(25 July 2007 4:54 pm)

MUMBAI: Microsoft Corp. will acquire AdECN Inc., whose technology would serve as a hub where advertising networks can come together in a neutral, real-time auction marketplace for buying and selling display advertising.

The deal is part of Microsoft's strategy to develop a comprehensive search and display advertising platform enabling advertisers and publishers to maximize return on investment (ROI) on their digital advertising investments. Financial terms of the deal were not disclosed.

Microsoft platforms and services division president Kevin Johnson said, "Both Microsoft and AdECN have a deep commitment to creating the technologies and platforms that enable advertisers and publishers to maximize their ROI in the digital marketplace. We believe the addition of AdECN to the Microsoft portfolio is a perfect fit and will create more efficiency for the industry by forming a more robust marketplace between advertisers and publishers, aggregating more supply and demand. This is good for the whole advertising industry."

AdECN founder and CEO William Urschel said, "Joining forces with Microsoft will provide the capital and resources to enable AdECN to scale the exchange at a much faster pace, making it more attractive to the advertising networks and other traffic aggregators looking to better serve their advertisers and publishers."

Through this deal advertisers can get access to more inventory, enabling more efficient matching of their requirements and increased ROI. Publishers can increase yield – earn more money per page view – due to the higher volume of available inventory.

Both groups are likely to benefit from the exchange's neutrality and transparency, enabling them to make more informed decisions about their bid and ask decisions.

The exchange concept is similar to the Nasdaq which serves as the hub for financial brokerages, enabling all parties to come together and have access through a neutral party to a larger pool of supply and demand for their clients. Exchanges are a means by which liquidity is created for advertising networks by bringing together a maximum number of both buyers and sellers.

The acquisition is expected to be completed in the first half of Microsoft's fiscal year 2008. AdECN is a privately held venture based in Santa Barbara anf functions as an advertising exchange platform.