Microsoft Makes Largest Buy in History

Furthering the pace of consolidation in the Internet advertising industry, Microsoft on Friday announced it will acquire aQuantive for around $6 billion - its largest acquisition in history. Microsoft is paying nearly an 85 percent premium for the company.

Microsoft was rumored to be bidding for 24/7 Real Media, one of the smaller advertising firms up for sale, however WPP Group announced it won the deal Thursday for a price of approximately $649 million. Last month, market leader DoubleClick was acquired by Google, and Yahoo purchased ad firm Right Media.

aQuantive is perhaps best known in the industry for its ad agency Avenue A | Razorfish, one of the largest in the world. It offers marketing consultation, media planning and buying, and creative services to advertisers.

The company additionally offers DRIVEpm, a tool that matches advertiser campaigns with available publisher inventory and maximizes the return. aQuantive's Atlas platform also helps optimize marketing campaigns and improve publisher revenue.

"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," remarked Microsoft CEO Steve Ballmer. "Microsoft is intensely committed to creating a thriving advertising business and to partnering closely with all key constituencies in this industry to help maximize the digital advertising opportunity for all."

aQuantive's 2,600 employees will continue to operate as part of Microsoft's Online Services Business. Unlike the Google-DoubleClick deal that Microsoft claims reduces competition by combining companies offering the same services, Microsoft says aQuantive is complementary to currently available MSN adCenter solutions.