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May 7, 2007

NEWS: Internet Giants Vie to Snap Up Web Ad Firms

Online Advertising Share and Forecast
Chasing Ad Dollars

It’s a good time to be an Internet advertising company.
The struggle reached new heights yesterday when Microsoft agreed to buy the online advertising company aQuantive for about $6 billion. It is Microsoft’s largest acquisition ever and a sign of its struggle to build an Internet ad business on its own.

The purchase caps a month of intense deal making, ignited when Google agreed to buy DoubleClick, a competitor of aQuantive, for $3.1 billion, outbidding Microsoft. Since then, all of Google’s main competitors have snapped up online advertising specialists.
Online ads accounted for 5.8 percent of the $285 billion spent on advertising in the United States in 2006, according to eMarketer, a research firm. It estimates that the online share will rise to 10.2 percent by 2010.

In the first quarter of this year, AT&T spent $79 million on online image-based advertising, compared with $55.6 million in the quarter a year ago, according to Nielsen/NetRatings Ad Relevance. The Ford Motor Company increased its purchases to $29 million in the period, from $7 million a year earlier.
Until recently, for instance, Google was largely focused on selling small text ads that appear alongside its search results and on other Web sites.
Internet Giants Vie to Snap Up Web Ad Firms, New York Times

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