The acquisition frenzy in the online ad space continues with Microsoft's plans to acquire aQuantive (parent of Avenue A Razorfish), the largest online ad agency, in a $6 billion all cash deal. The Redmond giant's move to increase its share of the $40 billion worldwide Internet ad market comes in the wake of major and minor deals, which include:
- Google's acquisition of DoubleClick (for US$ 3.1 billion) and Adscape (for US$ 23 million).
- Yahoo's purchase of 80% of Right media for US$ 680 million.
- WPP's buy-out of ad serving company 24/7 Real Media for US$ 649 million.
- Publicis's (a multinational advertising and communications company) acquisition of US-based e-marketing company Digitas for US$1.3 billion.
aQuantive operates three individual businesses in the online marketing space:
- Avenue A | Razorfish, which produces creative content for interactive ads.
- Atlas, a digital marketing and ad placement technology.
- DRIVEpm - a publishing system that helps advertisers and publishers manage campaigns and ad inventory.
The acquisition provides Microsoft increased depth in building a new generation of advertising in markets, such as video-on-demand and Internet Protocol Television, as well as cross-platform ad delivery, which bridges traditional and new media formats.
Here's an excerpt from the article at E-commerce Times:
"Microsoft's buy is the biggest to date in terms of value and may have the widest-reaching implications. With the purchase, Microsoft said it would build an Internet-wide ad publishing and tracking system and instantly enhance its relationship with many of the country's top advertisers. The move lets Microsoft go beyond its own Web properties — principally the MSN portal as well as its Live on-demand software offerings — to embrace "the full capacity of the Internet," said CEO Steve Ballmer."
For more follow-up on the news:
- Microsoft Agrees to Purchase AQuantive for $6 Billion (Bloomberg.com)
- Too Little, Too Late (Forbes)
- Microsoft's $6B deal: Following in Google's footsteps? (Computerworld)
- Quantifying Microsoft's biggest purchase ever (News.com)
- Microsoft-AQuantive deal portends Web video fight (Reuters)
- Microsoft to buy Online Ad Company (New York Times)
As traditional advertising behemoths and technology heavyweights seek to consolidate their position in the ever-lucrative online ad market, is Microsoft's recent purchase a clarion call to Google or an expensive face-saver? Join the discussion.
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