Microsoft’s next generation advertising solutions and services
"The 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. 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.” said Steve Ballmer, chief executive officer of Microsoft.
The deal is expected to be completed in the first half of Microsoft's fiscal year 2008. The acquisition is not expected to have a significant impact on the financial guidance issued by the company. aQuantive will continue to operate out of Seattle as part of Microsoft's Online Service Business.
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5/19/2007 5:12:02 PM
$6 Billion sounds overpriced considering Internet advertising doesn't work all that well. Google is different because it's a search engine and you're clearly looking for something when you visit. Ad banners, related links, intellitext annoying double underlines - those distract me.
The only thing I've seen interesting lately as far as Internet advertising is where Google has stuck a YouTube style streamed TV ad on a page that you can choose to watch if you click on it.
Obviously they're making a buy in order to make more profit - a buy that will pay for itself, but it sure seems overpriced.
5/21/2007 7:52:31 AM
Despite not being Google, the company has managed to grow gradually in 2005. And I am sure Microsoft did some thorough research before the purchase.
Either way, aQuantive shareholders have something to celebrate about. The stock price almost doubled!
"We are going to continue to work with them to make sure they understand the reality of the Internet. A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis
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