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Friday, May. 18, 2007 at 9:01 am

$6B Paid For aQuantive: Ad Network Bubble?

By Jeffrey Eisenberg
May 18th, 2007

TechCrunch reports:

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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Comments (2)

  1. 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.

  2. microsoft is at the point where it can only grow by acquiring new established business.

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Jeffrey Eisenberg, founder of FutureNow, is a professional marketing speaker and the co-author of New York Times and Wall Street Journal bestselling books Call to Action and Waiting For Your Cat to Bark. You can friend him on Facebook.

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