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Facebook May Buy Microsoft’s Ad Biz

aQuantive could be a nice pickup for the social network


According to a report in AllThingsDigital, it looks like Facebook (NASDAQ:FB) is in discussions to purchase Microsoft’s (NASDAQ:MSFT) ad-serving business. There was no report on the valuation.

At the core of Microsoft’s ad business is aQuantive, which was purchased back in 2007 for a whopping $6 billion. The company had a sophisticated ad platform called Atlas.

2012: For IPOs, Its the Year of the Blooper
2012: For IPOs, Its the Year of the Blooper

Unfortunately, Microsoft failed to get much traction with the technology. In fact, Microsoft wrote off the total value of the aQuantive deal in July.

Yet Facebook may be able to get much more value from Atlas. Keep in mind that, since the early days, it has used the platform for its own ad-serving.

But as Facebook looks for more revenue, Atlas could fit the bill. After all, this strategy worked for Google (NASDAQ:GOOG), which purchased DoubleClick as a way to cut out the middleman.

Facebook also has the advantage of its massive scale and data. Just imagine if it could offer an ad system that targets ads to users based on their phone numbers, emails and physical addresses. All in all, it could put pressure on Google as well as other players in the market, such as Yahoo (NASDAQ:YHOO).

It’s true that Facebook could build its own ad network, but it wouldn’t be easy. So why not pick up something that’s already battle-tested?

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”  Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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