I always wondered what I would do with a million dollars. Buy a nice luxury car, sip on a Starbucks every morning and not have to sacrifice my dinner over it, maybe even buy a few zip codes in other parts of the world. Ah yes, that would be the life. Now, I know to most people these days a million dollars seems like an easy win on “Deal or No Deal†or “Are You Smarter than a 5th Grader?†(Yes, that is a real show). But what would you do with $6 billion? Yep, that’s right…$6 BILLION! Well, ask Microsoft what they would do with $6 billion and they would proudly declare “Buy aQuantive!†Ah, I see we’re in a race to buy up ad networks these days. In an effort to stay on top of the competition Microsoft acquired ad network aQuantive for a mere $6 billion today (um, can I get a receipt for that?). Due to the recent rise in market share competition with Google’s DoubleClick purchase ($3.1 billion) and Yahoo’s RightMedia buyout ($680 million), Microsoft knew it’s only chance to stay in the game was to purchase a digital agency and fast!
It seems like every week the Internet marketing industry hears big news about the search engine giants in the process of or in pursuit of acquiring some advertising network to further dominate or not lose grip of market share in the online ad space. Take a look at some comparable acquisitions from 2007 alone:
February 2007: Google buys AdScape, ad network which specializes in in-game advertising, for $23 million.
April 2007: Google buys Doubleclick for $3.1 billion; generally thought to be a major victory for Google, since Microsoft supposedly also wanted to acquire Doubleclick.
April 2007: Yahoo buys RightMedia for $680 million. It now seems like a modest number compared to Google and Microsoft’s acquisitions.
May 2007: WPP Group acquires 24/7 Real Media for $649 million.
May 2007: AOL purchased AdTech AG. Undisclosed amount.
May 2007: Microsoft acquires aQuantive for $6 billion
So what would you do with a million big ones? I’ve made up my mind. With a million dollars I would start up my own ad agency and flaunt my bad self in front of Google, Yahoo or Microsoft to turn that million into six…billion.
For additional information please visit the following sources:
http://mashable.com/2007/05/18/microsoft-aquantive/
http://clickz.com/showPage.html?page=3625912
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Comments (3 comments)
I like the timeline in this post about all of the acquisitions. What I’m most interested about is how all of these parent companies now own their own Top 20 advertising agencies. How are other agencies going to perceive these acquisitions as they have their own relationships with DrivePM, Atlas, Doubleclick and 24/7. Do the agencies involved pitch their ad network access first? Even if it’s not implied, isn’t it a possibility? Does Google, Yahoo, AOL and Microsoft have too much of our data now? “Hey not only can we create your ad campaigns for you, but now we can streamline your spending because we own our own ad network.” Where does the gray really become black and white?
BJ / May 21st, 2007, 10:21 am / #
Great post and very thought-provoking material in the above comment regarding the complicated dynamics that may start to emerge as agencies and ad networks begin to fall under the same corporate umbrella. How exactly will this all work? It will be interesting to watch…..
Like the great empires of the ancient world, it feels a little like Google, Yahoo and Microsoft are rapidly conquering “civilizations” in an effort to determine who will take over the world! And in a sense, I guess that’s exactly what they are doing.
I assume (or I hope) that there is a lot of thought and research that goes into each of these monster purchases, but each new acquisition feels just a little more impulsive and reactive than the one before it. Could it just be the multi-billion dollar equivalent of “Keeping up with the Joneses”? Or, is it just pure coincidence that these deals occurred within weeks of each other?
Alison / May 21st, 2007, 11:10 am / #
It’s been referred to as “Keeping up with the Googles” and Microsoft is definitely not one to be left behind. This is a heated race for the few remaining online advertising businesses, as the media and tech companies compete for a position in the Internet advertising market. It’s no coincidence that these deals are occurring consistently right after one another. It’s the ultimate chase - when one makes the first big move the rest will frantically follow!
The purchase will allow Microsoft to move into new markets, and diversify from its traditional software base, as we move away from PC software and into web-based applications. It will create new revenue channels, which will help in the financial longevity of their business model. Plus I’m sure there was a lot of pressure on the acquisition team to close a deal!
So what do you think - Did they overpay for aQuantive and will the acquisition eventually pay off? It’s hard to say, only time will tell.
Sarah / May 21st, 2007, 4:00 pm / #
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