Microsoft Corp. said on Friday it would buy a Quantive Inc. for $6 billion, paying an 85 percent premium to snap up one of the last large independent companies in a consolidating Web advertising market.
In the biggest acquisition ever made by the world's No. 1 software maker, Microsoft said it would pay a Quantive shareholders $66.50 a share, a hefty premium to the company's closing share price of $35.87 on Thursday.
Shares of aQuantive shot to $63.95 in morning Nasdaq trade while Microsoft fell 1.1 percent to $30.64.
The all-cash deal tops a dramatic one-month consolidation spree across the online advertising market sparked when Google Inc. agreed to buy DoubleClick for $3.1 billion.
Yahoo Inc. followed by snatching up the 80 percent of Right Media it did not already own in a deal valued at $680 million. This week, WPP Group said it would acquire 24/7 Real Media Inc. for $649 million.
Ahead of the wave, French advertising giant Publicis agreed to buy online ad agency Digitas in December for $1.3 billion.
Microsoft of Redmond, Washington said it would acquire aQuantive, based in nearby Seattle, to expand its push into Internet advertising through aQuantive's tools for serving up online ads and tracking their impact.
"This deal takes our advertising business to a new level, and we are committed to earn a bigger slice of that $40 billion pie that's growing," said Kevin Johnson, president of Microsoft's platforms and services division, on a conference call with analysts.
Microsoft said it expects the deal to close in its next fiscal year starting July.
The company said the deal would add revenue and operating expense in fiscal 2008, but said it will not change its outlook for operating income or earnings per share next year.
ValueClick Inc., the last sizable independent player in the online advertising market saw its shares jump as much as 12.5 percent in pre-market trade to $31.36 from $27.88.
Microsoft beat other competitors for aQuantive, saying there are only a small number of companies with enough advertising assets to help it gain scale in the business.
AQuantive helps advertisers target online ads through its Atlas technology unit and offers Web-site development services through its design agency Avenue A/Razorfish.
It also operates an online advertising network that connects buyers and sellers and provides behavioral targeting for advertisers of Web site users.
Microsoft said the deal would allow it to strengthen ties with advertisers, ad agencies and Web site publishers.
The purchase also provides Microsoft more depth in building a new generation of advertising in markets like video-on-demand and Internet Protocol Television, as well as cross-platform ad delivery across traditional and new media formats.
---Mirror News
In the biggest acquisition ever made by the world's No. 1 software maker, Microsoft said it would pay a Quantive shareholders $66.50 a share, a hefty premium to the company's closing share price of $35.87 on Thursday.
Shares of aQuantive shot to $63.95 in morning Nasdaq trade while Microsoft fell 1.1 percent to $30.64.
The all-cash deal tops a dramatic one-month consolidation spree across the online advertising market sparked when Google Inc. agreed to buy DoubleClick for $3.1 billion.
Yahoo Inc. followed by snatching up the 80 percent of Right Media it did not already own in a deal valued at $680 million. This week, WPP Group said it would acquire 24/7 Real Media Inc. for $649 million.
Ahead of the wave, French advertising giant Publicis agreed to buy online ad agency Digitas in December for $1.3 billion.
Microsoft of Redmond, Washington said it would acquire aQuantive, based in nearby Seattle, to expand its push into Internet advertising through aQuantive's tools for serving up online ads and tracking their impact.
"This deal takes our advertising business to a new level, and we are committed to earn a bigger slice of that $40 billion pie that's growing," said Kevin Johnson, president of Microsoft's platforms and services division, on a conference call with analysts.
Microsoft said it expects the deal to close in its next fiscal year starting July.
The company said the deal would add revenue and operating expense in fiscal 2008, but said it will not change its outlook for operating income or earnings per share next year.
ValueClick Inc., the last sizable independent player in the online advertising market saw its shares jump as much as 12.5 percent in pre-market trade to $31.36 from $27.88.
Microsoft beat other competitors for aQuantive, saying there are only a small number of companies with enough advertising assets to help it gain scale in the business.
AQuantive helps advertisers target online ads through its Atlas technology unit and offers Web-site development services through its design agency Avenue A/Razorfish.
It also operates an online advertising network that connects buyers and sellers and provides behavioral targeting for advertisers of Web site users.
Microsoft said the deal would allow it to strengthen ties with advertisers, ad agencies and Web site publishers.
The purchase also provides Microsoft more depth in building a new generation of advertising in markets like video-on-demand and Internet Protocol Television, as well as cross-platform ad delivery across traditional and new media formats.
---Mirror News