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Microsoft completes aQuantive takeover

The completion of Microsoft's foray into online advertising will create a new advertising and publishing division at the tech giant.

By Miya Knights, 14 Aug 2007 at 15:44

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Microsoft has announced it has completed its takeover of digital media and advertising services firm aQuantive, creating a new division dedicated to winning market share in the online advertising sector.

The announcement of the new business unit follows the approval of the acquisition by aQuantive shareholders last week and sees Brian McAndrews, the former aQuantive chief executive, installed as senior vice president of a new Microsoft Advertiser and Publisher Solutions Group (APS), which will compete with the top two leading online advertising and search vendors, Google and Yahoo.

APS will form part of the software firm's Platforms and Service Division (PSD). The newly formed APS Group will also be home to a new Emerging Media Group, which will include other online advertising-related functions within the company as a result of other recent acquisitions, Massive, AdECN and ScreenTonic.

Microsoft acquired AdECN in July for its ability to link buyers and sellers of internet advertising space, while the purchase of ScreenTonic in May will be used to deliver its location-based ad functionality to mobile phones. The company bought video gaming advertising firm, Massive last year.

Although terms were not disclosed for any of those deals, at $6 billion (£2.98 billion), aQuantive is Microsoft's largest ever acquisition and its new position within the company means it will be responsible for coordinating technology development for advertisers and publishers buy, sell and exchange online ads.

The company will make use of tools developed by aQuantive for managing advertising campaigns: Atlas provides ad management software and DRIVEpm matches advertiser campaigns with publisher inventory.

Bob Tarzey, service director for analyst firm Quocirca said the detail of the reorganisation was really a moot point in the reaction of Microsoft to the challenge it faces by Google.

"The really valuable desktop real estate is becoming what you run in your browser as opposed to the software on your PC," he said. "These moves from Microsoft should really been seen in terms of the fact that it will do almost anything to face up to the Google challenge and this acquisition is just another way of doing that."