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In this issue:
Microsoft Buys aQuantive, Inc for $6 billion
by Arie Slob
Hello Windows users,
After Microsoft's rival in the online advertising battle - Google - managed to outmaneuver the software giant last April with its $3 billion purchase of DoubleClick, Microsoft wanted to come up with something - anything. So at the end of last week Microsoft announced it would be acquiring aQuantive Inc. for over $66.50 a share, a hefty premium to the previous day's closing share price of $35.87.
After Google bought DoubleClick, Yahoo followed by snatching up the remaining 80 percent of Right Media it did not already own for $680 million. Then last week Thursday (the day before Microsoft's announcement), WPP Group Plc announced it would acquire 24/7 Real Media Inc. for $649 million.
"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," said Steve Ballmer, chief executive officer of Microsoft. "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 is intensely committed to creating a thriving advertising business and to partnering closely with all key constituencies in this industry to help maximize the digital advertising opportunity for all."
If you've never heard of aQuantive you're not alone. I haven't, and neither did several other people I spoke to. Seattle based aQuantive is a company with several divisions. Besides the ad serving side of the business, aQuantive also operates the largest interactive ad agency in the U.S., Avenue A/Razorfish, putting it in the position of both buying and selling online ads.
Microsoft is trailing Google (and Yahoo! for that matter) by a large margin when it comes to earning money in online advertising. While Google made $1 billion last quarter, Microsoft's MSN lost $205 million. Microsoft is also losing out percentage wise: Google accounts for an estimated 33 percent of the online ad market compared to Microsoft's 7 percent, so Microsoft felt the need to make an acquisition to strengthen its position in the online advertising market.
Windows Updates
In the past two weeks, Microsoft issued a number of updates for Windows XP and Vista:
Windows XP:
- KB933612 - Install this update to resolve an issue where Outlook Express cannot connect to Exchange Server 2007 using SSL over SMTP port 587.
- Update for Windows XP x64 Edition (KB933061) - Install this update to improve the reliability of the Windows Management Instrumentation (WMI) repository.
Windows Vista:
- KB933612 - Install this update to resolve an issue where Outlook Express cannot connect to Exchange Server 2007 using SSL over SMTP port 587.
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