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Monday, May 21, 2007

Search Engine Power Play – Microsoft acquires aQuantive

Posted by @ 6:21 pm
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The search heavyweights have all been busy on the acquisition front trying to secure their piece of the top end online advertising market. Microsoft is the last of the search trinity to flex its acquisition muscle, picking up aQuantive for a mere $6 billion.

After Google’s recent purchase of DoubleClick for $3.1 billion, and Yahoo!’s less publicized buyout of Right Media for $680 million, this latest power play by Microsoft was not only expected by somewhat overdue.

aQuantive, owns interactive ad agency Avenue A RazorFish, advertising tool provider Atlas, and DrivePM, an online advertising network. While the company is definitely one of the bigger players in the market, the $6 billion price tag was a shock to many in the industry.

So why has Microsoft been so keen to spend big?

It’s a case of last chance. After being beaten to the punch by Google in the DoubleClick deal, it was vital that Microsoft bought into the lucrative top end ad market and ensure this time – they weren’t out bid.

The Microsoft executives will be ruing the one that got away with DoubleClick, and simply put, aQuantive was really the last major player up for grabs. If they were outbid again, which at that price was unlikely, they would have been essentially locked out of the market.

As Paul Kedrosky pointed out in his post about the deal, it might have been a deliberately aggressive approach by the tech giant.

“It’s also a sign of newfound aggression from Microsoft, an example of it saying that it can play the price premium game, locking out competitors like Google and Yahoo by playing bid-’em-up.”

aQuantive is definitely a handy addition to the Microsoft advertising arsenal, but I’m still not convinced the deal will help them gain ground on Google and Yahoo! in the online advertising race. Time will tell…



Rene LeMerle Rene is the marketing manager of ineedhits.com - a global search engine marketing company. He also leads the marketing for Gooruze.com - a web 2.0 style community for online and digital marketers. Rene has been in the industry since 1997 with much of that time spent helping businesses embrace the best of the internet and digital world.

View Rene LeMerle's profile






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