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Originally published August 13, 2007 at 12:00 AM | Page modified August 13, 2007 at 3:02 PM


Microsoft closes $6 billion purchase of aQuantive

Microsoft today completed its its $6 billion acquisition of Seattle-based digital advertising leader aQuantive. The deal was announced May...

Seattle Times technology reporter

Microsoft today completed its its $6 billion acquisition of Seattle-based digital advertising leader aQuantive.

The deal was announced May 18 and aQuantive shareholders voted Thursday to approve the transaction, which nets them gains of more than $30 a share, 85 percent, over the price before the deal was announced.

Microsoft is restructuring part of its advertising business to incorporate aQuantive's technologies and 2,600 employees. This business will compete directly with Internet giants Google and Yahoo for a greater share of the growing market for digital advertising.

"We made a lot of progress in integration planning and basically launched a new organization within the Platforms and Services Division of Microsoft run by Kevin Johnson," said Brian McAndrews, CEO of aQuantive and now the head of Microsoft's new Advertising and Publisher Solutions Group (APS).

APS will include aQuantive's advertising technology, Atlas; its Drive publishing service; and Avenue A | Razorfish, the company's digital advertising agency. It will also incorporate product management, technology and planning groups focused on Microsoft's adCenter advertising platform, McAndrews said.

McAndrews, whose senior leadership team at aQuantive will remain intact, now reports directly to Johnson. The aQuantive employees will remain in Pioneer Square offices.

In addition, Microsoft clarified the structure of other parts of its advertising business.

Steve Berkowitz, who heads the existing Online Services Group, will continue to be responsible for generating the audience that Microsoft sells to advertisers through Web sites such as MSN and a growing portfolio of consumer-focused online services under the brand Windows Live. He reports directly to Johnson.

The new search and advertising technology group that Microsoft created earlier this year under the leadership of Satya Nadella will work for the relevant parts of Berkowitz' and McAndrews' teams. Nadella's group will also house the AdECN digital advertising exchange Microsoft is acquiring.

McAndrews' noted that while the combined Microsoft-aQuantive leads the industry in some areas, it is trailing in others.

"So we have work to do," he said. "But I think we now have both the people assets — combining what Microsoft brings to the party and what aQuantive does — and the technology assets to really be a formidable force."

Benjamin J. Romano:

Copyright © 2007 The Seattle Times Company

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