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Microsoft Buys Ad Firm for $6 Billion

Posted by Zonk on from the a-bunch-of-people-just-got-really-quite-wealthy dept.

bain writes "The BBC is reporting that Microsoft has agreed to buy the digital marketing firm Aquantive, in what will be its biggest ever acquisition. The software giant spent almost $6 billion acquiring the agency, in its first bid to tackle the online advertising market. 'The deal is expected to be completed in the first half of 2008, subject to regulation. Microsoft said the expensive price tag was worth it to access the complementary technology of Aquantive. The firm will continue to operate from Seattle as part of Microsoft's online operations, and will help the software giant broaden the scope of services its MSN consumer internet unit can offer. Microsoft is the latest technology firm to pounce on the shrinking independent online advertising sector.'"

15 of 167 comments (clear)

  1. Microsofts newest aquisition by Recovering+Hater · · Score: 5, Interesting

    Will have its addresses as the newest addition to my hosts file.

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    My humor is probably your flamebait
  2. Breaking news: by zyl0x · · Score: 5, Funny

    In an attempt to foil Microsoft's plans for internet advertising domination, Google has upped the bidding to eleventy billion dollars, a number which does not even exist. Yet.

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    Blerg.
    1. Re:Breaking news: by Gatekeyper · · Score: 5, Insightful

      I find it amusing, according to MS and others, that Google "overpaid" for Double-Click...#1 in the market. Not to mention the cries from Redmond of monopoly. However now, MS dishes out nearly twice the amount for the #2 in the market. Oh the irony. Google schools MS again.

    2. Re:Breaking news: by hackstraw · · Score: 4, Insightful

      I find it amusing, according to MS and others, that Google "overpaid" for Double-Click...#1 in the market. Not to mention the cries from Redmond of monopoly. However now, MS dishes out nearly twice the amount for the #2 in the market. Oh the irony. Google schools MS again.

      That, and this is what I find interesting. Kmart bought Sears for $11 billion. Sears has been around for a number of years. They are known for their kenmore (albeit rebranded) and craftsman product lines. They have real inventory, real stores, and real employees. Chrysler was recently sold for 7.4 billion. Well, 80% of it, but I'm talking ballpark figures here.

      Today, MS buys Aquantive. I've never heard of them before now. I would imagine this amounts to a database and some office space and maybe a website or something.

      I saw a headline the other day where the kid who made facebook (just a website), refused to sell for $2billion.

      To me, this seems overinflated. I guess that your ROI on "real" things like sears and chrysler dwarfs databases and websites.

      I guess this makes sense when you think that we are in the information/service age and we have left the industrial age, but this still seems a bit strange.

    3. Re:Breaking news: by gutnor · · Score: 4, Interesting

      "Google schools MS again"

      Yeah, Google is much more efficient than MS in detecting and buying evil companies.
      After seeing what MS has done in the past, I wonder why people are so happy to see another giant outwitting MS in its own game.

      Oh, I almost forgot, Google, unlike Microsoft will not use the evil tactics of DoubleClick and they fight underground for human rights in China.

    4. Re:Breaking news: by CodeBuster · · Score: 4, Interesting

      I saw a headline the other day where the kid who made facebook (just a website), refused to sell for $2billion.

      Actually he refused to sell for $750 million to Viacom in January of 2006 and again in September, this time to Yahoo, for $900 million (although negotiations are presumably ongoing with the offer still on the table since neither side has announced publicly that they are pulling out of the deal). I don't know what the book value of the Facebook is, but if I were in his shoes then I probably would have sold to Viacom for $750 million provided that the offer was all or mostly cash AND that I could walk away at any time with my money if I didn't like the way that Viacom was running the business or if they were interfering...same for Yahoo. You can always take the money, shore up your financial position, and then found another company or simply retire to private life. These geeks are playing a very dangerous game by trying to squeeze that last few hundred million out what is already a pretty large pot of gold. Just imagine what happens when the deal falls through because you were stubborn and the market or technology changes and you are left with the burnt out shell of a dot.bomb company? Most people would probably have difficulty recovering from that type of a psychological blow...some probably never would. If you are ever in that enviable position then take the money and run if you don't like the way that things are going.

      Of course, I am not in that position and it could be argued that given the amount of risk he took on to build the company to the point where he *could* sell it that he is either one of those people that thrives on insane risks and has a pair to match, he knows some *crucial* piece of information that we don't, or he is just plain stupid (unlikely). I tend to favor the risk taker hypothesis myself, that is probably why he controls an almost billion dollar corporation and I do not. On the other hand I would like to save enough money to die someplace warm when I am old and I don't fancy the idea of going broke a couple of times along the way on the outside chance that I might be in exactly the right place with exactly the right product at exactly the right time to make a killing, but that is just me I suppose.

  3. Compare all replies to replies from Google deal by Rosyna · · Score: 4, Interesting

    I wonder if Microsoft is still going to complain about Google's purchase of Doubleclick....

    In fact, all replies to this story should be immediately compared to the comments of Google's purchase. It'll be interesting to see the people that backed Microsoft's position that Google did something evil now commenting on this news.

    And people say there's no Microsoft-cult.. Pftt.

    1. Re:Compare all replies to replies from Google deal by Timesprout · · Score: 4, Interesting

      I wonder if Microsoft is still going to complain about Google's purchase of Doubleclick....
      Well to be fair in this case MS did have a point. DoubleClick gives a lot of insider track knowledge to Google and they do have the existing infrastructure to leverage it to squeeze out competitors should they choose. For this reason I did think that Google wanted DoubleClick more than MS and were prepared to pay over the odds to acquire it despite the talk of MS just trying to drive the price up. It's interesting now that having baulked at the DoubleClick price MS are now paying almost double for this acquisition. I don't know if Aquantive is a better fit for them or if they have just decided to get in the ad game at all costs.
      --
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  4. how innovative by gEvil+(beta) · · Score: 5, Funny

    Ahh, I see they've decided to innovate some more to compete with Google...

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    This guy's the limit!
  5. And google got DoubleClick for "just" 3.1B by vivaoporto · · Score: 4, Insightful

    Just so you see that was a bargain for Google to acquire Doubleclick for that amount, and how much Microsoft was yearning for acquiring an advertising company, in order to better compete with Google on other fronts (instead of letting the real battle go to the "software as a service" front).

  6. crazy by grub · · Score: 5, Interesting


    $1/per pair of eyeballs on the planet.

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    Trolling is a art,
  7. a bid to unseat flash? by pohl · · Score: 5, Interesting

    This strikes me as an expensive (but possibly effective) way to ensure that silverlight-based adverts get shoved in our faces.

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  8. Colour me confused.. by ratboy666 · · Score: 5, Informative

    aQuantive has ~900 million in assets, and a current shareholder equity of ~600 million. Net revenue is the first quarter of this year was ~14 million.

    Microsoft is aquiring them for 6 billion? Sounds about as dumb-ass as Google with DoubleClick (what, 31x premium?).

    aQuantive stock is now 64.75 *up 27.88*. I missed it.

    As a Microsoft shareholder, I don't like this. What a waste of money! I mean, paying 3 billion would be high, but 6 billion?

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    Just another "Cubible(sic) Joe" 2 17 3061
    1. Re:Colour me confused.. by mcguyver · · Score: 4, Informative

      Doubleclick was bought at 15x premium of revenue! Not profit. That's just amazing. Aquantive is going for 13x revenue. I wonder if these deals are going to work out or have the same stink of AOL-Time Warner.

  9. Don't Panic...(or maybe Do Panic) by RotateLeftByte · · Score: 4, Interesting

    But I think this is a sign of Microsoft Panicing.

    IMHO is that since Google bought Doubleclick(Yuk) they have been lookin at getting slice of the Online Advertising Market.
    However (Dons invertment managers hat) to pay a premium of 68% over yesterday's close for each shae is just plain crazy.
    Ok, I know that there are billions of dollars in cash sitting in the Bank of Microsoft but really...
    If I were a Microsoft shareholder (and thankfully, I'm not) I would be looking for some detailed explanations as to why the paid so much over the odds for this business. Its not as if they were in a bidding war (or were they?)

    68% is just too heavy a premium to pay.

    This has all the signs of panic.

    Balmer wants to buy up an Ad company before Google buys them all. but 68%, Really. this is really bad economics and seems like we have returned to the Dot.Com Bubble days.

    Google must be laughing their socks off.

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