Microsoft buys aQuantive for $6 billion

Fact: Microsoft has--thus far--failed to capitalize on the web advertising market that Google currently dominates. Fact: Microsoft has been rumored to buy just about every company in existence in an effort to better compete with Google, from DoubleClick to Yahoo. Fact: In the post-YouTube-buyout age, web companies often get sold for a ridiculous premium.

Given those facts, the latest news should come as no surprise: Microsoft has announced a buyout of Seattle-based web advertising firm aQuantive for a whopping $6 billion--the largest acquisition in Microsoft history. To put that cartoonish sum in perspective, consider this: that's almost exactly twice what Google will pay for DoubleClick ($3.1 billion) and at a rate of $66.50 a share, (compared to the $35.87 a share the stock closed at on Thursday) is almost twice the value of the company. "This deal expands upon the company's previously outlined vision to provide the advertising industry with a world class, Internet-wide advertising platform, as well as a set of tools and services that help its constituents generate the highest possible return on their advertising investments," Microsoft said in a prepared statement. Though this may have been an act of desperation, it significantly alters the landscape of online advertising and puts Microsoft and its struggling MSN unit in a much better position to compete with the likes of Google and Yahoo. Microsoft CEO Steve Ballmer was quoted as saying that the buyout represents "the next step in the evolution of our ad network from our initial investment in MSN, to the broader Microsoft network including Xbox Live, Windows Live and Office Live, and now to the full capacity of the Internet."

For more on the acquisition:
- see this ZDnet article