Microsoft buys online ad firm for $6 billion

MUMBAI: Microsoft has announced its largest acquisition ever, countering multiple bids, by paying a premium price of $6 billion to buy Seattle based online advertising firm aQuantive.

The Redmond company, which made its fortune building software, believes that in an estimated $40 million global digital advertising market, this move would help it rise to the challenges posed by arch-competitor Google Inc.

Internet search provider Google outbid Microsoft last month to snap up online advertising firm DoubleClick Inc. for $3.1 billion. Soon after, Yahoo Inc., another global competitor, gobbled up Right Media, for $680 million.

Shares of aQuantive rocketed 77.84 per cent, a gain of $27.92, to $63.79 after the deal was disclosed yesterday. Microsoft‘s shares, meanwhile, retreated 0.48 per cent, or 15 cents, to $30.83.

Microsoft has been expanding into advertising and other Internet businesses as its core software business matures.


Its alliance with aQuantive, which owns a cluster of computer servers, an ad network, and an interactive advertising agency, will catalyse its efforts to use online advertising market that is projected to reach $40 billion in 2008 and to grow at 20 per cent a year through the rest of the decade.

aQuantive‘s technology will enable Microsoft to drive advertising to the sites of third parties, such as news, sports, entertainment, online game, and other content companies. Many of those companies now contract with Google to place advertisements on their sites.

The deal also could give Microsoft a leg up in providing ads for game consoles, Internet television and cellular phones. Last month, Microsoft signaled its interest in that market by buying ScreenTonic, a mobile phone advertising firm in Europe.


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