What’s the big deal?

When Google bought DoubleClick for $3.1bn in April, aQuantive said it expected its Atlas platform to benefit since advertisers were likely to have concern over impartiality when the world’s biggest ad-serving network is owned by the biggest interactive adveritising seller. It seems highly unlikely when they said this that they weren’t already doing a dance with Microsoft who on Friday has made an offer of $6.1bn for the business.

OK, so here are the numbers. The offer is $66.50 a share (85% more than the stocks previous close price of $35.87). aQuantive is included in AdAge’s top 10 US Marketing organisations and – in addition to ad serving and tracking that everyone has focussed on (primarily Atlas and DrivePM) – contains the US’s biggest and best (according to the very reliable* Forrester Wave Study) web design agency, Avenue A | Razorfish. It is the biggest deal ever done by Microsoft. Indeed it’s is the biggest in history of the advertising industry.

So… why? Whilst Avenue A | Razorfish is clearly a successful and respected agency, it would be difficult to see how Microsoft ownership will improve its fortunes (not a criticism of Microsoft but a reality about creativity in monolithic organisations). And will this really help Microsoft’s bid to sell agencies on recently released Silverlight (and pre-exising WPF) functionalities? Unrealistic as it may be, will agencies be wary of partnering with the software giant amid fears that Microsoft’s agencies might be quietly slipped in?

The real deal is around the larger tracking and adserving platforms. Like Doubleclick and Google, Microsoft will see the deal as an opportunity to know more about users and to better target relevant advertising to them. It’s an enduring oddity that when Google does a multi-billion pound deal, everyone cheers that greater relevance and value will be delivered to customers. When Microsoft does it, we’re all up in arms that the software giant is too powerful.

Analysts have suggested that Microsoft has moved into the advertising business. That gives the impression they’ll move their headquarters to Madison Avenue and all start untucking their shirts. I think they’ve moved into the attenion business, more like a media company than an advertising agency, trying to own the new, targeted canvases of our lives. An expensive gamble perhaps but with all the other options off the table, perhaps one they couldn’t afford not to take, as they become new entrants into the Space Race.

* Sorry that’s an in-joke as Forrester rated my firm very highly in the European version of the study.