Pender's Blog

Blog archive

Microsoft's $6 Billion Ad Firm

If you're old enough, or just enough of a fan of TV trivia, you might remember the tastefully named Lee Majors starring in "The Six Million Dollar Man." The actor played a test pilot who was horribly injured in a plane crash and subsequently rebuilt by the U.S. government with all sorts of high-performance bionic parts in his body -- hence the reason his reconstruction cost $6 million, a hefty price tag back in the mid-'70s. (That kind of money might get you a decent middle reliever today, but we digress.)

Anyway, Majors' Col. Steve Austin character, who made that name famous long before it belonged to a certain "Stone Cold" wrestler, could do all sorts of amazing things with his tricked-out robobody. He paid the government back for the favor of rebuilding him by doing intelligence work and combating all sorts of terrifying threats to national security -- including, in one episode, Bigfoot. (This, of course, was before the phrase "the terrorists" meant anything -- but we digress again.)

It turns out that this "Six Million" metaphor has come back around again, and this time it's about an online advertising firm called aQuantive. Presumably aQuantive hasn't suffered a horrible accident and doesn't need to be rebuilt with bionic parts. But it has a few things in common with Lee Majors as Col. Steve Austin, starting with its price tag. Microsoft announced this week that it's buying aQuantive for an eerily similar sum, updated for inflation in 2007 -- $6 billion.

And just as the government made a major investment in Steve Austin's body, Microsoft is paying a huge premium to buy aQuantive. This deal, in fact, dwarfs the $3.1 billion buyout of DoubleClick by Google that upset Microsoft so much about a month ago.

We've been wondering here at RCPU just how serious Microsoft was about the online ad game -- and we had to ask some questions again earlier this week when 24/7 Real Media, another firm Microsoft had been rumored to be eyeing, went to another bidder. However, $6 billion big ones should answer anybody's questions about Redmond's commitment to catching up with Google. The question now is whether it's too little (or maybe too much), too late. After all, Google has a huge lead in search and online advertising over Microsoft, and unlike Redmond's highly diversified corporate profile, Internet stuff is what Google does -- and does very well.

For most partners, it's hard to see a direct entry into the online ad game, but anybody whose business relies on the corporate giant in Redmond should pay close attention to how and where Microsoft spends its money, especially a chunk of money this large. If Microsoft gets bogged down in an online ad game it can't win with an expensive acquisition it can't swallow, the fallout could affect the company's stock price and executive leadership -- and maybe even trickle down throughout its operations.

Then again, if the aQuantive acquisition works, it could be a cornerstone of a Microsoft Internet strategy that still seems a bit shaky for now and really needs to come together. Plus, Microsoft has a pretty darn good track record with acquisitions it's made in the past. Still, this is a watershed moment for Microsoft. The commitment is there; the money is there -- now it's time for Redmond to produce results.

Of course, to continue the metaphor, we shouldn't forget how Lee Majors fits into all this. Just as the government needed Col. Steve Austin to perform superhuman feats, Microsoft needs aQuantive to help it pull off a near-miracle and catch Google in the online ad game. Let's remember, though, what Lee Majors did after "The Six Million Dollar Man" ended its run -- he became "The Fall Guy."

Taking a fall and failing to catch rival Google isn't what Redmond plans with aQuantive, of course. No doubt, Redmond is hoping for something more like the "Promised Land" where Lee Majors spent an episode (OK, we're stretching here, but just go with it).

What's your take on Microsoft's big acquisition? How do you see it affecting you as a partner? Can you get the theme song from "The Fall Guy" out of your head? I can't. Enlighten me at lpender@rcpmag.com.

Posted by Lee Pender on 05/18/2007 at 1:20 PM


Featured

  • Microsoft Ending Azure Container Service Support in 2020

    Microsoft gave notice earlier this month that it will be ending its Azure Container Service on Jan. 31, 2020.

  • Microsoft Releases Surface Diagnostic Toolkit for Business

    Microsoft released a new tool, Surface Diagnostic Toolkit for Business, earlier this month, providing a means for IT pros to find and troubleshoot problems on Microsoft Surface devices.

  • How To Enable Guest Access for Office 365

    While it's possible to give outside users access to certain content in your organization's Office 365 environment, the process of setting them up requires a few extra steps.

  • Microsoft Now Supports OpenSSH in Windows Server 2019

    Microsoft announced on Tuesday that the OpenSSH solution used for remote management is now a supported "Features on Demand" addition in both Windows 10 version 1809 and Windows Server 2019.

comments powered by Disqus
Most   Popular

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.