21 May 2007
The race to buy up online advertising agencies reached new heights last week when Microsoft announced that it would be spending $6 billion to acquire Aquantive, a digital marketing and services company.
The move comes shortly after rivals Google announced that they would be spending $3.1 billion on the digital advertising company DoubleClick, and Yahoo! announced a $680 million deal for Right Media.
The move is Microsoft's largest ever deal and emphasises the huge value that is being placed upon online advertising, as well as the shift away from traditional media into online marketing. It is thought that Microsoft may have been felt the need to act fast before all the main internet advertising companies were bought up, fuelled by a need to expand with the knowledge that they were behind their rivals in this field.
Microsoft CEO Steve Ballmer said in a statement on Friday:
"The advertising industry is evolving and growing at an incredible pace, moving increasingly toward online and IP-served platforms, which dramatically increases the importance of software for this industry."
He added:
"Today's announcement represents the next step in the evolution of our ad network from our initial investment in MSN, to the broader Microsoft network including Xbox Live, Windows Live and Office Live, and now to the full capacity of the Internet."
However, some have speculated that Microsoft's record spend, which is three times the amount it has paid for any other company - and twice the amount Google paid for DoubleClick - may have been a move to please stockholders and a statement to their rivals. There has also been considerable discussion within the blogosphere as to how long it will take for Microsoft to make a return on this investment from this acquisition.
Nevertheless, the purchase will allow Microsoft to move into new markets, and diversify from its traditional software base, which many think has peaked, as we move away from an age of isolated PC software and into web-based applications.
Keeping up with the Googles? Microsoft drop $6 billion on Aquantive
The race to buy up online advertising agencies reached new heights last week when Microsoft announced that it would be spending $6 billion to acquire Aquantive, a digital marketing and services company. The move comes shortly after rivals Google announced that they would be spending $3.1 billion on the digital advertising company DoubleClick, and Yahoo! announced a $680 million deal for Right Media.
The move is Microsoft's largest ever deal and emphasises the huge value that is being placed upon online advertising, as well as the shift away from traditional media into online marketing. It is thought that Microsoft may have been felt the need to act fast before all the main internet advertising companies were bought up, fuelled by a need to expand with the knowledge that they were behind their rivals in this field.
Microsoft CEO Steve Ballmer said in a statement on Friday:
"The advertising industry is evolving and growing at an incredible pace, moving increasingly toward online and IP-served platforms, which dramatically increases the importance of software for this industry."
He added:
"Today's announcement represents the next step in the evolution of our ad network from our initial investment in MSN, to the broader Microsoft network including Xbox Live, Windows Live and Office Live, and now to the full capacity of the Internet."
However, some have speculated that Microsoft's record spend, which is three times the amount it has paid for any other company - and twice the amount Google paid for DoubleClick - may have been a move to please stockholders and a statement to their rivals. There has also been considerable discussion within the blogosphere as to how long it will take for Microsoft to make a return on this investment from this acquisition.
Nevertheless, the purchase will allow Microsoft to move into new markets, and diversify from its traditional software base, which many think has peaked, as we move away from an age of isolated PC software and into web-based applications.
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