May 20, 2007

Microsoft Acquires aQuantive for $6B

aQuantive Digital Advertising
Microsoft and Google having been waging the digital advertising wars with one another for quite some time now….and Google has been winning hands down. "Microsoft was beaten out by Google on DoubleClick, in the [2005] bid for a stake in AOL, and on the [2006] ad deal for MySpace. In each of these cases Microsoft was simply outbidded by Google.

Now, Microsoft has tapped into it's available $35B cash flow to acquire the digital marketing and advertising firm aQuantive. AQuantive's Atlas set of products, which allow agencies and publishers to manage, develop and serve up ads directly to online properties, also allows Microsoft to sell advertising for sites other than its own, something it currently cannot do with its adCenter platform. Doran said Microsoft plans to integrate adCenter with Atlas to extend the reach of its own paid-search platform, and has no plans to abandon its efforts in this area.

An option to buy aQuantive shares for $35 by today's expiration deadline (18 May 07) jumped tenfold yesterday to $1. The price of the option surged almost 29-fold today after Microsoft offered to buy aQuantive for $66.50 a share, sparking a 78 percent rally in the stock.

Will this acquisition of aQuantive give Microsoft the firm foothold in the digital advertising realm it has been seeking? And above all was the $6B pricetag to acquire aQuantive money well spent in their competition with Google?

During a conference call, several financial analysts asked Microsoft executives to explain and defend the US$6 billion (NZ$8.2 billion), all-cash deal.

"We believe it is definitely the right company to buy," said Chris Liddell, Microsoft's CFO, "and hence we're willing to pay the value we're talking about today."

Only time will tell. However, I feel that this was definitely a step in the right direction for Microsoft to start gaining some much needed leverage in the digital advertising sector. With the exponential growth within the digital advertising market I would not be surprised to see even greater purchases by Microsoft in the not too distant future.

About aQuantive: Founded in 1997 and headquartered in Seattle, aQuantive, Inc. helps global companies tap into the incredible marketing power of today's digital media. Through its operating units - interactive agency Avenue A | Razorfish, digital marketing technology provider Atlas, as well as DRIVEpm, a performance media company - aQuantive is positioned to bring value to any interaction in the digital marketplace.

Stephen Ralph
http://www.Top-Affiliate.com
http://www.FreeAdvertisingBlog.com

Technorati Tags: aquantive, microsoft, digital advertising, adcenter, doubleclick, google

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