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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  1. identicon
    re: thunk different, 18 May 2007 @ 3:14pm

    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.

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