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$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?
About the author
Jeffrey Eisenberg is the CEO & co-founder of FutureNow (OTCBB: FUTR.OB), providers of OnTarget™. OnTarget™ monitors your website 24/7, uncovers the reasons your visitors fail to buy, register, or become a lead, and then provides specific recommendations for you to implement to keep your goals on target. Future Now has been helping businesses generate more engagements, leads, subscriptions, and sales with its unique framework, Persuasion Architecture®, since 1998. Jeffrey is the co-author of the Wall Street Journal, Business Week, USA Today and New York Times bestselling books “Call to Action” and “Waiting For Your Cat to Bark?” and has spoken at events such as Search Engine Strategies,, Shop.org, UIE, NAB and ad:tech. Please feel free to friend Jeffrey on Facebook
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May 23rd, 2007
2:49 pm
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.