Microsoft yesterday announced the biggest acquisition in its history, buying online advertising company Aquantive for $6 billion (€4.44 billion) and making what it described as a "big bet" on its own long-term growth.
The move continued the frenzy of interest in online advertising, coming a day after WPP bought 24/7 Real Media in a deal that valued the company at $649 million. It also follows Google's agreement to buy DoubleClick for $3.1 billion and Yahoo buying the Right-Media advertising exchange outright for $680 million.
Microsoft, which reportedly failed in its own bid for DoubleClick, offered $66.50 a share, an 85 per cent premium to Aquantive's closing price on Thursday.
Kevin Johnson, president of Microsoft's platform and services division, said: "It is a big bet on advertising monetisation for the long-term growth of the company and this is a significant step forward."
He said that the online advertising market would be worth $40 billion this year and was growing at 20 per cent a year.
The acquisition, expected to be completed in the second half, means that Microsoft will market its services to the wider internet. Aquantive, founded in 1997, offers Atlas, a campaign management and publishing platform for advertisers, and Drivepm, which matches advertisers' campaigns with inventory.
It also includes Avenue A Razorfish, one of the largest interactive advertising agencies, offering creative services, media planning and buying. This would not appear to be a core element of Microsoft's strategy, but Mr Johnson said there were no plans to offload the agency.
Microsoft has raised anti-trust objections to Google's acquisition of DoubleClick, which gives the search giant a strong grip on the growing online display advertising market. But Brad Smith, Microsoft general counsel, said that Aquantive was complementary to Microsoft's business and should not face any such objections, as it would promote competition in the industry.
"Google and DoubleClick, in contrast, have strongly overlapping businesses in serving ads to third-party web publishers on the internet. We believe that acquisition will give that combined entity 80 per cent or more market share," he said. - (Financial Times Service)
