Saturday, May 19, 2007

The Online Ad Wars -- Microsoft's $6 Billion Gambit

Microsoft announced yesterday that it will purchase online ad firm AQuantive for $6 billion, in an effort to keep up to speed with the other online behemoths. This represents Microsoft's biggest acquisition to date.

Just last month, Google agreed to buy online ad firm DoubleClick Inc. for $3.1 billion and Yahoo Inc. agreed to pay $649 million for the remaining 80% of Right Media Inc. it didn't already own. In 2004, AOL acquired ad-serving business and, according to the Los Angeles Times, "credits much of its resurgence in online advertising" due to this deal (AOL also, this past Wednesday, bought a controlling interest in the German company, AdTech).

And, the traditional advertising agencies have recently gotten into the online game in a big way with major acquisitions of their own. Just this past Thursday, WPP, the world's second largest advertising company, announced it was acquiring 24/7 Real Media Inc. to enhance its online ad serving prowess. WPP's move follows about six months after one of its major rivals, Publicis Groupe, acquired the online advertising firm Digitas Inc.

Looks like the online ad business is now, not surprisingly, shaping up to be a battle of the titans. And, remaining pure-play online ad companies such as ValueClick Inc. are positioned well as other titans circle the waters ...