Thursday, May 17, 2007

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.

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