At A Great Expense, Microsoft Finally Gets Itself An Ad Firm

from the done-deal dept

The trend that was started when Google bought DoubleClick may have finally run its course as Microsoft has announced the purchase of Aquantive for $6 billion. This is almost double the price that Google paid for DoubleClick, which was the original company that Microsoft wanted to buy. But because Microsoft took so long to get a deal done, the value of online advertising firms has gone way up. Not only has Aquantive been rallying on anticipation of a buyout, but Microsoft had to pay nearly an 80% premium to get the deal done. Also boosting the valuation is the fact that Aquantive recently turned in great quarterly results, which probably gave the company a lot of leverage during negotiations. At this point, there really aren’t many independent companies like this left. Now attention will turn to Valueclick, although it’s not clear that there’s anyone left to buy them out, other than, perhaps, a traditional advertising firm looking to expand its internet business.


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Comments on “At A Great Expense, Microsoft Finally Gets Itself An Ad Firm”

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7 Comments
This sucks says:

Microsoft only did this because of bad press

How many years until MS makes it’s money back from this purchase? Calculators with the BEST estimates would say about 35-40 years to break even. Nice purchase.

Microsoft only made this huge stupid purchase to make its retarded stockholders happy due to so much bad publicity. These type of unfeasible purchases will actually cost the stockholders potential dividends.

It would be much cheaper for Microsoft to develop its own system and PAY people twice the commissions of doubleclick to use it and still have 5 billion left over. This would definately get it the customer base it needs.

Since there have been so many articles overhyping the importance for Microsoft to purchase one of these firms, Microsoft bought one out to appease the ignorant stockholders.

chris (profile) says:

Re: Microsoft only did this because of bad press

Since there have been so many articles overhyping the importance for Microsoft to purchase one of these firms, Microsoft bought one out to appease the ignorant stockholders.

Sweet. now all we have to do is run lots of stories about opening up APIs and how they should stop patent trolling and then maybe MS has a shot at becoming cool again.

Anonymous Coward says:

Re: Re: Microsoft only did this because of bad pre

Sweet. now all we have to do is run lots of stories about opening up APIs and how they should stop patent trolling and then maybe MS has a shot at becoming cool again.

You will need to get the major stock news firms to publish articles. Investors are gullible enough to believe anything they read.

As crappy as MS is, it is still the coolest product on the market.

ThunkDifferent (user link) says:

Re: Microsoft only did this because of bad press

oh, I don’t know, i think it was to keep a competitive edge. Did they lose money, hell yes. Do they have way more to burn, hell yes. This was expensive, but i don’t see how it will take 40 years to make back, perhaps a few, besides i think it was a secondary damage control purchase, it was NOT their first choice. Doubleclick was their first choice, this was their second, now Yahoo, who wanted a deal too is out in the cold. Bring on the cola wars.

http://ThunkDifferent.com

re: thunk different says:

Re: Re: Microsoft only did this because of bad pre

a couple of years? please… Do you know what you are talking about?

Google’s purchase of doubleclick will break even in 20 years (counting inflation and all that jumble). Doubleclick was #1 in the industry.

Take another company that makes less revenue and pay more for it. You will find that it will take at least 20 years to break even.

Do the math: Aquantive will make close to 200 million this year. At this rate, it will make the 6 billion back in 30 years. (Assuming advertising rates increase at the same rate that the money can be invested elsewhere)

In my opinion:
Microsoft could instead create a new system for about 10 million. They could then buy 5 million advertisers giving them $500 each. They could spend $490 million on advertising. That is enough to dominate the market. This would put them at about 3 billion. The other 3 billion could be issued back to investors as dividends. When the dividends increase, the stock value will go up from the good publicity.

Tarky7 (profile) says:

Hah !

This will be fun to watch. I went through 7, yes 7 interviews with Microsoft’s AdCenter, before they even came up with a name for it.

After a painful process involving homework assignments (can you say free consulting, I finally had my Big Interview with the MAN. I told him in no uncertain terms that if ‘the homework’ assignment was any indication of their paid search strategy that they had better re-think.

Needless to say I didn’t get the job, but I had reached such a level of frustration with the process, and ‘the homework’ thingy used a new lexicon that MSN in all their Imperial Wisdom had determined that were going to be ‘the new defining keywords for search’ I asked what these new words meant, and was told that I should know. Pleeease ! Spare me.

Gustaf Erikson (user link) says:

It's ValueClick, goddamnit

I work for a subsidiary of ValueClick. While I don’t know if they’re a good buy or not, I do know that love CamelCasing their company names. So it’s ValueClick, not Valueclick.

I’m happy I dodged the bullet of getting bought out by Microsoft. It would have been an interesting experience, sure, but so’s getting flayed alive. Any crazy overprice they’d pay would sure not filter down to us in the rank and file.

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