Only a Microsoft could afford aQuantive

As I was saying yesterday, we should still expect the most valuable ad technology companies to land with the the major online media properties. In case you haven't heard yet, Microsoft announced early this morning that it is buying aQuantive for $6 billion, paying an 85 percent premium for the privilege, and paying twice as much for the company as Google paid for DoubleClick. Though I'm not sure I ever saw it printed, rumors have been circulating for about a month that Microsoft would buy aQuantive, the best way, other than whining about the Google/DoubleClick deal, for Microsoft to fight back against its archrival. It probably also got the better company. What has always been impressive about aQuantive is how it managed its way deftly through the dot-com bust, always steadfastly believing that in the end, strong analytics capabilities and a focus on ROI would win over clients. As for the price, $6 billion is a lot of money, but Microsoft can afford it, especially when one considers what is at stake: Microsoft has had its problems in competing against Google and Yahoo in online advertising, and there just aren't many ad technology companies still on the market that can hold up to aQuantive. It was time for Microsoft to do something dramatic. But let's take a look back at WPP's agreement yesterday to buy 24/7 Real Media for a paltry $649 million—WPP's valuation is just under $19 billion; Microsoft's is almost $300 billion. So, though I'm sure that WPP, and its rivals, may have been eyeing aQuantive (which also, of course, owns the digital agency Avenue A/Razorfish), the value of the company's ad technology simply put it out of their league. One last thought: isn't it somehow a sign of the times, that this flurry of ad technology acquisitions occurred during the same week that the TV networks held their upfront presentations?

WPP gets its ad technology company

In some ways, it’s hardly surprising that WPP Group has succeeded in buying 24/7 Real Media. Talks between the two companies had been rumored for weeks. On the other hand, it still seems a bit odd. Though old business models are being done away with all over the place, the acquisition marks the first time that one of the big ad holding companies has gotten into the business of selling ads—24/7 handles inventory for a number of sites. And while WPP said when it announced the deal this morning that it was buying the company for the technology, it’s worth asking whether WPP was also buying what it could. Consider that 24/7 competitor DoubleClick was bought by Google for $3.1 billion, and the decidedly second-tier, 24/7 is being bought by WPP for about $650 million. Microsoft also allegedly kicked 24/7’s tires, with at least one report putting the amount Microsoft was willing to offer at $1 billion. If this had come to a serious bidding war between any agency holding company and Microsoft, the holding companies surely would have lost., despite what Motley Fool says. As the consolidation of ad technology companies continues, we should still expect the most valuable to land with the the major online media properties, not with WPP and its competitors.