Microsofts big revenge – buys aQuantive in $6 billion-deal May 18, 2007Posted by John in Technology.
With Friday came Microsoft’s big revenge. After having been described as the company ”left dancing alone” in the big players ongoing mass-acquisition of advertising firms, Microsoft today announced it will buy aQuantive in an all-cash transaction valued at approximately $6 billion.
This is a huge deal following Google’s acquisition of DoubleClick, Yahoo’s acquisition of Right Media and WPP’s acquisition of 24/7 Real Media – that was announced yesterday. ”The deal is an indication of Microsoft’s efforts to catch up in the growing online advertising space,” Chris Isidore writes at CNN Money.com.
It also sets a trend.
“It’s clear now that the media and advertising industries, which thanks to Google and Web 2.0 now include the software industry, will be dominated by a new breed of company — the vertically integrated media and advertising company,” Scott Karp writes at Publishing 2.0 adding that these “vertically integrated media and advertising companies will battle it out for control of all of the dollars in the online advertising value chain”.
At Wired’s blog Epicenter Adario Strange notes that the deal makes all other recent advertising firm acquisitions look positively Lilliputian. At Screenwerk, Greg Sterling writes that the transaction is the largest in Microsoft’s history: “Microsoft apparently won a competitive bidding situation (other bidders weren’t disclosed). The consolidation continues . . . and when the dust settles there will only be a small number of very large firms that control 90%+ of all online advertising,” he writes.
So what is aQuantive, and what makes it worth this huge chunk of money? At Geekwatch Blog Mathew Ingram asks if aQuantive ”which I had never heard of until this morning” is worth twice as much as Google paid for Doubleclick not too long ago.
Larry Dignan, writing at Between the Lines provides a useful history lesson on the company (based on a dossier from Securities and Exchange Commission filings). It ends with the latest results: On May 8 2007 aQuantive reported net income of $14.2 million on revenue of $142.6 million. At TechCrunch Michael Arrington notes that aQuantive is the parent company to Avenue A, Razorfish, Atlas and DRIVEpm. ”Microsoft is saying that there is very little overlap between the two companies, the products are highly complementary,” Arrington writes.
So now all the giants have their own advertising firm. We look forward to seeing how these new media and advertising companies will navigate in the world of web 2.0 – and what new firms they’ll add on in the future.
By John Furrier and Tina Magnergard Bjers