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Microsoft to Buy Online Ad Agency aQuantive For $6 Billion

AP
Friday, 18 May 2007 | 12:56 PM ET

Microsoft said Friday it will purchase online advertising firm aQuantive Inc. for about $6 billion in cash, paying a premium to catch up with major ad deals by its competitors over the last six weeks.

The $66.50-per-share purchase price represents an 85% premium to aQuantive's Thursday closing price of $35.87.

Microsoft's Deal
Discussing the thinking behind Microsoft's acquisition of aQuantive, with Yusuf Mehdi, Microsoft sr. vp & chief advertising strategist; David Faber, CNBC news desk editor and CNBC's Mark Haines

It comes just one day after WPP Group, the world's second-largest advertising and marketing conglomerate, said it would buy online advertising company 24/7 Real Media Inc. for $649 million. Microsoft had been widely seen as a potential bidder for 24/7.

Last month, Google agreed to buy online advertising company DoubleClick for $3.1 billion, and Yahoo Inc. struck a deal to buy the privately-held online ad exchange Right Media Inc. for $680 million.

"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," said Microsoft Chief Executive Steve Ballmer in a statement.

The deal is expected to be completed in the first half of Microsoft's fiscal 2008. The acquisition is not expected to significantly impact the company's prior financial guidance.

With about 2,600 employees, aQuantive will continue to operate from its Seattle headquarters as part of Microsoft's online services business. The company, which operates marketing services firm Avenue A/Razorfish, reported 2006 profit of $54 million on sales of $442.2 million.

Shares of online ad company, ValueClick , soared more than $5 to $33 in premarket trading.

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