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Microsoft splurges $6bn to boost ad clout
Buys Aquantive - with an eye on IPTV...

By Margaret Kane

Published: Friday 18 May 2007

In a bid to boost its presence in advertising, Microsoft has announced it will pay $6bn to acquire aQuantive, a digital marketing and services company.

Microsoft said the deal will help it support more-advanced advertising products and technologies across areas including media planning, video-on-demand and IPTV. aQuantive produces the Atlas Media Console and Drive PM tools for advertisers and publishers, and owns interactive ad agency Avenue A/Razorfish.

Microsoft CEO Steve Ballmer said in a statement: "The advertising industry is evolving and growing at an incredible pace, moving increasingly toward online and IP-served platforms, which dramatically increases the importance of software for this industry.

"Today's announcement represents the next step in the evolution of our ad network from our initial investment in MSN, to the broader Microsoft network including Xbox Live, Windows Live and Office Live, and now to the full capacity of the internet."

Microsoft said it will pay $66.50 per share for aQuantive, an 85 per cent premium over its Thursday closing price of $35.87.

Earlier this week, ad giant WPP Group said it will spend $649m to buy digital marketer 24/7 Real Media, a company Microsoft had recently been rumoured to be interested in. Last month, Google announced plans to acquire digital advertising company DoubleClick for $3.1bn, and Yahoo! followed that up with its own acquisition announcement - a $680m deal for Right Media.

aQuantive, which was founded in 1997, has about 2,600 employees and is based in Seattle.

CNET News.com reporter Dawn Kawamoto contributed to this story

Margaret Kane writes for CNET News.com