FT.com / Companies / IT - Microsoft plays down Yahoo move
Microsoft plays down Yahoo move
By Chris Nuttall in San Francisco
Published: May 24 2007 01:59 | Last updated: May 24 2007 01:59
Microsoft has played down reports that it could acquire Yahoo, saying agreeing to buy the Aquantive online advertising company for $6bn last week has given it all it needs.
Yusuf Mehdi, Microsoft’s chief advertising strategist, told the Goldman Sachs Internet Conference in Las Vegas in answer to a question on whether the search engine company had assets that could assist the software giant: “From where we are today, I think we have all the pieces.”
It emerged earlier this month that Microsoft had made a tentative takeover approach for Yahoo.
But on Friday, Microsoft agreed to pay $6bn incash for Aquantive – more than four times the size of its previous largest acquisition.
Mr Mehdi hinted that Microsoft would makemuch smaller bolt-on acquisitions in future to fill inany gaps in its internet offerings.
“There are other small pieces that we’re in the process of getting to as well, organically or otherwise,” he said.
He added that the Aquantive deal put Microsoft in a strong position to serve display advertisements on websites targeted to users’ interests and behaviour.
He said this kind of advertising was growing faster than the text-based kind that appears with search results on services such as Google’s.
Google has agreed to pay $3.1bn for DoubleClick, whose technology serves display advertisements.
Microsoft is objecting to the deal on antitrust grounds, arguing that it would give Google 80 per cent of the market.
A merger or partnership with Yahoo could have given Microsoft access to the Silicon Valley company’s own advertising technologyas well as its extensive content from a network of websites.
But Microsoft’s sites, including the MSN network, already boast the largest internet audience withhalf a billion visitors a month and with the Aquantive acquisition it will offer advertising services to sites outside its network. This is something it has not yet attempted, apart from a relationship with the Facebook social networking site.
A combined Microsoft and Yahoo would still trail Google significantly in search.
Google had 55 per cent of all search queries in the US in April, according to Nielsen NetRatings, compared with 22 per cent for Yahoo and 9 per cent for MSN/Windows Live.
Mr Mehdi said Microsoft was planning new features for its search service that would give Google a “run for their money”.
He said it was necessary to “do something big and bold and different” to try to displace the market leader.
Copyright The Financial Times Limited 2007
Showing posts with label DoubleClick. Show all posts
Showing posts with label DoubleClick. Show all posts
Thursday, May 24, 2007
Monday, May 21, 2007
FT.com / Companies / US & Canada - Microsoft ready for a strategic upgrade
FT.com / Companies / US & Canada - Microsoft ready for a strategic upgrade
Microsoft ready for a strategic upgrade
By Chris Nuttall in San Francisco
Published: May 21 2007 03:00 | Last updated: May 21 2007 03:00
Consolation prize or prize capture? Microsoft's $6bn acquisition of online advertising company Aquantive on Friday was a secondary target, but may prove to be a source of primary growth in the future.
The software giant turned its attention to Aquantive after it lost out to Google in a bid for Aquantive's rival, DoubleClick. Google will pay $3.1bn in that deal, almost half as much as Microsoft is paying.
This is the parsimonious Redmond company's biggest ever buy - costing more than four times its previous record, the $1.45bn paid for Danish software company Navision in 2002.
But cash-rich Microsoft can easily afford the 85 per cent premium it has paid and the acquisition had become a strategic imperative - the online ad business is expected to be worth $40bn in 2007 and is growing at 20 per cent a year, a rate that makes its core software business seem becalmed.
"We have walked away from some transactions over the last few years because we have considered they haven't been strategically important enough to pay a premium for," said Chris Liddell, chief financial officer, on Friday.
The Seattle company is key in that it provides a complete advertising solution for Microsoft's ambitions to sell and profit from advertising beyond its own network of websites. It also enables it to stay in touch with market leader Google.
"Google has significantly more advantages than Microsoft," says Shahid Khan, a partner at Interactive Broadband Consulting.
"If you go back, it started selling, using its own ad-serving technology, then it built a sales force and started selling on other people's websites, and then expanded to print and radio. Now DoubleClick gives it even more technology, better integration with ad agencies and publishers and the best platform overall."
Microsoft has been way behind, admitting as much in making anti-trust complaints that Google combined with DoubleClick will have 80 per cent market share for serving online ads.
It only recently developed its own ad-serving technology and, apart from a partnership with the Facebook social networking site, has confined its business to its own network of sites such as MSN and Windows Live.
"We are new in the advertising business but we have made a lot of investment," says Yusuf Mehdi, Microsoft's chief advertising strategist. "We have the biggest audience for an ad network - half a billion users visiting our properties every month. To this point, we have really not run advertising for other companies except Facebook . . . now we will."
Mr Mehdi says Aquantive has bigger revenues and profits than DoubleClick and offers the best ad tools.
Tim Vanderhook, chief executive of the SpecificMedia online ad network, agrees Aquantive's Atlas tool for advertisers is a superior product offering. "Microsoft has paid up to catch up. I was really surprised that DoubleClick was the initial prime target, it's only an ad-serving technology, it doesn't have a division that buys or sells online media [like Aquantive]," he says.
In seeking a more complete solution through Aquantive, Microsoft is following Google in trying to build a broad platform that can serve as a one-stop shop for advertisers trying to reach specific audiences across a range of media.
Shahid Khan cites Microsoft's earlier acquisition of Massive, which serves in-game advertising, and Google's moves to sell TV advertising. He believes mobile advertising networks will be the next acquisition targets as the big players spread their offerings to advertising on cellphones.
Copyright The Financial Times Limited 2007
Microsoft ready for a strategic upgrade
By Chris Nuttall in San Francisco
Published: May 21 2007 03:00 | Last updated: May 21 2007 03:00
Consolation prize or prize capture? Microsoft's $6bn acquisition of online advertising company Aquantive on Friday was a secondary target, but may prove to be a source of primary growth in the future.
The software giant turned its attention to Aquantive after it lost out to Google in a bid for Aquantive's rival, DoubleClick. Google will pay $3.1bn in that deal, almost half as much as Microsoft is paying.
This is the parsimonious Redmond company's biggest ever buy - costing more than four times its previous record, the $1.45bn paid for Danish software company Navision in 2002.
But cash-rich Microsoft can easily afford the 85 per cent premium it has paid and the acquisition had become a strategic imperative - the online ad business is expected to be worth $40bn in 2007 and is growing at 20 per cent a year, a rate that makes its core software business seem becalmed.
"We have walked away from some transactions over the last few years because we have considered they haven't been strategically important enough to pay a premium for," said Chris Liddell, chief financial officer, on Friday.
The Seattle company is key in that it provides a complete advertising solution for Microsoft's ambitions to sell and profit from advertising beyond its own network of websites. It also enables it to stay in touch with market leader Google.
"Google has significantly more advantages than Microsoft," says Shahid Khan, a partner at Interactive Broadband Consulting.
"If you go back, it started selling, using its own ad-serving technology, then it built a sales force and started selling on other people's websites, and then expanded to print and radio. Now DoubleClick gives it even more technology, better integration with ad agencies and publishers and the best platform overall."
Microsoft has been way behind, admitting as much in making anti-trust complaints that Google combined with DoubleClick will have 80 per cent market share for serving online ads.
It only recently developed its own ad-serving technology and, apart from a partnership with the Facebook social networking site, has confined its business to its own network of sites such as MSN and Windows Live.
"We are new in the advertising business but we have made a lot of investment," says Yusuf Mehdi, Microsoft's chief advertising strategist. "We have the biggest audience for an ad network - half a billion users visiting our properties every month. To this point, we have really not run advertising for other companies except Facebook . . . now we will."
Mr Mehdi says Aquantive has bigger revenues and profits than DoubleClick and offers the best ad tools.
Tim Vanderhook, chief executive of the SpecificMedia online ad network, agrees Aquantive's Atlas tool for advertisers is a superior product offering. "Microsoft has paid up to catch up. I was really surprised that DoubleClick was the initial prime target, it's only an ad-serving technology, it doesn't have a division that buys or sells online media [like Aquantive]," he says.
In seeking a more complete solution through Aquantive, Microsoft is following Google in trying to build a broad platform that can serve as a one-stop shop for advertisers trying to reach specific audiences across a range of media.
Shahid Khan cites Microsoft's earlier acquisition of Massive, which serves in-game advertising, and Google's moves to sell TV advertising. He believes mobile advertising networks will be the next acquisition targets as the big players spread their offerings to advertising on cellphones.
Copyright The Financial Times Limited 2007
Wednesday, April 18, 2007
FT.com / Services & tools / SearchFT.com / Services & tools / Search
FT.com / Services & tools / SearchFT.com / Services & tools / Search
Google/DoubleClick
FT.com site
Published: Apr 16, 2007
After being on the receiving end for so many years, Microsoft can finally stir the anti-trust pot for somebody else. It should have learnt some tricks along the way to put the spotlight on Google's acquisition of online advertising platform DoubleClick. Microsoft's experience in Europe could be particularly useful, given that regulators there have been willing to go after fast-changing technology companies.
But does the complaint that a DoubleClick deal risks giving Google too much power in the provision of online adverts hold water? Possibly. Leave search advertising aside for now, where Google is the global market leader. In display advertising there are two main companies that serve ads to websites around the world. Google is the strongest in the contextual side – where ads are targeted based on the information on a given web page. DoubleClick is the strongest in ads that are placed according to the behavioural history of each internet user.
There is a risk that putting the two together – and allowing them to use the sheer scale of information they have about internet users – would raise barriers to entry for rivals. Those already exist, given the cost of building an ad-serving platform.
Microsoft, for example, has discovered how difficult it is to get into the provision of search-related advertising from scratch. Its failure, so far, in that arena is a big reason for its reaction to Google's deal. After all, advertising is the fuel for the internet and Microsoft has very little.
That is a good reason for people to take Microsoft's gripes with a fistful of salt. There are rivals who serve display ads. But regulators should still look very closely at how they define the market when assessing Google's deal. Too much dominance for one company now might be difficult to undo in the future.
Google/DoubleClick
FT.com site
Published: Apr 16, 2007
After being on the receiving end for so many years, Microsoft can finally stir the anti-trust pot for somebody else. It should have learnt some tricks along the way to put the spotlight on Google's acquisition of online advertising platform DoubleClick. Microsoft's experience in Europe could be particularly useful, given that regulators there have been willing to go after fast-changing technology companies.
But does the complaint that a DoubleClick deal risks giving Google too much power in the provision of online adverts hold water? Possibly. Leave search advertising aside for now, where Google is the global market leader. In display advertising there are two main companies that serve ads to websites around the world. Google is the strongest in the contextual side – where ads are targeted based on the information on a given web page. DoubleClick is the strongest in ads that are placed according to the behavioural history of each internet user.
There is a risk that putting the two together – and allowing them to use the sheer scale of information they have about internet users – would raise barriers to entry for rivals. Those already exist, given the cost of building an ad-serving platform.
Microsoft, for example, has discovered how difficult it is to get into the provision of search-related advertising from scratch. Its failure, so far, in that arena is a big reason for its reaction to Google's deal. After all, advertising is the fuel for the internet and Microsoft has very little.
That is a good reason for people to take Microsoft's gripes with a fistful of salt. There are rivals who serve display ads. But regulators should still look very closely at how they define the market when assessing Google's deal. Too much dominance for one company now might be difficult to undo in the future.
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