Online Advertising Movements
Following the recent purchase of DoubleClick by Google, and the rumoured discussions between Yahoo! and Microsoft, comes more significant purchases from major Information Technology companies in the field of online advertising.
Yahoo! recently bought out its remaining $680 million USD stake in Right Media Inc, and Real Media Inc has been bought up for $649 million USD by WPP Group, but the biggest news is in Microsoft's recent purchase.
Microsoft paid $6 billion USD to capture aQuantive, at a premium of over 80% over the current market value for the company. Even more interesting than the price is that it has been paid in cash ($66.50 per share when they closed at $35.87 on Thursday) and it represents the largest acquisition in Microsoft's history. For existing shareholders in aQuantive, the payday has already arrived, with shares jumping to $63.77 late Friday.
The recent spate of purchases and conglomeration taking place has left ValueClick as one of the few large online advertising companies left in public ownership.
With Google purchasing the #1 company in the sector for $3 billion USD, and Microsoft purchasing the #2 for $6 billion a number of observers are concerned that this is another sign of an overheated tech sector (at least on the stock market). Even though the figures appear excessive when compared to each other, both companies were purchased for almost the same multiple of annual revenue (15x and 13x respectively).
19 May 2007
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