Microsoft chases Google with $6bn purchase of internet ad broker

Source: The Independent

By Stephen Foley in New York
Published: 19 May 2007

Microsoft is spending $6bn (£3bn) on its biggest acquisition in a desperate attempt to keep up with Google in the market for online advertising.

...

Analysts expressed astonishment at the 85 per cent premium, and warned that it exposes how Microsoft has been forced to play an expensive game of catch-up with Google.

Less than a month ago, Microsoft ducked out of the auction for DoubleClick, the market-leading online ad broker, which was bought for $3.1bn by Google, saying the price had become unrealistic. Depending on which measure of earnings used, it is buying aQuantive at a valuation similar to, or even higher than, the price Google paid for DoubleClick.

Explaining the acquisition yesterday, Microsoft's chief financial officer, Chris Liddell, said: "We believe it's exactly the right company to buy, and hence we're willing to pay." The 10-year-old aQuantive is a bigger company than DoubleClick, since it also owns an advertising agency.

Read more: http://news.independent.co.uk/business/news/article2560076.ece

I guess time will tell.

They are using all the resources they can to try to get an edge.