Microsoft Makes Largest-Ever Acquisition to Compete in Online Ads

21 May 2007

REDMOND, Washington: Making its largest-ever acquisition, Microsoft has agreed to buy near-neighbor aQuantive, a Nasdaq-listed group of digital marketing companies based in Seattle. Its assets include Avenue A/RazorFish, Atlas and DRIVEpm.

So passionately did the software titan crave aQuantive, it agreed to shell-out $66.50 per share - eighty-five percent above the company's Thursday closing price - valuing it at an eyewatering $6 billion (€4.44bn; £3.04bn).

Analysts, a skeptical breed at the best of times, raised their eyebrows. Morningstar analyst Toan Tran voiced the thoughts of many: "There had to have been some desperation for Microsoft to pay the price that it did," he opined.

"Sometimes, I am worried that Microsoft has Google-tunnel vision. It's so worried what Google is doing that it becomes way too reactionary."

Microsoft was not of like mind. "This deal takes our advertising business to a new level," whooped Kevin Johnson, head of its platforms and services division.

Data sourced from BBC Online (UK); additional content by WARC staff