Early this morning Microsoft announced it will buy online marketing company aQuantive -- the holding parent of interactive agency Avenue A/Razorfish, display and paid search ad mangement platform Atlas and inventory management system DrivePM. The $6 billion deal cash deal represents an 85% premium to aQuantive's closing price last night and will likely close during the first half of 2008.
I think there are two obvious calls to make based on this deal:
1. The acquisition certainly builds out Microsoft's access to the entire online advertising supply chain. Prior to the acquisition Microsoft had the execution channel -- sites where advertisers could buy ads. Now, they also have the upstream pieces of this chain: planning, strategy, creative. WPP is working toward a similar goal with its recent announcement to acquire 24/7 Real Media. But WPP had the planning, strategy, and creative pieces and bought 24/7 for access to the downstream channel.
As the day continues, the talk of a Microsoft/Yahoo! union is sounding more and more specious. None-the-less I thought I'd weigh in with my take on what this pairing would mean for interactive marketers.
I still think Yahoo and MS are wrong to continue to chase Google. If that is what this potential merger about it just seems really naïve. Billions of dollars to try to “catch up” to a company that will only continue to out-innovate them.
The New York Post and WSJ.com just came
out with stories
of a rumored merger between Yahoo! and Microsoft. On paper, the deal makes sense for the following
reasons, but in the end it's going to be so hard that I don't think it will happen.
First, let's take a look at why it makes sense:
combination. Yahoo! and Microsoft have two of the largest online audiences –
according to Nielsen//NetRatings, 108 million and 95 million respectively in the
US in March 2007. Google had slightly more uniques (108 million), but the
combined unduplicated audience for Yahoo! + Microsoft is 129 million.