Microsoft pays $6B for online ad company

[IJ Reilly]

Microsoft took a deep plunge into the online advertising business Friday, paying $6 billion in cash and a massive 85 percent premium to snap up one of the last major players in the sector, aQuantive Inc.

The deal came just one day after another online ad company, 24/7 Real Media Inc., was acquired for $649 million by advertising conglomerate WPP Group PLC and is the clearest proof yet of the urgency that technology and media companies feel about getting a piece of the online advertising boom.

It is the largest acquisition in Microsoft's history. The all-cash, $66.50 per share price represents an 85 percent premium to aQuantive's Thursday closing price of $35.87.

Microsoft Corp., whose MSN site has struggled behind search leader Google Inc. and Yahoo Inc. (Nasdaq:YHOO - news), is hoping that the acquisition of aQuantive will jump-start its own efforts to sell and deliver advertising on the Internet, a business that is on pace to grow nearly 30 percent this year, way ahead of other forms of advertising.

MSN delivers advertising to its own viewers but is not yet in the businesss of channeling ads to other third-party Web sites, something that aQuantive is known for.

aQuantive also has a significant interactive advertising agency called Avenue A / Razorfish, which buys, sells and creates online advertising — much like a traditional advertising agency, but online.

The deal caps a furious four weeks of deal-making in online advertising, kicked off by Google's acquisition of a leading advertising company DoubleClick Inc. in mid-April for $3.1 billion. Microsoft was said to have been interested in DoubleClick but got trumped.

...

http://news.yahoo.com/s/ap/20070518...quantive_12;_ylt=AtnmYtDKEcwpf.CyGmKUZ7AE1vAI

Six billion. Yikes.

 

[ravenvii]

Dang, Microsoft is really getting desperate those days.

Keep it up, Google! You might very well be the leading cause of the downfall of Microsoft.

 

[elppa]

Microsoft loses about 6bn every year in expenses they label as "other".

Some of this is admin, a lot of it appears to be settlements and fines for anti competitive practice (i.e. breaking the law).

Microsoft has no track record of succeeding with anything apart from Windows, Office and Keyboards and Mice (financial wise).

I doubt this will do anything to aid there online presence let alone get anywhere near to competing with Google and Yahoo.