July 27, 2007
Microsoft Corp. is acquiring a small broker of ad space on Web sites, part of a broader Internet industry exploration of how electronic exchanges can make the market for online advertising more efficient.
The Redmond, Wash., software maker said it has purchased AdECN Inc. of Santa Barbara, Calif., a 30-person start-up that runs a network linking buyers and sellers of Internet ad space. Terms of the agreement weren't disclosed.
The acquisition follows the purchases by Microsoft's lead online competitors of companies building similar exchanges. Google Inc. this year announced a $3.1 billion deal to buy DoubleClick Inc., which is building an ad exchange. Yahoo Inc. in April paid $680 million for the remaining 80% of Right Media Inc., following a 20% stake it bought in October.
In each case, the Internet companies want to be the first to build a large-scale, dynamic market for the ad industry. Each hopes its exchange can inject efficiencies in trading ad space in much the same way the Nasdaq electronic market did for stocks.
Microsoft executives said they will include their ad inventory from the company's own nascent ad networks and a network it acquired through its $6 billion deal in May to buy online-ad specialist aQuantive Inc.
Microsoft will run AdECN as a stand-alone company in an effort to create a neutral venue for trading.
Write to Robert A. Guth at rob.guth@wsj.com
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