$6B Paid For aQuantive: Ad Network Bubble?
Breaking: Microsoft is acquiring advertising network aQuantive, the parent company to Avenue A | Razorfish, Atlas and DRIVEpm, for roughly $6 billion in an all-cash transaction, the company said this morning.
aQuantive is a public company (AQNT) and had a market cap of just $2.8 billion as of yesterday. The acquisition price of $6 billion is a roughly 2x premium on yesterday’s closing price. The acquisition comes after recent big acquisitions by Google and Yahoo in this space. Google bought Doubleclick for $3.1 billion in April. Later that same month, Yahoo acquired competitor RightMedia for $680 million. Just yesterday, WPP Group acquired yet another company in this space, 24/7 Real Media, for $649 million.
2006 revenues for aQuantive were $442 million. Net income as about $54 million.
aQuantive’s operating companies include both tools and ad agencies. The company is located in Seattle.
Are these valuations smart or delusional? I can see it both ways. What do you think?
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Written by:Jeffrey Eisenberg
Interesting one. Without knowing the going on’s, it seems strange to pay twice as much for a company, unless it’s to put up the prices of other companies and make them harder for Microsoft’s competitors to be bought out. Or they just loved the idea of doing it.