Last week, Microsoft announced the largest acquisition in its history. They are purchasing Seattle-based interactive ad firm aQuantive for $6 billion. Microsoft describes the acquisition as the next step in the evolution of its advertising network.
What is aQuantive?
aQuantive is the holding company for several online ad firms and agencies including Atlas, DRIVEpm, Avenue A and Razorfish. The deal is the latest in a string of large acquisitions in the internet ad space. As online advertising increasingly becomes the lynchpin of many new web-based businesses, owning your own ad network has been critical to revenue. Here are some of the biggest players now and their acquisitions: Google: DoubleClick, WPP: 24/7 Media, Yahoo: Right Media.
Why is Microsoft Spending So Much Money So Quickly to Buy aQuantive?
Microsoft, which lost out on the bidding for DoubleClick, will pay an 85% premium over aQuantive’s closing share price on Thursday, the day before the deal was announced. aQuantive was an expensive purchase for Microsoft, but a necessary move to keep the company from falling too far behind their competitors.
aQuantive CEO Brian P. McAndrews added, “Microsoft has set a leading example in prioritizing industry partnership, transparency, measurement and quality, and we look forward to combining forces and bringing the value of our combined assets to bear for the benefit of advertisers, ad agencies and publishers.”
Frank Wilson is a retired teacher with over 30 years of combined experience in the education, small business technology, and real estate business. He now blogs as a hobby and spends most days tinkering with old computers. Wilson is passionate about tech, enjoys fishing, and loves drinking beer.