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Microsoft Buys Ad Firm for $6 Billion

Posted by Zonk on Fri May 18, 2007 12:06 PM
from the a-bunch-of-people-just-got-really-quite-wealthy dept.
Businesses Microsoft The Internet The Almighty Buck
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.'"
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  • How 'bout microsoft buyout some of that thevinylgroove.com or fishybell.com. I hear that even though they're offline they're worth millions. Millions I say!

  • Microsofts newest aquisition (Score:5, Interesting)

    by Recovering Hater (833107) on Friday May 18 2007, @12:09PM (#19181047)
    Will have its addresses as the newest addition to my hosts file.

  • Breaking news: (Score:5, Funny)

    by zyl0x (987342) on Friday May 18 2007, @12:09PM (#19181065)
    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.
    • eleventy billion dollars

      Is that larger or smaller than a googolyplexy?

      • eleventy billion dollars

        Is that larger or smaller than a googolyplexy?
        Larger, of course. Eleventy = one louder.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Google has upped the bidding to eleventy billion dollars, a number which does not even exist. Yet.

      Your Google Overloards saysotherwise:

      Results 1 - 10 of about 186,000 for eleventy. (0.16 seconds)

    • Re:Breaking news: (Score:5, Insightful)

      by Gatekeyper (1095277) on Friday May 18 2007, @12:47PM (#19181703)
      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.
      • Or you could just consider that market conditions change. Oh my god, you over paid for gas two years ago and now its way more expensive. Guess you were right at the time.

      • Re:Breaking news: (Score:5, Insightful)

        by hackstraw (262471) on Friday May 18 2007, @02:07PM (#19182947) Homepage
        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.

        • See, here's the thing. Real Things are really hard to make. Research, development, testing, certification, more testing, marketing, shipping, storing, selling, and maybe even shipping one more time make for a lot of money invested to not a lot of return, considering all the effort that goes into them. Sure, you might say that Sears makes a lot of Real Things and has a lot of Real Assets and employs a lot of Real People, but at the end of the day, are its profits in line with the amount of money invested to

        • Re:Breaking news: (Score:5, Interesting)

          by CodeBuster (516420) on Friday May 18 2007, @06:17PM (#19186261)
          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.
          • The facebook owner doesn't read Slashdot Semel, quit trying your luck and fork up the extra hundred million.

      • Re:Breaking news: (Score:5, Interesting)

        by gutnor (872759) on Friday May 18 2007, @02:16PM (#19183081)
        "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.
    • Is eleventy billion larger than a googol [wikipedia.org]? Is it larger than a googolplex [wikipedia.org]?

  • Compare all replies to replies from Google deal (Score:5, Interesting)

    by Rosyna (80334) on Friday May 18 2007, @12:09PM (#19181067) Homepage
    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.
    • I agree. This action by Microsoft is just proof that Microsoft screaming 'anti-trust' over the Google-DoubleClick deal was going nowhere.

      Good move for Google, they paid half the price for a better known entity.

      • It wouldnt surprise me if Aquantive has some patents that MS needs to stop Google.

        • Re: (Score:3, Interesting)

          by Ucklak (755284)
          I've never heard of Aquantive until now.
          I've heard of Doubleclick and they're blocked in my router.

          I just wonder what patents that Aquantive has that aren't in use that could be used to compete with Doubleclick.

        • If Microsoft wanted to use Aquantive's patents against Google the last thing that it would do is buy the company. Microsoft almost certainly infringes on some patents that Google owns, especially if you throw in Windows and the rest of Microsoft's software. The Holy Grail of patent litigation is to produce a patent that is being infringed by Windows as the potential payoff can be enormous. If Aquantive sues Google then the possible damages from a counter suit are much lower than the possible damages from a counter suit against Microsoft. If this was about patent litigation then Microsoft would announce a "partnership" (or maybe it wouldn't even do that) and Aquantive would sue Google.

          Microsoft is not going to sue any organization that has software patents over patent infringement as Microsoft almost certainly has more to lose than any other player.

    • Re:Compare all replies to replies from Google deal (Score:5, Interesting)

      by Timesprout (579035) on Friday May 18 2007, @12:27PM (#19181411)

      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.

    • Re: (Score:3, Interesting)

      by fermion (181285)
      My reply to the google deal was the purchase of the unsavory doubleclick made google a much less trustworthy operation. Google was always not absolutely trustworthy as one is never sure if the data they store is going to come back to haunt a user. BHut at least they are providing a service at only indirect costs, and users often have a choice of thier service or others service as their is no lockin. My actualy response was to go through my cookie permission file and deny permission for most of the google

  • how innovative (Score:5, Funny)

    by gEvil (beta) (945888) on Friday May 18 2007, @12:09PM (#19181075)
    Ahh, I see they've decided to innovate some more to compete with Google...
  • 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).

  • crazy (Score:5, Interesting)

    by grub (11606) <slashdot@grub.net> on Friday May 18 2007, @12:11PM (#19181103) Homepage Journal

    $1/per pair of eyeballs on the planet.

  • Well I wonder if Google sold it all and jumped off a cliff if M$ would blindly do the same?? What is up with this rampant battle to out do each other?? If Google started making washing machines would M$ follow suit??
    • MS has been copying or buying anyone else that is considered a leader in the marketplace since day one, if not before that. The only originality (if you can call it that) from MS has been their marketing strategy of forcing the world to buy their software when buying a pc. Had it not been for that kind of originality, MS would have been an also ran long ago... well, it could have happened that way. At this moment in time, Google and a few others have managed to carve out a spot in the marketplace before MS

  • What are Aquantive's domains? (Score:3, Interesting)

    by Animats (122034) on Friday May 18 2007, @12:17PM (#19181217) Homepage

    What domains do Acquantive ads come from? I need to update certain tables. Thanks.

  • a bid to unseat flash? (Score:5, Interesting)

    by pohl (872) * on Friday May 18 2007, @12:17PM (#19181219) Homepage
    This strikes me as an expensive (but possibly effective) way to ensure that silverlight-based adverts get shoved in our faces.
    • You know, this might even be a good thing. If it looks like silverlight is just being used for annoying ads maybe people will avoid it at first and it'll never take hold!

      In related news, has Miguel de Icaza tried to buy a bankrupt ad agency for $6 yet?

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

      I pray every day to the highest Gods of the Internet that the most holy and blessed developers of Flashblock will also bestow unto us a Silverlight block, as soon as its impure code oozes onto the interwebs. (much as I actually do appreciate Flash getting much sorely needed competition).

      Flashblock developers - friends of the Internet.

  • In Other News . . . (Score:4, Funny)

    by UnknowingFool (672806) on Friday May 18 2007, @12:30PM (#19181453)
    As a gesture to welcome the new acquisition, Aquantive received a shipment of new office furniture at their soon to be headquarters in the Microsoft complex. A welcome note from CEO Steve Ballmer was attached to the shipment. Current Aquantive employees were happy about the gesture but questioned why there appeared to be disportionately more chairs than employees. The estimates were a 5 to 1 ratio. In a separate shipment, bolts, bars, and steel plates were also delivered to the offices. An attached, unsigned note read: "You're going to need these for the chairs. Good luck and Godspeed."
  • 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?
  • now next thing you know they will be having those advert boxes just below the login box.
    and special offer notifications popping up during your screensaver
    not to mention linking with some telesails.
    so whenever you login and start to surf you will get a call

    dam will have to pattent that before m$ does , dam prior art in public domain above

    what was that deal they where on about for discounted versions for schools that the users
    would be compelled to watch advert streams before they could use it
    looks like that m

  • Don't Panic...(or maybe Do Panic) (Score:5, Interesting)

    by RotateLeftByte (797477) on Friday May 18 2007, @01:32PM (#19182371)
    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.

      • Re: (Score:3, Informative)

        by RotateLeftByte (797477)
        Companies have a statutory duty to their shareholders to operate their business properly.
        This especially includes their M&A activity.
        Paying a premium of say 10% is usually as high as you can go before shareholders start asking awkward questions.
        A premium of 68% is way beyond that level.
        It is the sort of level that could get shareholders angry. If enough of them sufficiently angry they can force a company to hold an EGM.
        It does not matter who the company is. One worth Billios or one worth a few Millions.

  • Dot Com Boom 2.0 (Score:4, Funny)

    by rlp (11898) on Friday May 18 2007, @02:21PM (#19183143)
    New exit strategy - sell to Google, Microsoft, or Yahoo.

    • Re:wRong nAme (Score:4, Funny)

      by owlnation (858981) on Friday May 18 2007, @01:08PM (#19182051)

      The capitalization of the company name should be "aQuantive" not "Aquantive."
      And good luck to everyone in MS forced to try and type this in Word with intellisense switched on.

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